Arbitration Court Reckoner: September 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 September 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 7 (i) Non-signing of agreement containing arbitration clause by one party not a ground to hold that there was no binding arbitration clause In M/s. Chaitanya Construction Company v Delhi Jal Board[1] High Court of Delhi took note of the fact that S. 7(4) of the Act itself provides that the arbitration agreement need not be in any concrete or particular form and held that the mere fact that the Respondent therein, who had invited tenders for the work in question, had not signed the agreement containing the arbitration clause was not a ground to hold that there was no arbitration clause. The Court took note of the fact that the petitioner signed the agreement containing the arbitration clause, as provided by the respondent, and that the respondent had issued the work orders based on this contract, and thus it cannot be said that the parties were not ad idem on the applicability of the arbitration clause, even though the Respondent had not eventually signed the agreement. Section 8 (ii) Averment in Written Statement that it is being filed "Without Prejudice to the Arbitration agreement" does not constitute an application u/s 8 Power of the Court to stay Arbitration must be impliedly read into the 1996 Act In Lindsay International P. Ltd. & Ors. v Laxmi Niwas Mittal & Ors.[2] High Court of Calcutta took note of the fact that the Defendant before it had filed a comprehensive Written Statement of Defence taking objections and addressing on merits each of the claims in the plaint individually and specifically and it was not until the expiry of three full years that the said Defendant has moved for Request For Arbitration. It, thus held, that it could therefore safely be said that the Defendant has waived the Arbitration agreement and has submitted to the jurisdiction of the Court for all intents and purposes and the Arbitration agreement has been rendered inoperative by waiver. Further, held that an averment in the Written Statement of defense that it is being filed "Without Prejudice to the Arbitration agreement" does not constitute an application under S. 8 of the Act and a clear, specific and overt Act in the form of an independent, stand alone application is required to be made which the Defendant had not done. It held that while the Defendant has referred to the Arbitration agreement in his written statement but has not prayed or pleaded that it seeks reference of the disputes to arbitration. The Court further held that the power of the Court to stay arbitration must be impliedly read into the 1996 Act and to allow an arbitration to proceed even after the Defendant has waived the arbitration agreement, or that the same is null and void or inoperative would be a travesty of justice and thus accordingly restrained the Defendant from proceeding with the Request for Arbitration. Section 9 (iii) Copyright disputes pertain to rights in rem and thus not arbitrable In Sanjay Lalwani v Jyostar Enterprises & Ors.[3] High Court of Madras held the S. 9 petition filed by the petitioner therein not maintainable as dispute were arising from Copyright Assignment, and thus pertained to right in rem and as such, were not arbitrable. (iv) In absence of manifest intention to arbitrate, Court would be reluctant to pass interim measures In H. Thiagaraj & Ors. v Maryammal & Ors.[4], High Court of Madras set aside the injunction granted by the District Judge in a S. 9 petition inter alia on the ground that though the dispute was raised by the applicant in the year 2009 and the Court had directed the parties to go for arbitration as early as 02.03.2011, no steps whatsoever was taken out by the applicant or some other party to refer the matter to arbitration. Only in the year 2014, the application u/s 9 of the Act has been filed. It held that the above conduct of parties makes it clear that manifest intention to arbitrate the dispute is absent on the part of the applicants, who were the parties to the earlier proceedings. Therefore, it held, that in view of absence of manifest intention shown by the petitioners, who seek interim measure u/s 9 of the...

Arbitration Court Reckoner: September 2020

Kanika Singh

Tags