Arbitration Weekly Round-Up: 15th April to 21st April 2024
Ausaf Ayyub
25 April 2024 2:00 PM GMT
High Courts Bombay High Court Can A Section 29A Application Be Filed In The Commercial Court Or Only In The High Court? Single Bench Of Bombay High Court Refers The Issue To Larger Bench The High Court of Bombay (Goa Bench) has referred the issue of maintainability of a Section 29A application seeking extension of the arbitration before the Commercial Court to a larger bench...
High Courts
Bombay High Court
The High Court of Bombay (Goa Bench) has referred the issue of maintainability of a Section 29A application seeking extension of the arbitration before the Commercial Court to a larger bench in view of conflicting views by two co-ordinate benches of the High Court.
The Bench of Justice Bharat P. Deshpande observed that the since Section 29A of the A&C Act not just involves extension of the mandate of the arbitrator, but also questions relating to the substitution, termination and reduction of the fees of the arbitrator, therefore, the power under Section 29A can only lie with the High Court in view of the appointing power given to it under Section 11 of the Act.
However, the Court remarked that since conflicting decisions are taken by the two co-ordinate benches, Judicial Propriety demands that the issue must be referred to a larger bench for an authoritative pronouncement.
Case Title: N.P. Enterprises v. General Manager, Western Railway – Commercial Arbitration Application No. 30940 of 2023
The High Court of Bombay has held that appointment of arbitrator from a narrow panel of 4 arbitrators is violative of Section 12(5) of the A&C Act. It held that such practice of preparing narrow panels restricts free choice and give rise to suspicion that favourites are chosen.
The bench of Justice Bharati Dangre held that independence and impartiality of arbitrators is a hallmark of arbitration and the rule against bias is one of the fundamental principles of natural justice, which is applicable with equal force in all quasi-judicial proceedings.
Calcutta High Court
Case Title: UpHealth Holdings Inc v. Glocal Healthcare Systems Pvt Ltd, AP-COM/490/2024
The High Court of Calcutta has held that ease of doing business in india with indian entities is also a matter of 'Public Policy'. These observations were made by the High Court while hearing an application under Section 9 of the A&C Act at post award stage in arbitration with seat in United States (US).
The Bench of Justice Ravi Krishan Kapur held that the fruits of the award must be made real and realizable so that the award is not rendered illusory or meaningless. It held that Courts must make serious attempts to protect awarded amount so that the awards are enforced and do not become mere paper awards.
Case Title: Uphealth Holdings Inc v. Glocal Healthcare Systems Pvt Ltd, AP-COM/490/2024
The High Court of Calcutta has held that power of a Court exercising powers under Section 9 of the A&C Act are wider than the powers of a Court under Order XXXVIII Rule 5 of CPC. It held that unlike under CPC, the dissipation of assets is not a mandatory requirement for interim relief under Section 9 of the A&C Act.
The bench of Justice Ravi Krishan Kapur a petitioner under Section 9 of the A&C Act cannot be burdened with the rigours of Order XXXVIII Rule 5 of CPC.
Delhi High Court
The High Court of Delhi has held that an arbitration award, in which the tribunal rendered findings contrary to its own observations, falls within the rubric 'Public Policy' under Section 34 of the Act.
The bench of Justice Chandra Dhari Singh also held that in a situation wherein the arbitral tribunal has given conflicting awards on an identical issue involving the same parties and with same contractual conditions, the Court would have to set aside the award in such an anomalous situation.
Case Title: M/s Advance Stimul v. GAIL India, ARB.P. 13 of 2014
The High Court of Delhi has held that when the jurisdiction of the MSEF Council is wrongly invoked due to uncertainty in law, the time spent before the Council would not be counted while calculating limitation.
The bench of Justice Pratibha M. Singh held that benefit of Section 14 of Limitation Act, which exempts the bond fide time spent before the wrong forum, would be given in such a situation.
Case Title: Telecommunication Consultants India Ltd v. Shivaa Trading
Citation: 2024 LiveLaw (Del) 471
The High Court of Delhi has held that an award passed by a unilaterally appointed arbitrator can be challenged on ground of invalidity of such appointment and consequent lack of jurisdiction even by the party who made such an appointment.
The bench of Justice Anup Jairam Bhambhani held that a defect of jurisdiction can be challenged at any stage since it goes to the power of the tribunal to decide the dispute. It held that mere participation in the arbitral proceedings cannot be deemed to be an 'express waiver' in terms of Section 12(5) of the A&C Act.
Case Title: M/s Advance Stimul v. GAIL India
Citation: 2024 LiveLaw (Del) 457
The High Court of Delhi has held that a notice given by a party invoking jurisdiction of MSEF Council under Section 18 of the MSMED Act can be considered to be a notice of arbitration required under Section 21 of the A&C Act.
The bench of Justice Pratibha M. Singh held that prior to the judgment of the Supreme Court in Gujarat State Civil Supplies Corporation and M/S Silpi Industries, the position of law with respect to an entity not registered under the MSMED Act at the time of contract was not clear, therefore, the party wrongly invoking jurisdiction of MSEF Council cannot be faulted if it was due to uncertainty in law.
Case Title: Akhil Gupta v. Hindustan Unilever Ltd
Citation: 2024 LiveLaw (Del) 456
The bench of Justice Prathiba M. Singh of Delhi High Court has held that pre-arbitral steps providing for resolution of disputes through mutual talks or through Ombudsman would lose its relevance when a party fails to give reply to notices issued by the other party seeking amicable settlement.
Case Title: Lease Plan India Pvt Ltd v. Rudrakash Pharma Distributor
Citation: 2024 LiveLaw (Del) 454
The Single Bench of Justice Prateek Jalan of High Court of Delhi has held that service of the petition on the WhatsApp number and the Email address mentioned in the agreement between the parties constitutes a valid service.
Case Title: Cobra Instalaciones Y Servicios v. Haryana Vidyut Prasaran Nigal Ltd
Citation: 2024 LiveLaw (Del) 453
The High Court of Delhi has held that an arbitrator is empowered to award compensation to an aggrieved party that has suffered losses on the basis of 'rough and ready method' or 'guesswork' when the loss is difficult to prove.
The bench of Justices Rajiv Shakdher and Amit Bansal held that as long as there is material available with the arbitrator that damages have been suffered, but it does not give him an insight into the granular details, he is permitted the leeway to employ honest guesswork and/or a rough and ready method for quantifying damages.
Karnataka High Court
Case Title: Buoyant Technology Constellations Pvt Ltd v. Manyata Infrastructure Developments Pvt Ltd, WP. 8654 of 2024
The High Court of Karnataka has dismissed a writ petition seeking termination of arbitral proceedings under Section 29A of the A&C Act by observing that the arbitrator had proceeded diligently and it was the petitioner itself who had taken various adjournments causing delay. It imposed a cost of Rs. 25,000/- on the petitioner.
The bench of Justices S.G. Pandit and C.M. Poonacha held that the 12 months period for delivery of an arbitral award under Section 29A would begin from the date of completion of proceedings which would also include a sur-rejoinder statement if permitted.
Case Title: M/s Azeem Infinite Dwelling v. M/s Patel Engineering, Commercial Appeal No. 60 of 2024
The High Court of Karnataka has held that a termsheet for buyout is only an offer and a contract if it was valid only for a limited period or till the execution of a definitive agreement.
The Bench of Justices Anu Sivaraman and Anant Ramanath Hedge ruled that a termsheet would expire if the specified period for executing a definitive agreement passes without such an agreement being made. It held that an expired termsheet cannot be enforced or acted upon.
Madhya Pradesh High Court
Case Title: Ramesh Kumar Khandelwal v. The State of Madhya Pradesh, WP No. 11123 of 2019
The High Court of Madhya Pradesh, Jabalpur bench has held that a writ would not be entertained when the petitioners fail to avail the efficacious contractual remedy before the Arbitrator.
The bench of Justice Gurpal Singh Ahluwalia held that merely because the nominated arbitrator is the managing director of the respondent corporation, it cannot be assumed that it would not be able to fairly discharge its functions as an arbitrator.
Rajasthan High Court
Case Title: Vimlesh Baregama v. Manglam Cement Ltd, S.B. Arbitration Application No. 23 of 2021
The High Court of Rajasthan, Jaipur Bench, has held that an application seeking the appointment of an arbitrator would not be allowed if the parties had already entered into a full and final settlement, and the applicant had encashed the settlement amount without protest or objection. The Court held that in such cases, the dispute would be considered non-arbitrable.
Chief Justice Manindra Mohan Shrivastava's bench further clarified that a petition seeking the appointment of an arbitrator would be deemed frivolous if it fails to disclose the full and final settlement between the parties and the encashment of cheques issued as part of the settlement.
The Court explained that although there is limited scrutiny permissible under Section 11(6) of the Arbitration and Conciliation Act, a petition may still be allowed, and an arbitrator appointed, if the petitioner can demonstrate fraud or economic duress. However, the Court emphasized that if the settlement amount was accepted without protest, the petition seeking the appointment of an arbitrator would not be maintainable.
