Arbitration Cases Monthly Round-Up: October 2022

Supreme Court: Arbitral Tribunal Must Give Reasons For Fixing Interest Rate; Award Holder Not Entitled To Interest For Delay Caused By It : Supreme Court Case Title: Executive Engineer (R and B) versus Gokul Chandra Kanungo The Supreme Court recently held that a case where the award holder was responsible for delaying the proceedings which led to a huge lapse of time would be a fit case of exercising power under Article 142 to reduce the rate of interest on the sum of award. The Court further held that the Arbitration and Conciliation Act casts a duty upon the arbitral tribunal to give reasons as to how it deems the rate of interest to be reasonable. The bench of Justices B.R. Gavai and B.V. Nagarathna held that no interest would be payable for the period on which there were lapses on the part of the award holder. Arbitration- Court Can Undertake Preliminary Inquiry Under Section 11 To Ascertain If Dispute Is Arbitrable : Supreme Court Case Title: Emaar India Ltd. versus Tarun Aggarwal Projects LLP The Supreme Court has held that the High Courts while appointing the arbitrator can launch a preliminary inquiry to decide the issue of 'Excepted Matters' when an objection to that effect is taken by the respondent. The bench of Justices M.R. Shah and Krishna Murari held that if any dispute falls within the 'excepted' category provided in the contract between the parties, then it falls outside the scope of arbitration, therefore, no arbitration can happen with respect to those matters. High Courts Andra Pradesh High Court: Review Of Judgment/Order Passed Under Section 11 Of The A&C Act Is Not Permissible: Andhra Pradesh High Court Case Title: Nagireddy Srinivasa Rao versus Chinnari Suryanarayana & Ors. The Andhra Pradesh High Court has held that review of an order/judgment passed under Section 11 of the Arbitration and Conciliation Act, 1996 (A&C Act) is not permissible. The Bench of Justice R. Raghunandan Rao held that power of review is the creature of a statute and in absence of any such provision in a statute, an order/judgment cannot be reviewed on its merit unless it is for some procedural irregularity. Bombay High Court: Execution Of Agreement, In Bid Document As Condition Precedent; Failure To Execute, Not A Concluded Contract: Bombay High Court Case Title: Kalpataru Limited versus Middle Class Friends Co-operative Housing Society Limited The Bombay High Court has ruled that where reference to a future contract is made in the tender documents and in the Letter of Intent (LoI) issued to a successful bidder, in such terms which shows that the parties do not intend to be bound until the said contract is signed between them, there is no concluded contract between them which can be specifically enforced. The Division Bench of Justices R.D. Dhanuka and Kamal Khata added that the terms and conditions of the contract, which were not agreed by and between the parties, cannot be drafted by the Court or the arbitrator for incorporating them in the agreement. The Court ruled that it cannot re-write a contract or suggest any conditions of a contract to be incorporated, by passing an order against the parties. Calcutta High Court: Dispute of Unregistered Partnership Firm Can Be Referred To Arbitration, Bar U/S 69Partnership Act Not Applicable: Calcutta High Court Case Title: Md. Wasim & Anr. versus M/s. Bengal Refrigeration and Company & Ors. The Calcutta High Court, while hearing an application filed under Section 11 of the Arbitration and Conciliation Act, 1996 ('Arbitration Act') for appointment of an arbitrator to resolve the dispute between the parties, held that the bar for instituting a suit or any other proceeding under Section 69 of the Indian Partnership Act, 1932 shall not be applicable to arbitral proceedings under Section 11 of the Arbitration Act. Arbitrator Cannot Delegate The Task Of Quantifying The Amount Of Award To A Chartered Accountant: Calcutta High Court Case Title: Usha Martin Limited versus Eastern Gases Limited The Calcutta High Court has held that the arbitrator can indeed take assistance from a third party, including a Chartered Accountant, however, it cannot completely delegate the important function of quantifying the amount of award to any third party. The Bench of Justice Shekhar B. Saraf held that an arbitral award wherein the arbitrator failed to determine the amount of award and delegated that function to a third party cannot be sustained in the eyes of law. The Court remarked that an arbitrator cannot shun away from its duty and delegate an important function to a third party. Delhi High Court: Members Of Joint Venture Cannot Invoke Arbitration Clause In Their Individual Capacity: Delhi High Court Case Title: Consulting Engineers Group Limited versus National Highways Authority of India (NHAI) The Delhi High Court has ruled that...

Arbitration Cases Monthly Round-Up: October 2022

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