Arbitration Quarterly Digest 2024
Ausaf Ayyub
9 April 2024 6:30 AM GMT
Supreme Court Arbitral Awards Cannot Be Modified Under Sections 34 & 37 Of Arbitration & Conciliation Act : Supreme Court Case Title: S.V. Samudram v. State of Karnataka Citation: 2024 LiveLaw (SC) 14 The Supreme Court has reiterated the settled position of law that any attempt to “modify an award” while adjudicating Sections 34 and 37 petitions is not...
Supreme Court
Case Title: S.V. Samudram v. State of Karnataka
Citation: 2024 LiveLaw (SC) 14
The Supreme Court has reiterated the settled position of law that any attempt to “modify an award” while adjudicating Sections 34 and 37 petitions is not permissible under the Arbitration and Conciliation Act, 1996.
Supreme Court Issues Notice On Plea Challenging Validity Of Section 3G Of National Highways Act
Case Title: B.D. Vivek v. Union of India, Writ Petition Civil No. 1364 of 2023
The Supreme Court Bench of Justices B.V. Nagrathna and Ujjal Bhuyan has issued notice on a writ petition challenging the Constitutional Validity of Section 3G of the National Highways Act, 1956.
The writ petition questions the legality of Section 3G(5) of the Act. This section mandates arbitration to resolve disputes over the compensation amount payable to landowners when their land is acquired. The arbitration is to be conducted by an arbitrator appointed by the Central Government.
The petitioner argues that Section 3G(5) violates Article 14 of the Indian Constitution. The contention is that imposing mandatory arbitration, with an arbitrator selected solely by the Central Government, unfairly biases the process against the landowners.
Case Title: M/s Arif Azim Co. Ltd. Versus M/s Aptech Ltd., ARBITRATION PETITION NO. 29 OF 2023
In a recent ruling, the Supreme Court held that the Limitation Act, 1963 is applicable to proceedings for appointment of arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996 ("A&C Act"), and a Court may refuse to make a reference if the claims, on the date of commencement of arbitration proceedings, are ex-facie barred.
"...there is no doubt as to the applicability of the Limitation Act, 1963 to arbitration proceedings in general and that of Article 137 of the Limitation Act, 1963 to a petition under Section 11(6) of the Act, 1996 in particular", said the Bench of CJI DY Chandrachud and Justices JB Pardiwala, Manoj Misra.
Case Details: M/S Arif Azim Co Ltd v. M/S Aptech Ltd. Arbitration Petition No. 29 of 2023
In a recent verdict, the Supreme Court delved into the crucial question of whether the Limitation Act, 1963 is applicable to applications for the appointment of arbitrators under Section 11(6) of the Arbitration and Conciliation Act, 1996. The court highlighted the absence of a statutory prescription regarding the time limit for such applications and expressed concerns about the unduly long three-year period allowed for filing under Article 137 of the Limitation Act. While recognizing the legislative vacuum, the court urged Parliament to consider amending the Act to prescribe a specific limitation period for filing applications under Section 11(6). The decision emphasized the need for expeditious resolution of commercial disputes and addressed the potential impact of the absence of a time-bound framework.
Case Title: M/s Arif Azim Co. Ltd. Versus M/s Aptech Ltd., ARBITRATION PETITION NO. 29 OF 2023
In a recent ruling, the Supreme Court held that the Limitation Act, 1963 is applicable to proceedings for appointment of arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996 ("A&C Act"), and a Court may refuse to make a reference if the claims, on the date of commencement of arbitration proceedings, are ex-facie barred.
"...there is no doubt as to the applicability of the Limitation Act, 1963 to arbitration proceedings in general and that of Article 137 of the Limitation Act, 1963 to a petition under Section 11(6) of the Act, 1996 in particular", said the Bench of CJI DY Chandrachud and Justices JB Pardiwala, Manoj Misra.
The Supreme Court has referred to the larger bench the question of whether the courts have the power to modify the arbitral award under Sections 34 or 37 of the Arbitration and Conciliation Act, 1996.
“Whether or not the Courts in exercise of power under sections 34 or 37 of the Arbitration and Conciliation Act, 1996 are empowered to modify an arbitral award is a question which frequently arises in proceedings not only before this Court but also before the High Courts and the District Courts.”, the Supreme Court frames the question.
Case Title: NBCC (INDIA) LIMITED VERSUS ZILLION INFRA PROJECTS PVT.LTD.
Citation : 2024 LiveLaw (SC) 246
The Supreme Court reiterated that a dispute cannot be referred to arbitration based on the arbitration clause contained in another contract unless a specific reference was made in the main contract to incorporate the arbitration clause into the main contract.
Reversing the findings of the High Court, the Bench Comprising Justices B.R. Gavai and Sandeep Mehta held that unless a specific reference is made in the main contract to incorporate the arbitration clause of another contract then the parties are bound to settle their dispute through the mode of settlement agreed to in the main contract.
Case Title: AVITEL POST STUDIOZ LIMITED & ORS. v. HSBC PI HOLDINGS (MAURITIUS) LIMITED.,
Citation: 2024 LiveLaw (SC )267
In a crucial judgment, while allowing the enforcement of a foreign arbitral award, the Supreme Court (on March 04), held that to determine the factor of arbitral bias, Court must endeavour to follow international standards than domestic ones. It is only in exceptional circumstances that enforcement of a foreign should be refused on the ground of bias the Court said.
"Embracing international standards in arbitration would foster trust, certainty, and effectiveness in the resolution of disputes on a global scale. The above discussion would persuade us to say that in India, we must adopt an internationally recognized narrow standard of public policy, when dealing with the aspect of bias"
High Courts
Allahabad High Court
Case Title: Sushil Kumar Mishra vs. State Of U.P. And Another 2024 LiveLaw (AB) 44
The Allahabad High Court has held that the District Judge exercising jurisdiction under Section 34 of the Arbitration and Conciliation Act, 1996 does not have the power to modify an award. The Court held that though parts of an award can be severed and set aside, provided such severance does not affect the remaining award.
“Reduction of interest is nothing but a modification of the original arbitration award, and accordingly, the same is illegal and against the principles established by the Supreme Court,” held Justice Shekhar B. Saraf relying on the decision of Supreme Court in on Larsen Air Conditioning and Refrigeration Company Vs. Union of India and others.
Case Title: Dr. Rajeev Sinha vs. Union Of India And 2 Others 2024 LiveLaw (AB) 136 [WRIT - C No. - 33840 of 2023]
Case citation: 2024 LiveLaw (AB) 136
The Allahabad High Court has held that existence of an alternate remedy is not a bar to exercising jurisdiction under Article 226 of the Constitution of India.
While exercising writ jurisdiction under Article 226 of the Constitution of India, the Court set aside an arbitral award passed by the District Magistrate/Collector, Jhansi acting as an Arbitrator under Section 3G(5) of the National Highways Act, 1965 for not following the directions given by the District Judge while allowing appeal under Section 34 of the Arbitration and Conciliation Act, 1996.
The bench comprising of Justice Manoj Kumar Gupta and Justice Kshitij Shailendra held
“This Court seriously deprecates the approach of the Arbitrator/Collector who is vested with statutory powers to determine lawful compensation as per the scheme of the Act of 1956 and, therefore, once the Court superior to him analyzed each and every aspect of the initial award dated 30.09.2010 as well as the arbitral award dated 15.09.2017 and set aside the same after recording findings on merits of the petitioner's claim as regards market value of the land on the date of notifications acquiring the land, the Arbitrator/Collector was bound to follow the quasi-judicial discipline and record finding on each of the parameters discussed by the learned District Judge”
Case Title: Gepdec Infratech Limited Thru Authorized Representative vs U.P. Power Transmission Corporation Ltd. Thru Superintending Engineer Lucknow.
The Allahabad High Court single bench of Justice Rajnish Kumar held that the allegation under Item No. 24 of the Fifth Schedule of the Arbitration and Conciliation Act, 1996 doesn't automatically disqualify the arbitrator without disclosing any specific relationship between the arbitrator and the party. Item No.24 of the Fifth Schedule states that doubts about an arbitrator's independence or impartiality can arise if they currently serve or have served as an arbitrator in another arbitration on a related issue involving one of the parties or an affiliate of one of the parties within the past three years.
The High Court noted that Section 11 delineates the procedure for arbitrator appointments, particularly Sub-sections (6) and (8), underscoring the High Court's role when parties fail to agree on an appointment. Sub-section (8) emphasizes the necessity for the arbitral institution, before appointing an arbitrator, to seek written disclosure from the prospective arbitrator in accordance with Section 12(1). The court is mandated to consider qualifications agreed upon by the parties, the contents of the disclosure, and other factors ensuring the appointment of an independent and impartial arbitrator.
Case Title: The Public Works Department Thru. Chief Engineer vs Pnc Infratech Limited Thru. Authorized Signatory.
Case Number: Civil Misc. Review Application Defective No. 16 of 2024
The Allahabad High Court single bench of Justice Jaspreet Singh held that questions of implications of agreements, Section 64 of the Contract Act, whether the disputes relate to the construction stage or implications of legal provisions of National Highways Act, 1956 need to be decided by the arbitral tribunal. It held that the scope of the review jurisdiction is narrow and limited to ascertain an error apparent on the face of the record.
Case Title: - State Of U.P. And 5 Others vs Rajveer Singh And Another
Case Number: APPEAL UNDER SECTION 37 OF ARBITRATION AND CONCILIATION ACT 1996 DEFECTIVE No. - 619 of 2023.
The Allahabad High Court single bench of Justice Shekhar B. Saraf held that Section 5 of the Limitation Act does not encompass long delays, and condonation can only be granted in exceptional cases where the appellant acted in a bona fide manner and not negligently.
Case Title: Smt. Sudha vs Union Of India And 3 Others.
Case Number: - APPEAL UNDER SECTION 37 OF ARBITRATION AND CONCILIATION ACT 1996 No. - 271 of 2022
The Allahabad High Court single bench of Justice Shekhar B. Saraf set aside an order under Section 34 of the Arbitration and Conciliation Act, 1996 passed by the District Judge, noting that the judge failed to give due consideration to Appellant's assertion regarding the non-receipt of the signed copy of the arbitral award. Since the limitation period for Section 34 commences upon the receipt of signed award copy, the bench held that it was incumbent on the judge to note the date on which the signed copy was received by the Appellant.
Case Title: M/S Sahbhav Engineering Ltd. Ahmadabad Thru. Authorised Representative Mr. Pramod Dave vs. U.P. State Micro Small And Medium Enterprises Facilitation Council Kanpur Thru. Chairman And Others 2024 LiveLaw (AB) 67 [WRIT - C No. - 3774 of 2023]
The Allahabad High Court has held that an arbitral award passed in a reference made under Section 18 of the Micro, Small and Medium Enterprises Development Act, 2006 must be challenged as per provisions of Section 19 of the MSMED Act read with Section 34 of the Arbitration and Conciliation Act, 1996.
Section 19 of the MSMED Act provides that any application for setting aside any decree, award or other order made either by the Council itself or by any institution or centre providing alternate dispute resolution services to which a reference is made by the Council under the MSED Act shall not be entertained by any court unless the appellant (not the supplier) deposits 75% of the decretal amount.
Case Title: M/S Neelkanth Construction vs. Union Of India And 3 Others 2024 LiveLaw (AB) 68
The Allahabad High Court has reiterated that the scope of judicial review in proceedings under Section 11(6) of the Arbitration and Conciliation Act, 1996 is very narrow. The Court held that debatable questions of fact cannot be gone into by the Court while adjudicating an application for appointment of arbitrator.
“The rival contentions regarding arbitrability, in my view, cannot be decided in the instant proceedings. Its adjudication requires appreciation of evidence. The scope of judicial review in deciding issue of arbitrability is very limited,” held Acting Chief Justice Manoj Kumar Gupta.
The Court relied on Vidya Drolia and Others vs. Gujarat Informatics Limited wherein the Supreme Court had held that the scope of adjudication under Section 11(6) is very narrow.
“In the said judgment, it has been observed that while deciding issue of arbitrability, the Court under Section 11(6) has a very limited power, confined to cases where there is not even a vestige of doubt that the claim is non-arbitrable.”
Case Title: M/s Jaypee Infratech Limited V. M/s Ehbh Services Private Limited And Another [Civil Misc. Arbitration Application No.2 Of 2022]
The Allahabad High Court has referred the question whether application under Section 29A of the Arbitration and Conciliation Act, 1996 for time extension can only be heard by the Supreme Court or the High Court where the appointment of such arbitrator has been made by the Supreme Court or the High Court, as the case may be.
Further, the Court has raised a query regarding the powers of the 'Court' as defined under Section 2(1)(e) of the Act to adjudicate on an application under Section 29A of the Act.
Section 29A of the Arbitration and Conciliation Act, 1996 provides that award must be passed within 12 months from the date on which the arbitral tribunal enters reference. Sub-section (4) of Section 29A provides that mandate of the arbitral tribunal shall end within 12 months or at the expiry of the extended period provided the 'Court' extends the said period. Sub-section (6) of Section 29A empowers the 'Court' to substitute arbitrators while extending the said period.
Case Title: Sanjay Agarwal vs Rahul Agarwal And Ors.
The Allahabad High Court single bench of Justice Alok Mathur held that the objections under Section 47 of the CPC are not maintainable in execution proceedings for the enforcement of an arbitration award. It held that an arbitration award, not being issued by a "court," falls outside the definition of a decree as outlined in Section 2(2) of CPC. Moreover, once the award attains finality, any objections must be raised exclusively in proceedings under Section 34 of the Arbitration Act.
The High Court highlighted the nature and scope of revisional jurisdiction, emphasizing its role in correcting errors of jurisdiction committed by subordinate courts. It held that the revisional jurisdiction is confined to addressing questions of jurisdiction and is not intended for re-examining or reassessing evidence on record.
The High Court dismissed the revisionist's argument regarding the maintainability of objections under Section 47 of the CPC at the execution stage. It held that the revisionist should have challenged the award under Section 34 of the Arbitration Act and that objections under Section 47 of CPC were not maintainable at the execution stage.
Compliance Of Section 21 Of Arbitration & Conciliation Act, 1996 Is Mandatory: Allahabad High Court
Case Title: M/S Samyam Industries and Others v Shivalik Small Finance Bank Ltd.
The Allahabad High Court has held that the compliance of Section 21 of the Arbitration and Conciliation Act, 1996 (“Arbitration Act”) is mandatory. Thus, arbitral proceedings would only commence once the notice invoking arbitration issued by the claimant is received by the respondent.
The Bench comprising Justice Manju Rani Chauhan was adjudicating a writ petition filed under Article 226 of the Constitution by borrowers, challenging the arbitration proceedings initiated against them by Shivalik Small Finance Bank Ltd. without serving a Notice Invoking Arbitration. The Bench has quashed the arbitration proceedings for not complying with the requirements of Section 21 of Arbitration Act.
Andhra Pradesh High Court
Writ Petition Not A Remedy For Execution Of Arbitration Award: Andhra Pradesh High Court
Case Title: The Project Director, National Highways Authority of India vs M/s. Vijayanagaram Hatcheries Pvt. Ltd.
The Andhra Pradesh High Court division bench comprising Chief Justice Dhiraj Singh Thakur and Justice R. Raghunandan Rao held that that it lacks the authority in writ petition to enforce an award issued by an arbitrator when it is already challenged under Section 34 of the Arbitration and Conciliation Act, 1996.
The High Court referred to the decision of the Supreme Court in the case of National Highways Authority of India Vs. Sheetal Jaidev Vade & Others, [2022 LiveLaw (SC) 705] and highlighted the Supreme Court's disapproval of entertaining writ petitions under Article 226 of the Constitution of India for the execution of awards passed by arbitral tribunals or courts. The Supreme Court, in the cases, expressed its disapproval of a judgment and order passed under Article 226, directing the NHAI to deposit the entire compensation amount awarded by the arbitrator and allowing the original landowners to withdraw the said amount.
Bombay High Court
The Bombay High Court single bench of Justice R.I. Chagla stayed an arbitral award noting that the Arbitrator contravened the settled law that for a claim for damages, there must be proof of actual loss which is sine qua non for such claim. It held that the Arbitrator failed to consider the proof of loss while awarding damages to the Claimant.
Case Title: Era International v. Aditya Birla Global Trading India Pvt. Ltd, Commercial Arbitration Petition (L) No. 27638 of 2023
The High Court of Bombay has held that that provisions of Section 12(5) r/w 7th Schedule of the A&C Act also apply to Institutional Arbitrations.
The bench of Justice Bharati Dangre held that rules of an arbitral institution cannot override the provisions of the A&C Act. It held that even if parties agree to institutional arbitration, it does not exclude the Court's power to decide on the termination of an arbitrator's mandate if a controversy arises regarding the grounds mentioned in Section 14(1)(a).
Case Title: Mahavir Enterprise vs Chandravati Sunder Salian.
Case Number: COMMERCIAL ARBITRATION APPLICATION NO.15 OF 2023.
The Bombay High Court single bench of Justice Bharati Dangre held that claims that are clearly time-barred must not be entertained, as doing so would perpetuate injustice rather than serving justice. The High Court held that even the slightest doubt regarding the timeliness of a claim warrants its referral to arbitration, as interfering in such matters would encroach upon the tribunal's jurisdiction.
Case Title: M/s.Paresh Construction & Foundation Ltd. vs Hindustan Petroleum Corp. Ltd.
Case Number: ARBITRATION APPLICATION (L) NO.18473 OF 2023 WITH ARBITRATION PETITION NO.13 OF 2023
The Bombay High Court single bench of Justice Bharti Dangre held although there might be an impression that with the legal termination of the arbitral tribunal's mandate upon the expiration of one year from the reference entry, as per Section 29A of the Arbitration and Conciliation Act 1996 there might be a technical difficulty. However, it held that such technicalities should not thwart the overarching objective of the proceedings.
Case Title: M/s. Balmer Lawrie & Co.Ltd vs M/s. Shilpi Engineering Pvt.Ltd.
Case Number: INTERIM APPLICATION (L) NO. 779 OF 2024 IN COMMERCIAL ARBITRATION PETITION NO. 1131 OF 2018.
The Bombay High Court single bench of Justice R.I. Chagla held that where the arbitral award is in the nature of money decree, there is a requirement for deposit of 100% of the awarded amount for grant of stay. Further, it held that there is no distinction in the application of parameters between stays sought under Section 36(3) and Section 37 of the Arbitration Act, as neither provision specifies such differentiation.
Cause Title: Kalpataru Projects International Ltd. v. Municipal Corporation of Greater Mumbai and Anr.
The Bombay High Court has rejected a construction company's claim that the dispute resolution clause in the General Conditions of Contract with Mumbai Municipal Corporation constituted a valid arbitration agreement due to a lack of mutual intention to arbitrate.s
The court pointed out that the title "Finality of Decision and Non-Arbitrability" of the clause clearly indicates the parties did not intend for it to serve as an arbitration agreement. The bench of Justice Firdosh P. Pooniwalla further opined that mere declaration of the adjudication committee's decision as "final and binding" did not inherently indicate an intention to arbitrate.
The court added that the clause does not even make any reference to arbitration or appointment of an arbitrator, therefore, this dispute resolution clause did not constitute a valid arbitration agreement.
Case Title: Hyundai Construction Equipment India Pvt. Ltd vs Saumya Mining Limited and Another
The Bombay High Court bench comprising Justice Neela Gokhale held that in cases where an application has been made in a court concerning an arbitration agreement, that court alone possesses jurisdiction over an application for appointment of arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996. Further, the bench held that even in agreements where no specific seat is mentioned, multiple courts may potentially have jurisdiction, depending on where a part of the cause of action arises.
Case Title: Ketan Champaklal Divecha vs DGS Township Pvt. Ltd. & another
The Bombay High Court bench comprising Justice Manish Pitale held that individual and minority members of a society cannot invoke arbitration clauses in development agreements against the developer. The bench held that when a society and its members enter into a development agreement with the developer, the society speaks for its members and the members would lose their independent rights qua the society.
Case Title: M/s Bafna Udyog vs Micro & Small Enterprises, Facilitation Council and anr.
The Bombay High Court bench comprising Justice Neela Gokhle held that the parties should have a separate arbitration agreement between them for reference to arbitration under Micro, Small & Medium Enterprises Development Act, 2006 by Micro & Small Enterprises, Facilitation Council. The bench rejected the argument that Section 18(3) of the MSMED Act 2006 provides for a deemed arbitration agreement, thereby, eliminating the necessity for a separate arbitration agreement between the parties.
Arbitrators Can't Unilaterally Modify Fee, Needs Parties' Consent: Bombay High Court
Case Title: Shanklesha Construction and Others vs Ashok Mohanraj Chhajed
The Bombay High Court bench comprising Justice Manish Pitale held that any amendments, revisions, or modifications in fees of an arbitrator must only occur with the consent of the parties, as outlined in the tripartite agreement and per Schedule IV of the Arbitration and Conciliation Act, 1996. The High Court also held that the arbitrator is not bound by the strict rules of the CPC and the Evidence Act and can employ a reasonable approach while judging the proceedings, in light of the principles of natural justice. Any grievances related to the conduct of the proceedings can be raised by the aggrieved party under the grounds mentioned in Section 34 of the Arbitration and Conciliation Act, 1996.
The High Court referred to the decision of the Supreme Court in Oil and Natural Gas Corporation Limited (ONGC) Vs. Afcons Gunanusa JV where the Supreme Court issued guidelines on determination of arbitrator's fees, emphasizing the need for a tripartite agreement, setting out the fee components. The Supreme Court further elucidated in its judgment that the 'sum in dispute' encompasses the entire amount to be adjudicated upon, allowing the arbitrator or arbitral tribunal to compute and charge fees for both the claim and the counter-claim. The High Court held that any amendments, revisions, or modifications in fees must only occur with the consent of the parties, as outlined in the tripartite agreement.
Case Title: K.I.P.L. Vistacore Infra Projects J.V vs Municipal Corporation of the city of Ichalkarnji
The Bombay High Court bench comprising Justice Bharati Dangre held that the power to extend the mandate of an arbitral tribunal or arbitrator under Section 29-A of the Arbitration and Conciliation Act, 1996 lies exclusively with the court that appointed the arbitrator(s). The bench held that the term 'Court' in Section 29A must be interpreted in a manner consistent with the Court's power to appoint arbitrators under Section 11.
The High Court referred to its decision in Cabra Instalaciones Y. Services vs. Maharashtra State Electricity Distribution Company Limited, where the arbitral tribunal was constituted by an order from the Supreme Court under Section 11(5) of the Act. The judgment specifically held that the High Court, exercising power under Section 29A, does not possess the authority to appoint a substitute arbitral tribunal or any member thereof. Further, it emphasized that in the context of international commercial arbitration, such powers exclusively belong to the Supreme Court. Furthermore, the judgment pointed out that the jurisdiction conferred upon the “Court” by Section 29A precludes other courts from exercising similar powers.
Case Title: Nilesh Shejwal vs Agrowon Agrotech Industries Pvt. Ltd.
The Bombay High Court single bench comprising Justice Bharati Dangre held that due to an evolution in contemporary arbitration where there was a belief that fraud disputes were unsuitable for arbitration, today, arbitral tribunals routinely navigate through extensive material in various dispute types. Thus, it held that the previous notion of fraud being non-arbitrable due to complexity is archaic and no longer applicable in modern arbitration practices.
The High Court emphasized the distinction between rights in rem, which are adjudicated by courts or statutory tribunals as they pertain to rights exercisable against the world at large, and actions in personem, which determine the rights and interests of parties to the subject matter of disputes and are arbitrable. Contrary to past views that fraud disputes involving voluminous evidence were unfit for arbitration, the High Court noted that there is an evolution of contemporary arbitration practice, wherein arbitral tribunals routinely navigate through extensive material in various dispute types. Thus, it held that the previous notion of fraud being non-arbitrable due to complexity is archaic and no longer applicable in modern arbitration practices.
Calcutta High Court
Case Title: Suresh Dhanuka vs Shahnaz Husain
The Calcutta High Court bench comprising Justice Krishna Rao held that while interpreting the arbitration agreements, the courts should have a presumption in favour of arbitration of the dispute and the court could only interfere if the party shows prima facie non-existence of valid arbitration agreement. It held that Sections 8 and 11 of the Arbitration and Conciliation Act, 1986 give the arbitrator or the tribunal the primary authority to determine the questions of non-arbitrability of the disputes. Further, it held that Section 16 confers significant powers upon the tribunal to determine any objections concerning the existence or validity of the arbitration agreement.
Case Title: R S Fuel Pvt Ltd vs Ankit Metal And Power Ltd
The Calcutta High Court bench comprising Justice Moushumi Bhattacharya held that neither the Arbitration and Conciliation Act, 1996 nor the Insolvency and Bankruptcy Code, 2016 allows a party's request to halt the publication of an arbitral award to the extent of its reliance on another party's counter-clam. The bench noted that the notion of splitting an arbitral award for this purpose is unnatural and unsupported by law.
The High Court noted that Section 14(1)(a) of the IBC applies to the institution or continuation of suits and proceedings against the corporate debtor, including arbitration proceedings. However, the High Court noted that the Respondent, who was also the claimant in the arbitration, cannot rely on Section 14(1)(a) to impede the publication of the arbitral award.
The Calcutta High Court single bench of Justice Prasenjit Biswas held that consumer forum cannot assume jurisdiction when a special statue prescribes for arbitration and designates a forum for adjudication of disputes. It held that a special law takes precedence over a general law.
The High Court, referred to Section 84 of the Multi-State Co-operative Societies Act, 2002, and held that the dispute between the Petitioner co-operative society and Complainant should have been referred to arbitration as per the specific provision of the Act. The High Court observed that both the District Forum and State Commission failed to take into account the statutory provisions, specifically overlooking the jurisdictional limitations imposed by the Multi-State Co-operative Societies Act.
Case Title: RKD Niraj JV vs The Union Of India.
The Calcutta High Court single bench of Justice Moushumi Bhattacharya held that the clause in General Conditions of Contract stipulating appointment of a panel of three gazetted railway officers for arbitration violated Section 12(5) of the Arbitration and Conciliation Act, 1996, read with the Fifth and Seventh Schedules of the Act.
The High Court noted that the Clause 64(3)(a)(ii) of the GCC mandated an agreement to arbitration under three gazetted railway officers, subject to a specified rank. The High Court noted that Section 12(5) of the Arbitration Act, in conjunction with the Fifth and Seventh Schedules, guards against the appointment of arbitrators with potential conflicts of interest. It highlighted Entry-1 of the Seventh Schedule, which specifically bars arbitrators with relationships or conflicts with the parties, counsel, or if the arbitrator has a business relationship with a party.
Case Title: Cholamandalam Investment and Finance Company Limited. Vs. Uma Earth Movers and Anr.
The Calcutta High Court single bench of Justice Moushumi Bhattacharya held that both Principal Civil Court and Commercial Division of the High Court has the jurisdiction to entertain Section 9 petition if the claim amount is between Rs. 10 lakhs to Rs. 1 crore. It rejected the contention that the City Civil Court doesn't have jurisdiction to receive or try the first application under Section 9.
The High Court held that Section 2(1)(e) of the Arbitration Act, meticulously defined the term "Court," designating the forum where a party is obligated to bring a subject matter related to arbitration for adjudication.
It referred to a Notification published on 20.3.2020 in the Kolkata Gazette Extraordinary by the Judicial Department, Government of West Bengal. This notification, executed under the authority granted by section 3(1-A) of The Commercial Courts Act, 2015, altered the landscape by delineating the pecuniary jurisdiction of both the City Civil Court and the Calcutta High Court. The notification specifies the pecuniary jurisdictions of these courts in relation to the value of commercial disputes, establishing concurrent jurisdiction for commercial disputes ranging from Rs. 10 lakhs to Rs. 1 crore. Notably, considering the Petitioner's claim of approximately Rs. 67.53 lakhs, the High Court held that both the City Civil Court and the Commercial Division of the Calcutta High Court would have concurrent jurisdiction.
Arbitration And Conciliation Act Does Not Overlap West Bengal Public Land Act: Calcutta High Court
Case Title: Rolta Infrastructure and Technology Services Private Limited vs Department of Information Technology And Electronics, Government of West Bengal
The Calcutta High Court single bench of Justice Moushumi Bhattacharya held that there exists no conflict between the Arbitration and Conciliation Act, 1996, and the provisions of The West Bengal Public Land (Eviction of Unauthorised Occupants) Act, 1962. It held that both statutes operate within distinct domains and do not overlap in their scope or application.
Addressing potential conflicts with other statutes, the Court rejected arguments suggesting conflict between the Arbitration Act, and the West Bengal Public Land (Eviction of Unauthorised Occupants) Act, 1962. It asserted that both statutes operate independently, and the former does not override the latter. Moreover, the High Court disagreed with contentions regarding the exclusivity of the judicial authority under the 1962 Act, noting that there is no statutory prohibition on invoking arbitration clauses even when proceedings are initiated under the 1962 Act.
Case Title: Tarit Mitra and Anr. vs Sharad Goenka
The High Court of Calcutta bench comprising Justice Sugato Majumdar adjudicated on a matter involving a civil suit for possession of premises from the tenants and an application made under Section 8 of the Arbitration and Conciliation Act, 1996 by the tenants seeking to refer the dispute to arbitration based on the tenancy agreement which had expired a few years ago and was not novated or renewed. The High Court emphasized that while the tenancy may be established by conduct, arbitration cannot be inferred from the parties' conduct alone. Therefore, it was concluded that there existed no arbitration agreement within the meaning of Section 7 of the Act.
The High Court further noted that there was no explicit agreement showing that disputes related to tenancies should be resolved through arbitration. Additionally, the other two incidental agreements were not renewed, and there was no written indication that disputes between the parties should be referred to arbitration, as required by Section 7 of the Arbitration and Conciliation Act, 1996. It emphasized that while a tenancy may be established by conduct, arbitration cannot be inferred from the parties' conduct alone. The original agreement had a clause stating that disputes under the tenancy agreement should be referred to arbitration, but as the tenancy was renewed and novated, the parties were not in agreement regarding the applicability of the arbitration clause.
Case Title: RKD Niraj JV vs The Union Of India.
The Calcutta High Court single bench of Justice Moushumi Bhattacharya held that the clause in General Conditions of Contract stipulating appointment of a panel of three gazetted railway officers for arbitration violated Section 12(5) of the Arbitration and Conciliation Act, 1996, read with the Fifth and Seventh Schedules of the Act.
The High Court noted that the Clause 64(3)(a)(ii) of the GCC mandated an agreement to arbitration under three gazetted railway officers, subject to a specified rank. The High Court noted that Section 12(5) of the Arbitration Act, in conjunction with the Fifth and Seventh Schedules, guards against the appointment of arbitrators with potential conflicts of interest. It highlighted Entry-1 of the Seventh Schedule, which specifically bars arbitrators with relationships or conflicts with the parties, counsel, or if the arbitrator has a business relationship with a party.
Case Title: Cholamandalam Investment and Finance Company Limited. Vs. Uma Earth Movers and Anr.
The Calcutta High Court single bench of Justice Moushumi Bhattacharya held that both Principal Civil Court and Commercial Division of the High Court has the jurisdiction to entertain Section 9 petition if the claim amount is between Rs. 10 lakhs to Rs. 1 crore. It rejected the contention that the City Civil Court doesn't have jurisdiction to receive or try the first application under Section 9.
The High Court held that Section 2(1)(e) of the Arbitration Act, meticulously defined the term "Court," designating the forum where a party is obligated to bring a subject matter related to arbitration for adjudication.
It referred to a Notification published on 20.3.2020 in the Kolkata Gazette Extraordinary by the Judicial Department, Government of West Bengal. This notification, executed under the authority granted by section 3(1-A) of The Commercial Courts Act, 2015, altered the landscape by delineating the pecuniary jurisdiction of both the City Civil Court and the Calcutta High Court. The notification specifies the pecuniary jurisdictions of these courts in relation to the value of commercial disputes, establishing concurrent jurisdiction for commercial disputes ranging from Rs. 10 lakhs to Rs. 1 crore. Notably, considering the Petitioner's claim of approximately Rs. 67.53 lakhs, the High Court held that both the City Civil Court and the Commercial Division of the Calcutta High Court would have concurrent jurisdiction.
Case Title: SRMB Srijan Limited vs Great Eastern Energy Corporation Limited.
Case Number: IA No: GA 1 of 2022 In A.P.- COM 281 of 2024
The Calcutta High Court single bench of Justice Moushumi Bhattacharya held that for an unconditional stay of an arbitral award on pretext of fraud, there should prima facie case of fraud which should be evident on the face of the record without the necessity of a detailed or through examination. The bench held that fraud must be evident and reprehensible, with a substantial impact on the outcome of the arbitration proceedings.
Case Title: Praxair India Pvt. Ltd. vs Steel Authority of India Ltd.
Case Number: A.P. COM 41 of 2024.
The Calcutta High Court single bench of Justice Moushumi Bhattacharya held that the word “Court” in Section 29A of the Arbitration and Conciliation Act, 1996 for extension of the mandate of the arbitrator takes the character of the appointing authority under Section 11 of the Arbitration Act. Therefore, it held that can only be the Court which has the power to appoint an arbitrator under Section 11.
Case Title: The Secretary, E & NF Railway Junior Co-operative Credit Society Limited, Eastern Railway vs Sri Jyotish Chandra Sarkar & Anr.
Case Number: C.O. No. 3243 of 2013
The Calcutta High Court single bench of Justice Prasenjit Biswas held that disputes concerning the management, constitution, or business of the society, between the society and its members or those claiming through them, are subject to arbitration under Section 84 of the Multi-State Co-operative Societies Act, 2002. Therefore, it set aside orders of District Consumer Disputes Redressal Forum and the State Consumer Disputes Redressal Commission for entertaining the complaint.
Case Title: Tree House Education And Accessories Ltd. Versus Holy Trust School
Case Number: AP/24/2024
The Calcutta High Court single bench of Justice Moushumi Bhattacharya held that it would be an unnatural construction of Section 11 of the Arbitration and Conciliation Act, 1996 where a party with a bona fide and a genuine claim is left in the lurch on the defence of the claim being barred by limitation. It held that when parties engage in constant communication for the settlement of claims, it would be unjust to dismiss a claim solely on the grounds of being time-barred.
Delhi High Court
Case Title: Shri Balaji Enterprises & Ors vs Reserve Bank Of India & Anr. Citation: 2024 LiveLaw (Del) 134
The Delhi High Court bench comprising Justice Subramonium Prasad held that the aggrieved party should avail the alternate remedy available under the Arbitration and Conciliation Act, 1996 before approaching the court under Article 226 unless there are extraordinary or exceptional circumstances. Further, the bench held that the remedy available to a party under Article 226 is not absolute and is at the discretion of the High Court.
6. It is well settled that High Courts do not entertain writs in cases where an equally efficacious alternate remedy is available to the aggrieved party and the aggrieved person has approached the High Court without availing of the said remedy.
Case Title: M/s Opuskart Enterprises & Ors vs Kaushal Kishore Tyagi
The Delhi High Court bench comprising Justice Pratibha M. Singh held that the disagreements related to the partners' business activities, whether conducted through the firm or the company, fall within the scope of arbitrable matters. The bench rejected the argument that the firm or the company cannot be brought forth in the arbitration proceedings since neither the firm nor the company are signatories to the arbitration agreement. It referred to the Supreme Court decision in Cox and Kings Ltd. v. SAP India Pvt. Ltd. and held that common business ventures of the partners, whether conducted through the firm or the Company, fell within the purview of the arbitration clause.
Case Title: M/s Exotic Buildcon Pvt. Ltd. vs M/s Medors Biotech Pvt. Ltd.
The Delhi High Court bench comprising of Justice Vibhu Bakhru and Justice Tara Vitasta Ganju dismissed a Section 34 application filed by Exotic Buildcon Pvt. Ltd. against M/s Medors Biotech Pvt. Ltd. The bench held that an arbitral award cannot be set aside merely because the respondent company's name was struck off from the Register of Companies post-commencement of arbitral proceedings. It upheld the principle that the cancellation of a company's incorporation doesn't affect the realization of amounts due to the company or the discharge of its obligations.
Case Title: The Braithwaite Burn and Jessop Construction Co Ltd vs Northern Railway
The Delhi High Court bench comprising Justice Sachin Datta allowed an application made under Section 14 of the Arbitration and Conciliation Act, regarding the termination of an arbitrator's mandate under his former employment with the respondent, Northern Railway. The bench held that a broad-based panel should have been provided to the complainant and 4 was very less a number, coupled with the fact that each arbitrator in the panel was a former employee of Northern Railway. The bench concluded that this was against the principles enshrined in Clause 64 of the General Conditions of Contract (GCC) and the decisions given by the Supreme Court. The bench also acknowledged the unjustified exclusion of four claims raised by the Petitioner and held it invalid as per the GCC.
Case Title: Information TV Private Limited vs Jitendra Dahyabhai Patel
The Delhi High Court bench, comprising Justice Prathiba M. Singh, held that a petition under Section 11 of the Arbitration and Conciliation Act, 1996 can only be filed after a notice of arbitration has been issued and there has been a failure to make the appointment of an arbitrator within 30 days. The bench held that the limitation period arises upon the failure to make the appointment of the arbitrator within 30 days from the issuance of the notice invoking arbitration.
Case Title: National Research Development Corporation & Anr vs Chromous Biotech Pvt Ltd.
The Delhi High Court bench comprising Justice Pratibha M Singh held that the time limit for limitation under Section 34(3) of the Arbitration and Conciliation Act, 1996 is absolute in nature and it is impermissible to condone the delay in challenging an arbitral award under Section 34 unless the party demonstrates diligence and bona fide reasons beyond its control for the delay.
The High Court referred to the decision of the Supreme Court in Union of India v. Popular Construction [(2001) 8 SCC 470], and noted the absolute nature of the time limit prescribed under Section 34 of the Act. The High Court noted that the use of the phrase 'but not thereafter' in the proviso to sub-section (3) of Section 34 serves as an express exclusion within the meaning of Section 29(2) of the Limitation Act, rendering any extension beyond the specified period impermissible. This interpretation is further supported by the historical context and the scheme of the Arbitration Act, which emphasizes minimizing the supervisory role of courts in the arbitral process.
Case Title: Air India Limited vs All India Aircraft Engineers Association & Anr.
The Delhi High Court bench comprising Acting Chief Justice Manmohan and Justice Tushar Rao Gedela modified its earlier order which restrained the execution of an arbitral award involving Air India as a party. Air India claimed that instead of granting an unconditional stay as requested, the High Court initially restrained the execution of the award by employing a contingency on Air India to pay the whole decretal amount. The High Court modified this order and allowed Air India to deposit 50% of decretal amount as an FDR and the remaining 50% as a Bank Guarantee.
The arbitral tribunal directed Air India to pay Rs 57.92 crore along with interest and the cost of arbitration proceedings to the All India Aircraft Engineers' Association, which represents 480 members serving as engineers for either Air India or Indian Airlines. Additionally, the arbitral tribunal instructed Air India to calculate and pay wage arrears with interest to the Indian Aircraft Technicians Association.
Case Title: Allied-Dynamic Joint Venture vs Ircon International Ltd, Delhi
The Delhi High Court bench comprising Justice Pratibha M. Singh held that objections regarding bias against an arbitrator, as outlined in Section 12(5) of the Arbitration and Conciliation Act, 1996, cannot be raised after the arbitrator has rendered a decision under Section 31. The single bench emphasized that once an award has been made, raising allegations of bias amounts to a waiver under Section 4 of the Arbitration Act.
The High Court noted that the Agreement itself, under clause 72.2.3, provided a safeguard against bias by stipulating that if an employee is appointed as an arbitrator, he/she must not be connected with the work in question. Despite the Petitioner's claim of raising the issue of bias through letters, the High Court held that there was no formal adjudication or request for a change of arbitrator on grounds of bias by the Petitioner. Given these circumstances, it held that it would impermissible for the Petitioner to wait for the award to be rendered and then approach the High Court with allegations of bias against the arbitrator.
Case Title: Nitin Kwatra vs Stadhawk Services Pvt. Ltd. & Ors.
The Delhi High Court single bench of Justice Sachin Datta held that even if the agreement specifies exclusive jurisdiction on a different court, courts having jurisdiction over the seat of arbitration retain supervisory authority over the arbitral process. Therefore, it held that the presence of a generic exclusive jurisdiction clause does not diminish Delhi courts' jurisdiction as the seat of arbitration.
The High Court held that the jurisdiction of the courts overseeing the arbitration process is tied to the designated seat of arbitration. Even if a contract includes a clause conferring exclusive jurisdiction on a different court, when the arbitration clause specifies a venue, it held that this effectively designates the venue as the seat of arbitration. Therefore, the High Court held that courts having jurisdiction over the seat of arbitration retain supervisory authority over the arbitral process. It noted that the clause in the Letter of Agreement (LOA) purporting to confer exclusive jurisdiction was generic and did not specifically refer to arbitration proceedings. Consequently, it allowed the application under Section 11(6) of the Arbitration Act and appointed Praveen Pahuja as the sole arbitrator to adjudicate the disputes between the Petitioner and Respondent No. 1.
Case Title: Sanjay Kumar Verma vs Planning And Infrastructural Development Consultants Pvt. Ltd.
The Delhi High Court bench comprising Justice Sanjeev Narula held that the intention of the parties to grant exclusive jurisdiction can be derived from the language of the arbitration clause even in the absence of the usage of the term “seat” in the arbitration clause. The bench held that if there is an agreement explicitly or impliedly stating a seat of arbitration, the exclusive jurisdiction is upon the court of the seat to appoint an arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996.
Upon analyzing the language of the arbitration clause, the High Court concluded that it signified a mutual agreement designating Patna as the place of arbitration. Despite the absence of the explicit term 'seat' in the clause, the parties' intent to establish Patna as the arbitration venue was clear. This interpretation aligned with the principle of party autonomy enshrined in Section 20 of the Arbitration Act, which mandates honouring the parties' consensus on such matters. Therefore, the High Court determined that Patna was indeed the designated seat of arbitration, depriving it of jurisdiction to adjudicate the petition.
Case Title: JKG Infratech Private Limited vs Larsen and Toubro Limited
The Delhi High Court bench comprising Justice Prateek Jalan held that registration under the MSME Act is a prerequisite for availing its benefits, and such benefits cannot be claimed retrospectively for contracts entered into before registration. The bench held that the Micro and Small Enterprises Facilitation Council doesn't have the power to entertain the dispute under Section 18 of the MSME Act for the claims which arose before registration. Therefore, the Council was not empowered to refer the parties to arbitration.
Case Title: State Trading Corporation Of India Ltd vs Micro And Small Enterprises Facilitation Council Delhi And Anr.
The Delhi High Court division bench of the Acting Chief Justice Manmohan and Justice Manmeet Pritam Singh Arora held that a party cannot file a writ petition under Article 226/227 challenging the arbitration award under Micro, Small, and Medium Enterprises Development Act, 2006 without taking recourse to a statutory remedy for challenging an award under Section 34 of the Arbitration and Conciliation Act, 1996. The bench noted that recourse is subjected to the requirement of pre-deposit of the award under Section 19 of the 2006 act.
The High Court disapproved of the stand taken by some High Courts that any order passed by the arbitral tribunal can be corrected by the High Court under Article 226 or 227. It advocated for minimizing judicial intervention during the arbitration process, stating that parties should generally wait until the award is pronounced, except in cases where a right of appeal is available under Section 37 under Arbitration Act. Consequently, it dismissed the appeal.
Case Title: Vedanta Limited vs Shreeji Shipping.
The Delhi High Court single bench of Justice Jasmeet Singh held that if an arbitration agreement stipulates multiple seats of arbitration, thereby, offering a choice to the parties is not void under Section 29 of the Indian Contract Act, 1872 declares agreements uncertain in meaning or incapable of being made certain as void.
The High Court referred to the decision of the Supreme Court in Indus Mobile Distribution (P) Ltd. v. Datawind Innovations (P) Ltd., [(2017) 7 SCC 678], and held that designating the seat of arbitration is akin to an exclusive jurisdiction clause. It clarified that once the seat is determined, it vests exclusive jurisdiction with the courts of that seat for regulating arbitral proceedings arising from the agreement between the parties. Hence, considering that the arbitration clause specified three potential seats, the High Court upheld its jurisdiction to entertain and decide the Section 11 petition.
Case Title: Surya Alloy Industries Ltd Vs Union Of India And Anr.
The Delhi High Court single bench of Justice Sachin Datta held that once a party has agreed to constituting an arbitral tribunal, it is precluded from subsequently opposing the appointment of an arbitrator based on the alleged non-fulfillment of pre-arbitral steps.
The High Court noted that the Respondents agreed to constitute the arbitral tribunal in a letter. It noted that Respondents' request for waiver of clause 12(5) of the Arbitration Act and after the Petitioner's refusal do so, the Respondents were obligated, as per the arbitration agreement, to send a panel of arbitrators to the Petitioner within 60 days from the demand for arbitration. The High Court held that this crucial step was not been taken by the Respondents.
Case Title: M/S S.K Agencies vs M/S DFM Foods
The Delhi High Court single bench of Justice Sachin Datta dismissed the notion that the arbitration clause would cease to exist with the termination of the contract. The bench emphasized that the arbitration clause, as part of the contract, should be treated as an independent agreement.
he High Court noted that the arbitral tribunal holds the primary authority to determine questions of non-arbitrability. It held that unless a dispute is manifestly or ex facie non-arbitrable, the general rule is to refer the dispute to arbitration, echoing the maxim "When in doubt, do refer".
The High Court highlighted that the dispute centered around the interpretation of clause 3 in the agreement, The Petitioner asserted that, based on contractual provisions and the conduct of the parties, there was no automatic termination of the agreements. Conversely, the Respondent contended that the agreement dated 22.12.2018 automatically expired on 24.07.2019 by virtue of clause 3, rendering the petitioner's subsequent claims outside the scope of the arbitration agreement. The High Court held that this should be adjudicated by a duly constituted arbitral tribunal, emphasizing that it was beyond the court's purview to interpret contractual provisions or delve into aspects influencing the merits of the parties' respective cases.
Delhi High Court Halts PCA Arbitration Over Arbitrator Appointment Breach
Case Title: Techfab International Pvt Ltd v. MIDIMA Holdings Limited, CS(COMM) 50 of 2024
The High Court of Delhi has stayed a PCA Arbitration between an African and an Indian Entity due to the constitution of the tribunal in violation of the arbitration agreement.
The bench of Justice Anup J. Bhambhani, dealing with a suit seeking anti-arbitration injunction and an application seeking ad-interim injunction, restrained the defendant from proceeding further with the arbitral proceedings in PCA Case No. AA773.
The Court held that consent of the parties is one of the cardinal principles of arbitration, therefore, the agreed procedure for the appointment of the arbitrator must be scrupulously followed.
Case Title: Mrs. Vinnu Goel v. Deputy Commissioner of Stamp Registration & Ors, WP(C) 9291 of 2023
The High Court of Delhi has allowed a writ petition enabling the petitioner to approach the Chief Controlling Revenue Authority to adjudicate/decide on the amount payable on the instrument despite the reference of the dispute arising out of the instrument to arbitration under Section 8 of the A&C Act.
The bench of Justice Subramonium Prasad held that merely because the arbitral tribunal is empowered to carry out the same exercise, it cannot deprive the High Court from entertaining a writ petition to determine if the state has been deprived of the revenue or not.
Case Title: Vingro Developments Pvt Ltd v. Nitya Shree Developers Pvt Ltd, Arb.P. 667/2023
The High Court of Delhi has held that directors of a company cannot be made parties to arbitration through 'Group of Companies' doctrine. It held that the relationship between the company and its director(s) is that of the 'Principal' and 'Agent' as defined under Section 182 of the Indian Contract Act.
The bench of Justice Dinesh Kumar Sharma held that in terms of Section 230 of the Indian Contract Act, the agent cannot be made personally liable for acts carried out on behalf of the principal.
A Party Cannot Challenge An Arbitral Award After Receiving Amount Payable Under It: Delhi High Court
Case Title: M/s K.S. Jain Builders v. Indian Railway Welfare Organisation, OMP(COMM) 456 of 2022
The High Court of Delhi has held that a party that has received payment in terms of an arbitral award cannot challenge the award with respect to the disallowed claims.
The bench of Justice Sanjeev Narula held that acceptance of payments under the award would estop a party from challenging the award. It held that party after receiving payment cannot repudiate part award detrimental to it.
Case Title: Arjun Mall Retail Holdings Pvt Ltd v. Gunocen Inc, FAO(COMM) 31 of 2021
The High Court of Delhi has held that a party cannot challenge an arbitral award on the ground of the unilateral appointment of the arbitrator if it did not challenge the appointment at an earlier stage.
The bench of Justices Suresh Kumar Kait and Neena Bansal Krishna upheld an arbitral award passed by a unilaterally appointed arbitrator by observing that aggrieved party did not challenge the award at an earlier stage either by filing an application under Section 11(6) or an application under Sections 13&14 of the A&C Act.
Case Title: MBL Infrastructure Ltd v. DMRC, OMP(COMM) 311 of 2021.
The High Court of Delhi has held that the Arbitral tribunal can award monetary compensation as damages for the delay attributable to employer even when the agreement provides for the extension of time as the only remedy to the contractor.
Also Read - Arbitration Weekly Round-Up: 25th March to 31st March 2024
The bench of Justice Chandra Dhari Singh held that the tribunal cannot deny damages on the ground that the agreement provides only for extension of time, especially when the agreement has already been terminated by the employer and there is no occasion for the contractor to seek extension. It held that the tribunal, in such a situation, has to necessarily compensate the contractor in terms of unliquidated damages.
Also Read - Calcutta High Court Weekly Round-Up 25th March-31st March 2024
Case Title: MBL Infrastructure Ltd v. DMRC, OMP(COMM) 311 of 2021.
The High Court of Delhi has held that an Arbitral Tribunal can transgress the boundaries of the contract to grant relief to aggrieved party when the contract illegally restricts or does not provide for sufficient remedies.
The bench of Justice Chandra Dhari Singh held that in a situation which is not anticipated in the agreement, the tribunal can transgress the boundaries of the agreement and grant relief to the aggrieved party which it is rightfully entitled to. It held that the tribunal cannot withhold a relief merely because of the explicit provision for such a relief in the agreement.
Case Title: Union of India v. M/s Panacea Biotec Limited, FAO(OS)(COMM) 81 of 2020
The High Court of Delhi has held that non-mentioning of prayer renders the petition under Section 34 of the A&C Act as invalid.
The bench of Justices Suresh Kumar Kait and Neena Bansal Krishna held that without a prayer to set aside the impugned award, a petition cannot be considered valid as such petitions would merely amount to empty submissions without a relief.
The Court held that without a prayer, the Court cannot decipher the relief that a party is seeking on the basis of the averments made in the petition and without seeking relief, the petition is not maintainable rendering it non-est.
The Court emphasized that condoning the delay in re-filing the petitions beyond the prescribed period of 3 months plus 30 days would entangle arbitrations in a web of prolonged delays. Such a situation, the Court reasoned, would undermine the very purpose of opting for arbitration, rendering it meaningless.
Case Title: Union of India v. M/s Panacea Biotec Limited, FAO(OS)(COMM) 81 of 2020
The High Court of Delhi has held that under Section 34(3) of the A&C Act, the limitation period of 3 months plus 30 days in inelastic and inflexible.
The bench of Justices Suresh Kumar Kait and Neena Bansal Krishna explained that the challenge petition must be filed within 3 months from the date of the receiving of the award, however, a grace period of 30 days is given in which the Court can exercise discretion to condone the delay in the filing of the application. However, the court is left with no discretion to condone a delay in filing after the period of 3 months plus 30 days grace is over.
Section 34 Petition Is Non-Est If Filed Without The Arbitral Award: Delhi High Court
Case Title: Union of India v. M/s Panacea Biotec Limited, FAO(OS)(COMM) 81 of 2020
The High Court of Delhi has held that non-filing of the arbitral award along with the petition under Section 34 of the A&C Act is a fatal defect which renders the filing as non-est.
The bench of Justices Suresh Kumar Kait and Neena Bansal Krishna held that filing of an award along with the challenge petition is not an empty procedural requirement as sans the award, the Court is left absolutely clueless to comprehend the grounds taken in the objection Petition and thereby unable to decide whether the Petition merits Notice to be issued or outright rejection.
Case Title: M/S Axalta Coating Systems India Pvt. Ltd. Vs M/S Madhuban Motors Pvt. Ltd.
The Delhi High Court single bench of Justice Anup Jairam Bhambhani held that mere expression of "place of arbitration" does not automatically indicate the seat and the determination of the seat should be inferred from other clauses in the agreement and the conduct of the parties. The bench held that the seat was in Delhi as the contract clause specified that the venue for arbitral proceedings would be in New Delhi, and it vested exclusive jurisdiction in the courts of law in Delhi for all disputes arising from the Supply Agreement.
The High Court referred to the decision of the Supreme Court in Ravi Ranjan Developers Pvt. Ltd. vs Aditya Kumar Chatterjee and noted that mere mention of a place in an arbitration clause does not inherently result in that place becoming the seat of arbitration. Secondly, parties, while having the discretion to refer disputes to a specific court to the exclusion of others, must do so in accordance with sections 11(6) and 20(1) of the Arbitration Act.
Case Title: Swashbuckler Hospitality Pvt. Ltd. vs Avdesh Mittal & Anr.
The Delhi High Court single bench of Justice Dinesh Kumar Sharma rejected an argument that a letter of intent was a non-binding agreement and noted that the arbitration agreement contained in the letter of intent should be treated as an independent and binding agreement. Further, it held that the referral court at Section 11 stage should not examine or impound an unstamped instrument and should leave it for determination by the arbitral tribunal.
Upon reviewing the Letter of Intent, which included the arbitration clause in clause 24, the High Court noted that the document was unstamped. It noted that the primary focus of the court, while considering applications under Section 11(6-A) of the Arbitration Act, was confined to examining the existence of an arbitration agreement. It held that the non-existence of an arbitration agreement is the only valid reason for a court's refusal to refer a matter to arbitration. The amended Section 8(1) of the arbitration agreement limited the judicial authority's intervention to the question of whether the parties have a valid arbitration agreement.
Case Title: Gorkha Security Services vs Govt. Of Nct Of Delhi.
The Delhi High Court single bench of Justice Mohan Kumar Ohri held that an arbitral award lacking adequate reasoning suffers from the inherent flaw of patent illegality. It emphasized that a reasoned order should be proper, intelligible, and adequate, and failure to adhere to these standards can lead to challenges under Section 34 of the Arbitration and Conciliation Act, 1996.
The High Court noted that the agreement does not prohibit either party from claiming interest, as it remains silent on the aspect of interest. Notably, it held the award lacked specificity in explaining the rationale behind the denial of pre-award interest, despite the explicit request made for such interest during the proceedings. It recognized that the Arbitrator possesses discretion to award interest, a discretion that must be reasonably exercised.
Case Title: Morgan Securities & Credits Pvt Ltd. vs Samtel Display Systems Ltd.
The Delhi High Court single bench comprising Justice Sachin Datta held that an award suffering from internal contradictions is considered perverse and patently illegal under Section 34 of the Arbitration and Conciliation Act, 1996.
The High Court, while exercising jurisdiction under Section 34 of the Arbitration Act, acknowledged the limited scope of interference with arbitral awards. It emphasized that an arbitrator is the final arbiter on factual issues, and the interpretation of contract terms lies within the arbitrator's domain. It held that interference is only allowed if the award is palpably perverse, where no reasonable person could arrive at the arbitrator's conclusion.
Case Title: Steel Authority Of India Ltd vs Uniper Global Commodities.
The Delhi High Court single bench of Justice Sachin Datta held that the court under Section 27 of the Arbitration and Conciliation Act, 1996 cannot determine the admissibility, relevancy, materiality, and weight of any evidence, as doing so would amount to impermissible interference with the Tribunal's proceedings.
The High Court held that the orders of an Arbitral Tribunal are not ordinarily disturbed in Section 27 petition, emphasizing that the court, in exercising powers under Section 27, is not hearing an appeal over the Tribunal's decision. It Court highlighted that while the Arbitral Tribunal is not bound by the rules of procedure like the Code of Civil Procedure and the Evidence Act, it is still obligated to form an opinion and exercise discretion in permitting the examination of a witness.
Case Title: Devender Kumar Kashyap vs Chander Muni.
The Delhi High Court single bench of Justice Rekha Palli held that when a party provides its incorrect address in proceedings cannot be permitted to urge that the invocation notice of arbitration under Section 21 of the Arbitration and Conciliation Act, 1996 was not served at the correct address.
The High Court favored the Petitioner's contention that the Respondent, having provided his address in the previous petition filed in December 2021, is not in a position to argue that the invocation notice was improperly served. Moreover, it held that the purpose of the invocation notice is to inform the opposing party about the dispute and provide an opportunity for mutual agreement on the appointment of an arbitrator. Given that the Respondent was well aware of the Petitioner's intent for arbitration, the High Court held rejected Respondent's argument.
Case Title: Umaxe Projects Private Limited vs Air Force Naval Housing Board
The Delhi High Court single bench of Justice Manoj Kumar Ohri held that filing of the Section 29(A) application by a party did not amount to a waiver of its right to challenge the arbitrator's ineligibility under Section 12(5) of the Arbitration and Conciliation Act, 1996. The bench held that filing an application under Section 29A of the Arbitration Act for an extension of the mandate did not amount to an express waiver in writing under Section 12(5).
The High Court noted that the arbitrator was unilaterally appointed by the Respondent, in accordance with Clause 18.2 of the General Conditions of Contract (GCC) forming part of the Agreement and Clause 22 of the Agreement. These clauses did not afford the Petitioner any say in the appointment process.
The High Court held that the chairman-cum-managing director of a party ineligible himself was also not eligible to appoint another arbitrator. Further, it held that participation in arbitral proceedings without objecting to the arbitrator's appointment did not constitute a waiver of the right under Section 12(5) of the Arbitration Act.
Case Title: Aakash Educational Services Ltd Vs M/S Lotus Education & Ors.
The Delhi High Court single bench of Justice Dinesh Kumar Sharma held that mere invalidation or unenforceability of the arbitrator appointment process does not render the entire arbitration clause void. The bench held that even if an arbitration award is set aside due to unilateral appointment and non-compliance with Section 12 of the Arbitration Act, fundamental agreement between the parties to submit their disputes to arbitration remains intact. Therefore, the parties can file a fresh application under Section 11 of the Arbitration Act for arbitrator appointment.
The primary objection raised by the Respondent was that if an arbitration award is set aside due to unilateral appointment and non-compliance with Section 12 of the Arbitration Act, the Petitioner cannot file a fresh application under section 11 of the Arbitration Act for arbitrator appointment.
The High Court rejected the Respondent's contention that exhaustion of remedies under the arbitration clause prevents seeking re-appointment of the arbitrator. It held that as long as disputes covered by the arbitration agreement remain unresolved, parties are free to invoke arbitration again after an award is set aside. It held that setting aside an award doesn't preclude parties from re-agitating their claims before another arbitral tribunal.
Case Title: Indian Highways Management Company Ltd. vs Prakash Asphaltings and Toll Highways (India) Pvt. Ltd.
The Delhi High Court single bench of Justice Prateek Jalan held that the MSME Facilitation Council does not have the jurisdiction to arbitrate matters pertaining to individual service providers who do not fall under the definition of 'supplier' under the MSME Act. The same would be violative of Section 34 of the Arbitration and Conciliation Act, 1996.
The High Court held that even with the Respondent's expansive interpretation of Section 2(n)(iii) of the MSME Act, the Respondent does not fulfil the definition of a 'supplier.' It held that the Agreement in question didn't entail the sale of any goods from the Respondent to the Petitioner. The services provided by the Respondent to the Petitioner were carried out by the Respondent itself, not by a micro or small enterprise. The Agreement assigned the Respondent the responsibility of procuring and installing equipment at the Petitioner's toll plazas and maintaining it for five years, along with other contracted services.
Case Title: Mr. Gajendra Mishra v. Pokhrama Foundation, ARB.P. 969/2023
Citation: 2024 LiveLaw (Del) 74
The High Court of Delhi has held that a party cannot insist on fulfilment of pre-arbitration conciliation once it has itself terminated the agreement. It held that pre-arbitration conciliation provided in the agreement falls with the termination of the agreement.
The bench of Justice Pratibha M. Singh held that once a party has itself proceeded to terminate the agreement without approaching the Project Manager for conciliation, it cannot object to the maintainability of the petition seeking appointment of the arbitrator on the ground of non-fulfilment of pre-arbitral steps.
The Court held that once the agreement has been terminated, no resolution or settlement or conciliation through Project Manager would be possible as designated authority would cease to exist upon the termination of the agreement.
Case Title: Jatinder Kaur & Ors v. Late Jagjit Singh & Ors, ARB.P. 1167 of 2022
Also Read - Calcutta High Court Weekly Round-Up 25th March-31st March 2024
Citation: 2024 LiveLaw (Del) 72
The High Court of Delhi has held that the limitation period for the appointment of the substitute arbitrator is 3 years from the date when the right to apply for such appointment accrues.
The bench of Justice Pratibha M. Singh held that since the act does not provide for any explicit period for the appointment of a substitute arbitrator, the limitation shall be governed by the residual provision found in Article 137 of the Limitation Act which provides a period of 3 years as the limitation period from the date when the right to apply accrues.
Case Title: Vivek Aggarwal v. Hemant Aggarwal, OMP(MISC)(COMM) 29 of 2023
Citation: 2024 LiveLaw (Del) 71
The High Court of Delhi has held that an issue related to the bias of an arbitrator in conducting the arbitral proceedings cannot be determined by a Court while dealing with the application under Section 29A of the A&C Act.
The bench of Justice Pratibha M. Singh reiterated that the scope of Court's power under Section 29A is limited to the examination of whether the extension should be granted or not. It held that the grievance of a party with the conduct of arbitral proceedings or any other substantive challenge cannot be decided by the Court under Section 29A.
Case Title: Allied-Dynamic JV v. Ircon International Ltd
Citation: 2024 LiveLaw (Del) 62
The High Court of Delhi has held that an arbitral award cannot be challenged on the ground of bias of arbitrator if no challenge to bias was made during the pendency of arbitral proceedings.
The bench of Justice Pratibha M. Singh held that a party that has fully participated in the arbitral proceedings without raising any challenge to the jurisdiction of the tribunal on ground of bias, cannot challenge the award directly under Section 34 of the A&C Act.
The Court held that in an arbitration that has commenced before the 2015 amendment, such a conduct by a party would constitute a waiver under Section 4 of the A&C Act.
Case Title: Simentech India Pvt Ltd v. BHEL, OMP(COMM) 348 of 2022
Citation: 2024 LiveLaw (Del) 63
The High Court of Delhi has held that to determine the pecuniary jurisdiction of the Court to deal with a challenge petition under Section 34 of the A&C Act, the value of the pendente lite and future interest cannot be included in the aggregate value of the claims and counter-claims to determine the 'Specified Value' as provided under Section 12 of the Commercial Courts Act, 2015 (CCA).
The bench of Justice Sanjeev Narula held that Section 12(2) of the CCA stipulates that the 'aggregate value' of the claim and any counterclaim in a commercial dispute arbitration forms the basis for determining the pecuniary jurisdiction of the Court.
The Court held that in cases where the SoC includes a component of interest, it is necessary to consider the portion of interest accrued up to the date of invocation of arbitration as part of the 'aggregate value', in accordance with Section 12(2) of CCA. However, this provision cannot be interpreted as requiring the computation of interest up to the commencement of proceedings under Section 34 of the Act. The intent is to consider interest only until the arbitration is invoked, thereby establishing a definitive cut-off for calculating the 'aggregate value' for jurisdictional purposes.
Th Court held that the interest component which is to be considered a part of the claim of arbitration can only be till the date of the invocation of arbitration and not the interest that accrues afterwards i.e., pendente lite and future interest.
Case Title: The Executive Engineer & Ors Vs M/S Bholasingh Jaiprakash Construction Ltd & Anr.
The Delhi High Court single bench of Justice Subramonium Prasad held that Article 226 of the Constitution of India is an extraordinary remedy and cannot be invoked where a party has failed to invoke other remedies available to it under law. It held that if a party fails to challenge the arbitration award under Section 34 of the Arbitration and Conciliation Act, 1996, cannot approach the High Court by filing a Writ Petition under Article 226 of the Constitution of India.
The High Court noted that the Arbitral Tribunal proceedings were initiated on 16.08.2022, with repeated reminders sent to the Petitioner urging its participation. However, the Petitioner consistently refused to engage in the proceedings. Despite being aware of the ongoing arbitration, the Petitioner did not challenge the award within the prescribed time under the Arbitration Act, opting instead to approach the court through a Writ Petition under Article 226 of the Constitution of India.
The High Court emphasized that Article 226 is an extraordinary remedy and cannot be invoked when other remedies available under the law have not been pursued. It acknowledged the objectives of the MSMED Act, which was designed to alleviate the regulatory burden on such enterprises. It noted that once a matter is referred to arbitration and an award is passed, it can be challenged under Section 34 of the Arbitration Act or Section 19 of the MSMED Act.
Section 29A Not Applicable To Arbitration Proceedings Commenced Before 2015: Delhi High Court
Case Title: Zillion Infraprojecs Pvt. Ltd Through Anant Saxena Vs Fab-Tach Works & Constructons Pvt. Ltd.
The Delhi High Court single bench Justice Manoj Kumar Ohri held that Section 29A of the Arbitration and Conciliation Act, 1996 which prescribes a time limit for issuance of arbitral award is not applicable to arbitration proceedings commenced before 2015 Amendment Act. It held that arbitral proceedings commence on the date when the Respondent receives the request for reference to arbitration. Section 29A mandates for the tribunal to make the award within a period of twelve months from the date of completion of pleadings.
The High Court noted that the Section 26 of the Amendment Act explicitly stated that the amendments would not apply to ongoing arbitral proceedings that had commenced in accordance with Section 21 of the Arbitration Act before the commencement of the Amendment Act, unless the parties agreed otherwise. In essence, the applicability of the Amendment Act was made prospective unless there was mutual agreement for retrospective application. The pivotal question before the High Court was whether Section 29A and its prescribed time limits would be applicable to arbitral proceedings initiated before the enactment of the Amendment Act.
Case Title: Govt. Of NCT of Delhi vs M/s R.S Sharma Contractors Pvt. Ltd
The Delhi High Court single bench of Justice Dinesh Kumar Sharma held that arbitral proceedings before the arbitrator are not required to be technical in nature and the arbitrator is within its power to decide the same on the basis of material on record. The bench held that the arbitrator is the sole judge of the quality and quantity of evidence, and the court's role is not to reassess the material or correct the arbitrator's errors under Section 34 of the Arbitration and Conciliation Act, 1996.
The High Court held that the legislative mandate is to ensure an expeditious and binding dispute resolution process with minimal court intervention. The proceedings under Section 34 are summary, reflecting the legislative intent for minimal interference and prompt dispute resolution. It clarified that the scope of inquiry under Section 34 is confined to assessing whether the grounds specified in Section 34(2), 13(5), or 16(6) justify setting aside the award. It reiterated that the arbitrator is the sole judge of the quality and quantity of evidence, and the court's role is not to reassess the material or correct the arbitrator's errors.
Case Title: M/s NHPC Ltd v. M/s Jaiprakash Associates Ltd, OMP(ENF.)(COMM) 184 of 2023
The High Court of Delhi has held that the counterclaims allowed by the arbitral tribunal can be enforced under Section 36 of the A&C Act when the portion of the award granting larger sums to the judgment-debtor (claimant in the arbitration) is set aside.
The bench of Justice Jasmeet Singh reiterated that partial setting aside of an award is permissible under the Act, therefore, when the award qua the claims allowed is set aside, the award regarding the counterclaims remains valid and enforceable.
The Court held that the counterclaims allowed by the arbitral tribunal can be enforced under Section 36 of the A&C Act when the portion of the award granting larger sums to the judgment-debtor (claimant in the arbitration) is set aside.
The Court reiterated that partial setting aside of an award is permissible under the Act, therefore, when the award qua the claims allowed is set aside, the award regarding the counterclaims remains valid and enforceable.
Case Title: Aakash Educational Services Ltd Vs M/S Lotus Education & Ors.
The Delhi High Court single bench of Justice Dinesh Kumar Sharma held that mere invalidation or unenforceability of the arbitrator appointment process does not render the entire arbitration clause void. The bench held that even if an arbitration award is set aside due to unilateral appointment and non-compliance with Section 12 of the Arbitration Act, fundamental agreement between the parties to submit their disputes to arbitration remains intact. Therefore, the parties can file a fresh application under Section 11 of the Arbitration Act for arbitrator appointment.
The primary objection raised by the Respondent was that if an arbitration award is set aside due to unilateral appointment and non-compliance with Section 12 of the Arbitration Act, the Petitioner cannot file a fresh application under section 11 of the Arbitration Act for arbitrator appointment.
The High Court rejected the Respondent's contention that exhaustion of remedies under the arbitration clause prevents seeking re-appointment of the arbitrator. It held that as long as disputes covered by the arbitration agreement remain unresolved, parties are free to invoke arbitration again after an award is set aside. It held that setting aside an award doesn't preclude parties from re-agitating their claims before another arbitral tribunal.
Case Title: Indian Highways Management Company Ltd. vs Prakash Asphaltings and Toll Highways (India) Pvt. Ltd.
The Delhi High Court single bench of Justice Prateek Jalan held that the MSME Facilitation Council does not have the jurisdiction to arbitrate matters pertaining to individual service providers who do not fall under the definition of 'supplier' under the MSME Act. The same would be violative of Section 34 of the Arbitration and Conciliation Act, 1996.
The High Court held that even with the Respondent's expansive interpretation of Section 2(n)(iii) of the MSME Act, the Respondent does not fulfil the definition of a 'supplier.' It held that the Agreement in question didn't entail the sale of any goods from the Respondent to the Petitioner. The services provided by the Respondent to the Petitioner were carried out by the Respondent itself, not by a micro or small enterprise. The Agreement assigned the Respondent the responsibility of procuring and installing equipment at the Petitioner's toll plazas and maintaining it for five years, along with other contracted services.
Case Title: The Executive Engineer & Ors Vs M/S Bholasingh Jaiprakash Construction Ltd & Anr.
The Delhi High Court single bench of Justice Subramonium Prasad held that Article 226 of the Constitution of India is an extraordinary remedy and cannot be invoked where a party has failed to invoke other remedies available to it under law. It held that if a party fails to challenge the arbitration award under Section 34 of the Arbitration and Conciliation Act, 1996, cannot approach the High Court by filing a Writ Petition under Article 226 of the Constitution of India.
The High Court noted that the Arbitral Tribunal proceedings were initiated on 16.08.2022, with repeated reminders sent to the Petitioner urging its participation. However, the Petitioner consistently refused to engage in the proceedings. Despite being aware of the ongoing arbitration, the Petitioner did not challenge the award within the prescribed time under the Arbitration Act, opting instead to approach the court through a Writ Petition under Article 226 of the Constitution of India.
The High Court emphasized that Article 226 is an extraordinary remedy and cannot be invoked when other remedies available under the law have not been pursued. It acknowledged the objectives of the MSMED Act, which was designed to alleviate the regulatory burden on such enterprises. It noted that once a matter is referred to arbitration and an award is passed, it can be challenged under Section 34 of the Arbitration Act or Section 19 of the MSMED Act.
Section 29A Not Applicable To Arbitration Proceedings Commenced Before 2015: Delhi High Court
Case Title: Zillion Infraprojecs Pvt. Ltd Through Anant Saxena Vs Fab-Tach Works & Constructons Pvt. Ltd.
The Delhi High Court single bench Justice Manoj Kumar Ohri held that Section 29A of the Arbitration and Conciliation Act, 1996 which prescribes a time limit for issuance of arbitral award is not applicable to arbitration proceedings commenced before 2015 Amendment Act. It held that arbitral proceedings commence on the date when the Respondent receives the request for reference to arbitration. Section 29A mandates for the tribunal to make the award within a period of twelve months from the date of completion of pleadings.
The High Court noted that the Section 26 of the Amendment Act explicitly stated that the amendments would not apply to ongoing arbitral proceedings that had commenced in accordance with Section 21 of the Arbitration Act before the commencement of the Amendment Act, unless the parties agreed otherwise. In essence, the applicability of the Amendment Act was made prospective unless there was mutual agreement for retrospective application. The pivotal question before the High Court was whether Section 29A and its prescribed time limits would be applicable to arbitral proceedings initiated before the enactment of the Amendment Act.
Case Title: Govt. Of NCT of Delhi vs M/s R.S Sharma Contractors Pvt. Ltd
The Delhi High Court single bench of Justice Dinesh Kumar Sharma held that arbitral proceedings before the arbitrator are not required to be technical in nature and the arbitrator is within its power to decide the same on the basis of material on record. The bench held that the arbitrator is the sole judge of the quality and quantity of evidence, and the court's role is not to reassess the material or correct the arbitrator's errors under Section 34 of the Arbitration and Conciliation Act, 1996.
The High Court held that the legislative mandate is to ensure an expeditious and binding dispute resolution process with minimal court intervention. The proceedings under Section 34 are summary, reflecting the legislative intent for minimal interference and prompt dispute resolution. It clarified that the scope of inquiry under Section 34 is confined to assessing whether the grounds specified in Section 34(2), 13(5), or 16(6) justify setting aside the award. It reiterated that the arbitrator is the sole judge of the quality and quantity of evidence, and the court's role is not to reassess the material or correct the arbitrator's errors.
Case Title: M/s NHPC Ltd v. M/s Jaiprakash Associates Ltd, OMP(ENF.)(COMM) 184 of 2023
The High Court of Delhi has held that the counterclaims allowed by the arbitral tribunal can be enforced under Section 36 of the A&C Act when the portion of the award granting larger sums to the judgment-debtor (claimant in the arbitration) is set aside.
The bench of Justice Jasmeet Singh reiterated that partial setting aside of an award is permissible under the Act, therefore, when the award qua the claims allowed is set aside, the award regarding the counterclaims remains valid and enforceable.
The Court held that the counterclaims allowed by the arbitral tribunal can be enforced under Section 36 of the A&C Act when the portion of the award granting larger sums to the judgment-debtor (claimant in the arbitration) is set aside.
The Court reiterated that partial setting aside of an award is permissible under the Act, therefore, when the award qua the claims allowed is set aside, the award regarding the counterclaims remains valid and enforceable.
Case Title: M/s Fortuna Skill Management Pvt Ltd v. M/s Jaina Marketing and Associates
Citation: 2024 LiveLaw (Del) 348
The High Court of Delhi has held that an arbitral tribunal cannot be faulted for disallowing additional evidence at the fag end especially when the document was already in possession of the party.
The bench of Justice Prateek Jalan also held that arbitral tribunal is not strictly bound by the Indian Evidence Act.
Case Title: Alka Sachdeva vs Bhasin Infotech And Infrastructure Pvt. Ltd.
Citation: 2024 LiveLaw (Del) 335
The Delhi High Court single bench of Justice Prateek Jalan dismissed the contention that a party can waive its right to object to the arbitrator's appointment through its conduct. It underscored that any waiver under Section 12(5) of the Arbitration and Conciliation Act must be explicit and in writing. It noted that there is no room for implying a waiver of rights under Section 12(5) through conduct or any other means. Even if a party participates in arbitral proceedings without explicitly objecting to the arbitrator's appointment, it cannot be construed as a waiver of its rights under Section 12(5) of the Arbitration Act.
Case Title: Ved Contracts Pvt Ltd Vs Indian Oil Corporation Ltd.
Citation: 2024 LiveLaw (Del) 336
The Delhi High Court single bench of Justice Anup Jairam Bhambhani held that if there are no clear indications to the contrary, the venue specified in an arbitration clause should be considered as the seat of arbitral proceedings. It underscored importance of discerning the intention of the parties by examining the entirety of the contract's terms.
One Party Cannot Appoint 2/3rd Of The Arbitral Tribunal: Delhi High Court
Case Title: Apex Buldsys Limited v. IRCON International Ltd
Citation: 2024 LiveLaw (Del) 341
The High Court of Delhi has held that a panel for appointment of arbitrator cannot be restricted to mere 3 names as it would violate broad-based representation. Moreover, one party cannot appoint 2/3rd members of the arbitral tribunal as it would violate principles of neutrality and counter-balancing.
The bench of Justice Dinesh Kumar Sharma also held that a petition under Section 11 cannot be dismissed on ground of non-service of Section 21 notice if the earlier petition under Section 11 was disposed of with directions to treat that petition as Section 21 notice itself.
Case Title: Avdhesh Mittal Vs Deepak Vig.
Citation: 2024 LiveLaw (Del) 342
The Delhi High Court single bench of Justice Manoj Kumar Ohri held that the delivery of a signed copy of the arbitral award to a party isn't merely procedural but confers a substantive right upon them to challenge the award within the statutory period. The bench held that the presumption of deemed service under Section 3 of the Arbitration Act is rebuttable and can be negated if a party establishes that delivery of the written communication could not have been effected despite fulfilling the conditions under Section 3.
Case Title: Srf Limited Vs Jonson Rubber Industries Limited.
Citation: 2024 LiveLaw (Del) 343
The Delhi High Court single bench of Justice Prathibha M. Singh held that the tax invoices explicitly containing the arbitration clause and parties without raising any dispute concerning it are legally bound by the arbitration clause.
“In the present case, the parties have a running account which is not in dispute. Two purchase orders may have been placed by the Respondent and various invoices may have been issued by the Petitioner. These invoices clearly state that the terms and conditions listed at the back are applicable. Considering that the parties are in regular business dealings with each other, it cannot be said prima facie that the rear of the invoice was not supplied to the Respondent.”
Case Title: Maj. Pankaj Rai vs M/s Niit Ltd.
Citation: 2024 LiveLaw (Del) 349
The Delhi High Court single bench comprising Justice Prateek Jalan held that once an arbitration award has been acknowledged to be fully and finally settled by both the parties, it cannot be challenged on the basis of one-sided nature of the arbitration agreement.
Case Title: CG Engineering Company Vs Ircon Infrastructure And Services Limited (Ircon Isl) And Anr.
Citation: 2024 LiveLaw (Del) 345
The Delhi High Court single bench of Justice Dinesh Kumar Sharma held that arbitral tribunal should generally be the primary authority to determine non-arbitrability, except in cases where claims were manifestly and ex facie non-arbitrable. It held that Sub-lease Agreement excluded the disputes related to public premise from arbitration, therefore, making them non-arbitrable.
Case Title: Spml Infra Limited vs Ntpc Limited
Citation: 2024 LiveLaw (Del) 353
The Delhi High Court single bench of Justice Prateek Jalan held that failure to file a copy of arbitral award renders the filing under Section 34 of the Arbitration and Conciliation Act, 1996 incomplete. The bench held that without the copy of the challenged award, it is impossible to consider the grounds to set aside the arbitral award.
Case Title: M/s Upper India Trading Co. Pvt. Ltd Vs M/s Hero Fincorp Ltd
Citation: 2024 LiveLaw (Del) 359
The Delhi High Court single bench of Justice Jasmeet Singh held aside an arbitral award noting that the arbitrator was unilaterally appointed by the Respondent. The bench held that that the unilateral appointment of the Sole Arbitrator by Respondent was non-est in law, as it contravened Section 12(5) read with the Seventh Schedule of the Arbitration and Conciliation Act, 1996.
Case Title: Techno Compact Builders v. Railtel Corporation of India Limited
Citation: 2024 LiveLaw (Del) 360
The High Cout of Delhi has held that a panel consisting of 23 names cannot be considered broad-based if lacks arbitrators from different backgrounds.
The bench of Justice Dinesh Kumar Sharma held that a panel must not only be broad in terms of numbers but should also reflect diversity by having arbitrators from diverse backgrounds.
Case Title: Rani Construction v. Union of India
Citation: 2024 LiveLaw (Del) 361
The High Court of Delhi has held the membership of an arbitral institution cannot be insisted upon as a pre-requisite for invoking arbitration.
The bench of Justice Sachin Datta held that when parties agree to resolve their dispute through an arbitral institution, such an agreement cannot be construed to mean that they have agreed to take its membership.
The Court held that insistence by an arbitral institution for such membership impinges on the validity of the appointment procedure and amounts to failure to perform the function entrusted to such institution. It held that in such a situation the appointment would be made by the Court under Section 11(6) of the A&C Act.
Case Title: Dharamvir & Company v. DDA
Citation: 2024 LiveLaw (Del) 362
The High Court of Delhi has held that merely because the delay in the execution of the work is attributable to the employer, the same would not entitle the contractor to claim damages unless it pleads and proves that such delay resulted in loss to it.
The bench of Justices Vibhu Bakhru and Tara Vitasta Ganju held that a procedural order passed by the earlier arbitrator, not being a final decision on the merits, does not preclude the substitute arbitrator from deciding the claims on their merits. It held that an order cannot be treated as an interim award when the issue was left to be decided on the merits at a later stage.
Delhi High Court Directs Arbitrator To Refund 6 Lakh Of 14.5 Lakh Fee Paid By Parties
Case Title: Smt. Manju Gupta & Ors. Vs Shri Vilas Gupta & Ors
Citation: 2024 LiveLaw (Del) 383
The Delhi High Court single bench of Justice Prathiba M. Singh directed the arbitrator to refund Rs.6,00,000- of the fees of Rs.14,50,000/- paid by the parties to the arbitrator noting the arbitrator had conducted a total of twelve hearings, of which only three resulted in substantive orders. Moreover, the bench noted that the issues in the arbitral proceedings had not yet been framed, and the arbitral proceedings had been on hold for over a year.
Case Title: Department Of Transport Govt Of Nct Of Delhi Vs Green City Transport Corporation Pvt Ltd
Citation: 2024 LiveLaw (Del) 376
The Delhi High Court single bench of Justice Dinesh Kumar Sharma held that not every defect leads to the dismissal of a petition under Section 34 of the Arbitration and Conciliation Act, 1996 and took a liberal approach for condonation of delay. It held that defects were not fundamental in nature and could be termed as curable or procedural.
Case Title: M/S Delhi Msw Solutions Limited vs Amity Software Systems Limited
Citation: 2024 LiveLaw (Del) 382
The Delhi High Court division bench of Justice Vibhu Bakhru and Justice Tara Vitasta Ganju rejected an application for condonation of delay of 191 days for petition filed under Section 37 of the Arbitration and Conciliation Act, 1996. It held that explanation provided for the delay was sketchy and did not corelate any event to specific dates or time period.
Case Title: Fusionnet Web Services v. Yash Fiber Network
Citation: 2024 LiveLaw (Del) 381
The Delhi High Court single bench of Justice Jasmeet Singh held that a mere franchisee responsible for promotion of services provided by the petitioner, ergo, it does not fall under the definitions of licensee, licensor, service provider, or group of consumers as per the TRAI Act. It held that bar under Section 14 only applies in relation to telecommunication services and not to every agreement involving a service provider.
Case Title: Oriel Financial Solutions v. Bestech Advisors Pvt Ltd
Citation: 2024 LiveLaw (Del) 380
The High Court of Delhi has held that an order of the arbitral tribunal rejecting an application challenging its jurisdiction under Section 16 of the A&C Act cannot be challenged in a writ petition unless the order is so perverse that it shocks the conscience of the Court.
The bench of Justice Subramonium Prasad reiterated that to protect the sanctity of the arbitral process, the Courts would not ordinarily interfere with an order of the arbitral tribunal in exercise of their writ jurisdiction.
Case Title: Nbcc India Ltd Vs Micro Small And Medium Enterprises Facilitation Council & Anr.
Citation: 2024 LiveLaw (Del) 379
The Delhi High Court single bench of Justice Subramonium Prasad held that a service supplier, upon registering during an ongoing contract, is eligible to avail benefits under the MSMED Act for services provided after registration. It held that it is always open to the arbitrator to decide this issue even as a preliminary issue.
Case Title: Vijay Kumar Mishra Construction Pvt. Ltd. Through Its Director Vijay Kumar Mishra vs The Oriental Insurance Co. Ltd
Citation: 2024 LiveLaw (Del) 378
The Delhi High Court single bench of Justice Jasmeet Singh dismissed the application filed under Section 11 of the Arbitration and Conciliation Act, 1996 and held that such a petition should be filed at the place of the subordinate office of the corporation.
“In the present case as well, the subordinate office of the respondent is situated at Satna, Madhya Pradesh and for the said reason, the State of Madhya Pradesh will have the jurisdiction to entertain and try the present petition under Section 11 of the Arbitration and Conciliation Act, 1996.”
Case Title: Psa Protech And Infralogistics Pvt. Ltd. Vs Food Corporation Of India
Citation: 2024 LiveLaw (Del) 377
The Delhi High Court single bench of Justice Jasmeet Singh held that the application under Section 29A of the Arbitration and Conciliation Act, 1996 can be allowed even after the expiry of the mandate of the Arbitral Tribunal.
Section 29A deals with the time limit for arbitral award. It specifies that the award shall be made within a period of twelve months from the date the arbitral tribunal enters upon the reference. However, parties may extend this period by mutual consent for up to six months. If the award is not made within this time frame, the mandate of the arbitral tribunal shall terminate unless the Court has extended the time period.
Case Title: Kamladityya Construction Pvt Ltd Vs Union Of India
Citation: 2024 LiveLaw (Del) 259
The Delhi High Court single bench of Justice Jasmeet Singh terminated mandate of an arbitrator who disclosed the award prematurely and revealed details about several claims during the hearing of the arbitral proceedings to the party. The bench held that Section 42 of the Arbitration and Conciliation Act, 1996 mandates for strictest confidentiality in arbitration proceedings and the Award itself.
After considering the report submitted by DIAC, the High Court noted that during the hearing, the Arbitrator was dictating the Award in the hearing room. This dictation was being typed by the P.A. on a desktop computer, which was mirrored on a large display in the room, as per general practice. Upon the arrival of the parties and their counsel, the Arbitrator initiated discussions about the mandate of the Tribunal. Simultaneously, the P.A. minimized the computer screen on which the Award was being typed, ensuring that the parties were not able to see the ongoing process. The DIAC, however, clarified that due to the enclosed space and confidentiality reasons, staff beyond the barest minimum required were not present in the room. The High Court noted that the Centre could not comment on any formal or informal discussions between the parties and the Arbitrator during that time.
Case Title: Sterlite Technologies Ltd. Vs Bharat Sanchar Nigam Limited
Citation: 2024 LiveLaw (Del) 260
The Delhi High Court single bench of Justice Prathiba M Singh held that multiple arbitrations before different Arbitral Tribunals in respect of the same contract is counterproductive and ought to be avoided.
The bench held that it is incumbent on the parties to disclose such information to the court when approaching for appointment of arbitrator under Section 11(6) of the Arbitration & Conciliation Act, 1996.
The High Court referred to the case of Gammon India Ltd. & Anr. v. NHAI, 2020:DHC:2144, and noted that it an important to avert the potential pitfalls associated with multiple arbitrations before distinct Arbitral Tribunals concerning the same contract. The High Court emphasized the counterproductivity of such a scenario and stressed the importance of avoiding conflicting and irreconcilable findings.
Case Title: M/S. Fiberfill Engineers Through Its Partner Mr. Rishabh Kishore Vs M/S. Indian Oil Corporation Limited Through Dy. General Manager (Engg.)
Citation: 2024 LiveLaw (Del) 261
The Delhi High Court single bench of Justice Prateek Jalan set aside an arbitral award noting that the Indian Oil Corporation Limited failed to present evidence before the Arbitrator, thereby, making it impossible to adjudicate the contention raised regarding payment of dues. The bench imposed a substantial costs of Rs.1 lakh on the Indian Oil for taking unjustifiable contrary stands at various points in the proceedings.
The High Court noted a contradiction in the Respondent's stance before the Arbitrator. Despite claiming that No Due Certificates were signed by the Petitioner, it noted that the Respondent failed to produce those certificates. Regarding the inconsistency of documents presented in arbitration proceedings, it highlighted the Respondent's inability to correlate certificates with specific work orders or match them with payments. It noted that the No Due Certificates were made prior to any payment by the Respondent. It held that there were no certificates issued after payment.
Case Title: Union Of India Vs NCC Limited
Citation: 2024 LiveLaw (Del) 262
The Delhi High Court single bench of Justice Prateek Jalan held that non filing of the arbitral award along with the Petition under Section 34 of the Arbitration and Conciliation Act, 1996 is a fatal defect, making such filing as non-est.
The bench held that the absence of a copy of the award renders it impossible to appreciate the grounds for seeking to set aside the award.
The High Court referred to the decision of its Division Bench, particularly the case of Oil & Natural Gas Corporation Ltd. v. Joint Venture of M/s Sai Rama Engineering Enterprises (SREE) & Ors. [FAO(OS)(COMM) 324/2019, dated 09.01.2023]. In this case, it was explicitly stated that non-filing of the award constitutes a fatal defect. The High Court emphasized the necessity for an application under Section 34 of the Arbitration Act, to be accompanied by a copy of the challenged award, without which the grounds for setting aside the award cannot be appreciated.
Case Title: M/S. Breakthrough Concepts Vs M/S. Atrix Group Of Restaurants & Anr.
Citation: 2024 LiveLaw (Del) 264
The Delhi High Court single bench comprising held that 'negotiation' necessitates communication between the involved parties, asserting that a party failing to respond to legal notices from another cannot be considered actively participating in the negotiation process. Consequently, Justice Sharma referred the matter to arbitral tribunal.
The High Court held that the Petitioner diligently pursued resolution by consistently dispatching demand notices to the Respondents, all of which went unanswered. It held that this showed the Petitioner's earnest attempt to seek a resolution before resorting to court intervention. In interpreting the term 'negotiation,' the High Court held that it is imperative to understand it in a pragmatic context. Negotiation necessitates communication between the involved parties, and for it to be effective, it must be a reciprocal exchange.
Case Title: National Skill Development Corporation Vs Best First Step Education Private Limited & Ors.
Citation: 2024 LiveLaw (Del) 265
The Delhi High Court single bench of Justice Prateek Jalan held that a petition under Section 29A of the Arbitration and Conciliation Act, 1996 is maintainable when filed before the award is delivered during the ongoing petition, but becomes non-maintainable if filed after the award is delivered and proceedings for setting aside have commenced.
The High Court referred to the case of Harkirat Singh Sodhi v. Oram Foods (P) Ltd. [2023 LiveLaw (Del) 538], involved a situation similar to the case, where the award was rendered during the pendency of the Section 29A petition, and the mandate was extended until the award date. Another Coordinate Bench, in Powergrid Corpn. of India Ltd. v. SPML Infra Ltd., considered the question of whether an award could be validated if made after the Tribunal's mandate had expired and no prior application for extension was submitted. The court concluded that such a petition is not maintainable.
Case Title: Tata Motor Limited vs Delhi Transport Corporation
Citation: 2024 LiveLaw (Del) 273
The Delhi High Court bench comprising Justice Manoj Kumar Ohri held that the Section 9 application under Arbitration and Conciliation Act, 1996 cannot act as res judicata for Section 17 application when the withdrawal of Section 9 application is conditional between the parties. The bench dismissed the reliance on Kanchan Kapoor v. Swaran Kumar noting that the principles of res judicata applied in that case due to the appellant's unconditional withdrawal of an appeal against a civil court judgment, where there was a finding against the appellant.
Section 17 provides the arbitral tribunal power to give interim measures to the parties.
The High Court expressed concern over DTC's failure to provide reasons for refraining from challenging the previous orders and questioned the rationale behind making an exception for challenging the present order.
Case Title: M/s Sabsons Agencies Private Limited Vs M/s Harihar Polymers & Anr.
Case Number: CS(COMM) 899/2023 & I.As. 25472-25473/2023, 4893/2024.
The Delhi High Court bench comprising Justice Prateek Jalan held that the requirement of pre-litigation meditation under Section 12-A of the Commercial Courts Act, 2015 is mandatory in nature.
Section 12-A of the Act outlines the mandatory requirement for pre-institution mediation before filing a suit, provided urgent interim relief is not sought. The Central Government may authorize Legal Services Authorities for this purpose, with a three-month mediation timeframe extendable by two months with parties' consent. Settlements reached hold the same status as arbitral awards under the Arbitration and Conciliation Act, 1996 (“Arbitration Act”).
The High Court noted that the circumstances in this case was distinguishable from the precedent in Amit Walia v. Shweta Sharma. In that case, the judgment was rendered based on mediation conducted under the Delhi High Court Mediation and Conciliation Centre, which the Court deemed sufficient compliance with Section 12-A, despite not occurring before the District Legal Services Authority as stipulated by the Commercial Courts Act.
Case Title: Godavari Projects (J.V) Vs Union of India.
Case Number: ARB.P. 1342/2022.
The Delhi High Court single bench of Justice Sachin Datta held that proceedings contemplated in Section 14 of the Insolvency and Bankruptcy Code (IBC) do not expressly exclude the jurisdiction of the court or authorities to entertain applications under Section 11(6) of the Arbitration Act or other proceedings initiated by the corporate debtor against another party. It held that even if a Joint Venture is undergoing insolvency, the bench held that preclude the corporate debtor from filing an application under Section 11.
The High Court emphasized that the question of whether the Petitioner had the authority to terminate the contract by relying on the Government of India's Office Memorandum must be addressed within the arbitral proceedings.
Furthermore, the High Court delved into the concept of a joint venture, referencing the Supreme Court in New Horizons Limited v. Union of India (1995) 1 SCC 478. The High Court noted that a joint venture as a legal entity akin to a partnership, emphasizing the collaborative nature involving shared assets and risks. Even assuming the Petitioner JV is undergoing insolvency, the High Court clarified that it does not preclude the corporate debtor from filing an application under Section 11 of the Arbitration Act against another party. It highlighted that proceedings contemplated in Section 14 of the Insolvency and Bankruptcy Code (IBC) do not expressly exclude the jurisdiction of the court or authorities to entertain applications under Section 11(6) of the Arbitration Act or other proceedings initiated by the corporate debtor against another party.
Case Title: Aerosource India Pvt Ltd. Vs Geetanjali Aviation Pvt Ltd.
Citation: 2024 LiveLaw (Del) 296
The Delhi High Court single bench of Justice Dinesh Kumar Sharma dismissed a petition filed under Section 11 (5) of the Arbitration and Conciliation Act, 1996, noting that prima facie there was no arbitration agreement between Petitioner and Respondent. The High Court noted that Section 8(1), as amended in 2015, mandates the referral of parties to arbitration by a judicial authority unless there is prima facie finding that no valid arbitration agreement exists.
Case Title: Rites Ltd Vs Ahuwalia Contract (India) Ltd. & Anr.
Citation: 2024 LiveLaw (Del) 295
The Delhi High Court single bench of Justice Prateek Jalan held that when parties agree that no interest shall be payable, the Arbitral Tribunal is bound by that agreement. The bench held that that such an agreement is not ultra vires under Section 28 of the Contract Act, 1872.
Case Title: Chabbras Associates vs M/s Hscc (India) Ltd & Anr.
Citation: 2024 LiveLaw (Del) 293
The Delhi High Court single bench of Justice Dinesh Kumar Sharma rejected the contention presented by Respondent, that the unilateral appointment of the arbitrator made in accordance with the contract cannot be challenged and the only option available to the petitioner is to challenge the mandate of the arbitrator. It emphasized that the unilateral appointment of an arbitrator as stipulated in Clause 25 of the GCC was inherently and blatantly unlawful.
Case Title: M/s Sabsons Agencies Private Limited Vs M/s Harihar Polymers & Anr.
Citation: 2024 LiveLaw (Del) 286
The Delhi High Court bench comprising Justice Prateek Jalan held that the requirement of pre-litigation meditation under Section 12-A of the Commercial Courts Act, 2015 is mandatory in nature.
Section 12-A of the Act outlines the mandatory requirement for pre-institution mediation before filing a suit, provided urgent interim relief is not sought. The Central Government may authorize Legal Services Authorities for this purpose, with a three-month mediation timeframe extendable by two months with parties' consent. Settlements reached hold the same status as arbitral awards under the Arbitration and Conciliation Act, 1996 (“Arbitration Act”). Arbitral Tribunal Can Award Damages For Delay Attributable To Employer Even When The Agreement Provides For The Extension Of Time As The Only Remedy To The Contractor: Delhi High Court
Case Title: MBL Infrastructure Ltd v. DMRC, OMP(COMM) 311 of 2021.
The High Court of Delhi has held that the Arbitral tribunal can award monetary compensation as damages for the delay attributable to employer even when the agreement provides for the extension of time as the only remedy to the contractor.
The bench of Justice Chandra Dhari Singh held that the tribunal cannot deny damages on the ground that the agreement provides only for extension of time, especially when the agreement has already been terminated by the employer and there is no occasion for the contractor to seek extension. It held that the tribunal, in such a situation, has to necessarily compensate the contractor in terms of unliquidated damages.
Case Title: MBL Infrastructure Ltd v. DMRC, OMP(COMM) 311 of 2021.
The High Court of Delhi has held that a clause that restricts the right of the contractor to seek damages for delay attributable to the employer is against public policy in terms of Section 23 of the Indian Contract Act.
The bench of Justice Chandra Dhari Singh held a clause that restricts the right of the aggrieved party to claim damages is prohibitionary in nature and against the fundamental policy of Indian Law. It held that such a clause is no fetter on the power of the arbitral tribunal to compensate, by way of unliquidated damages, a party that has suffered loss due to the delay attributable to the other party.
The Court held that once the tribunal has ascertained that the employer is responsible for the delays in the execution of the project work, the tribunal must award damages to the contractor and it cannot deny the damages merely because the agreement prohibits or does not contain any provision for damages.
Court Under Section 34 Of The A&C Act Can Partially Set Aside The Award: Delhi High Court Reiterates
Case Title: MBL Infrastructure Ltd v. DMRC, OMP(COMM) 311 of 2021.
The High Court of Delhi has held that a Court exercising powers under Section 34 of the A&C Act can sever an offending portion of the arbitral award. It held that such exercise of power amounts to partial setting aside of the award and not a modification.
The bench of Justice Chandra Dhari Singh explained that modification would be when the court modifies/changes the damages awarded, modifies the interest rate, etc. But mere setting aside of unconnected/independent findings of the tribunal on different claims does not amount to modification of the award.
Case Title: Godavari Projects (J.V) Vs Union of India.
Citation: 2024 LiveLaw (Del) 287
The Delhi High Court single bench of Justice Sachin Datta held that proceedings contemplated in Section 14 of the Insolvency and Bankruptcy Code (IBC) do not expressly exclude the jurisdiction of the court or authorities to entertain applications under Section 11(6) of the Arbitration Act or other proceedings initiated by the corporate debtor against another party. It held that even if a Joint Venture is undergoing insolvency, the bench held that preclude the corporate debtor from filing an application under Section 11.
Case Title: Indigrid Technology Pvt. Ltd Vs Genestore India Pvt. Ltd
Citation: 2024 LiveLaw (Del) 292
The Delhi High Court single bench of Justice Jasmeet Singh held that fraud alleging regarding the internal management of the company doesn't go to the root of the contract. Therefore, the bench held that the dispute concerning the lack of authority to enter into a contract are arbitrable.
The bench held that the Court while deciding a petition under Section 11 of the Arbitration and Conciliation Act, 1996 is only required to see the existence of an Arbitration Clause.
Gauhati High Court
Case Title: M.S. Oil India Limited vs M.S. Badri Rai And Company
The Gauhati High Court single bench of Justice Sanjay Kumar Medhi held that the commencement under Section 21 of the Arbitration and Conciliation Act, 1996 does not arise unless an Arbitration Tribunal is constituted. It held that the arbitration does not automatically commence when the other party gives receipt of the claim.
The High Court held that there is a presumption that there is consent from the nominee arbitrators of both parties for the appointment of the Presiding Arbitrator. It emphasized that the Presiding Arbitrator cannot assume jurisdiction to adjudicate the dispute and issue a declaration under Section 12 of the Arbitration Act without such consent.
Case Title: M/s Atw (India) Pvt. Ltd. vs Union Of India And Anr
The Gauhati High Court single Judge Justice Michael Zothankhuma has rejected the notion that it is a mere post office under Section 11(6) of the Arbitration and Conciliation Act, 1996, obligated to appoint an arbitrator without considering obvious legal infirmities.
The single-judge held that the court under Section 11(6) of the Arbitration Act decides the arbitrability of the dispute by prima facie analysis.
The High Court noted that Clause 63 & 64(1)(i) of the GCC clearly mandated the resolution of disputes through arbitration. However, it noted the introduction of a limitation in Clause 10.1, stating that when the claim or dispute value exceeds 20% of the contract work value, the provisions of Clause 63 & 64 of the GCC would not be attracted. The Petitioner a claim amounting to Rs. 1,86,23,336.78, which constituted approximately 36.6% of the total contract value as per the contract agreement.
Case Title: M/s Barpeta Agro Infra vs The Union Of India And 2 Others
Case Number: Arb.P./51/2023
The Gauhati High Court single bench of Justice Michael Zothankhuma held that panel/appointment of the serving/retired officials of the Railways, as members of the Arbitral Tribunal, is hit by Section 12(5) and the 7th Schedule of the Arbitration and Conciliation Act.
Case Title: M/S Trideep Changmai Vs Micro and Small Enterprises Facilitation Council And Anr
Case Number: Case No. : WP(C)/5029/2021
The Gauhati High Court single bench of Kaushik Goswami dismissed a writ petition noting that when a dispute arises regarding payment under Micro, Small and Medium Enterprises Development Act, 2006, the mechanism under Section 18 shall be followed to resolve the dispute by way of a conciliation proceeding, failing which arbitration proceeding as prescribed under Section 18 to be conducted.
Case Title: Bhartia Dooars (JV) And 2 Ors Vs Union Of India And 3 Ors.
Case Number: Arb.P./5/2023
The Gauhati High Court single bench of Justice Michael Zothankhuma held the personnel who is the employee of the Indian Railways cannot be appointed as an arbitrator as it would violate Section 12(1) of the Arbitration and Conciliation Act, 1996 and the law laid down in Perkins Eastman Architects DPC & Anr. Vs. HSCC (India) Ltd.
Gujarat High Court
Case Title: Board Of Trustees Of Deendayal Port Through Executive Engineer (H) Vs M/S. Shantilal B. Patel & Anr.
The Gujarat High Court division bench of Chief Justice Sunita Agarwal and Justice Aniruddha P. Mayee held that Court cannot sit in appeal over the arbitral award and re-examine the merits. It held that it is not permissible for a court to reappreciate the evidence on record.
Further, it held that the arbitral award cannot be interfered with where on interpretation of any contract or document, two views are possible, and the Arbitrator has accepted one view.
The High Court held that it cannot sit in appeal over an arbitral award and re-examine the merits of the case. It emphasized that it is impermissible to re-appreciate the evidence on record in a Section 34 application. It highlighted the limited scope of interference under Sections 34 and 37 of the Arbitration Act. Further, it held that interference is not warranted when two possible views on the interpretation of a contract or document exist, and the arbitrator has accepted one view.
Case Title: M/S Sai Polyplast Vs Vikas Raj Chhajer
The Gujarat High Court single bench of Chief Justice Sunita Agarwal held that the High Court noted that allegations in criminal proceedings regarding fraud and misappropriation of funds, being inter se parties and having no public implications, do not make the dispute non-arbitrable.
The High Court referred to the case of World Sport Group (Mauritius) Limited vs. MSM Satellite (Singapore) Pte. Limited, (2014) 11 SCC 639, and noted that the arbitration agreement does not become “inoperative” or incapable of being performed merely because allegations of fraud are made. It emphasized that the dispute should not be refused arbitration under Section 45 of the Arbitration Act, solely on the grounds of fraud allegations. It clarified that the arbitration agreement can be declined only if it is found to be null and void, inoperative, or incapable of being performed, not based on the need to inquire into fraud allegations.
In the case of A. Ayyasamy vs. A. Paramasivam and others, (2016) 10 SCC 386, the trial Court rejected an application under Section 8 of the Arbitration Act, citing serious fraud allegations. The Supreme Court examined the correctness of this stand, noting that the Act does not categorize disputes as non-arbitrable. The Supreme Court affirmed that serious fraud allegations should not automatically render the dispute non-arbitrable.
Case Title: Poll Cont Associates vs Narmada Clean Tech Ltd.
The High Court of Gujarat single bench of Chief Justice Sunita Agarwal allowed a Section 11 application of the Arbitration and Conciliation Act seeking the appointment of an Arbitrator. It refuted the contention of the Respondent that the dispute had become non-arbitrable because the Petitioner had issued a 'No Claim Certificate' earlier, making the dispute 'stale' in nature.
The bench reiterated that it could only carry on a prima-facie assessment as a general rule of law and the decision on arbitrability lies primarily within the Arbitrator's ambit.
At the outset, the High Court refuted the Respondent's contention that the disputes are no more arbitrable because they've become 'stale'. In this regard, the High Court referred to the 'Eye of the Needle' principle propounded by the Supreme Court in NTPC Limited vs SPML Infra Limited, which means that the jurisdiction of the courts under Section 11(6) of the Arbitration Act is very narrow and warrants just two inquiries. The primary inquiry has to be whether an arbitration agreement existed between the parties (this includes the question of privity of contract) and the secondary inquiry has to be whether the dispute is arbitrable. The High Court further clarified that arbitrability of the dispute, as a general rule, also lay under the Arbitrator's ambit. However, the referral court may reject claims which are ex-facie and manifestly non-arbitrable.
Case Title: Board Of Trustees Of Deendayal Port Through Executive Engineer (H) Vs M/S. Shantilal B. Patel & Anr.
The Gujarat High Court division bench of Chief Justice Sunita Agarwal and Justice Aniruddha P. Mayee held that Court cannot sit in appeal over the arbitral award and re-examine the merits. It held that it is not permissible for a court to reappreciate the evidence on record.
Further, it held that the arbitral award cannot be interfered with where on interpretation of any contract or document, two views are possible, and the Arbitrator has accepted one view.
The High Court held that it cannot sit in appeal over an arbitral award and re-examine the merits of the case. It emphasized that it is impermissible to re-appreciate the evidence on record in a Section 34 application. It highlighted the limited scope of interference under Sections 34 and 37 of the Arbitration Act. Further, it held that interference is not warranted when two possible views on the interpretation of a contract or document exist, and the arbitrator has accepted one view.
The Gujarat High Court division bench of Chief Justice Sunita Agarwal and Justice Aniruddha P Mayee dismissed appeal under Section 37 of the Arbitration and Conciliation Act, 1996 noting that arbitrator's finding was based upon the proper appreciation and interpretation of the prevalent conditions and the site inspection along with the documents on record.
Himachal Pradesh High Court
Case Title: Chander Prabha vs LAC & Anr.
Case Number: Arb. Case No. 303 of 2024.
The Himachal Pradesh High Court single bench of Justice Sushil Kukreja held that when a statute envisages an authority, be it an Arbitrator, to do a particular act in a particular manner and in a prescribed time schedule, then the onus is upon the said authority/Arbitrator to perform the task entrusted to it within the time schedule prescribed in the statute. It held that the Divisional Commissioner, acting as an arbitrator under National Highways Act, 1956, despite the completion of pleadings granted adjournments to the proceedings.
Jammu & Kashmir and Ladakh High Court
High Court At Designated 'Venue' Has Jurisdiction, J&K High Court Dismisses S. 11 Application
Case Title: Babu Ram vs Tata Project Ltd. Residential Manager and Ors.
The Jammu & Kashmir and Ladakh High Court bench comprising Chief Justice N. Kotiswar Singh affirmed that when parties specify a particular location as the venue for arbitration proceedings, that location effectively becomes the seat of arbitration. Consequently, only courts with jurisdiction over that designated venue possess the authority to hear and decide on matters pertaining to the arbitration agreement. Therefore, the bench dismissed an application under Section 11(6) of the Arbitration and Conciliation Act, 1996 for the appointment of an arbitrator noting that the arbitration clause specified Hyderabad is the seat of arbitration, thereby, excluding its jurisdiction to entertain the application.
The High Court referred to the decision of the Supreme Court in BGS SGS Soma JV v. NHPC, (2020) 4 SCC 234, and reinforced the interpretation of arbitration clauses with designated venues as indicating the "seat" of arbitration. The High Court noted that the term "venue" in arbitration clauses refers to the "seat" of arbitration, signifying not only the location for hearings but the overall conduct of the arbitration proceedings. This interpretation aligns with Section 20 of the Arbitration Act, wherein parties have the autonomy to select the place of arbitration.
Case Title: Suncity Dhoot Colonizers v. Ram Chandra, W.P. No. 28151 of 2023
The High Court of Madhya Pradesh held that an order of the arbitral tribunal rejecting a challenge to its jurisdiction under Section 16 of the A&C Act is not challengeable in a writ petition.
The bench of Justice Sushrut Arvind Dharmadhikari held that a party aggrieved by the rejection of its application under Section 16 of the AC& Act has to wait till the passing of the final award and then challenge the award under Section 34 of the Act including the ground of lack of jurisdiction of the arbitral tribunal.
Case Title: J.K. Sthapak vs Satish Kumar Saxena and Anr.
The High Court of Madhya Pradesh bench comprising Justice Achal Kumar Paliwal dismissed a revision petition seeking to invoke Section 8 of the Arbitration and Conciliation Act, 1996 based on a dispute related to the transfer of cheques under a partnership deed. The arbitration clause in the deed was about disputes arising between the parties, touching the firm's business or interpretation of any subsequent provisions relating to the firm and its business. The High Court noted there was no record suggesting that the mentioned amount was provided to the Petitioner concerning the partnership's business. As a result, the High Court concluded that Clause 22 of the partnership deed, which pertained to arbitration in business-related disputes, would not be applicable in this case.
The High Court observed that two cheques out of three were issued from the firm's account and one cheque was issued from the Respondent's account. The High Court further noted that even prima facie, there was no evidence to demonstrate that Rs. 22 Lakh was given to the Plaintiff from the firm's account. Consequently, there was no record suggesting that the mentioned amount was provided to the Petitioner concerning the partnership's business. As a result, the High Court concluded that Clause 22 of the partnership deed, which pertained to arbitration in business-related disputes, would not be applicable in this case.
Jharkhand High Court
Case Title: M/s Bharat Petroleum Corporation Limited v Anant Kumar Singh, Commercial Appeal No. 15 of 2020
The Jharkhand High Court while dismissing an appeal directed challenging the Commercial Court's dismissal of a Section 34 Petition against an arbitrator's award, has held that a mere contravention of substantive law by itself does not constitute a valid ground for setting aside an arbitral award subsequent to the 2015 amendment in the Arbitration and Conciliation Act, 1996 (Act).
The division bench headed by Acting Chief Justice Shree Chandrashekhar and Justice Anubha Rawat Choudhary observed, “As explained above, it has been held by the Hon'ble Supreme Court that post-2015 amendment a mere contravention of the substantive law of India, by itself, is no longer a ground available to set aside an arbitral award.”
Karnataka High Court
Case Title: M/S. Mvr Constructions Vs M/S. V.M.R Constructions And Others.
Case Number: WRIT PETITION NO. 4604 OF 2018 (GM-CPC)
The Karnataka High Court single bench of Justice M G Uma held that the parties not signatories to the Joint Venture Agreement, stipulating the arbitration clause, cannot be forced to arbitration proceedings.
Case Title: M/s Bellary Nirmithi Kendra v. M/s Capital Metal Industries, CRP No. 100067 of 2022
The High Court of Karnataka has held that Section 47 of the CPC does not apply to proceedings for enforcement of arbitral award.
The bench of Justice C.M. Poonacha held that an arbitral award can only be challenged on the grounds mentioned under Section 34 of the Act and not otherwise. It held that the award is deemed to be a decree for the purpose of the enforcement, however, this deeming fiction is limited to its enforcement only.
Case Title: M/S Durga Projects Inc Vs Sri. B.G. Babu Reddy
Case Number: Criminal Appeal No.434 Of 2014 (A) C/W Criminal Appeal No.433 Of 2014 (A)
The Karnataka High Court single bench of Justice Anil B Katti held that simultaneous proceedings can be carried on under the Arbitration and Conciliation Act, 1996 and Section 138 of the Negotiable Instruments Act. The bench further held that a party cannot be acquitted solely on the basis of presence of an arbitration agreement.
Kerala High Court
Case Title: Rkec Projects Limited Vs The Cochin Port Trust, The Office Of Chief Engineer And Another.
Case Number: IA.NO.1/2023 IN AR NO. 53 OF 2019
The Kerala High Court single bench of Justice Anu Sivaraman held that the Court would be empowered to extend the time for passing the award under Section 29A of the Arbitration and Conciliation Act, 1996 even in a case where the arbitral award has already been passed if there exit sufficient grounds for such an extension.
Case Title: Sabu George & Ors. v. James George & Ors.
Citation: 2024 LiveLaw (Ker) 25
The Kerala High Court recently held that an order passed by a Subordinate Judge's Court acting as a Commercial Court under a Government notification, would be appealable only before the concerned Commercial Appellate Court as per Section 13 of the Commercial Courts Act, and not before the High Court, as per the Arbitration & Conciliation Act, 1996 ('Act, 1996).
Madhya Pradesh High Court
Case Title: M/S Banco Construction Pvt Ltd Vs Narmada Extrusions Ltd
Case Number: ARBITRATION CASE No. 40 of 2022.
The Madhya Pradesh High Court single bench of Justice Anand Phatak held that proceedings under Section 138 of the Negotiable Instruments Act regarding dishonoring of cheques and arbitration are two proceedings moving in different jurisdictional realm and they are parallel in nature rather than overlapping. It held that “both may continue because scope of Section 138 of the N.I. Act is confined to the dishonoured cheques, whereas dispute between the parties appears to be such deep and exact depth can only be fathomed by the arbitrator where parties would have all opportunities to canvas their cause.”
Orissa High Court
The Orissa High Court single bench of Justice KR Mohapatra held that Micro & Small Enterprises Facilitation Council doesn't have power to entertain an application with regard to the maintainability of the reference at the conciliation stage under Micro, Small And Medium Enterprises Development Act, 2006. It held that question of maintainability can only be adjudicated if arbitration is taken up by the Council.
Patna High Court
Case Title: State of Bihar v. Bihar Rajya Vikas Bank Samiti, Miscellaneous Appeal No. 238 of 2021
The High Court of Patna has held that no dispute can be referred to arbitration by a Court exercising powers under Article 226 of the Indian Constitution when there is no agreement between the parties.
The bench of Justice Partha Sarthy held that the remedy of arbitration is the creature of a contract and the same cannot be utilised in absence of a written agreement between the parties as provided under Section 7 of the A&C Act.
Punjab & Haryana High Court
Case Title: M/S Dharam Pal Maddar And Sons Vs Union Of India Through Senior D.E.N. Iii Drm Office Northern Railway, Ferozepur.
Case Number: RA-CR-204-CII-2018 IN/AND ARB-222-2016 (O&M).
The Punjab and Haryana High Court single bench of Justice Vinod S. Bhardwaj held that notice for appointment of an Arbitrator was not necessarily required to be addressed to the General Manager of the Railways. Notice to invoke arbitration was said to be fulfilled as it was sent by a registered post to the Railways.
Case Title: M/s A.G. Construction Co. vs The State of Punjab and Others
The High Court of Punjab and Haryana single-judge bench of Justice Suvir Sehgal adjudicated on a Section 11 petition filed by a Construction Company which was conducting work for the Department of Technical Education and Industrial Training, although the department itself wasn't a party to the petition. The single-judge bench determined that even though the work was intended for the Department, this department neither issued the allotment nor acted as the executing agency. As a result, the petition was allowed.
The High Court held that the objections raised by the respondents were invalid. The allotment letter was executed between the Petitioner and the Respondent. Although the work was intended for the Department of Technical Education and Industrial Training, this department neither issued the allotment nor is it the executing agency. Therefore, it was not considered a necessary party to the petition for the appointment of an arbitrator.
Rajasthan High Court
Case Title: Akha Ram and Others vs National Highway Authority Of India and Others.
Case Number: S.B. Civil Misc. Appeal No. 1805/2023.
The Rajasthan High Court single bench of Justice Rekha Borana held that determination of compensation under National Highways Act, 1956 can be challenged before the arbitrator appointment by the Central Government. The bench held that challenges to such determination fall under the Arbitration and Conciliation Act, 1996.
Telangana High Court
Case Title: M/S Sms Limited vs Uranium Corporation Of India Limited
Case Number: ARBITRATION APPLICATION No.175 of 2023.
The Telangana High Court single bench of Chief Justice Alok Aradhe held that the question of whether the claims of a party are barred by limitation is a matter that necessitates adjudication by the Arbitral Tribunal. Considering the provisions outlined in Section 16 of the Arbitration and Conciliation Act and the legislative intent to curtail judicial interference at the pre-reference stage, the bench held that the issue of limitation falls within the purview of the Arbitral Tribunal for adjudication.
Arbitrator Taking A Different View Is Not A Ground To Set Aside Award: Telangana High Court
Case Title: M/S Nile Ltd. vs Sri Gurdip Singh and Another
The Telangana High Court bench comprising Justice M.G. Priyadarsini held that the scope of setting aside an arbitral award under Section 34 of the Arbitration and Conciliation Act, 1986 is very limited and can only be set aside if there is an error apparent on the face of the record and there is perversity in the award. Further, it held that the courts should not interfere with the arbitral awards merely because a different view has been taken by the arbitrator based on the evidence and that it should be against public policy or public interest.
Regarding the scope of interfering with the arbitration award, the High Court noted that there is limited scope for interfering with an award under Section 34 of the Arbitration and Conciliation Act, 1986 (“Arbitration Act”). Further, it noted that the expression “public policy” in Section 34 has a wider amplitude and awards passed against the terms of the contract are not in public policy. It referred to the decision of the Supreme Court in NTPC Limited v. Deconar Services Private Limited [2021 SCC OnLine SC 498], where it was held that the courts should not interfere with arbitral awards merely because a different view could be taken based on the evidence. It emphasized that unless there is perversity in the award or an error of law, courts should refrain from intervening. The High Court clarified that showing another reasonable interpretation of the evidence is insufficient grounds for interference.
Case Title: East Hyderabad Expressway Limited vs The Hyderabad Metropolitan Development Authority and another.
The Telangana High Court bench comprising Justice C.V. Bhaskar Reddy held that the question of whether a claim is barred by limitation time is to be decided by the Arbitral Tribunal/Arbitrator under Section 20 of the Arbitration and Conciliation Act, 1996. Further, the bench noted that the scope of Section 11(6) in conjunction with Section 11(9) is confined to the appointment of an arbitrator based on the existence of an arbitration agreement and not to examine the merits of the case.
Case Title: Athelli Mallikarjun and others vs S.S.B Constructions, Registered Partnership Firm, Secunderabad and another.
The Telangana High Court single bench comprising Justice CV Bhaskar Reddy held that the mere exchange of communications or settlement discussions between the parties does not extend the period of limitation for issuing a notice of arbitration. The bench held that mere negotiations do not delay the cause of action for the purpose of limitation.
The High Court held that since the Arbitration Act does not specify the limitation period for filing an application under Section 11, recourse must be taken to the Limitation Act, 1963. The High Court noted that the notice invoking arbitration issued by the Applicants was over five years after the rejection of their claims by the Respondent. It noted that the period of limitation for such notices begins immediately after the rejection of final bills, pursuant to Article 55 of the Schedule of the Limitation Act. It highlighted the necessity for a clear notice invoking arbitration, setting out the particular dispute within three years from the rejection of a final bill.
Case Title: M/s Naolin Infrastructure Private Ltd. vs M/s Kalpana Industries
The Telangana High Court single bench of Justice Alok Aradhe held that the requirement under Section 8(1) of the Arbitration and Conciliation Act, 1996 to inform the court regarding the existence of an arbitration clause is fulfilled when a party files an application for rejection of plaint under Order VII Rule 11 of the Code of Civil Procedure, 1908 in a commercial court.
The High Court noted that the essence of Section 8(1) of the Arbitration Act is to bring to the notice of the court the existence of an arbitration agreement between the parties involved. Referencing the decision of the Supreme Court in the case of Sundaram Finance Ltd. vs Abdul Samad [AIR 2018 SC 965], the High Court held that once an application is made under Section 8 of the Arbitration Act, the approach of the civil court should not centre around jurisdiction but rather on whether its jurisdiction has been ousted. It stressed the importance of adhering to the procedures outlined in special statutes, stating that general law should yield to special law. Further, it held that failure to do so could delay dispute resolution and exacerbate the complexity of grievances.
Case Title: Sri Gourishetty Srinivas vs M/s Karvy Data Management Services
The Telangana High Court bench comprising Justice K Lakshman held that the court can refer a dispute to arbitration unless a party could establish a prima facie case of the non-existence of a valid arbitration agreement. The bench held that in cases where doubt arises regarding the validity of the arbitration agreement, the matter should be referred and decided by the arbitrator.
The High Court, after referring to the arbitration clause and the existence of a dispute regarding rent payment between the parties, observed that an arbitration clause was indeed present in the agreement. Referring to the decision of the Supreme Court in Vidya Drolia v. Durga Trading Corporation [(2021) 2 SCC 1], where the Supreme Court laid down principles for exercising power under Section 11 of the Arbitration and Conciliation Act, 1996. The High Court emphasised the court's role in referring matters to arbitration unless a party could establish a prima facie case of the non-existence of a valid arbitration agreement.
Case Title: K. Venkateswara Rao vs Union Of India.
The Telangana High Court single bench of Justice M.G. Priyadarsini held that as long as the composition of the arbitral tribunal or the arbitral procedure aligns with the agreement between the parties, Section 34 of the Arbitration and Conciliation Act, 1996, does not allow a challenge to an award solely on the basis that the composition of the arbitral tribunal conflicts with the provisions of Part I of the Act.
In the present case, the High Court observed that there was no material to demonstrate an error apparent on the face of the record or perversity in the award. Additionally, it noted that the Petitioner failed to establish any question of law in the case, as the grounds raised by it were based on questions of fact rather than legal issues.
Further, the High Court held that an arbitral award can be set aside only on specific grounds mentioned in Section 34 of the Arbitration Act. It emphasized that Section 34(2)(a)(v) does not apply if the composition of the arbitral tribunal is in accordance with the agreement of the parties. Moreover, it clarified that objections to the composition should have been raised at the initial stage, and the parties are deemed to have waived their right to object if not raised.
Case Title: Atheli Mallikarjun v. S.S.B. Constructions, Arbitration Application No. 169 of 2022
The High Court of Telangana has held that mere negotiations between the parties related to the dispute would not delay the cause of action for the purpose of limitation for the appointment of the arbitrator.
The bench of Justice C.V. Bhaskar Reddy dismissed an application for the appointment of an arbitrator wherein the cause of action accrued more than 7 years before the date of the application.
