Arbitration : Court Reckoner October 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 October 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 8 (i) Intention of the parties to arbitrate must be discernible for reference to be made under S. 8 BVM Finance Private Limited v Vistra ITCL (India) Ltd. and Ors.[1]High Court of Bombay held that it is settled position of law that when the parties have agreed to get their disputes resolved through arbitration, then all efforts be made to encourage and facilitate resolution of dispute through arbitration but for that purpose the arbitration agreement must exist between the parties and the intention of the parties to arbitrate must be discernible. The Court held that first what is to be seen is the subjective intention of the parties, and if it is not clear then mutually shared common intention. The Court rejected the argument of the Respondent that the suit/dispute was premised on a composite transaction with interconnected documents and as one such document contained an arbitration clause, the parties had to be referred to arbitration. The Court agreed with the plaintiff that the suit/dispute was premised on one document mainly i.e. Debenture Trust Deed which was the final document and superseded all earlier documents by virtue of a clause contained in same which stated it constitutes the Entire agreement between parties and as the said Trust Deed did not contain any arbitration clause the intention of the parties was not to arbitrate.Section 9 (ii) Principles of Specific Relief Act & Code of Civil Procedure to guide Court exercising power u/s 9 but do not strictly the course of decision In Western Haryana Highways Projects P. Ltd. v NHAI & Ors.[2] High Court of Delhi held that while the well-settled principles governing grant of injunctions, as laid out under the provisions of the Specific Relief Act and Code of Civil Procedure, are to guide the Court while exercising its powers under Section 9, they do not strictly bind the course of the decision. Ultimately, the Court, after examining the facts of the case, has a duty to assess and decide which would be the most just and convenient route to take as also to prevent the ends of justice from being defeated. That the Court rejected the prayer of the Petitioner seeking grant of injunction against the NITs issued by Respondent for repair & maintenance work taking note that there is a serious dispute between the parties regarding the quality of work rendered by the petitioner, and thus any injunction granted upon these NITs could possibly impede or delay the repair and maintenance work on the highway as also have a direct impact on its safety and condition and granting such an injunction, would fall foul of Section 20A of the Specific Relief Act and operate against public interest. However it found in favour of the petitioner with regards to its relief against the Respondent No. 1's act of suspending the Petitioner's right of toll collection noting that, pending arbitration, withholding the rights of the petitioner under the Concession Agreement, including the right to collect toll, would cause it serious injury and expose it to greater financial vulnerability by aggravating its debts and increasing its liabilities to its lenders under the financing agreement. It thus held that Petitioner had made out a sufficient prima facie case and proved balance of convenience in its favour, and also established that it is likely to incur irretrievable injury were it to be denied its rights under the Concession Agreement, including its right to collect toll. The Court further observed that the action of Respondent NHAI in appointing a third party agency even before suspending Petitioner's rights under the Concession Agreement, is not only unfair, it also robs private players of their motivation to participate in any infrastructure development projects in the future and harms national interest in the long run. (iii) Assessment of Jurisdiction in S. 9 application different than in case of a suit In Srei Equipment Finance Limited v. Seirra Infraventure Private Limited[3], High Court of Calcutta held that unlike a challenge made to the territorial jurisdiction of a court in a suit where the court decides on the issue of ...

Arbitration : Court Reckoner October 2020

Kanika Singh

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