Arbitration Cases Weekly Round-Up: 26 June To 2 July, 2022

Undisputed Claims Can't Be Set-Off Against Unliquidated Damages That Are Not Ascertained: Bombay High Court

Case Title : Ocean Sparkle Limited. V Oil and Natural Gas Corporation Ltd. and Anr.

The Bombay High Court recently has observed that set-off of unliquidated damages that are not ascertained or admitted against an undisputed claim is not tenable.

The Single Bench of Justice G.S. Kulkarni reiterated that a Section 9 Court would not be unduly bound by procedural law contained in the Code of Civil Procedure, 1908, the underlying principle being to make arbitration an effective form of dispute resolution; and that a performance bank guarantee ("PBG") cannot be invoked contrary to the provision for its invocation in the PBG itself.

Chattisgarh High Court:

Arbitral Award Vitiated By Serious Fraud And Criminal Conspiracy Can Be Set Aside In A Writ Petition: Chhattisgarh High Court

Case Title: Bali Nagwanshi v. State of Chattisgarh

The High Court of Chhattisgarh has held that an arbitral award that is vitiated by fraud and criminal conspiracy would be void and non-est and can be set aside in a Writ Petition and the availability of an alternative remedy under Section 34 of the A&C Act is not a bar to the maintainability of the petition.

The Division Bench of Chief Justice Anup Kumar Goswami and Justice Rajendra Chandra Samant further held that on a plain reading of Section 34 of the A&C Act, it is revealed that fraud and conspiracy are not the ground to challenge an arbitral award.

Delhi High Court:

Power Under Section 9 Of The A&C Act Cannot Be Exercised For Directing Specific Performance Of The Contract: Reiterates Delhi High Court

Case Title: Pink City Expressway Private Limited versus National Highways Authority of India & Anr.

Citation: 2022 LiveLaw (Del) 598

The Delhi High Court has reiterated that power under Section 9 of the Arbitration and Conciliation Act, 1996 (A&C Act) cannot be exercised for directing specific performance of the contract itself.

The Division Bench of Justices Jyoti Singh and Anoop Kumar Mendiratta held that a direction to the opposite party to extend the contract for a further period would amount to granting specific relief of the contract, which is beyond the scope of the powers of the Court under Section 9 of the A&C Act.

Himachal Pradesh High Court:

Pre-Arbitration Reference To Adjudicator Is Only Directory, Not A Bar To The Appointment Of The Arbitrator: Himachal Pradesh High Court

Case Title: Backend Bangalore Pvt. Ltd. v. Chief-Engineer-Cum-Project Director

Citation: 2022 LiveLaw (HP) 14

The High Court of Himachal Pradesh has held that pre-arbitration reference to the adjudicator in terms of arbitration clause is only directory and cannot be held to be a bar to the appointment of an arbitrator by the Court.

The Single Bench of Chief Justice Mohammed Rafiq held that the respondent could not object to the maintainability of the petition, merely on the ground that the precondition of reference to adjudicator was not met if it also did not make efforts to settle the dispute but proceeded to terminate the agreement.

Jammu and Kashmir and Ladakh High Court:

Non-Filing Of Application U/S 8 Arbitration Act Before Civil Court Does Not Debar Party From Seeking Appointment Of Arbitrator: J&K&L High Court

Case Title: Anita Mehta v Gulkand Hues Private Ltd. & Anr.

The Jammu and Kashmir and Ladakh High Court on Tuesday reiterated that non-filing of an application under Section 8 of the Arbitration and Conciliation Act would not mean that the petitioner has surrendered to the jurisdiction of the court and left the right to get the disputes resolved through arbitration so as to debar the petitioner for seeking appointment of an arbitrator through the intervention of the Court.

A Single Bench of Chief Justice Pankaj Mithal was hearing a plea filed by the petitioner under Section 11(6) of the Act seeking the appointment of an arbitrator to adjudicate the matters of controversy between the parties.

Jharkhand High Court:

Application For Appointment Of Arbitrator Filed After Many Years : Jharkhand High Court Dismisses The Application

Case Title: Jharia Petrol Supply versus Indian Oil Corporation Limited

The Jharkhand High Court has ruled that if the application for appointment of Arbitrator under Section 11(6)(c) of the Arbitration and Conciliation Act, 1996 (A&C Act) is itself not maintainable on the ground of inordinate delay in filing it, the issue of limitation cannot be referred to the Arbitrator for adjudication.

The Single Bench of Justice Sujit Narayan Prasad held that, in view of the decision of the Supreme Court in the case of Bharat Sanchar Nigam Limited and Another versus Nortel Networks India Private Limited (2021), the issue of limitation is required to be answered at the threshold itself, i.e., at the stage where the application filed under Section 11(6)(c) of the A&C Act is considered by the Court.

Madhya Pradesh High Court:

Section5 Of The Limitation Act Applies To Arbitration Reference Under National Highways Act, 1956: High Court of Madhya Pradesh

Case Title: Ghanshyam Gupta v. State of Madhya Pradesh and Ors.

The High Court of Madhya Pradesh has held that Section 5 of the Limitation Act would be applicable to reference to arbitration under the National Highways Act, 1956.

The Division Bench of Chief Justice Ravi Malimath and Justice Purushiandra Kumar Kaurav reiterated that since no limitation is provided under Section 3G (5) of the National Highways Act, the provisions of Article 137 of the Schedule to the Limitation Act would apply to such proceedings.

Punjab and Haryana High Court:

A Statement Made At The Stage Of Interim Injunction Is Not A First Statement For Section 8 Of The A&C Act: P&H High Court

Case Title: Chat Aroma v. Hamir Real Estate Pvt. Ltd.

The High Court of Punjab and Haryana has held that a statement made at the stage of interim injunction is not a first statement for Section 8 of the A&C Act.

The Single Bench of Justice Rajbir Sherawat held that any statement made at the stage of and for the purpose of opposition to the application under Order 39 Rules 1 & 2 or to prevent any interim order being passed by the court, could not be taken as a statement on the subject matter of the dispute.

Telangana High Court:

Application For Attachment Can Be Filed Before A Court Even If The Property Is Outside Its Jurisdiction: Telangana High Court

Case Title: M/s Rashmi Metaliks Limited versus M/s Techno Unique Infratech Pvt. Ltd.

The Telangana High Court has reiterated that an Execution Petition for enforcement of an arbitral award can be filed in any court at any place in the country. However, the High Court added that the said court must have the jurisdiction to execute the award, which would depend on the award debtor and its location.

The Bench, consisting of Chief Justice Satish Chandra Sharma and Justice Abhinand Kumar Shavili, held that even if the properties sought to be attached are outside the territorial jurisdiction of a Commercial Court, a petition under Order 21 Rule 46 of the Code of Civil Procedure, 1908 for attachment of the property can be filed.