Arbitration Weekly Round-Up: [13th January-19th January 2025]

Update: 2025-01-20 12:30 GMT
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High Courts Calcutta High Court Section 8 Application Must Be Filed Before Or Simultaneously With Written Statement: Calcutta High Court Case Title: Smt. Gitarani Maity -vs- 1A. Mrs. Krishna Chakraborty and others Case Number: FAT No. 308 of 2023 The Calcutta High Court bench of Justice Sabyasachi Bhattacharyya and Justice Subhendu Samanta held that when no application...

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High Courts

Calcutta High Court

Section 8 Application Must Be Filed Before Or Simultaneously With Written Statement: Calcutta High Court

Case Title: Smt. Gitarani Maity -vs- 1A. Mrs. Krishna Chakraborty and others

Case Number: FAT No. 308 of 2023

The Calcutta High Court bench of Justice Sabyasachi Bhattacharyya and Justice Subhendu Samanta held that when no application for reference to arbitration under Section 8 of the Arbitration Act is made by either party, the civil court may very well entertain the suit and proceed with the adjudication of the same on merits in accordance with law.

Also, the court held that the Trial Judge committed a patent error of law on both counts: first, the suit could not have been dismissed under Section 8. And secondly, the Section 8 application, having not been filed before or even simultaneously with the written statement of the defendant, could not have been entertained at all by the trial Judge.

[Seat vs. Venue] Designated “Seat” Of Arbitration Has Exclusive Jurisdiction: Calcutta High Court Reiterates

Case Title: Versatile Construction vs. Tata Motors Finance Ltd.

Case Number: APOT/389/2024 with AP.COM/822/2024 IA No.: GA-COM/1/2024

The Calcutta High Court bench of Justice Soumen Sen and Justice Biswaroop Chowdhury has held that once the “seat” of arbitration is designated in an agreement, it is to be treated as the exclusive jurisdiction for all arbitration proceedings. The Court referred to the 'Shashoua Principle', which propounds that when there is an express designation of a "venue" and no alternative seat is specified, the venue is considered the juridical seat of arbitration.

The court noted that the Supreme Court in Bharat Aluminium Company v Kaiser Aluminium Technical Services Inc. (BALCO) opined that the legislature had intentionally given jurisdiction to two courts i.e. the court which would have jurisdiction where the cause of action is located and courts where the arbitration takes place. This was necessary as the agreement may have provided for a seat of arbitration at a place which was neutral to both the parties.

Power To Correct Computation Error U/S 33 Of Arbitration Act Can Be Exercised Suo Moto If No Application Is Filed Within 30 Days: Calcutta HC

Case Title: Haldia Development Authority Vs M/s. Konarak Enterprise

Case Number:AP-COM No.229 and 255 of 2024

The Calcutta High Court bench of Justice Sabyasachi Bhattacharyya has held that power to correct computation error in the award under section 33 of the Arbitration Act can be exercised suo moto by the Arbitral Tribunal when no application is filed to this effect within 30 days.

The court at the outset rejected the contention with respect to claims barred by limitation on the ground that the final bill was prepared on May 18, 2016 based on which the claim was made on November 11, 2016 which was within the limitation period.

The court also noted that clause 3(a) of the contract allowed the forfeiture of security deposit only when the contract was rescinded but in the present case there was no material on record indicating that the contract was rescinded

Delhi High Court

Expert Tribunal's Award Did Not Suffer From Patent Illegality, Cannot Be Set Aside U/S 34 Of Arbitration Act: Delhi High Court

Case Title: Center For Research Planning And Action v. National Medicinal Plants Board Ministry Of Ayush Government Of India

Citation: 2025 LiveLaw (Del) 42

The Delhi High Court bench of Justice Yashwant Varma and Justice Dharmesh Sharma has held that the scope of interference by the Court with the arbitral award under Section 34 is very limited, and the Court is not supposed to travel beyond the aforesaid scope to determine whether the award is good or bad.

In the present case, the court held that the expert tribunals award did not suffer from patent illegality, and thus could not be set aside under Section 34 of the Arbitration Act.

Arbitral Award Cannot Be Challenged In Writ Petition, Party Must Use Remedy U/S 34 Of Arbitration Act: Delhi High Court

Case Title: MAHANAGAR TELEPHONE NIGAM LTD v. MICRO AND SMALL ENTERPRISE FACILITATION COUNCIL AND OTHERS

Citation: 2025 LiveLaw (Del) 44

The Delhi High Court bench of Justice Sachin Datta has held that it cannot entertain a writ petition challenging an arbitral award, and the petitioner should challenge the award by taking recourse to appropriate remedies under Section 34 of the Arbitration Act.

The court observed it is impermissible for the petitioner to agitate these issues in the present petition under Article 226 of the Constitution of India. The impugned award having been rendered by the sole arbitrator, and the objections as regards (lack of) jurisdiction having been rejected by the sole arbitrator, the appropriate remedy for the petitioner is to assail the same by taking recourse to the remedies under the Arbitration and Conciliation Act, 1996.

Arbitrator's Order Determining Substantive Rights Of Parties Constitutes “Award”, Amenable To Challenge U/S 34 Of Arbitration Act: Delhi HC

Case Title: Aptec Advanced Protective Technologies AG vs. Union of India

Citation: 2025 LiveLaw (Del) 48

The Delhi High Court division bench of Justice Navin Chawla and Justice Shalinder Kaur has held that orders passed by the Arbitrator during the pendency of Arbitral proceedings, which finally determines any substantive rights of the parties, constitutes an interim Arbitral Award, and can be challenged under Section 34 of the Arbitration and Conciliation Act, 1996.

At the outset, the court noted that the A&C Act does not define “interim award”. The court referred to IFFCO Ltd. v. Bhadra Products which held that the Arbitral Tribunal can make an interim arbitral Award on any matter with respect to which it may make a final Award; and the term “matter” in Section 31(6) of the A&C Act includes any point of dispute between the parties which has to be answered by the Arbitral Tribunal. The Supreme court had held that while the arbitration proceedings can be terminated only by way of a final Award, there can be one or more interim Awards before the final Award, which conclusively and finally determine some of the issues between the parties, finally leading upto the final Award.

Section 13 Of Commercial Courts Act Doesn't Provide Any Independent Right To Appeal In Arbitration Matters: Delhi High Court Reiterates

Case Title: Synergies Casting Ltd. vs. National Research Development Corporation & Anr.

Citation: 2025 LiveLaw (Del) 64

The Delhi High Court bench of Justice Navin Chawla and Justice Shalinder Kaur has held that an order which neither sets aside nor refuses to set aside the arbitral award, does not fall under the ambit of Section 37(1)(c) of the Arbitration & Conciliation Act and is not appealable.

The court observed that appeals in arbitration matters are maintainable only if expressly provided for in section 37/ 50 of the A&C Act. Section 13 of the Commercial Courts Act, 2015 does not confer an independent right to appeal.

Himachal Pradesh High Court

Application For Extension Of Time Cannot Be Dismissed Due To Mentioning S.151 Of CPC Instead Of S. 29A Of Arbitration Act: Himachal Pradesh HC

Case Title: Mangal Chand and ors vs. LAC NHAI and ors.

Case Number:Arb. Case No. 799 of 2023

The Himachal Pradesh High Court bench of Justice Rakesh Kainthla has held that it is well-settled law that mere mentioning of an incorrect provision is not fatal to the application if the power to pass such an order is available with the court.

The court noted that a specific section in the form of section 29A exists in the Arbitration Act for the same purpose for which this application has been filed.

In My Palace Mutually Aided Coop. Society v. B. Mahesh, 2022 the Supreme Court held that “Section 151 of the CPC can only be applicable if there is no alternate remedy available in accordance with the existing provisions of law. Such inherent power cannot override statutory prohibitions or create remedies which are not contemplated under the Code.”

Based on the above, the court observed that the application under Section 151 CPC would not be maintainable when specific provision under Section 29 A (4) of the Arbitration and Conciliation Act exists to extend the time.

Jammu and Kahsmir and Ladakh High Court

Irregularity & Curable Defect Cannot Be Grounds For Dismissal Of Application U/S 34 Of Arbitration Act: J&K High Court

Case Title: Union of India v. M/s Des Raj Nagpal Engineers & Contractors

Case Number: Arb App No.1/2022

The Jammu & Kashmir and Ladakh High Court bench of Justice Sanjeev Kumar and Justice Puneet Gupta has held that the failure of the Chief Engineer to sign the pleadings, which were signed by the Garrison Engineer would only be an irregularity and a curable defect and would not entail dismissal of the application filed under Section 34 of the Arbitration Act without providing opportunity to the appellants to correct the irregularity.

The court noted that Order XXVII of the Code of Civil Procedure deals with suits by or against the Government. Rule 1 provides that in any suit by or against the Government, the plaint or written statement shall be signed by such person as the Government may by general or special order appoint in this behalf. The Government of India has, in the exercise of powers conferred by Rule 1 of Order XXVII aforesaid, issued notification authorizing different officers to sign the pleadings on behalf of Government of India in any suit by or against the Government. The Garrison Engineer is one of those officers. That being the clear position emerging from reading of the provisions of Article 299 of the Constitution of India and, it cannot be said that the Garrison Engineer was not an officer authorized to sign pleadings on behalf of the Government of India.

Madhya Pradesh High Court

Matter Relating To Partnership Act & Partnership Deed Where Third-Party Rights Are Involved Cannot Be Referred To Arbitration: Madhya Pradesh HC

Case Title: GOKUL BANSAL Vs. VIPIN GOYAL & ORS.

Case Number: ARBITRATION CASE NO. 44 of 2021

The Madhya Pradesh High Court bench of Justice Anand Pathak held that when matter relates to Partnership Act and partnership deed and third-party rights are also involved then it cannot be referred to arbitration.

The court held that the relief of partition of subject property as sought by the applicant during subsistence of partnership firm is barred by law. Therefore, the matter is non-arbitrable. Additionally, the court noted that scope of enquiry having the trappings of adjudication is limited at the stage of application under Section 11 of the Act, but the Court can certainly determine existence of arbitration agreement and also to enquire whether there is prima facie arbitration dispute or not.

Patna High Court

Unilateral Appointment Clause Of Arbitrator Hinders Equal Participation Of Parties In Appointment Process: Patna High Court

Case Title: M/s R.S. Contruction Versus Building Construction Department

Case Number: REQUEST CASE No.105 of 2024

The Patna High Court Bench of Chief Justice K. Vinod Chandran held that a clause that allows one party to unilaterally appoint a sole arbitrator gives rise to justifiable doubts as to the independence and impartiality of the arbitrator. Further, such a unilateral clause is exclusive and hinders equal participation of the parties in the appointment process of arbitrators.

The court relied on the judgment in Central Organisation for Railway Electrification v. M/s ECI SPIC SMO MCML (JV) A Joint Venture Company (2019) and held that a clause that allows one party to unilaterally appoint a sole arbitrator gives rise to justifiable doubts as to the independence and impartiality of the arbitrator. Further, such a unilateral clause is exclusive and hinders equal participation of the parties in the appointment process of arbitrators. Finally, the court rejected the request case.

Punjab and Haryana High Court

Pendency Of Civil Or Criminal Litigation Between Partners Cannot Estop Either Partner From Invoking Arbitration Clause: Punjab and Haryana HC

Case Title: PRIKSHIT WADHWA AND ORS VERSUS VINOD K WADHWA

Case Number:ARB-241-2022 (O&M)

The Punjab and Haryana High Court bench of Justice Suvir Sehgal has held that pendency of a civil and criminal litigation inter se partners, cannot estop one of the partners from invoking the arbitration clause or bar the reference of dispute for adjudication to an arbitrator for determination.

The court after referring to section 21 of the Arbitration Act observed that the provision has been incorporated primarily with the objective of determining the date of the commencement of the arbitral proceedings. The proceedings are deemed to have been initiated from the date the notice invoking the arbitration clause “is received by the respondent”. While coming to the facts of the present case, the court said that the clause does not require the notice to be served by all the parties to the agreement. Notice by one of the parties to the agreement would be a sufficient compliance of the statutory provision. The giving of such a notice is purely procedural and not a decisive step.
Rajasthan High Court

Commercial Court Committed Jurisdictional Error By Imposing Pre-Condition To Deposit 50% Of Amount For Stay Against Arbitral Award: Rajasthan HC

Case Title: Jaipur Development Authority v. TPl-Sucg Consortium

Citation: 2025 LiveLaw (Raj) 20

The Rajasthan High Court bench of Justice Sudesh Bansal has held that the Commercial Court has committed jurisdictional error in exercising its discretion arbitrarily, mechanically and injudiciously, while putting the condition to deposit 50% of the awarded amount, for operating stay against arbitral award without assigned justified and sound reasonings.

Additionally, the court modified the order in the manner that the stay order will become operative only after furnishing security in the form of FDR of a nationalised bank, equivalent to the 50% of the awarded amount, before the Commercial court.
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