All India Bar Examination (AIBE) 6-VI Previous Year Question Papers with Answers

aThe correct option is B: Not entail ipso jure the invalidity of the arbitration clause. 

This is based on the principle of separability or autonomy of the arbitration clause, which means that the arbitration clause is considered as a separate and independent agreement from the main contract. Therefore, even if the contract is null and void, the arbitration clause may still be valid and enforceable, unless it is specifically challenged or affected by the same grounds that invalidate the contract. This principle is recognized in many jurisdictions and international conventions, such as the UNCITRAL Model Law on International Commercial Arbitration and the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards.

For example, in India, the Supreme Court has clarified that an arbitration clause in a memorandum of understanding (MoU) does not necessarily come to an end even if the MoU does not materialize into a full-fledged agreement. Similarly, in England, the Court of Appeal has held that an arbitration clause in a letter of intent was not invalidated by the subsequent termination of the letter of intent.

Therefore, unless there are specific reasons to challenge the validity of the arbitration clause itself, a decision by the arbitral tribunal that the contract is null and void does not automatically affect the validity of the arbitration clause.