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Monthly Digest Of Arbitration Cases- April 2022
Ausaf Ayyub
3 May 2022 7:22 AM GMT
Supreme Court Arbitrators Must Say Upfront Their Fees For The Number Of Sittings, Opines Supreme Court During Hearing Case Title: Oil and Natural Gas Corporation Ltd. versus Afcons Gunanusa The Supreme Court, while hearing on the issue of fixation of standards for fees for arbitrators, has emphasized on "upfront" fixation of arbitrator's fee. The Bench of Justices D.Y....
Supreme Court
Case Title: Oil and Natural Gas Corporation Ltd. versus Afcons Gunanusa
The Supreme Court, while hearing on the issue of fixation of standards for fees for arbitrators, has emphasized on "upfront" fixation of arbitrator's fee.
The Bench of Justices D.Y. Chandrachud, Sanjiv Khanna and Surya Kant was considering the issue regarding the mandatory nature of the 'model' fee scale for arbitrators prescribed under the Fourth Schedule of the Arbitration and Conciliation Act 1996.
Case Title: Bihar Industrial Area Development Authority & Ors. v. Rama Kant Singh
The Supreme Court has observed that A. 137 of the Limitation Act, 1963 would have no application in arbitration proceedings commenced under Bihar Public Works Contracts Disputes Arbitration Tribunal Act, 2008 (the 2008 Act) when there is no arbitration agreement between the parties.
The Division Bench of Justice Abhay S. Oka and Justice Ajay Rastogi also observed that in absence of an arbitration agreement, the Arbitration Act 1996 will also have no application and the reference to the Arbitration Tribunal and the arbitral proceedings will be governed by the 2008 Act.
The Court held that the 2008 Act provides for a specific period of limitation, therefore, A. 137 of the Limitation Act, 1963 will have no application. However, the Court also observed that since the 2008 Act also allows the Tribunal to condone the delay, the Tribunal is well within its power to admit the reference beyond the period provided under S. 9 of the 2008 Act when sufficient reason for delay was given.
Case Title: Evergreen Land Mark Pvt. Ltd. versus John Tinson and Company Pvt. Ltd. and Anr.
Citation: 2022 LiveLaw (SC) 389
The Supreme Court has held that the Arbitral Tribunal cannot pass an order by way of interim measure under Section 17 of the Arbitration and Conciliation Act, 1996 to deposit the amount involved in the dispute, in a case where the liability to pay such an amount is seriously disputed and the same is yet to be adjudicated upon by the Tribunal.
A Bench comprising of Justices M.R. Shah and B.V. Nagarathna partly allowed an appeal assailing the order of the Delhi High Court, which affirmed the order passed by the Arbitral Tribunal under Section 17 directing the appellant to deposit the entire rental amount even when the liability of the said amount was yet to be considered by it.
Case Title: Oil and Natural Gas Corporation Ltd. versus Discovery Enterprises Pvt. Ltd
Citation: 2022 LiveLaw (SC) 416
The Supreme Court, in a judgment delivered on 27th April 2022, explained the 'Group of companies' doctrine which postulates that an arbitration agreement entered into by a company within a group of companies, can bind its non-signatory affiliates or sister concerns if the circumstances demonstrate a mutual intention of the parties to bind both the signatory and affiliated, non-signatory parties.
The bench comprising Justices DY Chandrachud, Surya Kant and Vikram Nath observed that a non-signatory may be bound by the arbitration agreement where: (i) There exists a group of companies; and (ii) Parties have engaged in conduct or made statements indicating an intention to bind a non-signatory.
Case Title: M/s Shree Vishnu Constructions versus The Engineer in Chief Military Engineering Service
The Supreme Court has decided to examine whether Section 11(6) as amended by the Arbitration & Conciliation (Amendment Act), 2015 ("2015 Amendment Act") would be applicable to arbitral proceedings commenced before the Court prior to when the 2015 Amendment came into force on 23.10.2015, or the cases wherein notice was issued prior to 23.10.2015 or cases where notice invoking arbitration was issued prior to the amendments.
A Division Bench comprising Justices M.R. Shah and B.V. Nagarathna noted that there were divergent views on this issue.
Case Title: Indian Oil Corpn. Ltd versus U.B. Engineering Ltd and Anr.
Citation: 2022 LiveLaw (SC) 409
The Supreme Court has held that the arbitral tribunal can grant post-award interest on the sum of the award which also includes the interest component.
The Bench comprising Justice M.R. Shah and Justice B.V. Nagarathna reiterated that the word sum used under Section 31(7) of the A&C Act includes the interest awarded on the substantive claims, therefore, the post award interest would be on both the amount awarded in respect of the substantive claims and the interest awarded on such claims.
Case Title: M/s Shree Vishnu Constructions versus The Engineer in Chief Military Engineering Service and Ors.
The Supreme Court has asked its Registry to seek particulars of the pending applications under Section 11(6) of the Arbitration and Conciliation Act, 1996 from all High Courts. It noted that the same shall reach the Apex Court by 06.05.2021.
A Bench comprising Justices M.R. Shah and B.V. Nagarathna was hearing a plea assailing an order passed by the Telangana High Court, which had decided to dismiss an application filed under Section 11(6) of the Arbitration Act for appointment of Arbitrator after 4 years.
High Courts
Allahabad High Court
Case Title: Indian Farmers Fertilizers Cooperative Ltd. versus Manish Engineering Enterprises
Citation: 2022 LiveLaw (All) 185
The Allahabad High Court has held that the Court for the purpose of an application under S. 29A of the A&C Act would only be the High Court that appointed the arbitrator.
The Single Bench of Justice Rohit Ranjan Agarwal held that the Principal Civil Court does not have the jurisdiction to entertain an application for an extension of time. The Court held that Sub-section 6 of Section 29A allows the Court to substitute the arbitrator(s) and conferring this power on the Principal Civil Court would lead to an inconceivable situation where the mandate of an arbitrator appointed by the High Court could be substituted by an inferior Court.
Case Title: CG Power and Industrial Solutions Ltd. versus U.P. Power Transmission Corporation Ltd.
Citation: 2022 LiveLaw (All) 191
The Allahabad High Court has held that the embargo under S.86 of the Electricity Act which provides that only the Regulatory Commission can appoint an arbitrator does not apply when the agreement is for supply simpliciter and does not have an element of transmission, distribution, and trading of electricity, and that the Court can appoint an arbitrator in such cases.
The Single Bench of Justice Sangeeta Chandra held that a party that has supplied some material for the construction of an electricity sub-station would not fall within the meaning of a licensee or supplier under the Electricity Act, and when the contract is purely commercial arising out of a contract for supply and does not involve an element of trade in electricity, the provisions of Electricity Act are not attracted.
Bombay High Court
Case Title: Tagus Engineering Private Limited & Ors. versus Reserve Bank of India & Anr. AND IDFC First Bank Limited versus Bell Invest India Limited & Anr.
Citation: 2022 LiveLaw (Bom) 127
The Bombay High Court has ruled that remedy against orders passed under Section 16 of the Arbitration and Conciliation Act, 1996 lies elsewhere and the petitioners, aggrieved by the orders passed under Section 16, cannot file Writ Petitions under Article 226 or Article 227 of the Constitution of India on the ground of 'exceptional circumstances'.
The Bench, consisting of Justices G.S. Patel and Madhav J. Jamdar, held that it is impermissible for the Court to exercise jurisdiction under Article 226 of the Constitution even on questions with respect to the jurisdictional competence of an Arbitral Tribunal, except in cases where the arbitral tribunal is a statutory tribunal created by a statute.
Case Title: IDFC First Bank Limited versus Bell Invest India Limited & Anr (WRIT PETITION NO. 7348 OF 2021)
Citation: 2022 LiveLaw (Bom) 127
The Bombay High Court has ruled that remedy against orders passed under Section 16 of the Arbitration and Conciliation Act, 1996 lies elsewhere and the petitioners, aggrieved by the orders passed under Section 16, cannot file Writ Petitions under Article 226 or Article 227 of the Constitution of India on the ground of 'exceptional circumstances'.
The Bench, consisting of Justices G.S. Patel and Madhav J. Jamdar, held that it is impermissible for the Court to exercise jurisdiction under Article 226 of the Constitution even on questions with respect to the jurisdictional competence of an Arbitral Tribunal, except in cases where the arbitral tribunal is a statutory tribunal created by a statute.
Court Does Not Have Adjudicatory Powers Under Section 27 Of The A&C Act: Bombay High Court
Case Title: Dilip s/o. Bhavanji Shah versus Errol Moraes
Citation: 2022 LiveLaw (Bom) 130
The Bombay High Court has ruled that the Court does not have the jurisdiction under Section 27 of the Arbitration and Conciliation Act, 1996 (A&C Act) to consider the legality of the reasons set out by the arbitral tribunal in its order permitting the examination of a witness.
The Single Bench of Justice G.S. Kulkarni ruled that once the arbitral tribunal had formed a prima facie opinion that a particular witness is required to be examined by a party in the arbitral proceedings, the reasons laid down by the tribunal in its order cannot be revisited and scrutinized by the Court, since proceedings under Section 27 of the A&C Act are not in the nature of an appeal and the Court does not have any adjudicatory powers under Section 27.
Case Title: Concrete Additives and Chemicals Pvt Ltd versus S N Engineering Services Pvt Ltd.
Citation: 2022 LiveLaw (Bom) 133
The Bombay High Court has ruled that acceptance of tax invoices by the opposite party, containing a reference to arbitration, does not lead to the presumption that an arbitration agreement exists between the parties.
The Single Bench of Justice G.S. Kulkarni held that unilateral invoices cannot bring about an arbitration agreement between the parties.
Case Title: Wadhwa Group Holdings Pvt. Ltd. versus Homi Pheroze Ghandy and Anr.
Citation: 2022 LiveLaw (Bom) 134
The High Court of Bombay has held that when an award is set aside for other reasons and not on merit, the parties are well within their rights to initiate fresh arbitration in respect of the same claims and pendency of an appeal against such an order is not a ground to refuse the appointment.
The Single Bench of Justice A.K. Menon has further held that an objection as to the claims being barred by Res Judicata, since an appeal is pending before the Court, is outside the limited scope of judicial examination permissible under Section 11 of the A&C Act. The Court held that invocation of arbitration cannot be subjected to the fate of the appeal.
Case Title: Purushottam s/o Tulsiram Badwaik and Ors. versus Anil s/o Hariram Malewar and Ors
Citation: 2022 LiveLaw (Bom) 146
The Bombay High Court has ruled that a Court cannot appoint an Arbitrator when the only proceeding before it is an application for grant of interim measures under Section 9 of the Arbitration and Conciliation Act, 1996 (A&C Act), solely on the ground that the opposite party has not objected to the appointment of an Arbitrator.
The Single Bench of Justice Manish Pitale held that even if an arbitration clause exists, appointment of an Arbitrator can only take place in accordance with the law. The Court added that merely because no objection is endorsed by the opposite party, a Court will not be foisted with the jurisdiction to appoint an Arbitrator.
Case Title: Chetan Iron LLP versus NRC Ltd.
Citation: 2022 LiveLaw (Bom) 157
The Bombay High Court has held that an application for interim relief in the form of specific performance of the contract would not be maintainable when the nature of the contract is determinable.
The Single Bench of Justice G.S. Kulkarni has held that specific performance cannot be granted in respect of an agreement that can be terminated by either of the parties without assigning any reasons. It held that Section 14(1)(c) and Section 41(e) of the Specific Relief Act would be attracted when the interim relief for specific performance is prayed for in respect of an agreement that is in its nature determinable.
Case Title: Malvika Rajnikant Mehta & Ors versus JESS Construction
Citation: 2022 LiveLaw (Bom) 169
The High Court of Bombay has held that simply because the arbitration agreement provides for the name of the arbitrator, the same would not amount to a waiver of notice under Section 21 of the A&C Act.
The Single Bench of Justice N.J. Jamadar has held that the use of the word "Unless otherwise agreed by the parties" in Section 21 means that the parties can dispense with the requirement of giving a notice of arbitration, however, the mere fact that the parties have named the Arbitrator would not imply that the parties have agreed to waive the requirement of the notice contemplated under Section 21 of the Act.
Case Title: Jasani Realty Pvt. Ltd. versus Vijay Corporation
Citation: 2022 LiveLaw (Bom) 162
The High Court of Bombay has held that merely because an application under S.7 of IBC is filed before the adjudicating authority which is pending consideration does not oust the jurisdiction of the High Court to entertain an application filed under S. 11 of the A&C Act.
The Single Bench of Justice G.S. Kulkarni has held that an application filed under S.7 of the IBC creates an erga omnes effect or involves third party rights only after it has been admitted by the adjudicating authority, however, before its admission, there is no embargo on the power of the court to decide on an application filed under S.11 of the A&C Act for the appointment of an arbitrator.
Calcutta High Court
Case Title: APL Metals Ltd. v. Mountview Tracom LLP & Ors, LPA 1 of 2022
Case Citation: 2022 LiveLaw (Cal) 113
The Calcutta High Court has observed that S.37 of the Arbitration & Conciliation Act (Arbitration Act) and S.13 of the Commercial Courts act exclude the applicability of Clause 15 of Letters Patent.
The Division Bench of Justice I.P. Mukerji and Justice Aniruddha Roy relied on the decision of the Apex Court in Union of India v. Simplex Infrastructures, (2017) 14 SCC 225, to hold that the Arbitration Act is a self-contained code and no appeal lies against an order which does not fall within the four corners of S. 37 of the Arbitration Act.
Case Title: M/s. Satyen Construction versus State of West Bengal & Ors.
Citation: 2022 LiveLaw (Cal) 124
The Calcutta High Court has ruled that the scope of Section 9 of the Arbitration and Conciliation Act, 1996 (A&C Act) cannot be extended to enforcement of the arbitral award or granting the fruits of the award to the award holder as an interim measure.
The Single Bench of Justice Ravi Krishan Kapur held that the right to withdraw the amount deposited by the award debtor, pursuant to an application filed for stay of operation of the award under Section 36(2), does not constitute as an interim protection under Section 9 of the A&C Act since it transgresses into the domain of enforcement of the award.
Case Title: Dr. Papiya Mukherjee versus Aruna Banerjea and Anr.
Citation: 2022 LiveLaw (Cal) 125
The Calcutta High Court has ruled that an arbitration agreement will not be discharged by the death of a party and it will be enforceable by or against the legal representatives of the deceased party.
The Single Bench of Chief Justice Prakash Shrivastava held that though the legal representatives were not signatories to the arbitration agreement, but being the legal representatives of the signatory to an arbitration agreement, they were bound by the agreement.
Case Title: Sukumar Ray versus M/s Indo-Industrial Services and Ors.
Citation: 2022 LiveLaw (Cal) 140
The High Court of Calcutta has held that a subsequent agreement entered into between the parties need not contain a separate arbitration clause if it is made only to extend the validity of the original agreement that contained an arbitration clause.
The Single Bench of Justice Shekhar B. Saraf has held that if the new agreement provides for a specific reference to the terms of the earlier agreement and does not contain any clause other than the extension of the validity of the original agreement then there is no requirement to have an arbitration clause in the new agreement.
Chhattisgarh High Court
Case Title: SEW Infrastructure Ltd. versus Micro & Small Enterprises Facilitation Council and Anr.
Citation: 2022 LiveLaw (Chh) 28
The High Court of Chhattisgarh has observed that the bar under S. 80 of the A&C Act which prevents the conciliator from acting as an arbitrator does not apply to the MSME Facilitation Council.
The Single Bench of Justice Rajendra Chandra Singh Samant has observed that provisions of S.80 of the A&C Act cannot override the provision of the MSMED Act to prevent the council from acting as an arbitrator. It has been held that the combined reading of Section 18 and 24 of the MSMED Act, 2006, show that there is an overriding effect over the provisions of Section 80 of the A&C Act, 1996.
Case Title: Devanshi Construction versus CPWD and others
Citation: 2022 LiveLaw (Chh) 29
The High Court of Chhattisgarh has observed that a S. 11 application is not maintainable if the Petitioner before invoking the jurisdiction of the Court has not complied with the pre-condition of referring the dispute to the Dispute Resolution Committee as provided under the Agreement.
The Chief Justice Mr. Arup Kumar Goswami held that the remedy of arbitration would only come into the picture after the Petitioner has successfully exhausted the other dispute resolution remedy provided in the agreement. The Court ruled that failure of the Petitioner to comply with a contractual stipulation would render the application for appointment of an arbitrator as pre-mature.
Delhi High Court
Case Title: Ministry of Youth Affairs & Sports versus Agility Logistic Pvt Ltd
Citation: 2022 LiveLaw (Del) 307
The Delhi High Court has ruled that it is not necessary that a notice issued under Section 21 of the Arbitration and Conciliation Act, 1996 should quantify the amounts that are claimed by the claimant before the Arbitral Tribunal.
The Single Bench of Justice Vibhu Bakhru held that a notice under Section 21 is required to set out the disputes between the parties, and upheld the view of the Arbitral Tribunal that the claims raised by the claimant before the Arbitral Tribunal cannot be rejected only on the ground that they were not mentioned in the notice issued under Section 21.
Case Title: Alstom Systems India Pvt. Ltd. versus Zillion Infraprojeccts Pvt. Ltd.
Citation: 2022 LiveLaw (Del) 311
The High Court of Delhi has observed that when the agreement between the parties provides for mandatory mediation, the time spent in the mediation process shall be excluded from the period of limitation.
The Single Bench of Justice C. Hari Shankar held that the notice invoking arbitration as well as the substantive claims of a party would not become time-barred if the parties were undergoing the mediation process contemplated in the arbitration clause and the time consumed in an unfruitful mediation process shall be excluded for the purpose of calculating the limitation period.
Case Title: Orissa Concrete and Allied Industries Ltd. versus Union of India
Citation: 2022 LiveLaw (Del) 312
The High Court of Delhi has observed that a subsequent dispute arising from the same transaction can be referred to a separate arbitration and the arbitration agreement cannot be said to be a one-time measure that cannot be invoked after an award is made in the earlier reference.
The Single Bench of Justice Mukta Gupta observed that the word "all disputes" in an arbitration agreement means all the existing disputes at the time of invocation of arbitration and the disputes that arise subsequently can be decided in a separate arbitration. There is no legal impediment that proscribes the invocation of the arbitration agreement if there is a pending arbitration or an award is made in an earlier arbitration.
Case Title: Parsvnath Developers Ltd versus Future Retail Limited
Citation: 2022 LiveLaw (Del) 323
The Delhi High Court has ruled that the Court cannot adjudicate on the issue whether the claims made by the petitioner are barred by limitation while dealing with a petition filed under Section 11 of the Arbitration and Conciliation Act, 1996 for referring the parties to arbitration.
The Single Bench of Justice Vibhu Bakhru held that the dispute as to whether the contract containing the arbitration clause is sufficiently stamped or not, and the nature of the contract, are contentious issues which cannot be decided by the Court in a petition filed under Section 11.
Case Title: India Tourism Development Corporation Ltd (ITDC) versus Bougainvillea Multipex & Entertainment Centre Pvt Ltd (BMEL)
Citation: 2022 LiveLaw (Del) 272
The Delhi High Court has upheld the award of an Arbitral Tribunal that stipulating the condition of 'as is where is basis' in a License Agreement does not absolve the contracting parties to make a disclosure about the licensed premises, which is otherwise not evident on visual inspection.
The Single Bench of Justice Vibhu Bakhru ruled that the Indian Evidence Act, 1872 does not apply to the proceedings before the Arbitral Tribunal and that the Court was not required to reappreciate every material or piece of evidence that was placed before the Arbitral Tribunal.
Performance Security Cannot Be Retained After Acknowledgement Of Due Performance : Delhi High Court
Case Title: Bharat Sanchar Nigam Limited versus Teracom Limited
Citation: 2022 LiveLaw (Del) 271
The Delhi High Court has ruled that there is no principle in law whereby a party could be permitted to retain the Performance Security after it had acknowledged due performance of a contract.
The Single Bench of Justice Vibhu Bakhru upheld the award of an Arbitral Tribunal directing BSNL to refund the amount recovered by it from invocation of Performance Bank Guarantee, since no claim regarding failure to perform obligations under the Contract was made by it.
Case Title: IRCON International Limited v. GPT-Rahee JV
Citation: 2022 LiveLaw (Del) 270
The High Court of Delhi has observed that a No Claim Certificate (NCC) shall be examined along with the covering letter in which it is sent and that mere issuance of the NCC by the Claimant shall not ipso facto entail the extinguishment of all the claims.
The Single Bench of Justice Vibhu Bakhru further held that while adjudicating an application under S. 34 of the Arbitration & Conciliation Act, the Court must be mindful of the fact the Indian Evidence Act, 1872 and strict rules of evidence are not applicable in arbitration and the tribunal enjoys considerable discretion to take a view on the quality and sufficiency of the evidence.
Case Title: Vijay Kumar Munjal V. Pawan Kumar Munjal, Arb. P. 975/2021
Citation: 2022 LiveLaw (Del) 278
The High Court of Delhi has observed that all the disputes that arise out of the Trade Marks Agreement are not outside the scope of arbitration. The Single Bench of Justice Vibhu Bakhru clarified that disputes that purely deal with the interpretation of the terms of a trademark agreement and are not related to the grant or registration of the trademarks can be decided in arbitration.
The Court further clarified that unless it is a dispute relating to registration of trademarks, there is no legal requirement of raising the same before the Registrar of Trade Marks or the IP Division of the High Court and the disputes that purely arise out of contractual rights and obligations under a Trade Mark agreement can be adjudicated in arbitration.
Rules Of Arbitral Institution Do Not Determine The Place Of Arbitration: Delhi High Court
Case Title: Ecogreen Energy Gwalior Pvt. Ltd. v. Commissioner of Municipal Corporation, Gwalior., Arb.P. 1120/2021.
Citation: 2022 LiveLaw (Del) 297
The Single Bench of Justice Vibhu Bakhru of the Delhi High Court has held that the rules of arbitral institution would not determine the place of the arbitration and only the Courts at the place of arbitration proceedings will have the jurisdiction to entertain an application for the appointment of an arbitrator.
The Court further held that rules of arbitral institutions are only procedural and comes into play after the commencement of the arbitration.
Case Title: Mahavir Prasad Gupta versus Union of India & Anr.
Citation: 2022 LiveLaw (Del) 280
One of the long pending Arbitration proceedings have come to a logical conclusion by making the arbitral award 'the rule of the Court' under the old Arbitration Act, 1940.
The Delhi High Court had made the arbitration reference way back in 1994, but the arbitral proceedings took an inordinately long time to complete with the constitution of the Arbitral Tribunal being changed a number of times and finally the award was passed in the year 2021. And finally, the Single Bench of Justice Vibhu Bakhru has made the arbitral award the rule of the Court as per the requirement of Arbitration Act, 1940.
Case Title: Glocaledge Consultants Pvt Ltd versus Rec Power Distribution Company Limited
Citation: 2022 LiveLaw (Del) 285
The Delhi High Court has ruled that merely filing a complaint with an unrelated government office expressing one's grievance does not constitute a notice under Section 21 of the Arbitration and Conciliation Act, 1996.
The Single Bench of Justice Vibhu Bakhru held that though it is a trite law that all contentious disputes are to be addressed by the Arbitration Tribunal, however in cases where there was no doubt that the claims raised were barred by limitation, the Court would decline to appoint an arbitrator.
Case Title: Virtual Perception Opc Pvt Ltd versus Panasonic India Pvt Ltd
Citation: 2022 LiveLaw (Del) 291
The Delhi High Court has ruled that a petition under Article 227 of the Constitution cannot be allowed against an order passed by the Arbitral Tribunal rejecting a plea raised under Section 16(3) of the Arbitration and Conciliation Act, 1996 that the Tribunal had exceeded its jurisdiction, on the ground that the Tribunal had violated the applicable legal provisions.
The Single Bench of Justice Prateek Jalan held that such an expansive reading would open the doors of the Court under Article 227 against virtually any procedural order of the Arbitral Tribunal, adding that Article 227 cannot be used to correct every order of an Arbitral Tribunal, even if it is found to be erroneous.
Case Title: Tata Capital Financial Services Limited versus Naveen Kachru Proprieter of M/S South Delhi Motorcycle & Ors.
Citation: 2022 LiveLaw (Del) 293
The Delhi High Court has ruled that Section 10 of the Code of Civil Procedure, 1908 does not lay an embargo in proceeding with arbitral proceedings during the pendency of insolvency proceedings under the Provincial Insolvency Act, 1920.
The Single Bench of Justice Sanjeev Sachdeva held that the issues involved in the insolvency proceedings and the issue involved in the arbitral proceedings were completely different and therefore the embargo of Section 10 of CPC does not apply.
Case Title: Cement Corporation of India versus Promac Engineering Industries Limited
Citation: 2022 LiveLaw (Del) 329
The Delhi High Court has ruled that a petition under Section 9 of the Arbitration and Conciliation Act, 1996 (A&C Act) for interim measures of protection, is not maintainable before the Court against the procedural orders passed by the Arbitral Tribunal.
The Bench, consisting of Justices Mukta Gupta and Neena Bansal Krishna, held that the procedural orders passed by the Arbitral Tribunal fixing the arbitration fees does not fall within the ambit of Section 9 of the A&C Act, and rejected the contention that the petition was maintainable under the residuary clause of Section 9(1)(ii)(e) of the A&C Act.
Case Title: National Highways Authority of India versus Continental Engineering Corporation (CEC)
Citation: 2022 LiveLaw (Del) 331
The High Court of Delhi has observed that the failure of the contractor to issue notice under the contract does not deprive him of his right to claim additional payment before the arbitral tribunal.
The Single Bench of Justice Bakhru also observed that such a stipulation in the contract is not a mandatory provision but only directory in nature and must be examined with reference to the other clauses and the contemporary records.
Arbitral Tribunal Cannot Award Interest On Interest: Delhi High Court
Case Title: Delhi Development Authority versus Watcon Water Specialists Pvt. Ltd. and Anr.
Citation: 2022 LiveLaw (Del) 347
The High Court of Delhi has observed that the arbitral tribunal cannot award interest on the amount of interest already granted in the award. The Court held that pendente lite interest on the amount of awarded interest amounts to awarding of interest on interest.
The Single Bench of Justice Bakhru has held that when the arbitrator has awarded interest on a substantive claim, allowing interest on the awarded interest is not permissible under the law.
Case Title: National Highways Authority of India versus M/S Abhijeet Angul Sambalpur Toll Road Limited
Citation: 2022 LiveLaw (Del) 351
The Delhi High Court has ruled that any matter on which the Arbitral Tribunal has the jurisdiction to pass a final award can also be the subject of an interim award made by it, and the same can be challenged before the Court under Section 34 of the Arbitration and Conciliation Act, 1996 (A&C Act).
The Single Bench of Justice C. Hari Shankar held that the right of a party to file counter claims before the Arbitral Tribunal exists independently of any liberty granted to it by the Arbitral Tribunal.
Case Title: Bhavanishankar H Sharma versus SRS Private Investment Powai Limited
Citation: 2022 LiveLaw (Del) 359
The Delhi High Court has observed that a petition filed under sec. 14 of the Arbitration and Conciliation Act, 1996 does not confer any power on the Court to expunge any part of the order of the Arbitral Tribunal.
Justice Sanjeev Sachdeva was dealing with a plea filed under sec. 14(2) read with sec. 15 of the Arbitration and Conciliation Act seeking termination of the mandate of the Arbitral Tribunal and also for expunging the adverse and prejudicial remarks contained in the order of the Arbitral Tribunal.
Case Title: Vistrat Real Estates Private Limited versus Asian Hotels North Ltd
Citation: 2022 LiveLaw (Del) 357
The Delhi High Court has ruled that once a valid arbitration agreement exists between the parties, the issue whether a party is entitled to any relief in the arbitral proceedings in the absence of a third party, who is not a party to an agreement, is covered by the Doctrine of Competence-Competence and must be decided by the Arbitrator.
The Single Bench of Justice Mukta Gupta held that whether a party who is not a signatory to an arbitration agreement is required to be impleaded in the arbitral proceedings or not is to be determined by the Arbitrator.
The Arbitral Tribunal Cannot Reduce The Liquidated Damages On 'Guess Work': Delhi High Court
Case Title: Haryana Vidyut Prasaran Nigam Ltd. versus M/s Cobra Instalaciones Y. Services S.A. & M/s Shyam Indus Power Solution Pvt. Ltd. (JV)
Citation: 2022 LiveLaw (Del) 387
The High Court of Delhi has held that the arbitral tribunal cannot reduce the liquidated damages on 'guesswork' if it finds that it is a genuine pre-estimate of damages and it is not possible to quantify the damages.
The Single Bench of Justice Bakhru held that once the arbitrator finds that the employer has suffered substantial losses due to the fault of the contractor and the contract provides for liquidated damages which were a genuine pre-estimate of the loss as the quantification of the claim is not possible, then the arbitrator cannot reduce the amount of the damages on guesswork.
Case Title: Hunch Circle Pvt. Ltd. versus Futuretimes Technology India Pvt. Ltd.
Citation: 2022 LiveLaw (Del) 379
The High Court of Delhi has given primacy to an exclusive jurisdiction clause over the seat clause in an arbitration agreement. The Court held that when a clause confers exclusive jurisdiction on a court other than the seat court, then only the court on which exclusive jurisdiction is conferred shall decide all the applications arising out of the arbitration agreement.
The Single Bench of Justice Hari Shankar held that despite the fixation of the seat of arbitration if the agreement also provides that the court at some other place has been conferred with the jurisdiction to deal with all the matters arising out of the arbitration agreement, then in such a situation the seat clause must surrender to the exclusive jurisdiction clause.
Case Title: Religare Finvest Ltd versus Asian Satellite Broadcast Pvt. Ltd.
Citation: 2022 LiveLaw (Del) 368
The High Court of Delhi has held that the sufficiency of the stamp duty on the arbitration agreement is a jurisdictional issue under Section 16 of the A&C Act.
The Single Bench of Justice Sanjeev Narula has held that an objection as to the deficiency in the stamp duty shall be decided as a preliminary issue since the inadequately stamped arbitration agreement can neither be taken in evidence nor can be acted upon, therefore, the tribunal should direct the parties to first get the agreement sufficiently stamped before adjudicating rights and obligations under the agreement.
Gujarat High Court
Case Title: M/S M N Trapasia versus Divisional Railway Manager (WA)
Citation: 2022 LiveLaw (Guj) 119
The Gujarat High Court has ruled that unless the embargo placed under Section 12(5) of the Arbitration and Conciliation Act, 1996 is waived by the parties, the provisions of Section 12(5) would continue to be attracted.
The Single Bench of Chief Justice Aravind Kumar held that there cannot be a deemed waiver of Section 12(5) by merely issuing a letter or communication calling upon the opposite party to waive the embargo.
Case Title: Time Cinemas and Entertainment Pvt Ltd versus Venus Infrastructure and Developers Pvt Ltd
Citation: 2022 LiveLaw (Guj) 138
The Gujarat High Court has ruled that once an application under Section 9 of the Arbitration and Conciliation Act, 1996 (A&C Act) seeking interim measures has been disposed of, a subsequent similar application seeking similar reliefs, which were already dealt with in the earlier proceedings, is not maintainable.
The Bench, consisting of Justices N.V. Anjaria and Samir J. Dave, held that principal relief cannot be granted at the interim stage, and granting interim directions which are in the nature of main relief is not permissible in law.
Case Title: M/S Bharmal Indane Service versus Indian Oil Corporation Limited
Citation: 2022 LiveLaw (Guj) 111
The Gujarat High Court has ruled that petition for referring the matter to arbitration cannot be disallowed on the ground that the dispute involves interpretation of policy guidelines.
The Single Bench of Chief Justice Aravind Kumar held that whether there is an arbitrable dispute or not and whether the Arbitral Tribunal has jurisdiction to decide the dispute is an issue which can be decided by the arbitrator himself under Section 16 of the Arbitration and Conciliation Act, 1996.
Karnataka High Court
Case Title: South India Biblical Seminary versus Indraprastha Shelters Pvt Ltd and Anr.
Citation: 2022 LiveLaw (Kar) 141
The Karnataka High Court has ruled that reference of a dispute to arbitration cannot be allowed if it would lead to splitting up of the cause of action and cause determination on matters which were not contemplated for arbitration.
The Single Bench of Justice B. M. Shyam Prasad held that there cannot be a complete adjudication of the claimant's rights unless the third parties were also heard, therefore, the matter was demonstrably non-arbitrable.
Kerala High Court
Dissenting Views Of Minority Members Does Not Constitute An Arbitral Award: Kerala High Court
Case Title: Lloyed Insulations (India) Ltd versus Foremexx Space Frames
Citation: 2022 LiveLaw (Ker) 178
The Kerala High Court has ruled that the Arbitral Tribunal can pass only one arbitral award and not multiple awards.
The Bench, consisting of Justice P.B. Suresh Kumar and C.S. Sudha, ruled that the dissenting views of the minority member(s) of an Arbitral Tribunal does not constitute an Arbitral Award, and the dissenting views cannot be made the basis of a proceeding under Section 34 of the Arbitration and Conciliation Act, 1996 for setting aside the arbitral award or proceedings under Section 36 for its enforcement.
Case Title: M/s Bativala and Karani versus K.I. Johny & Anr.
Citation: 2022 LiveLaw (Ker) 187
The Kerala High Court has held that there is no legal impediment for arbitrating parties to initiate fresh proceedings if the district court sets aside an award on any issue not yet concluded in that award. This implies that the principles of res judicata will have only a limited application in such proceedings under the Arbitration and Conciliation Act.
A Division Bench of Justice P.B. Suresh Kumar and Justice C.S Sudha observed that even if the earlier award was one set aside not on any ground affecting the competency of the Tribunal, the subsequent arbitral proceedings are not hit by the principles of res judicata.
Madhya Pradesh High Court
Case Title: Anil Kumar Tripathi versus Doorsanchar Nigam Ltd. (BSNL)
Citation: 2022 LiveLaw (MP) 106
The High Court of Madhya Pradesh, Gwalior Bench has held that a court can direct requisition of record from an arbitral tribunal and that the same would not be akin to remanding the matter to the tribunal, but to ascertain the exact nature of the dispute through record of the case.
Justice Anand Pathak dealt with a writ petition moved by the Petitioner who was aggrieved by the order of the commercial court, whereby it directed the requisition of the original record of the arbitrator before considering the application u/s 34 of the Arbitration and Conciliation Act, 1996.
Case Title: Parenteral Drugs (India) Limited versus Gati Kintetsu Express Pvt Ltd
Citation: 2022 LiveLaw (MP) 111
The Madhya Pradesh High Court has ruled that even if a party disputes the existence of an arbitration agreement, an application under Section 34 of the Arbitration and Conciliation Act, 1996 (A&C Act) to set aside an arbitral award cannot be filed in a Court not having jurisdiction under the arbitration agreement, solely on the ground that cause of action arose within its jurisdiction.
The Single Bench of Justice Subodh Abhyankar held that the contention that since there was no arbitration agreement between the parties, therefore, the arbitral award could also be challenged wherever the cause of action arose between the parties, would defeat the provisions of Section 16 and Section 34 of the A&C Act and lead to a chaotic situation.
Madras High Court
Case Title: Madurai Kamraj University versus The Chairman, Micro & Small Enterprises Facilitation Council and Anr.
Citation: 2022 LiveLaw (Mad) 160
The High Court of Madras has observed that S. 18 of the MSMED Act will override the arbitration clause between the parties. The Court observed that since S. 24 of the MSMED Act is a non-obstante clause, it gives overriding effect to the provisions of S. 15 -23 of the Act.
The Bench of Justice Pushpa Sathyanarayan and Justice P. Velmurgan observed that once a reference is filed before the MSME Council under S. 18 of the Act, the provisions of the arbitration clause must yield to the provisions contained under S. 18 of the Act.
Writ Petition Is Not Maintainable To Enforce The Arbitral Award: Madras High Court
Case Title: D. Nagarathinammal versus The Project Director, National Highways Authority of India and Anr.
Citation: 2022 LiveLaw (Mad) 161
The High Court of Madras observed that a writ petition cannot be filed to enforce an arbitral award when an alternative remedy is available under S. 36 of the A&C Act.
The Single Bench of Justice G.K. Ilanthiraiyan observed that the A&C Act is a complete code in itself and envisages minimum judicial intervention.
Case Title: M/s Cholamandalam Investment and Finance Company Ltd. versus Harkhabhai Amarshibhai Vaghadiya
Citation: 2022 Livelaw (Mad) 171
The High Court of Madras has held that manifest intention to arbitrate is a sine qua non for filing an application under S. 9 before the commencement of the arbitration and no interim relief can be granted if the intention to arbitrate is missing.
The Single Bench of Justice M. Sundar held that manifest intention to arbitrate is a jurisdictional fact that must precede the application under S. 9 of the Act. It also held that the Court would only appoint the receiver when the applicant is successful in demonstrating that the property is in imminent danger of waste.
Arbitral Award Not Hit By Adequacy Facet If Reasons Given Are Not Laconic: Madras High Court
Case Title: The Chief Engineer / Metropolitan Transport Project (Railways), Southern Railway and Anr. versus M/s. Progressive-Aliens
Citation: 2022 LiveLaw (Mad) 189
The Madras High Court has ruled that an arbitral award cannot be set aside on the ground of non-adequacy of reasons as long as the reasons given are not laconic.
The Single Bench of Justice M. Sundar ruled that being 'tersely eloquent' is not alien to judgment writing.
Case Title: M/s. Color Home Developers Pvt. Ltd. versus M/s. Color Castle Owners Society
Citation: 2022 LiveLaw (Mad) 186
The High Court of Madras has held that the challenge proceedings under Section 34 of the A&C Act are summary in nature, therefore, the same shall be decided based on the record that was available with the arbitral tribunal and no additional document shall be permitted to be brought in at that stage unless absolutely warranted.
The Single Bench of Justice M. Sundar further held that the court would not allow any additional document under a Section 34 petition if there was nothing that prevented the petitioner from furnishing the same document before the arbitrator.
Case Title: Rajasthani Marbles and Anr. versus Na. K. Kumar
Citation: 2022 LiveLaw (Mad) 177
The High Court of Madras has held that the arbitration clause contained in a partnership deed survives the termination of the deed. The Court held that the clause is an independent agreement and outlives the main contract in which it is incorporated.
The Single Bench of Justice M. Sundar reiterated that all the issues related to the arbitrability of the claims shall be decided by the arbitral tribunal unless it is a clear case of deadwood. The Court ruled that Section 11 of A&C Act does not permit elaborate pleadings on the claims.
Orissa High Court
Case Title: M.G. Mohanty and Anr. versus State of Odisha and others
Citation: 2022 LiveLaw (Ori) 44
The High Court of Orissa has observed that the Court for the purpose of deciding all the applications arising out of the arbitration agreement between the parties would be the Commercial Court as defined under the Commercial Courts Act which need not necessarily be the Principal Civil Court as provided under the Arbitration Act.
The Court observed that the jurisdiction of the Commercial Court can be conferred on a judicial officer subordinate to the rank of a District Judge, i.e., the Principal Civil Judge notwithstanding anything contained in S. 2(1)(e) of the Arbitration Act.
Case Title: M/s Bajaj Electricals Ltd. versus Micro Small and Enterprises Facilitation and Anr.
Citation: 2022 LiveLaw (Ori) 45
The High Court of Orissa has observed that a writ petition is maintainable against an award rendered by the MSME Council under S. 18 of the MSMED Act wherein the petitioner was not given a hearing on a material issue regarding the limitation of the substantive claims.
The Single Bench of Justice Arindam Sinha has observed that in cases where an award is passed without hearing a party, the availability of an alternative remedy to challenge the award under S. 19 of the MSMED Act r/w S. 34 of the Arbitration Act shall not be a ground to dismiss the writ petition as compelling the petitioner to challenge the award would require him to comply with the requirement of deposit of 75% of the amount awarded.
Telangana High Court
Arbitral Award A Nullity If Passed Beyond Prescribed Period: Telangana High Court
Case Title: Roop Singh Bhatty and others versus M/s. Shriram City Union Finance Limited
Citation: 2022 LiveLaw (Tel) 24
The Telangana High Court has held that the provisions of Section 29A of the Arbitration and Conciliation Act, 1996 (A&C Act) are cast in mandatory terms and the mandate of the arbitrator terminates under Section 29A(4) after the expiry of the prescribed period, making the arbitrator functus-officio and the award passed by him a nullity.
The Bench, consisting of Justice P. Naveen Rao and Dr. Justice G. Radha Rani, ruled that substitution of Section 29A(1) of the A&C Act by the Amendment Act of 2019, amending the time limit for making an award, does not operate retrospectively, and merely because the word substitution is used the amended provision does not relate back to the date of the original provision.
Case Title: Mrs. Ragya Bee (deceased) and Others versus M/s. P.S.R. Constructions
Citation: 2022 LiveLaw (Tel) 28
The Telangana High Court has held that a Civil Court does not have the power to modify an arbitral award in an application filed under Section 34 of the Arbitration and Conciliation Act, 1996 (A&C Act) to set aside an arbitral award.
The Bench, consisting of Justice P. Naveen Rao and Dr. Justice G. Radha Rani, ruled that execution proceedings are not maintainable with respect to the decision of a Civil Court in a petition filed under Section 34 of the A&C Act.
Case Title: Union of India, Rep. by Ministry of Railways versus Krishnapatnam Railway Company Limited
Citation: 2022 LiveLaw (Tel) 29
The Telangana High Court has ruled that a writ petition under Article 226 of the Constitution of India cannot lie against an order passed by an Arbitral Tribunal in an application filed under Section 16 of the Arbitration and Conciliation Act, 1996 (A&C Act), challenging the jurisdiction of the Arbitral Tribunal, if the challenges raised by the party go into the merits of the claim raised by the claimant before the Arbitral Tribunal and not to the jurisdiction of the Arbitral Tribunal.
The Bench, consisting of Chief Justice Satish Chandra Sharma and Justice A. Rajasheker Reddy, held that a party cannot seek the High Court under Article 226 of the Constitution to traverse into the merits of the claims raised by the claimant in the arbitral proceedings.
Parties Cannot Be Referred To Arbitration In Absence Of Privity Of Contract: Telangana High Court
Case Title: Gagiri Hari Krishna versus M/s Jasper Industries Pvt Ltd
Citation: 2024 LiveLaw (Tel) 32
The Telangana High Court has ruled that in the absence of a privity of contract parties cannot be referred to arbitration.
The Single Bench of Justice Ujjal Bhuyan held that the word 'party' under the Arbitration and Conciliation Act, 1996 (A&C Act) has been given a definite meaning with respect to an arbitration agreement. The Court added that only the disputes between the signatories to an arbitration agreement can be referred to arbitration and a third party cannot be roped into arbitration in the absence of privity of contract.
