Arbitration Cases Monthly Round Up: August 2022

Supreme Court: Mere Use Of Words "Arbitration" Or "Arbitrator" In A Clause Won't Make It Arbitration Agreement: Supreme Court Case Title: Mahanadi Coalfields Ltd. versus IVRCL AMR Joint Venture Citation: 2022 LiveLaw (SC) 657 The Supreme Court observed that an arbitration agreement should disclose a determination and obligation on behalf of the parties to refer the disputes to arbitration. The Bench comprising Justices DY Chandrachud and AS Bopanna noted that mere use of the word "arbitration" or "arbitrator" in a clause will not make it an arbitration agreement, if it requires or contemplates a further or fresh consent of the parties for reference to arbitration. Arbitrators Cannot Unilaterally Fix Their Fee As It Violates Party Autonomy : Supreme Court Case Title: Oil and Natural Gas Corporation Ltd. vs Afcons Gunanusa JV Citation: 2022 LiveLaw (SC) 723 In a significant judgment, the Supreme Court on Tuesday held that arbitrators do not have the power to unilaterally fix their fees without the consent of the parties. The Court further held that the fee scale prescribed under the 4th schedule of the Arbitration and Conciliation Act 1996 is not mandatory. Arbitrators Fee Cap Is Rs 30 Lakhs, Ceiling Limit Applicable To Individual Arbitrators, Not Tribunal As A Whole : Supreme Court Case Title: Oil and Natural Gas Corporation Ltd. vs Afcons Gunanusa JV Citation: 2022 LiveLaw (SC) 723 The Supreme Court held that the ceiling of Rs 30,00,000 in entry at Serial No 6 of the Fourth Schedule of the Arbitration and Conciliation Act is applicable to the sum of base amount and the variable amount, and not just the variable amount. This means that the highest fee payable shall be Rs 30,00,000, the bench comprising Justices DY Chandrachud, Surya Kant and Sanjiv Khanna observed. The court also held that the ceiling is applicable to each individual arbitrator, and not the arbitral tribunal as a whole, where it consists of three or more arbitrators. Arbitrators Entitled To Charge Separate Fee For Claim & Counter Claim In Arbitration Proceedings : Supreme Court Case Title: Oil and Natural Gas Corporation Ltd. vs Afcons Gunanusa JV Citation: 2022 LiveLaw (SC) 723 The Supreme Court held that the term 'sum in dispute' in the Fourth Schedule of the Arbitration Act refers to the sum in dispute in a claim and counter-claim separately, and not cumulatively. "Arbitrators shall be entitled to charge a separate fee for the claim and the counter-claim in an ad hoc arbitration proceeding, and the fee ceiling contained in the Fourth Schedule will separately apply to both, when the fee structure of the Fourth schedule has been made applicable to the ad hoc arbitration", the majority judgment authored by Justice DY Chandrachud held. High Courts: Andhra Pradesh High Court: Arbitration Agreement Not A Bar For Referring Parties To Facilitation Council Under MSMEDAct: Andhra Pradesh High Court Case Title: M/s. Dalapathi Constructions versus The State of Andhra Pradesh & Ors. The Andhra Pradesh High Court has ruled that a reference to the Facilitation Council under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) for conciliation and subsequent arbitration, is not barred on account of the presence of an arbitration agreement between the parties. The Single Bench of Justice R. Raghunandan Rao held that even if the arbitration agreement between the parties provides for a different method of constituting an Arbitral Tribunal, the party can be referred to the Facilitation Council under Section 18 of the MSMED Act for recovery of its dues. Bombay High Court: Arbitral Tribunal Not Barred Under Section 79 Of The RERA Act From Passing An Order Of Injunction: Bombay High Court Case Title: Ashok Palav Coop. Housing Society Ltd. versus Pankaj Bhagubhai Desai & Anr The Bombay High Court has ruled that the Arbitral Tribunal is not a Civil Court within the meaning and purview of the Code of Civil Procedure, 1908 and thus, the arbitral proceedings cannot be said to be barred under Section 79 of the Real Estate (Regulation and Development) Act, 2016 (RERA Act). The Single Bench of Justice G.S. Kulkarni held that the bar of Section 79 of the RERA Act would not apply to an Arbitral Tribunal and thus, the Arbitral Tribunal is not barred from passing an order of injunction under Section 17 of the Arbitration and Conciliation Act, 1996 (A&C Act). Interim Relief Under Section 9 Of A&C Act -Incidental To Recovery Of Possession Of Property; Small Causes Court Alone Would Have Jurisdiction: Bombay High Court Case Title: BXIN Office Parks India Pvt. Ltd. versus Kailasa Urja Pvt. Ltd. The Bombay High Court has ruled that reliefs which are incidental to the possession of the licensed premises cannot be sought in an application for interim measures under Section 9 of the...

Arbitration Cases Monthly Round Up: August 2022

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