Arbitration Cases Weekly Round-Up: 6th January To 12th January 2025

Supreme Court Supreme Court Sets Aside Awards Of Over Rs 46 Lakhs Passed Against UP Govt In Sham Arbitration Proceedings Case Details : STATE OF UTTAR PRADESH AND ANOTHER VERSUS R.K. PANDEY AND ANOTHER | CIVIL APPEAL NO. 10212 OF 2014 Citation : 2025 LiveLaw (SC) 45 The Supreme Court on Thursday (January 9) set aside two ex-parte arbitration awards on grounds of fraud played by the litigant who appointed sole arbitrators and conducted 'sham' arbitration proceedings in a service dispute against U.P. Government and Government Hospital where he was employed. The bench of CJI Sanjiv Khanna and Justice Sanjay Kumar was hearing an appeal by the State of Uttar Pradesh challenging the veracity of the ex parte awards and the arbitration agreement relied by the respondent on the basis of which such arbitration proceedings were conducted. The Court observed : "It was not the case of Respondent No. 1, R.K. Pandey that the Municipal and Development Board, Kanpur, or the Governor of Uttar Pradesh has invoked the arbitration clause. The unilateral appointment of the arbitrator by Respondent No. 1, R.K. Pandey is, therefore, contrary to the arbitration clause as propounded by him." The Court placed reliance on the recent decision in Central Organisation of Railway Electrification v. ECI PIC SMO MCPL (JV), a Joint Venture Company which 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. Supreme Court Flags Stringent Limitation Provisions Curtailing Arbitration Appeal Remedies, Urges Parliament To Address Issue Case no. – My Preferred Transformation & Hospitality Pvt. Ltd. & Anr. v. M/S Faridabad Implements Pvt. Ltd. Citation : 2025 LiveLaw (SC) 49 The Supreme Court raised concerns about the interpretation of limitation statutes in arbitration cases and observed that the rigid application of the law could curtail the limited remedy available under Section 34 of the Arbitration and Conciliation Act, 1996 to challenge arbitral awards. “In our view, the above construction of limitation statutes is quite stringent and unduly curtails a remedy available to arbitrating parties to challenge the validity of an arbitral award. This must be addressed by the Parliament”, the Court observed. A bench of Justice PS Narasimha and Justice Pankaj Mithal dismissed an appeal filed by a company against a Delhi High Court judgment rejecting its challenge to an arbitral award as barred by limitation under Section 34. While the Court concluded that the appellant's delay in filing the petition was not condonable under the prevailing legal framework, Justice Narasimha, in his opinion, with which Justice Mithal agreed, highlighted concerns with the strict interpretation of limitation provisions. High Courts Andhra Pradesh High Court While Deciding Petition U/S 9 Of Arbitration Act, Court Cannot Ignore Basic Principles Of CPC: Andhra Pradesh HC Case Title: Tuf Metallurgical Private Limited Vs. Bst Hk Limited and Others Case Number: ICOMAA. No.2 of 2024 The Andhra Pradesh High Court bench of Justices Ninala Jayasurya and Nayapathy Vijay observed that in deciding a petition under Section 9 of the Arbitration Act, the Court cannot ignore the basic principles of the CPC. At the same time, the power of the Court to grant relief is not curtailed by the rigours of every procedural provision in the CPC. In exercise of its powers to grant interim relief under Section 9 of the Arbitration Act, the Court is not strictly bound by the provisions of the CPC. The court observed that the Order 38 Rule 5 CPC contemplates a notice to the defendant to furnish security within a specified time, either to furnish security in such sum as may be specified in the order, to produce and place at the disposal of the Court, when required, the said property or value of the same, or such portion thereof as may be sufficient to satisfy the decree, or to appear and show cause why he should not furnish security. It also noted that the Order 38 Rule 5 CPC does not debar the Court to pass ex parte order of attachment if the Court is of the opinion that there is a requirement of doing so as the defendant might dispose of the property in the interregnum. On attachment, the defendant can appear before the Court and show cause as to why attachment should be removed. Bombay High Court Substantive Objections On Validity Or Existence Of Arbitration Agreement Can Be Adjudicated By Tribunal U/S 16 Of Act: Bombay HC Case Title: Shreegopal Barasia Versus M/s. Creative Homes & Ors. Citation: 2025 LiveLaw (Bom) 17 The Bombay High Court bench of Justice Somasekhar Sundaresan has held that...

Arbitration Cases Weekly Round-Up: 6th January To 12th January 2025

Mohd Talha Hasan

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