Calcutta High Court Annual Arbitration Law Digest 2023

Case Title: Uphealth Holdings Inc versus Glocal Healthcare Systems Pvt. Ltd. & Ors.

Citation: 2023 LiveLaw (Cal) 2

The Calcutta High Court has allowed the application filed under Section 9 of the Arbitration and Conciliation Act, 1996 (A&C Act), seeking interim measures granted by the Emergency Arbitrator under the ICC Arbitration Rules.

The bench of Justice Ravi Krishan Kapur noted that the A&C Act does not provide for enforcement of orders passed by an Emergency Arbitrator in cases of a foreign seated arbitration. However, it observed that both the parties had participated in the proceeding before the Emergency Arbitrator and had agreed to be bound by its order, which was well-reasoned and elaborate. Thus, the Court concluded that the order of the Emergency Arbitrator can be taken into account at the stage of considering a Section 9 application.

Case Title: Jhajjar K.T. Transco Pvt. Ltd. v. Oriental Insurance Company, AP 449 of 2021

Case Citation: 2023 LiveLaw (Cal) 27

The High Court of Calcutta has held that the jurisdiction of the Court under Section 11 of the A&C Act is limited to the examination of the existence of the arbitration clause and determination of an arbitrable dispute.

The bench of Justice Shekhar B. Saraf relied on the judgment in Mayavati Trading v. Pradyvat Deb Burman[1] to hold that a Court exercising powers under Section 11 of the A&C Act cannot determine the question of 'accord and satisfaction' in view of Section 11(6A) of the Act.

Case Title: Jagrati Trade Services Pvt Ltd versus Deepak Bhargava & Ors.

Case Citation: 2023 LiveLaw (Cal) 29

The Calcutta High Court has ruled that, post the Amendment Act of 2015, the powers of the Arbitrator to grant interim measures under Section 17 of the Arbitration and Conciliation Act, 1996 (A&C Act), is pari passu with the powers of the Court under Section 9 of the Act.

The bench of Justice Shekhar B. Saraf remarked that the test applicable for granting interim protection under Section 9 would also apply to test the validity of an order passed by the Arbitrator under Section 17.

Case Title: McLeod Russel India Limited v. Aditya Birla Finance Limited, A.P. No. 106 of 2020

Case Citation: 2023 LiveLaw (Cal) 39

The High Court of Calcutta has held that all unilateral appointment of arbitrator are not invalid per se unless the arbitrator's relationship falls within the Seventh Schedule to the A&C Act.

The bench of Justice Moushumi Bhattacharya distinguished between an arbitration clause that permits unilateral appointment of arbitrator and a clause that provides for arbitration before some person in charge of one of the parties or right of that person to delegate his function to a third party. The Court held that only in the latter scenario the persona designata would not just himself be ineligible to act as an arbitrator but would also be precluded from appointing someone else on its behalf.

5. Admitting Jurisdiction In The Pleading Enough For ' Express Agreement' Under Section 12(5) Of The A&C Act: Calcutta High Court

Case Title: McLeod Russel India Limited v. Aditya Birla Finance Limited, A.P. No. 106 of 2020

Case Citation: 2023 LiveLaw (Cal) 40

The High Court of Calcutta has held filing of pleadings before the arbitral tribunal and agreeing to the jurisdiction of the tribunal therein satisfies the requirement of 'express agreement' given under proviso to Section 12(5) of the Act.

The bench of Justice Moushumi Bhattacharya held that a party, which was aware of the position of law qua the invalidity of the unilateral appointment of arbitrator, if participates in the arbitral proceedings for a considerable period of time and obtain the benefit of the order of the tribunal cannot later turn around and challenge the appointment of the arbitrator.

The Court held that all unilateral appointment of arbitrator are not invalid per se unless the arbitrator's relationship falls within the Seventh Schedule to the A&C Act.

Case Title: Sarada Construction v. Bhupendra Pramanik

Citation: 2023 LiveLaw (Cal) 51

The High Court of Calcutta that the A&C Act is a complete code in itself and it does not contain any provision for the review of an order passed under Section 11 of the Act.

The Bench of Justice Shekhar B. Saraf held that power of review is a creature of statute and unlike the Supreme Court which has inherent power of review under Article 137 of the Constitution of India, no such power is conferred on the High Courts by the Constitution, therefore, it cannot review its order passed under Section 11 of the Act.

Case Title: Cholamandalam Investment & Finance Company Ltd v. Amrapali Enterprises

Citation: 2023 LiveLaw (Cal) 67

The High Court of Calcutta has deprecated the practice of banking and financial institutions unilaterally appointing the arbitrator. It refused to enforce an award passed by an arbitrator that was unilaterally appointed by the petitioner.

The bench of Justice Shekhar B. Saraf has held that an arbitration award passed by a unilaterally appointed arbitration is non-est and its enforcement would be refused under Section 36 of the A&C Act even if the award was not set aside under Section 34. It held that executing court also has the power to declare an 'unilateral appointment award' non-est in law, declare it to be a nullity and direct the parties to re-agitate their dispute before an independent and impartial arbitral tribunal.

Case Title: Marine Craft Engineers Pvt Ltd vs. Garden Reach Shipbuilders and Engineers Ltd

Citation: 2023 LiveLaw (Cal) 96

The Calcutta High Court has ruled that the date of execution of a contract between a buyer and a supplier under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) is irrelevant for the application of the provisions of the said Act.

The Facilitation Council would have exclusive jurisdiction to decide on the reference, and to take up the dispute/ refer the same for arbitration under Section 18(4) of the MSMED Act, if the supplier's claim relates to the goods or services supplied after the date of its registration under the MSMED Act, the Court held.

9. Once Civil Suit Has Been Disposed Of By Referring Parties To Arbitration Under S. 89 Of CPC, The Suit Can't Be Revived: Calcutta High Court

Case Title: Bharat Vanijya Eastern Private Limited versus State of West Bengal

Citation: 2023 LiveLaw (Cal) 97

The Calcutta High Court has ruled that once the court has disposed of a civil suit and referred the parties to arbitration in an application filed by it under Section 89 of the Code of Civil Procedure, 1908 (CPC), and has appointed an arbitrator with the written consent of both the parties, the suit cannot be revived.

The Court rejected the argument of the petitioner/ claimant that since the court under Section 37 of the Arbitration and Conciliation Act, 1996 (A&C Act) had set aside the arbitral award without deciding on the merits of its claim, the High Court must appoint a new arbitrator since the original arbitrator had expired, or, in the alternative, revive the civil suit instituted by it.

10. Arbitration- Limitation Starts From Failure Of Settlement Talks: Calcutta High Court

Case Title: Zillon Infraprojects Pvt. Ltd. v. BHEL

Citation: 2023 LiveLaw (Cal) 98

The High Court of Calcutta has held that the period of limitation will only begin to run when the talks of amicable settlement between the parties fail.

The bench of Justice Shekhar B. Saraf held that the period of limitation for referring a dispute to arbitration would be calculated from the date of the breaking point i.e., the date of failure of settlement talks, when the parties were trying to amicably settle the dispute.

Case Title: SREI Equipment Finance v. Sadhan Mandal, EC 137 of 2023

Citation: 2023 LiveLaw (Cal) 100

The High Court of Calcutta has held that an arbitration award passed by an arbitrator who was unilaterally appointed by one of the parties cannot be executed under Section 36 of the A&C Act.

The bench of Justice Shekhar B. Saraf held that a unilaterally appointed award does not carry the privilege of existence in the eyes of the law and is regarded as a nullity, therefore, there is nothing to execute in an enforcement petition.

Case Title: West Bengal Housing Board v. Abhisek Construction, AP 189 of 2019

Citation: 2023 LiveLaw (Cal) 103

The High Court of Calcutta has held that Section 12(5) of the A&C Act, which provides for ineligibility of a person to act as an arbitrator whose appointment falls under any categories mentioned under the Seventh Schedule to the Act, would not apply to an arbitration that commenced before the 2015 Amendment.

The bench of Justice Shekhar B. Saraf held that the 2015 Amendment that added Section 12(5) to the A&C Act would not retrospectively apply to arbitration proceedings that commenced before the Amendment became operative.

Case Title: Essar Oil and Gas Exploration and Production Ltd vs Gargi Travels Pvt Ltd

Citation: 2023 LiveLaw (Cal) 114

The Calcutta High Court has held that a prior reference to the Facilitation Council under Section 18(1) of the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act), which is still at the stage of conciliation, does not debar the Court from passing an order under Section 11 of the Arbitration and Conciliation Act, 1996 (A&C Act) for appointment of arbitrator on the basis of an independent arbitration clause between the parties.

The court ruled that the bar contemplated under Section 24 of the MSMED Act only comes into operation if and when there is anything inconsistent between Sections 15 to 23 of the MSMED Act and any other law for the time being in force.

Case Title: Ugro Capital Limited v. Raj Drug Agency

Citation: 2023 LiveLaw (Cal) 122

The Calcutta High Court has held that mere allegations of fraud inter-se the respondents would not make a dispute non-arbitrable.

The bench of Justice Shekhar B. Saraf held that merely because the respondents inter-se dispute the validity of the agreement containing arbitration clause and also their signature on it, it does not make the dispute non-arbitrable. It further held that mere possibility or existence of criminal proceedings arising out of the same facts would not put the dispute beyond the scope of arbitration.

Case Title: State of West Bengal v. Rajpath Contractors and Engineers Limited, AP 737 of 2022

Citation: 2023 LiveLaw (Cal) 125

The High Court of Calcutta has invoked its powers under Article 133(1)(a) r/w Article 134A of the Constitution to allow the aggrieved party to directly appeal against its judgment to the Supreme Court on the ground that the case involves a substantial question of law of general importance.

The bench of Justice Shekhar B. Saraf was dealing with a peculiar situation wherein the application filed under Section 34 of the A&C Act was rendered barred in law for the reason that the entire 30 days grace period provided under proviso to Section 34(3) coincided with the Court holidays.

Case Title: Godrej & Boyce Mfg. Co. Ltd vs Shapoorji Pallonji and Company Pvt Ltd

Citation: 2023 LiveLaw (Cal) 137

The Calcutta High Court has ruled that a single composite invocation of arbitration under Section 21 of the Arbitration and Conciliation Act, 1996 (A&C Act), pertaining to a consolidated claim arising out of three different Purchase Orders, containing separate arbitration clauses, cannot be labelled as invalid or unlawful.

The court made the observation while noting that all the Purchase Orders, though issued at different times, were a sub-set of the respondent's performance of a single Main Contract. Further, the relevant clauses of the Purchase Order established a link between the liabilities arising out of the Purchase Orders and the Main Contract, and contained identically worded arbitration clauses.

Case Title: East India Minerals Limited v. The Orissa Mineral Development Company Limited

Citation: 2023 LiveLaw (Cal) 141

The Calcutta High Court has held that once the arbitral proceedings have been commenced pursuant to reference under Section 21 of the Act, any delay in the conclusion/resumption of the such proceedings would not wipe out the arbitral reference.

The bench of Justice Shekhar B. Saraf held that arbitral proceedings cannot be rendered inoperative for the reason that there was some delay in the conclusion of the proceedings or that the proceedings were stalled and its resumption took a long time.

Case Title: Homevista Décor & Furnishing Pvt. Ltd. v. Connect Residuary Pvt. Ltd.

Citation: 2023 LiveLaw (Cal) 153

The High Court of Calcutta has held that the venue would not become the seat of the arbitration when the agreement confers exclusive jurisdiction on the Court in a different place.

The bench of Justice Shekhar B. Saraf held that presence of a clause which confers exclusive jurisdiction upon a Court in a place other than the venue of arbitration is a 'Contrary Indicia' that prevents the venue of arbitration from becoming the seat.

19. Clause Making Arbitration An Option For Resolution Of Dispute Is Not A Valid Arbitration Agreement: Calcutta High Court

Case Title: Blue Star Limited v. Rahul Saraf

Citation: 2023 LiveLaw (Cal) 154

The High Court of Calcutta has held that a clause in an agreement that merely provides for a possibility of arbitration is not a binding arbitration agreement.

The bench of Justice Shekhar B. Saraf held that a clause which provides for resolution of dispute either by way of litigation or arbitration cannot be held to be a binding arbitration agreement as the clause makes arbitration a possibility which may unravel itself, if and only if the parties choose to opt for it, post occurrence of disputes.

Case Title: Srei Equipment Finance Limited v. Seirra Infraventure Private Limited

Citation: 2023 LiveLaw (Cal) 189

The Calcutta High Court has recently held that when a party forfeits its right to appoint an arbitrator in accordance with Section 11 of the Arbitration & Conciliation Act, 1996 (“Arbitration act”), then it cannot subsequently “trace back its steps” to revive such a right, for the substitution of a fresh panel of arbitrators, when the existing arbitrator becomes de jure/de facto unable to discharge their duties.

In holding that the substitution of a new panel would be done by the Court under Sections 14 and 15 of the Arbitration Act, and that the entire arbitration process could not be permitted to go back to the stage of the parties conferring to appoint arbitrators mutually, under Article 11 of the Act, a single-bench of Justice Moushumi Bhattacharya held:

“After all, the intent of the 1996 Act, with all the amendments up to 2019, is to speed up the process of arbitration. The intent cannot be to retrace the steps from sections 15 to section 11 whenever an arbitrator is required to be substituted…The right to choose an arbitrator was relinquished in favour of the Court appointing an arbitrator which the Court did on 22.2.2022. The respondent cannot revive that right once the arbitrator became de jure / de facto unable to act under section 14. The above discussion must and invariably tilt towards the Court appointing new arbitrators in the same manner as was done on the previous occasion on 22.2.2022 when the parties approached the Court under Section 14 of the Act. There is no statutory basis to send the parties back to the section 11(5) position.”

Case Title: Jaya Industries v Mother Dairy Calcutta & Anr.

Citation: 2023 LiveLaw (Cal) 191

The Calcutta High Court has recently held that that the power of a Court to continue hearing an application for interim relief under Section 9(1) of the Arbitration and Conciliation Act, 1996, (“1996 Act”) would not be “fettered” under Section 9(3) after the constitution of an arbitral tribunal, if the court has already entertained the application.

A single-judge bench of Justice Moushumi Bhattacharya held, that while Section 9(3) barred the Court from taking up any interim application after the due constitution of the arbitral tribunal, the same could not fetter the power of a Court to continue hearing an application, which it had already entertained prior to constitution of such a tribunal. It was held:

“The Supreme Court considered the expression “entertain” and held that if the Court had already applied its mind to the issues raised, then the Court can proceed to adjudicate the application notwithstanding the bar of section 9(3)."

The bench was referring to Supreme Court's decision in Arcelor Mittal Nippon Steel India Limited vs. Essar Bulk Terminal Limited.

Court said the intended object of section 9(3) is to allow the arbitral tribunal to consider the prayer for interim relief once the tribunal has been constituted. Section 9(3) aims to prevent multiple levels of hearing for the same relief and envisages a clockwise motion of considerations of the matter after an arbitral tribunal has been constituted.

Accordingly, it was held that the Court would continue hearing the interim application under Section 9(1), notwithstanding the constitution of the Arbitral tribunal, since it would not fall under the bar under Section 9(3) due to having already 'entertained' the dispute previously.

Case: The State of West Bengal & Ors. Vs. M/s. BBM Enterprise

Citation: 2023 LiveLaw (Cal) 193

The Calcutta High Court has recently allowed an application filed by the State of West Bengal, as an award-holder in AP 808 of 2022, under the Arbitration and Conciliation Act, 1996 (“1996 Act”) to withdraw a security of Rs 9 crore furnished by BBM Enterprises (“award debtor”) in lieu of the arbitral award, during the pendency of setting aside proceedings on the impugned award, initiated by the award-debtor.

In holding that an award-holder required no statutory sanction or a separate application in the stay proceedings for withdrawing the secured amount, a single-bench of Justice Moushumi Bhattacharya directed the State to furnish a bank guarantee of an equivalent amount to the Registrar, Original Side, Calcutta High Court, before withdrawing the amount, and opined that withdrawal of the amount would not prejudice the rights of the award-debtor, during the pendency of the setting-aside proceedings.

Case: The West Bengal Small Industries Development Corporation Limited WBSIDC Vs. Kaushalya Infrastructure Development Corporation Limited KIDCO

Citation: 2023 LiveLaw (Cal) 204

The Calcutta High Court has recently dismissed a plea filed by petitioners West Bengal Small Industries Development Corporation Limited (“WBSIDC”) for unconditional stay of an arbitral award passed against it in 2019, on the grounds of fraud and corruption, under Section 36(3) of the Arbitration & Conciliation Act, 1996 (“Act”).

In holding that the facts of the case, along with the arguments made by the petitioners would not satisfy the twin threshold of fraud or corruption under Section 36(3), a single-bench of Justice Moushumi Bhattacharya held:

The complaint of the petitioner…by no means touches (or even brushes) the threshold of the award being liable to be unconditionally stayed on the ground of fraud or corruption (or more likely being dragged down to the depths) as envisaged under the second proviso to section 36(3) of the Act. Granting stay of an award without imposing conditions on the award-debtor is a departure from the scheme of the Act and must be established within the strict vocabulary used in the second proviso. Any act which falls short of a certain kind of conduct on the part of the arbitrator or of the proceedings will not amount to fraud or corruption. The failing must be brought within the sharpness and intensity of the parameters as decided in the case-law together with the causal nexus with the award. This Court is not satisfied, prima facie, as to the existence of facts which warrant unconditional stay of the operation of the Award.”

Case: The Board of Major Port Authority for the Shyama Prasad Mookerjee Port, Kolkata. v Marine Craft Engineers Private Limited.

Citation: 2023 LiveLaw (Cal) 209

The Calcutta High Court recently dismissed an application filed by the Board of Major Port Authority for the Shyama Prasad Mookerjee Port, Kolkata, for staying the operation of an arbitral award passed by the West Bengal State Micro Small Enterprises Facilitation Council (“MSME Council”).

In refuting the petitioners contention that filing an application u/s 34 of the Arbitration & Conciliation Act, 1996 (“1996 Act”) would be sufficient for the Court to deliberate on the question of stay, a single bench of Justice Moushumi Bhattacharya held, that in the absence of a pre-deposit of 75% of the award, in compliance with Section 19 of the MSMED Act, the application u/s 34 of the 1996 Act would remain “stillborn” for the purpose of stay of the award. It said:

The application under section 34 must be a valid application in terms of section 19 of the MSMED Act for the Court to consider stay of the arbitral award under section 36(2). Since the petitioner has admittedly not made the pre-deposit under section 19 of the MSMED Act, the section 34 application filed by the petitioner remains eclipsed in the eye of law as the foundation for a prayer for stay of the arbitral award under section 36(2) of the 1996 Act. Therefore, the present application for stay of the impugned award filed under section 36(2) of the 1996 Act cannot be entertained as the said application is foisted on a stillborn section 34 application. The petitioner must first comply with section 19 of the MSMED Act to breathe life into the application. AP 252 of 2023 is accordingly dismissed as not maintainable for the above reasons.

Case: Kobelco Construction Equipment India Private Limited vs. Lara Mining & Anr.

Citation: 2023 LiveLaw (Cal) 222

The Calcutta High Court has recently dismissed applications for interim relief filed by Kobelco Construction Equipment India Private Limited under Section 9 of the Arbitration and Conciliation Act, 1996 (“Act”).

In dismissing the prayer for an interim injunction on the respondents, and holding that the petitioners could not be allowed to incorporate an arbitration clause by-reference from the 'Master' agreement to the 'Settlement' agreement in the absence of unambiguous intention of both parties, a single-bench of Justice Moushumi Bhattacharya opined:

The present case involves two arbitration clauses and the Court is being asked to hold that the arbitration clause of the first Agreement should be treated as being incorporated into the second Agreement by reference…there is no special reference indicating a mutual intention on the part of the petitioner, SREI and the respondent no. 1 to incorporate the arbitration clause from the Master Facility Agreement to the Settlement Agreement. A general reference to the Master Facility Agreement is not sufficient to incorporate the arbitration clause.

27. Application For Removal Of Arbitrator Must Be Made Before Same 'Court' As Envisaged In s.2 (i) (e) & s.42 Of Arbitration Act: Calcutta High Court

Case: M/S. Gammon Engineers And Contractors Pvt. Ltd. V The State Of West Bengal

Citation: 2023 LiveLaw (Cal) 223

The Calcutta High Court recently dismissed an application filed by M/S Gammon Engineers and Contractors Private Limited (“petitioners”) u/s 11(6), 14 and 15 of the Arbitration and Conciliation Act, 1996 ('Act'), for removal of arbitrator while challenging their unilateral appointment.

In dismissing the application, a single-bench of Justice Shekhar B Saraf held that a challenge for withdrawal/removal of arbitrator would not be maintainable before the High Court, since an earlier Section 9 application for interim relief had been filed before the Jalpaiguri District court.

The understanding of 'court' under Section 42 is indisputably in terms of Section 2(1)(e) of the Act. The application under Section 9 is also made to a 'court' as understood under Section 2(1)(e) of the Act. Once such an application to a 'court' as understood under Section 2(1)(e) of the Act is made, all further applications under Part I to a 'court' must be to the 'court' to which the prior application has been made. This is the mandate of Section 42 of the Act. Therefore, the bar under Section 42 would lie and all applications to be made to a 'court' must be made to the District Judge at Jalpaiguri. In light of the above, A.P. 785 of 2022 is disposed of for not being maintainable before the High Court at this stage,” it held.

Case: Uphealth Holdings Inc. v Glocal Healthcare Systems Pvt. Ltd. & Ors.

Citation: 2023 LiveLaw (Cal) 239

The Calcutta High Court while exercising its admiralty jurisdiction, recently allowed an application for interim relief by Uphealth Holdings Inc. a wholly owned subsidiary of Uphealth Inc., a US-based healthcare company under section 9 of the Arbitration & Conciliation Act, 1996.

Justice Ravi Kishan Kapur observed that the applicant had made out a prima facie case for interim relief regarding an arbitrable dispute over its Share-Purchase Agreement (“SPA”) with the respondent.

"There is no question of non-arbitrability of any of the disputes raised in this proceeding. All the disputes raised in this proceeding are covered under the SPA and are ex facie contractual disputes. There is also no merit in the contention that the SPA is confined only to the purchase and sale of shares. This argument is misconceived and ignores the entire scope, purport and ambit of the SPA. All the reliefs sought for are in aid of and to protect the subject matter of the arbitration and to preserve the rights of the parties under the SPA. The Arbitral Tribunal is fully competent to consider and decide all other issues. For the foregoing reasons, the petitioner has been able to demonstrate a strong prima facie case on merits. The balance of convenience and irreparable injury are also in favour of orders being passed as prayed for herein."

Case: Sarat Chatterjee and Co. (VSP) Private Limited v Sri Munisubrata Agri International Limited (Formerly known as LMJ International Ltd.) and Anr.

Citation: 2023 LiveLaw (Cal) 259

The Calcutta High Court has recently held that the security furnished by an award-debtor for stay of an arbitral award must be “clean, unblemished and with good exchange value.”

In refuting the arguments of the applicants, while expressing its insecurity about the security proposed by them, a single-bench of Justice Moushumi Bhattacharya held:

The Court is empowered to impose conditions on the award-debtor who seeks stay of an Award and must look to the provisions of the CPC for taking recourse to the principles for grant of stay of a decree or order. The Court must simply ensure that the security offered by the award-debtor has good currency value and is not an empty reassurance given by the award-debtor on a speculated value of unsold goods. The limited protection by the Division Bench for sale of the 10,000 MTs of Met Coke in 2015 cannot be resurrected after years to urge that the award-holder stands secured to the extent of the projected sale value of the goods amounting to Rs. 45 crores. Besides the uncertainties listed above, the 10,000 MTs of Met Coke has admittedly not been sold till date and even the sale was mired in litigation.

Case: Rohan Builders (India) Pvt. Ltd. v Berger Paints India Limited & connected applications

Citation: 2023 LiveLaw (Cal) 266

The Calcutta High Court has recently held that the mandate of an arbitral tribunal is held to be terminated under Section 29A of the Arbitration & Conciliation Act, 1996, (“1996 Act”), unless the same is extended during its subsistence, in the absence of which, an arbitrator would become de jure inadmissible.

In disposing of three arbitration petitions containing the aforesaid identical point of law, a single-bench of Justice Moushumi Bhattacharya held:

Section 29-A of The Arbitration and Conciliation Act, 1996 contemplates making of the award within the prescribed statutory timelines. The timelines are to be read as mandatory limits where the arbitrator and the parties to the arbitration are required to be conscious and vigilant of the cut-off dates for applying for extension of the mandate of the arbitral tribunal. The application for extension must be made during continuation of the mandate and not thereafter. If the arbitral tribunal proceeds to make an award after expiry of the timelines, the award would suffer from a jurisdictional error. This is by reason of the fact that there is no provision for renewal of mandate of the tribunal once it stands terminated by operation of law.

The Calcutta High Court has recently allowed applications for appointment of arbitrator u/s 11 and for interim protection u/s 9(1) of the Arbitration & Conciliation Act, 1996 (“Act”) by Prathyusha- AMR, a Joint Venture.

In allowing the plea for appointment of an arbitrator u/s 11 of the Act, a single-bench of Justice Moushumi Bhattacharya noted that “a turning point” in negotiations between the parties may 're-vitalise' limitation in order to sustain a 'live claim.'

Citation: 2023 LiveLaw (Cal) 306

Case: Damodar Valley Corporation v Reliance Infrastructure Limited

In a landmark 255-page judgement, the Calcutta High Court has upheld an arbitral award in favor of Reliance Infrastructure (“RIL”), arising out of a deal struck with the Damodar Valley Corporation (“DVC”) for construction of thermal power plants in Raghunathpur.

In upholding the award passed by a panel of three arbitrators, a single-bench of Justice Shekhar B Saraf noted that India is in dire need of Arbitration reform due to increased judicial interference at every stage.

Citation: 2023 LiveLaw (Cal) 319

Case: Government of Maharashtra v Shrivin Pharma Pvt. Ltd.

Calcutta High Court in holding that the MSME Council could not 'desert the task of decision making' to a Chartered Accountant, who was not on the Council/arbitral tribunal under the MSMED Act, a single-bench of Justice Moushumi Bhattacharya observed:

Section 31(3) of the 1996 Act requires the arbitral tribunal to give reasons upon which the award is based subject to the parties agreeing otherwise. The reasons given by the Chartered Accountant in the present case for fixing the quantum of interest cannot be accepted to be the reasons of the Facilitation Council / arbitral tribunal in satisfaction of the mandate of section 31(3) of the 1996 Act. [By not completing the arbitral award] the Council would be undermining the very object of the MSMED Act and the legislative intent in enacting it.

Citation: 2023 LiveLaw (Cal) 325

Case: Damodar Valley Corporation v BLA Projects Pvt Ltd

The Calcutta High Court has held that the venue for arbitration, as decided by the parties under their contractual agreement would automatically be the seat for arbitration, in the absence of any 'contra-indicia.'

In rejecting jurisdictional objections on its competence to entertain an application under Section 34 of the Arbitration & Conciliation Act, 1996 (“A & C Act”) upon noting that Clause 16 of the Contract between the parties had designated Kolkata to be the venue of arbitration and the Court in the City of Kolkata to have exclusive jurisdiction a single-bench of Justice Moushumi Bhattacharya held:

The parties accepted this agreement to be the final agreement. The fact that venue would be construed as the juridical seat of the arbitration has also been judicially settled where the seat is not specified. There is hence no contra indicia to un-seat the arbitration from the Court in the city of Kolkata which is the High Court at Calcutta. The respondent has not presented any contrary indicia to show that the cause of action has arisen elsewhere and would consequently divest this Court of jurisdiction.”

Citation: 2023 LiveLaw (Cal) 341

Case: Manish Todi vs Pawan Agarwal

The Calcutta High Court has recently held that Section 43(4) of the Arbitration & Conciliation Act, 1996, (1996 Act) must defer to the provisions of the Limitation Act and that the period of limitation cannot be extended to create a new window after the expiry of the limitation.

In dismissing a plea for appointment of an arbitrator under Section 11 of the Act as time-barred, a single bench of Justice Moushumi Bhattacharya held:

Section 43(4), simply put, excludes the time from commencement of arbitration to the date of setting aside of the arbitral award...the petitioner's recourse to section 43(4) of the 1996 Act, even if applied to the facts, does not come to the petitioner's rescue since the petitioner would lag behind the limitation period by 4 years 3 months. The question of limitation must also be decided on the underlying principles of the Limitation Act and discounting the existence of an arbitration clause.

Citation: 2023 LiveLaw (Cal) 351

Case: M/s. Mehrotra Buildcon Pvt. Ltd. v South Eastern Railway

The Calcutta High Court has recently allowed a plea for the appointment of a sole arbitrator by M/s Mehrotra Buildcon Pvt Ltd, to adjudicate over its dispute with the South Eastern Railway (SER).

In allowing the petitioner's application under Section 11 of the Arbitration & Conciliation Act, 1996 ("Act"), by calling out the restrictive clause in the General Conditions of Contract ("GCC") which made the petitioner choose an arbitrator from a list given by the respondent, a single bench of Justice Moushumi Bhattacharya held:

Petitioner was to choose 2 names from the 4 names given by the respondent. The clause does not provide for any elbow-room for the petitioner to make a free choice. The names are simply handed on a platter, the petitioner is to choose 2 and the final choice rests on the GM of the respondent; that too as the petitioner's nominee arbitrator. Nothing can be more one-sided than this. The absence of consent and choice is writ large in clause 64(3)(b)(ii) of the GCC.