Arbitration Weekly Digest [7th April-14th April 2025]

High Courts Bombay High Court No Bar On Arbitrator To Allow Withdrawal Of Claims Provided Legitimate Interests Of Other Party Are Not Prejudiced: Bombay High Court Case Title: Central Depositories Services (India) Limited. Vs. Ketan Lalit Shah and Ors. Citation: 2025 LiveLaw (Bom) 144 The Bombay High Court bench of Justices Revati Mohite Dere and Dr. Neela Gokhale has held that the arbitrator can allow the parties to withdraw their claims to initiate fresh arbitration proceedings by issuing a new notice of arbitration, provided that the legitimate interests of the other party are not prejudiced. The court noted that the Delhi High Court in IDFC First Bank Limited v. Hitachi MGRM Net Limited (2023) held that an arbitral tribunal is subject to writ jurisdiction under Articles 226/227 of the Constitution; however, the exercise of such powers is limited to exceptional circumstances. The non-obstante clause in Section 5 of the Arbitration Act does not override the constitutional powers under Article 227. The court in the above case also held that interference is warranted only when the order is patently perverse or lacks inherent jurisdiction. Courts must discourage unnecessary interference in the arbitral process, as excessive judicial intervention undermines its efficiency. Therefore, the exercise of writ jurisdiction should be reserved for rare cases, particularly where bad faith is evident. Based on the above, the court observed that the claims were that of the Respondents. When the Arbitral Tribunal declined to allow an amendment to the claims on the ground that the mandate of the Arbitral Tribunal was nearing expiry in May 2024 it offered the claimants two options. Calcutta High Court Clause Empowering Contract Signatories To Resolve Disputes Does Not Constitute A Valid Arbitration Agreement Due To Lack Of Impartiality: Calcutta HC Case Title:Balasore Alloys Limited vs. Flynt Mining LLP Case Number: AP-COM/896/2024 The Calcutta High Court bench of Justice Shampa Sarkar has held that merely because a dispute resolution mechanism is provided in a clause empowering the signatories to the contract to resolve the dispute, it cannot be inferred that the parties intended to refer the dispute to arbitration. Such a clause amounts to an in-house mechanism and not a reference to an impartial arbitral tribunal, especially when impartiality is clearly lacking as the very individuals who signed the contract are themselves empowered to decide the dispute. The court at the outset observed that the clause 16 of the Agreement, though does not mention the word "arbitration," does not become invalid solely on that ground. If the dispute resolution clause reflects a clear intention of the parties to refer disputes to a private tribunal for an impartial decision after providing both parties a fair opportunity to present their case and if they have agreed to be bound by such decision, it would constitute a valid arbitration agreement despite the absence of the word "arbitration." As held in Jagdish Chander v. Ramesh Chander and ors. (2007). MSME Council Cannot Reject Arbitrable Claims Without Providing Any Reasons When Meditation U/S 18 Of MSME Act Has Failed: Calcutta HC Case Title: UMC TECHNOLOGIES P LTD VS ASSISTANT DIRECTOR OF POSTAL SERVICES, (RECRUITMENT) Case Number: AP-COM/39/2024 The Calcutta High Court bench of Justice Shampa Sarkar has held that the Micro, Small and Medium Enterprises (MSME) Facilitation Council cannot reject the arbitrable claims of the supplier without providing an opportunity to present evidence in support of the same, especially when mediation, as required under Section 18 of the Micro, Small and Medium Enterprises Development Act, 2006 (MSME Act) has failed. As per law, the Council is then mandated to either adjudicate the arbitrable matter itself or refer it to an institution providing alternative dispute resolution services. The court observed that the law mandates that once mediation fails, the Council must either handle the arbitration itself or refer the dispute to an institutional centre. Proceedings shall be governed by the Arbitration Act thereafter. The Council is required to allow both parties to present evidence. It further added that the Council noted that the claimant alleged the 2016 Job Completion Certificate was withheld, yet failed to address this as a dispute. Instead, the claim was rejected due to the absence of the certificate. The respondent had not presented arguments but only requested time to file a reply.Successor To Merger Transaction Can Invoke Arbitration Clause When All Rights And Liabilities Are Transferred: Calcutta High Court Case Title: TATA CAPITAL LIMITED VS KRISHNA KANT TIWARI Case Number: AP-COM/1035/2024 The Calcutta High Court bench of Justice Shampa Sarkar has held that once all liabilities, rights, and obligations are...

Arbitration Weekly Digest [7th April-14th April 2025]

Mohd Talha Hasan

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