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After a contract expires by efflux of time, A sues B to recover money accrued under it. Its arbitration…

An arbitration clause is separable from the other contractual terms and normally survives expiry for resolving disputes arising under that contract. Expiry by efflux of time…

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After a contract expires by efflux of time, A sues B to recover money accrued under it. Its arbitration clause covers that dispute and is not time-limited. B makes a timely, compliant section 8 application and no prima facie invalidity or non-arbitrability is shown. What must the court do?

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Answer and explanation

Correct answer B

An arbitration clause is separable from the other contractual terms and normally survives expiry for resolving disputes arising under that contract. Expiry by efflux of time therefore does not itself defeat B’s timely, compliant section 8 application. Referral does not depend on A consenting again or on sending the matter to a different court merely to decide whether arbitration is needed.

See sections 8 and 16(1)(a) of the Arbitration and Conciliation Act, 1996.

Option feedback

Option A

Expiry of the contract does not itself extinguish the separable dispute-resolution clause.

Option B

Referral follows when the stated section 8 requirements are satisfied.

Option C

A’s fresh consent is not required to enforce the existing valid arbitration agreement.

Option D

The section 8 court does not need to transfer this referral decision to a section 11 court.

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