A transaction contract, like any other contract, is of no use to a party intending to enforce it, unless it is valid. The transaction agreement includes the fundamental elements of a contract, with which it also contains other requirements to be valid, since the transaction agreement constitutes a particular type of contract. The transaction agreement is earlier known as a compromise agreement under labour law. In the transaction agreement, a worker undertakes not to assert certain actions of the labour tribunal against a potential respondent or respondent against an application. It is used when the employee leaves the organization and the payment of employees, including all receivables, is compensated. Certain conditions must be met by the parties for a proper transaction agreement. The argument that the transaction agreement is not sufficiently persuasive. The Court found that under Section 74, a transaction agreement would have the status and effect “as if it were an arbitral award”; Therefore, legal fiction gave the same status and effect as an arbitration award to a transaction agreement concluded in the conciliation procedure and certified by the conciliator. In other words, the transaction contract can be imposed as an arbitration award and it is not necessary for a party to a new procedure to be initiated in order to obtain an order concerning that decree. However, this does not mean that the transaction agreement will no longer be entered into voluntarily between the parties and will become an arbitral award; it has only the status and effect of a distinction under the law. The transaction agreement remains an agreement and should be labelled as such.” After the parties sign the agreement, the parties register the agreement if the purpose of the count is real estate. In accordance with Section 17 of the India Registration Act, a family colony claiming to assign real estate must be registered or the deed would not be valid. Stamp duty is levied on the value of the property on the agreement.
82. (6) Collective disputes must necessarily be subject to the conciliation procedure under the conditions set by decree. The decree specifies, among other things, the maximum duration of the conciliation procedure. Second, the Court of Appeal indicated that the complainant had not relied on the validity of the settlement agreement in the course of the judicial proceedings. Had the complainant raised the issue of the validity of the settlement agreement in the course of the court proceedings, the respondents could have applied for a mandatory stay under the International Arbitration Act (instead of a case management stay). This is because, in such a scenario, the issue that would be determined in the arbitration and judicial process would be the same, and the resolution of that issue after arbitration would be mandatory under the parties` arbitration clause. As noted above, a mandatory stay is granted when the status of disputes between the parties, which should depend on the object, has been brought to justice. On the other hand, a stay of case management could be granted, even if the issues that are decided by the court do not duplicate the issues dealt with by the arbitral tribunal. A mandatory stay is intended to maintain the agreement of the parties to settle their dispute, while the purpose of a case management stay is to ensure that the dispute between the parties as a whole is resolved in a fair and effective manner.
However, since the purpose of the compromise clause (i.e. the validity of the transaction contract) was addressed only by arbitration and not by the judicial process, the more appropriate stay that the respondents could request was a stay for reasons of case management.