Delhi High Court Refers Claims Against Essel Group Companies under ‘Letters Of Comfort’ To Arbitration

The Delhi High Court has ruled that the statements made by a party in a ‘Letter of Comfort’, assuring the creditor that it shall ensure that the debtor repays the loan on the relevant due dates, are promissory in character and thus enforceable, even if they do not meet the requirement of Section 126 of the Indian Contract Act, 1872 which deals with the Contract of Guarantee. The...

Clause Captioned As “Arbitration”, Doesn’t Conclusively Imply Mandatory Nature Of Arbitration: Bombay High Court

The Bombay High Court has ruled that the use of the word ‘can’ in the relevant clause has the effect of qualifying Arbitration as a mode of settlement, and the mere fact that a particular clause is captioned as “Arbitration”, does not conclusively imply the mandatory nature of arbitration when the option is left to the parties to settle their disputes through the mode...

Award Passed By Unilaterally Appointed Arbitrator Is Void; Himachal Pradesh High Court

The Himachal Pradesh High Court has held that arbitral proceedings conducted by a unilaterally appointed arbitrator are void ab initio and the consequent award is non-est. The bench of Justice Jyotsana Rewal Dua held that an arbitration award passed by a unilaterally appointed sole arbitrator is not enforceable under Section 36 of the A&C Act. The Court further held that...

Court Has Almost “Nil” Scope Of Interference Against Order Disposing Of S. 34 Petition Under Arbitration Act: Delhi High Court

The Delhi High Court has ruled that, as a necessary corollary of the provisions of Section 34 and Section 37 of the Arbitration and Conciliation Act, 1996 (A&C Act), what cannot be considered by the adjudicating Court under a Section 34 petition can certainly not be adjudicated upon by the appellate Court under Section 37. The Court added that it has almost “Nil” scope...

Reference To Wrong Agreement in Arbitration Notice, Not Invalid If Agreement Otherwise Exists: Delhi High Court

The Delhi High Court has reiterated that mere reference to a wrong provision or term of the agreement cannot invalidate the notice invoking arbitration, if otherwise such power or provision exists in the document executed between the parties. The bench of Justice Navin Chawla was dealing with a petition filed under Section 11 of the Arbitration and Conciliation Act, 1996 (A&C...

Arbitration Cases Monthly Round-Up: February 2023

High Courts Bombay High Court: Court Not Powerless To Appoint Appropriate Arbitral Tribunal, Even If Party Forfeits Its Right Under Arbitration Clause: Bombay High Court Case Title: PSP Projects Limited versus Bhiwandi Nizampur City Municipal Corp The Bombay High Court has ruled that even if a party’s right to appoint its nominee in the Arbitral Tribunal as per the...

Merely Because The Borrower Is An MSME, It Would Not Be Governed By The Arbitral Mechanism Provided Under MSMED Act: Gujarat High Court

The Gujarat High Court has ruled that merely because the borrower is an MSME, it would not be governed by the provisions of the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act), including the arbitral mechanism envisaged under the said Act. The bench of Justice Biren Vaishnav observed that though, as per the mechanism provided under the MSMED Act, the dispute...

Section 11 Petitions Seeking Relief But Not Raised In The Previous Arbitration; Gross Abuse Of Process of Court: Delhi High Court

The Delhi High Court has ruled that since the party had failed to challenge the termination of the Collaboration Agreement in the first round of arbitral proceedings, the demolition of the structure built by it under the said Collaboration Agreement would not give it a fresh cause of action. The bench of Justice Navin Chawla remarked that the cause of action for...

S. 34 Petition Can’t Be Amended To Introduce New Grounds Containing New Facts, To Challenge Arbitral Award: Delhi High Court Reiterates

The Delhi High Court has reiterated that though it is permissible to introduce an amendment in a petition filed under Section 34 of the Arbitration and Conciliation Act, 1996 (A&C Act), however, new grounds of challenge containing new material/ facts cannot be introduced when the said grounds were neither raised in the original petition under Section 34 nor before the...

Clause Exclusively Empowering Chief Project Manager To Appoint Arbitrator From A Panel Maintained By It, Illegal: Delhi High Court

The Delhi High Court has reiterated that when a person has itself become ineligible by operation of law to act as an arbitrator, it cannot nominate another person to act as arbitrator. The bench of Justice Yashwant Varma was dealing with an arbitration clause which exclusively empowered the Chief Project Manager to appoint the arbitrator from a panel which was itself maintained...

Order Passed Under Section 11 Of The Arbitration And Conciliation Act Cannot Be Reviewed: Calcutta High Court

The High Court of Calcutta that the A&C Act is a complete code in itself and it does not contain any provision for the review of an order passed under Section 11 of the Act. The Bench of Justice Shekhar B. Saraf held that power of review is a creature of statute and unlike the Supreme Court which has inherent power of review under Article 137 of the Constitution of India, no...

Arbitration Under Section 42 Of Special Economic Zones Act, 2005 Would Override A Contractual Arbitration Clause: Telangana High Court

The High Court of Telangana has held that arbitration under Section 42 of the Special Economic Zones Act, 2005 would override a contractual arbitration clause entered into between the parties. The bench of Chief Justice Ujjal Bhuyan held that Special Economic Zones Act, 2005 is a special legislation and Sections 42 and 51 of the Act gives it an overriding act over other acts and...