Explanation
A: An agreement not to pursue a legal remedy but to refer the dispute to an arbitrator under the provisions of the Indian Contract Act is valid.
Section 28 of the Indian Contract Act allows parties to a contract to agree that any dispute arising out of or in connection with the contract will be referred to an arbitrator instead of pursuing legal remedies through the court system. This agreement is valid as long as it is not opposed to public policy or any other laws in force.
Furthermore, the Indian Arbitration and Conciliation Act, 1996 governs the process of arbitration in India, providing a framework for conducting arbitration proceedings and enforcing arbitral awards. Thus, parties can enter into such agreements and can have their disputes resolved through arbitration as long as the agreement is in accordance with the law and not opposed to public policy.
