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Arbitration Cases Weekly Round-Up: 15th May to 21st May, 2022

Parina Katyal
22 May 2022 9:30 AM GMT
Arbitration Cases Weekly Round-Up
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Bombay High Court:

Novation Of Partnership Deed, Arbitration Clause Contained In The Deed Can Be Invoked: Bombay High Court

Case Title: Praful A. Mehta versus Nainesh M. Gandhi

The Bombay High Court has ruled that the allegation of forgery is required to be dealt with at the stage of trial before the Arbitrator.

The Single Bench of Justice A. K. Menon dismissed the contention that an arbitration clause cannot be invoked as a result of novation of the agreement containing the arbitration clause. The Court added that even though there had been a novation of the partnership deed containing an arbitration clause, an Arbitrator could be appointed for adjudication of disputes against the partner with respect to the partnership firm.

Calcutta High Court

The Finding Of The MSME Council On Its Jurisdiction Is Not AnInterim Award: Calcutta High Court

Case Title: Board of Trustees for the Syama Prasad Mookerjee Port, Kolkata versus Marinecraft Engineers Private Limited

Case Citation: 2022 LiveLaw (Cal) 194

The High Court of Calcutta has held that the decision of the MSME Council on its jurisdiction is an order under Section 16 of the A&C Act and it cannot be termed as an interim award that can be directly challenged under Section 34 of the A&C Act pending adjudication on the other issues.

The Single Bench of Justice Ravi Krishan Kapur has held that the order of the MSME Council that pertains to its jurisdiction has to pass the drill of Section 16(5) and Section 16(6) of the A&C Act and the aggrieved party must wait till the passing of the final award.

No Direction Can Be Passed To Sell Property To Third Party In Section 9 Petition Of The A&C Act: Calcutta High Court

Case Title: Aditya Birla Finance Ltd versus Mcleod Russel India Ltd. and Ors.

Case Citation: 2022 LiveLaw (Cal) 189

The High Court of Calcutta has held that no direction can be passed to sell property to third party in Section 9 petition of the A&C Act.

The Single Bench of Justice Moushumi Bhattacharya has held that a direction to sell the subject property to an outsider who was not a party to the arbitral proceedings would result in the property going out of the girdle of the arbitration and the purpose of a Section 9 application itself would be defeated.

Delhi High Court:

Rejected Claims By Resolution Professional In Insolvency Proceedings, To Be Decided By The Arbitrator: Delhi High Court

Case Title: Bharat Petroresources Limited versus JSW Ispat Special Products Limited

Citation: 2022 LiveLaw (Del) 469

The High Court of Delhi held that the claims rejected by Resolution Professional in the insolvency proceedings on the ground that they arose after the Insolvency Commencement Date (ICD), are to be decided by the arbitrator.

The Single Bench of Justice Vibhu Bakhru held that extinguishment of claims that arose after the Insolvency Commencement Date (ICD) is a contentious issue that is to be decided by the arbitrator when the parties have an arbitration agreement.

Deferment Charges On Liquidated Damages, No Liability To Pay When Liquidated Damages Itself Not Payable : Delhi High Court

Case Title: Haryana Vidyut Prasaran Nigam Ltd. (HVPNL) versus Cobra Instalaciones Y Services S.A. and Shyam Indus Power Solution Pvt. Ltd. JV

Citation: 2022 LiveLaw (Del) 454

The High Court of Delhi has held that there would be no question of recovery of deferment charges on the liquidated damages when the liquidated damages are themselves not payable.

The Single Bench of Justice Vibhu Bakhru has held that deferment charges cannot be treated as separate charges payable irrespective of whether the liquidated damages are payable or not. The Court held that these would only be payable when the liquidated damages are held to be payable

Challenge By NHAI On Fee Fixation By Arbitral Tribunal, Delhi High Court Holds That Tribunal Can Fix Its Fees

Case Title: National Highway Authority of India versus MEP Chennai Bypass Toll Road Pvt. Ltd. & Anr.

Citation: 2022 LiveLaw (Del) 453

The Delhi High Court has ruled that the Arbitral Tribunal is permitted to fix its fee, if its appointment is made by way of an ad hoc agreement between the parties.

The Single Bench of Justice Sanjeev Narula held that where the Arbitral Tribunal has accepted its appointment outside the mandate of the International Centre for Alternative Dispute Resolution (ICADR), it is entitled to determine its fee and is not bound by ICADR Rules. The Court upheld the order of the Arbitral Tribunal fixing the arbitral fee separately for the claims and the counter-claims.

Mere Pendency Of An Insolvency Petition Is Not A Bar To The Appointment Of The Arbitrator: Delhi High Court

Case Title: Millennium Education Foundation versus Educomp Infrastructure and School Management Limited

Citation: 2022 LiveLaw (Del) 449

The High Court of Delhi has held that the mere pendency of an insolvency petition under Section 9 of the IBC is not a bar to the appointment of an arbitrator.

The Single Bench of Justice Sanjeev Sachdeva has held that merely because an insolvency petition is pending, it cannot be an embargo on the power of the Court to decide arbitration applications. The Court added that it is only when the insolvency petition is admitted and the moratorium is declared that the proceedings under the Arbitration Act would be non-maintainable.

Madhya Pradesh High Court:

A Party Cannot Directly Seek The Appointment Of The Arbitrator If The Agreement Provides For Pre-Arbitration Reference To A Competent Authority: Madhya Pradesh High Court

Case Title: Dharmadas Tirthdas Construction Pvt. Ltd. versus Government of India and Ors.

The High Court of Madhya Pradesh has held that the court cannot appoint the arbitrator when the petitioner has not complied with the condition precedent of referring the dispute to the Superintending Engineer.

The Single Bench of Justice Vivek Rusia has held the pre-arbitral steps to be mandatory, the non-compliance of which will result in the rejection of the application for the appointment of the arbitrator.

Madras High Court:

Arbitral Award Rendered Mechanically, Awarding Lower Value For Land Acquired Under NHA: Madras High Court Remits Matter Back To Arbitrator

Case Title: Union of India versus J. Auuamar and Ors.

Citation: 2022 LiveLaw (Mad) 221

The Madras High Court has ruled that an arbitral award rendered by the District Collector awarding a lower value to the land owners with respect to the land acquired under the National Highways Act, 1956 without following the mandate of Section 3G (7) of the National Highways Act, is rendered mechanically.

The Bench, consisting of Justices R. Subramanian and N. Sathish Kumar, remitted the matter back to the Arbitrator for fixing the value of the land acquired under the National Highways Act afresh in terms of Section 3G (7) of the National Highways Act.

Orissa High Court:

Invocation Of Arbitration Clause In Tender Document Is Possible Only If Purchase Order Is Placed: Orissa High Court

Case Title: Emcure Pharmaceuticals Ltd versus The Managing Director, Odisha State Medical Corporation and Others

The Orissa High Court has ruled that till a purchase order is issued by the tenderee pursuant to the acceptance of an offer to supply, no completed 'contract' arises between the parties and thus the arbitration clause contained in the tender document is not attracted.

The Single Bench of Chief Justice Dr. S. Muralidhar reiterated that the arbitration clause contained in the tender document was not an arbitration agreement in praesenti, but a provision that was to come into existence in the future, if a purchase order was placed.

Rajasthan High Court:

Proceedings Under The A&C Act And SARFAESI Act Can Be Resorted To Simultaneously: Rajasthan High Court Reiterates The Legal Position

Case Title: Om Prakash Kumawa versus Hero Housing Finance Ltd.

The High Court of Rajasthan has held that proceedings under the A&C Act and SARFAESI Act can be resorted to simultaneously.

The Single Bench of Justice Mahendra Kumar Goyal has held that the existence of an arbitration clause and filing of an application under Section 9 of the A&C Act is not a bar to the institution of proceedings under the SARFAESI Act.

Condonation Of Delay | S.5 Limitation Act Not Applicable To Proceedings U/S 34 Arbitration & Conciliation Act: Rajasthan High Court

Case Title: State of Rajasthan & Anr. versus M/s. Godhara Construction Company

Citation: 2022 LiveLaw (Raj) 162

The Rajasthan High Court has observed that the provision of Section 5 of the Indian Limitation Act does not apply to the proceedings contained under Section 34 of the Arbitration and Conciliation Act, 1996.

The Single Bench of Justice Anoop Kumar Dhand observed that the proviso to Section 34(3) of the Act of 1996 empowers the court, if it is satisfied that the applicant was prevented by sufficient cause from making application within the said period of three months, to further extend the period and filing of the application for setting aside the arbitral award by 30 days but not thereafter.

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