Arbitration Court Reckoner : November & December 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 November & December 2020 under the Arbitration & Conciliation Act, 1996 (hereinafter referred to as the 'Act'). 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)(d) & Section 2(2) (i) Concept of emergency arbitration is not outside the scope or contrary to Part-1 of the Act In Future Retail Ltd. v Amazon.com Investment Holdings LLC & Ors.[1], High Court of Delhi was dealing with a case where the international commercial arbitration was seated in India but was to be conducted in accordance with SIAC Rules and the question arose as to whether the provisions of Emergency Arbitration in the SIAC rules, are in any manner contrary to/repugnant with the public policy of India, or with the mandatory requirements of the procedural law under the Act. The Court held the Indian law of arbitration allows the parties to choose a procedural law different from the proper law, and there is nothing in the Act that prohibits the contracting parties from obtaining emergency relief from an emergency arbitrator. Further held, parties having deliberately left it open to themselves to seek interim relief from an emergency arbitrator, or the Court in terms of Rule 30.3 of SIAC Rules, the authority of the said emergency arbitrator cannot be invalidated merely because it does not strictly fall within the definition under Section 2(1)(d). Inasmuch as S. 9 of the Act along with S. 27, 37(1)(a) and 37(2) are derogable by virtue of the proviso to S. 2(2) in an International arbitration seated in India upon an agreement between the parties, it cannot be held that provision of Emergency Arbitration under the SIAC rules are, per se, contrary to any mandatory provisions of the A&C Act. Section 2(3) & 5 (ii) S. 2(3) of the Act craves out an exception to S. 5 of the Act, thus provides for judicial intervention in relation to disputes which may not be submitted to arbitration. In Dr Bina Modi v. Lalit Kumar Modi and Others[2], High Court of Delhi held that issues under the Trusts Act cannot be the subject matter of arbitration. The Court further held that the decision in Kvaerner Cementation India Ltd. v Bajranglal Agarwal[3] did not deal with the exceptions carved out of S. 5 of the Act by the provision of S. 2(3) thereof, which provides for judicial intervention in matters, in relation to disputes which may not be submitted to arbitration, on account of any other law for the time being in force and thus civil courts have jurisdiction to pronounce upon arbitrability or non-arbitrability of the disputes and are not denuded of their jurisdiction to entertain anti-arbitration suits to consider whether the disputes are arbitrable or not. The Court further held that the principles of autonomy of arbitration and kompetenz-kompetenz did not prima facie arise in the present case, since the disputes themselves are not be capable of being submitted to arbitration. The Court thus set aside the decision of the Ld. Single Judge dismissing the anti-arbitration suit. Section 7 (iii) Clause providing the parties may opt for arbitration is a valid arbitration agreement if option is exercised by a party In Royal Orchid Associated Hotels P. Ltd v Kesho Lal Goyal[4], High Court of Delhi held a clause in the agreement which stipulated that in case of any dispute, the parties can approach Courts at Delhi or alternatively, they may opt to go for arbitration to be a valid arbitration agreement. The Court held that such a clause empowered the parties either to get the disputes / claims adjudicated through the jurisdiction of the Court or by way of arbitration and the petitioner having chosen the option of arbitration, the S. 9 petition filed by it was maintainable. However, on merits it refused to grant the relief, in the nature of specific performance of the agreement/relief against dispossession post termination of agreement, inter alia holding the grant of the said relief to be barred as a contract which is in its nature determinable cannot be specifically enforced. (iv) Reserving one's right to arbitrate under the Act is not an unequivocal commitment to arbitration, nor does it demonstrate the existence of an arbitration agreement. In Viren Umedial Mehta v Royal Food & Hospitality & Ors.[5] High Court of Bombay held that merely...

Arbitration Court Reckoner : November & December 2020

Kanika Singh

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