Arbitration : Court Reckoner [May 2020]

By way of the present column, an attempt is made to briefly review the salutary judgments pronounced by the Courts in the month of May 2020 under the Arbitration & Conciliation Act, 1996. That while as many judgments as possible are sought to be reviewed, owing to the limited column space, some judgments would invariably be left out. That also while an attempt is made to include and review some judgments of various other High Courts, the emphasis is essentially on the judgments of the High Court of Delhi and Supreme Court of India. That judgments have been compiled for review with reference to the Section of the Act that they are primarily dealing with and a detailed analysis has been forgone in favour of succinctness. Section 2(1)(e) In Microvision Technologies P. Ltd. v Union of India[1] , High Court of Bombay while deciding an application under S. 42 of the Act held that in view of the fact that arbitration between the parties was under arbitration clause contained in agreement between the parties which provided for place of arbitration as Mumbai and not under S. 18(3) of MSME Act and the appointment of Arbitrator was made under S 11 by the Court, thus the competent court for S. 2(1)(e) would be the High Court of Bombay and not Nashik Court where the Facilitation Council, to whom reference was initially made, was located. By obiter, it was also held that Section 18(3) of the MSME Act cannot be treated as an arbitration agreement for the Chief Justice or his designate to act upon under Section 11(6) of the Act upon failure of the Council to take up the dispute or refer it to arbitration. Section 7 In Galaxy Infra and Engineering P Ltd. v Pravin Electricals P. Ltd.[2], High Court of Delhi after discussing several precedents held that it is not mandatory that an arbitration agreement be signed and the facts of the case at hand make it squarely covered within S. 7(4)(b) of the Act. Section 8 In Magic Eye Developers P. Ltd v Green Edge Infra P. Ltd. & Ors.[3], High Court of Delhi allowed application under S. 8 and in doing so referred non-parties to the arbitration agreement to arbitration by holding that plaintiff's own contention calls for piercing of the corporate veil and thus defendant nos. 2 and 3, who though having pleaded misjoinder but having not opposed the plea of defendant no. 1 that the disputes are liable to be referred to arbitration, are also amenable to arbitration being group companies of defendant no. 1 and from the intent of the parties as gleaned from the various agreements. Section 9 In M/s. Haliburton Offshore Services Inc v Vedanta Ltd. & Anr.[4], the High Court of Delhi, refused to grant injunction against invocation/encashment of performance bank guarantees and in doing so rejected the petitioner's contention that the injunction be granted on account of the invocation of force majeure clause by the petitioner owing to Covid-19 induced lockdown. The Court held that while Covid-19 was a force majeure condition, there has to be a real reason and real justification for invoking the force majeure clause which would have to be seen in the facts of each case and it cannot be used to justify past non-performance by a party as was the case at hand. In Ashwani Minda & Anr. v U-Shin Ltd. & Anr.[5], the High Court of Delhi, while deciding a petition under S. 9 filed in an international commercial arbitration after the Petitioner had been unsuccessful before the Emergency Arbitrator, held that petitioner having excluded the applicability of Part I of the Act by agreeing to be governed by different Rules and procedures, binding on the parties and having invoked the same, cannot invoke jurisdiction of the High Court of Delhi and the petition was not maintainable. Section 11 In M/s Distribution Logistics P. Ltd. v M/s. BPB Builders P. Ltd.[6], High Court of Delhi held that there was a valid arbitration agreement between the parties as Petitioner was a successor in interest of the original contracting party. Further, it was reiterated that under S. 11(6A) Court only examines the existence of arbitration agreement and no more and thus the issue as to whether claims are barred by time was not to be seen by the Court while appointing the Arbitrator and allowed the petition for appointment of arbitrator. In Parsvnath Developers Ltd. & Anr. v Rail Land Development Authority[7] High Court of Delhi reiterated that under S. 11(6A) Court only examines the existence of arbitration agreement and held that Respondent's contentions that disputes sought to be raised are overlapping with the claims in the earlier arbitrations between the parties and / or are barred by principles of Order II Rule 2 CPC would have to be examined by the Arbitrator and cannot be a ground to oppose appointment of Arbitrator. Section 29A In DDA v M/s. Tara Chand Sumit Construction Co.[8] ...

Arbitration : Court Reckoner [May 2020]

Kanika Singh

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