Arbitration clause in an unregistered agreement to sell can remain valid, enabling substitute appointment when the named arbitrator declines to act.

An arbitration clause in an agreement to sell relating to immovable property was treated as independently valid where the agreement, though unregistered, was signed by both parties and clearly required disputes to be decided by a named advocate whose award would be final. The clause was separable from the underlying transaction, and non-registration of the agreement did not by itself invalidate the arbitration agreement under Section 7 of the Arbitration and Conciliation Act, 1996. Objections based on the Transfer of Property Act, 1882 and the Registration Act, 1908 were relevant to enforceability of the substantive transaction, not to the court's power to appoint an arbitrator. Refusal of the named arbitrator to act satisfied the condition for appointment under Section 11(6).

---

---

Issues: Whether the arbitration clause contained in an unregistered agreement to sell concerning immovable property was a valid arbitration agreement under Section 7 of the Arbitration and Conciliation Act, 1996, and whether the refusal of the named arbitrator to act entitled the applicant to appointment of an arbitrator under Section 11(6) of that Act.

Analysis: The agreement to sell was signed by both parties and contained a clause stating that any dispute arising from the terms of the agreement would be decided by a named advocate whose award would be final. The clause disclosed a clear intention to arbitrate, and an arbitration clause is separable from the other terms of the underlying document. Registration of the underlying agreement was not a statutory condition for the arbitration agreement to be valid. Objections based on non-registration under the Transfer of Property Act, 1882 and the Registration Act, 1908 went to the merits of enforceability of the underlying transaction and did not defeat the court's power to act under Section 11(6). Since the named arbitrator declined to act, the statutory contingency for court appointment was satisfied.

Conclusion: The arbitration clause was held to be valid and enforceable for the purpose of appointment, and the applicant was entitled to appointment of an arbitrator under Section 11(6).

Ratio Decidendi: An arbitration clause in an unregistered agreement remains independently enforceable if it manifests a clear intention to arbitrate, and when the named arbitrator refuses to act, the court may appoint a substitute arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996.

---