Arbitration Cases Weekly Round-Up: 28 May To 3 June 2023

Delhi High Court:SpiceJet Should Pay Entire Arbitral Award Of Rs 380 Crore To Its Former Promotor Kalanithi Maran: Delhi High CourtCase Title: Kal Airways Pvt. Ltd vs M/s SpiceJet Ltd. & Anr.The Delhi High Court has directed SpiceJet to pay the entire arbitral award of Rs. 380 crore to the airline’s former promotor, Kalanithi Maran, and his firm, Kal Airways Pvt. Ltd, in an execution petition filed by Maran seeking enforcement of a 2018 arbitral award passed in his favour.The court has also directed the airline to file an Affidavit of its assets within the specified time frame.The bench of Justice Yogesh Khanna passed the order after noting that the airline had failed to comply with the Supreme Court’s order dated 13.02.2023. The Apex Court in the said order had directed SpiceJet to pay an amount of Rs.75 crore to Maran within a period of three months, towards its interest liability, pending the disposal of the petition under Section 34 of the Arbitration and Conciliation Act, 1996. In the event of default in compliance with the said order, the top court had held that the entire arbitral award would be executable forthwith.Third Party Funders In Arbitration Play A Vital Role In Ensuring Access To Justice; Arbitral Award Cannot Be Enforced Against Them: Delhi High CourtCase Title: Tomorrow Sales Agency (P) Ltd. vs SBS Holdings, Inc.The Delhi High Court has ruled that a third-party funder, i.e., a non-signatory to arbitration agreement, who is not a party to the arbitral proceedings or the award, cannot be held liable for the awarded amount merely because it has funded a party in arbitral proceedings.The court dismissed the contention that third-party funders must be held liable for funding impecunious persons who are unsuccessful in pursuing their claims in the arbitral proceedings. It held that permitting enforcement of an arbitral award against a non-party which has not accepted any such risk, is neither desirable nor permissible.The court remarked that third-party funders play a vital role in ensuring access to justice. In absence of third-party funding, a person having a valid claim would be unable to pursue the same for recovery of amounts that may be legitimately due, the bench comprising Justices Vibhu Bakhru and Amit Mahajan observed.The Expression “Any” Member of Arbitral Tribunal Cannot Be Read As “All Members”: Delhi High CourtCase Title: Shapoorji Pallonji and Company Private Limited vs Union of IndiaThe Delhi High Court has ruled that the expression “any member” contained in a clause that lays down a mandatory qualification to be appointed as arbitrator, cannot be read as “all members” of the Arbitral Tribunal. The court said that the phrase “any member” must be interpreted in the context in which it is used. The bench of Justice Yashwant Varma was dealing with an Arbitration Clause that required that “any member” of the Arbitration Tribunal shall be a “Graduate Engineer with experience in handling public works engineering contracts” at a level “not lower than Chief Engineer (Joint Secretary level of Government of India)”. The said Clause provided that the same was “a mandatory qualification to be appointed as arbitrator”.‘Balance Rent’ During The Lock-In Period Is A Genuine Pre-Estimate Of Loss, Requires No Further Of Actual Loss: Delhi High CourtCase Title: DAG Private Limited vs Ravi Shankar Institute for Music and Performing ArtsThe High Court of Delhi has upheld an arbitral award wherein the arbitrator held that the ‘Balance Rent’ during the lock-in period is a genuine pre-estimate of loss which requires no further proof of loss. The bench of Justice V. Kameshwar Rao held that when the contract provides for payment of entire balance rent for the lock-in period if the deed is terminated before the expiry of the lock-in period, it would be a genuine pre-estimate of the losses that the lessor would bear for the early termination of the contract/deed. It held that lock-in period acts an assurance for the lessee that his possession would not be disturbed and it also guarantees the lessor a certain sum of money for a definite period and any breach involves consequences for both the parties.Clause Prohibiting Payment Of Interest On Delayed Payments, Doesn’t Prohibit Arbitrator From Granting Interest Under S. 31(7) Of The Act: Delhi High CourtCase Title: M/s Mahesh Construction vs Municipal Corporation of Delhi & Anr.The Delhi High Court has ruled that a clause in a contract that prohibits payment of interest on delayed payments, does not prohibit the arbitrator from granting interest under Section 31(7) of the Arbitration and Conciliation Act, 1996 (A&C Act). The bench of Justice Manoj Kumar Ohri held that the said stipulation only puts a restriction on the contracting party to claim interest on delayed payments. Since interest is compensatory in nature, the arbitrator’s powers are not curtailed by such narrow clauses in the contract.The bench concluded that the arbitrator is empowered under...

Arbitration Cases Weekly Round-Up: 28 May To 3 June 2023

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Arbitration Cases Weekly Round-Up: 28 May To 3 June 2023

Parina Katyal

This is a premium content Available exclusively to Our subscribers

INR 1099+GST

Tags

This is a premium content
Available exclusively to
Our subscribers