Validity of MOU & Arbitration Agreement For An Arbitration

Under Section 7, 11(6) and 16(1)(a) & (b) of Arbitration and Conciliation Act, 1996 , Supreme Court had dealt with an issue as to whether with termination of MOU , the arbitration clause therein also becomes null and void or otherwise ?

Supreme Court of India held the following :

Arbitration clause contained in memorandum of understanding (MoU) is an independent arbitration agreement .

Even if MoU is terminated, arbitration agreement continues to remain and parties are entitled to invoke said clause and exercise option for appointment of arbitrator.

[Ashapura Mine-Chem Ltd. v. Gujarat Mineral Development Corpn., (2015) 8 SCC 193]

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