An arbitration clause in a contract is not binding since it is hit by section 28 of the Indian Contract Act, 1872, being an agreement that restrains a party from invoking its legal remedy to file a suit. This proposition is:

Option A: Untrue, since the Indian Contract Act has no application to arbitration proceedings.

Option B: Untrue, since Exceptions 1 and 2 to section 28 save arbitration agreements from being void.

Option C: Untrue since the Arbitration & Conciliation Act, 1996 is a code in itself.

Option D: Untrue, since under section 16 of the Arbitration & Conciliation Act, 1996, an arbitration clause is to be treated as an independent agreement.

Correct Answer

Option: b

Explanation

Untrue, since Exceptions 1 and 2 to section 28 save arbitration agreements from being void.

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