Arbitration Weekly Round-Up [10th February-16th February]

Supreme Court 'Oral Undertaking Falls Within Scope Of Arbitration Clause' : Supreme Court Upholds Award Against Husband For Operation In Wife's Demat Account Case Title: AC CHOKSHI SHARE BROKER PRIVATE LIMITED VERSUS JATIN PRATAP DESAI & ANR. Citation : 2025 LiveLaw (SC) 178 The Supreme Court today (February 10) held that an oral contract undertaking joint and several liability falls within the scope of an arbitration clause. Holding so , the Court affirmed an arbitral award against a husband, finding him jointly liable for the award due to a debit balance in a joint demat account registered in his wife's name. The Court rejected the contention that the husband's liability constituted a "private transaction" beyond the scope of arbitration. Instead, it held that the arbitration clause, applicable to non-signatories, in conjunction with the husband's active participation in transactions within his wife's account, gave rise to an implied oral agreement establishing joint and several liabilities for both parties. High Court Allahabad High Court Section 36 Of Arbitration Act As Amended Applies To Pre-Amendment S.34 Applications: Allahabad High Court Reiterates Case Title: U.P. Jal Nigam (Urban) And Another vs. Spml Infra Ltd. Neutral Citation No.: 2025:AHC:20224 The Allahabad High Court bench of Justice Piyush Agrawal, placing reliance upon the judgment of the Supreme Court in Board of Control for Cricket in India vs. Kochi Cricket Private Limited & Others (2018), held that the amended Section 36 of the Arbitration and Conciliation Act, 1996 applies prospectively to court proceedings initiated on or after the date of commencement of the Amendment Act. Bombay High Court Mandate Of Facilitation Council Is Not Terminated Even If It Fails To Render Award Within 90 Days U/S 18(5) Of MSME Act: Bombay High Court Case Title: Maharashtra Public Service Commission Versus Vast India Pvt. Ltd. Citation: 2025 LiveLaw (Bom) 56 The Bombay High Court bench of Justice Somasekhar Sundaresan has held that the mandate of the MSME Facilitation Council (Council) cannot be terminated merely on the ground that it failed to render an award within 90 days under section 18(5) of the Micro, Small and Medium Enterprises Development Act, 2006 (“MSME Act”) from the date of entering reference as this time period is directory in nature. Additionally, the court observed that although the time period under the MSME Act is directory, once the arbitration is undertaken by the Council, the timeline prescribed under Section 29A of the Arbitration Act becomes applicable. Accordingly, the award must be rendered within 12 months from the completion of pleadings. However, the court noted that in this case, a counterclaim was also filed by the MPSC, which reset the 12-month deadline as provided under Section 29A of the Arbitration Act. Therefore, the award rendered by the Council was within the prescribed timeframe and could not be said to be in violation of Section 29A. When There Is Ambiguity In Arbitration Agreement, Business Efficacy Test Can Applied To Discern Intent Of Parties To Arbitrate: Bombay High Court Case Title: Lords Inn Hotels and Resorts Versus Pushpam Resorts LLP and 3 Ors. Citation: 2025 LiveLaw (Bom) 60 The Bombay High Court bench of Justice Somasekhar Sundaresan has held that when there is an ambiguity in the agreement with respect to arbitration related provisions, the business efficacy test can be applied to discern true intent of the parties to arbitrate. The court observed that as per section 7(4) of the Arbitration Act, an arbitration agreement would be considered in writing if it is contained in a document signed by the parties or in exchange of letters or other means of communication which includes electronic communication. Furthermore, the court observed that under Section 7(5), a reference in a contract, to a document containing an arbitration clause would constitute an arbitration agreement, if the contract is in writing and the reference is such as to make that arbitration clause a part of the contract.Limitation For Appeal U/S 37 Of Arbitration Act Is Governed By Article 116 Of Limitation Act, Delay Not To Be Condoned In Mechanical Manner: Bombay HC Case Title: Executive Engineer National Highway Division Versus Sanjay Shankar Surve & Ors Citation: 2025 LiveLaw (Bom) 61 The Bombay High Court bench of Justice Somasekhar Sundaresan has held that the delay in filing an appeal under section 37 of the Arbitration and Conciliation Act,1996 (“Arbitration Act”) should not be condoned in a mechanical manner as it would defeat the very objective of the Arbitration Act which is to provide a speedy resolution of disputes. It also held that as per judgment of the Supreme Court in Executive Engineer v. Borse Brothers Engineers and Contractors Private Limited (2021), the limitation period ...

Arbitration Weekly Round-Up [10th February-16th February]

Mohd Talha Hasan

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