Arbitration Court Reckoner :August-October 2021 (Part 2)

This is the second part of the article. The first part covering 30 judgments may be read here. (xxxiii)Court should not substitute its subjective satisfaction of urgency to grant interim measures with that of the Arbitral Tribunal Filing of Statement of Claim under S. 23 cannot be treated as a sine qua non for the maintainability of an application for interim protection under S. 17. In Mr. Sanjay Arora & Anr. v Mr. Rajan Chadha & Ors.[1] High Court of Delhi held that where the Arbitral Tribunal has returned a finding of urgency, supported by factual material, then, if the material is not found to be incorrect or irrelevant, the question of whether the material denotes urgency of a degree sufficient to grant interim protection is, essentially, a matter relating to the subjective satisfaction of the learned Arbitral Tribunal and the Court should not interfere with the same. The Court further held that read conjointly, S. 21 and 17 (as amended) empower the Arbitral Tribunal to pass orders in terms of S 17 at any point of time and thus there is no requirement of filing of statement of claim prior to filing an application u/s 17. Section 21 (xxxiv)Notice u/s 21 is sine qua non and there is no set form of the notice prescribed under the Act but nevertheless, the notice must specify that arbitration is being resorted to. In De Lage Landen Financial Services India Pvt. Ltd. v Parhit Diagnostic Private Limited & Ors.[2] High Court of Delhi observed that the notice u/s 21 of the Act is a request for initiation of arbitration proceedings, by reference of disputes to arbitration and the significance of such a notice is evident from the language of S. 21 which prescribes the date of commencement of arbitral proceedings and limitation will begin to run from the date when there is failure to appoint the Arbitrator. Court held that there is no defined or specific requirement as to the form of the notice prescribed under the Act but nevertheless, the notice must specify that arbitration is being resorted to. The Court held that the notice given in the facts of the case at hand complied with the requirement of such a notice as it gave notice to the Respondent that Petitioner would take recourse to legal proceedings under the agreement and thus it rejected the Respondent's objection that the S. 11 petition was premature due to non- compliance of S. 21. Court held that basic purpose of such a notice which is to have notice of Petitioner's intent to arbitrate, choice of Arbitrator, and identification of claims stood satisfied. (xxxv)3 years for considering if claims are within limitation is to be reckoned from date of S. 21 notice and not date of filing of statement of claims In Oil India Limited v Techno Canada Inc[3]., High Court of Delhi held that for considering the question whether a claim was barred by limitation, the notice issued under S. 21 of the Act was relevant and not the date when the Statement of Claims was filed and period of limitation would end on receipt of notice u/s 21. The Court thus held that the Arbitral Tribunal had rightly held the claims to be within limitation. Section 31(7)(b) (xxxvi)No scope for adding pre-award interest into the principal amount for calculating post-award interest by applying Section 31(7)(b) of the Act when the Tribunal has only awarded post-award interest on principal sum In Overeas Drilling Limited v Directorate General Of Hydrocarbons Of India[4] High Court of Delhi was dealing with a case where the Arbitral Tribunal had awarded post award interest only on the principal amount and the Appellant was seeking to claim post award interest on the principal as well as pre- award interest relying on S. 31(7)(b) as also the judgment of the Supreme Court in Hyder Consulting (UK) Limited v Governor, State of Orissa[5]. The Court negativated the said contention as it held the arbitral award being explicit on the interest for the post-award period, the same has primacy over the default provision of S. 31(7)(b) of the Act. The Court also rejected Appellant's prayer for grant of post- award interest on costs by relying on S. 31(7)(b) as it held that u/s 31A(4) it was for the Arbitral Tribunal to grant interest, if any, on the costs, fixed and in absence of such grant, the appellant cannot rely on S. 31(7)(b) of the Act for grant of interest on the cost fixed by the Arbitral Tribunal. Section 31(3) (xxxvii)Merely because the contentions of the parties were extensively noted does not in any manner indicate that the findings rendered by the Arbitral Tribunal are unreasoned In ITMA Hotels India Pvt Ltd. v M/s. Ammtys Interior (India) Projects Pvt Ltd.[6] High Court of Delhi rejected the contention that the impugned award is unreasoned and falls foul of the provisions of S. 31 of the Act. It found that when a plain reading of the award, indicates that the reasons are...

Arbitration Court Reckoner :August-October 2021 (Part 2)

Kanika Singh

Tags