Arbitration Cases Weekly Round-Up: July 31 To August 6 , 2022

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.

High Courts:

Calcutta High Court:

Clause "Every Effort" To Arbitrate; Must Be Referred To Arbitration: Calcutta High Court

Case Title: Manika Sett versus Sett Iron Foundry and Ors

The Calcutta High Court has ruled that it is the intention of the parties that has to be deciphered while determining whether or not the parties must be referred to arbitration.

The Single Bench of Justice Shekhar B. Saraf held that where the arbitration clause between the parties provided that "every effort" should be made by them to settle the dispute by arbitration, the term "every effort" expanded the scope and ambit of the arbitration clause, and clearly conveyed the intention to refer the disputes to arbitration.

Delhi High Court:

Remedy Under RERA Act Is Not A Bar For Initiation Of Arbitration: Delhi High Court

Case Title: Priyanka Taksh Sood & Ors. versus Sunworld Residency Pvt. Ltd. & Anr.

Citation: 2022 LiveLaw (Del) 752

The Delhi High Court has ruled that the dispute involving refund of payment under the 'Flat Buyer Agreement' from a real estate developer is arbitrable and is not barred by the existence of a concurrent remedy under the Real Estate (Regulation and Development) Act, 2016 (RERA Act).

The Single Bench of Justice Sanjeev Narula held that the remedies available under the RERA Act are in addition to, and not in supersession of, the remedies available under the Arbitration and Conciliation Act, 1996 (A&C Act), and that the application of concurrent remedies under the A&C Act is not barred under the RERA Act.

Arbitral Tribunal Has The Power To Vacate/Modify Its Earlier Order: Delhi High Court

Case Title: Airport Authority of India (Kolkata Airport) versus TDI International Ltd.

Citation: 2022 LiveLaw (Del) 750

The High Court of Delhi has held that the arbitral tribunal would be guided by the principles of O. 39 R. 1&2 of CPC while considering the issue of vacation/modification of an interim order.

The Bench of Justice Sanjeev Narula held that the tribunal does not have the power of substantive review of its order, however, it does have the power to vacate or modify the conditions of the interim order.

Arbitration Clause In The Annexure To The Agreement Would Be Binding On The Parties: Delhi High Court

Case Title: Piyush Kumar Dutt versus Vishal Mega Mart Pvt. Ltd.

Citation: 2022 LiveLaw (Del) 749

The High Court of Delhi has held that an arbitration clause contained in the annexure to the main agreement would be binding on the parties to that agreement.

The Bench of Justice Neena Bansal Krishna held that in view of Section 11(6-A) the justiciability of claims and the defences can only be determined through adjudication by the arbitrator.

Agreement Containing Arbitration Clause Not Signed By A Party; Parties Can Still Be Referred To Arbitration: Delhi High Court

Case Title: Buildmyinfra Private Limited versus Gyan Prakash Mishra

Citation: 2022 LiveLaw (Del) 734

The Delhi High Court has ruled that even if the Agreement containing an Arbitration Clause has not been signed by a party to the dispute, the parties can still be referred to Arbitration.

The Single Bench of Justice Prateek Jalan held that it is not necessary for the written document to be signed by all the parties, as long as the existence of an arbitration agreement can be culled out from the exchange of letters or other means of communication between the parties.

If The Imposition Of LD Was Contingent On Extension Of Time, Recovery Of LD Is Not Time Barred: Delhi High Court

Case Title: Shyama Power India Ltd. versus Haryana Vidyut Prasaran Nigam Ltd.

Citation: 2022 LiveLaw (Del) 733

The High Court of Delhi has held that the arbitrator cannot reject the claim of a party for refund of Liquidated Damages (LD) as barred by time if it was inextricably linked to the issue of Extension of Time (EOT) on which the decision of the competent authority was pending.

The Bench of Justice Vibhu Bakhru held that the period of limitation for the purpose of refund of LD would only begin from the date of the decision on the issue of EOT if the imposition of LD was contingent upon the EOT.

Jharkhand High Court:

Application Under Section 11 Of The A&C Act Is Maintainable Despite The Pendency Of Reference Before The MSME Council: Jharkhand High Court

Case Title: Case Title: National Collateral Management Services Ltd versus Kunk Bihari Food Processing Pvt. Ltd.

The High Court of Jharkhand has held that merely because a reference on the same issue is pending before the MSME Council under Section 18 of the MSMED Act, the same is not a bar to the application under Section 11 of the A&C Act for the appointment of the arbitrator.

The Bench of Justice Sujit Narayan Prasad has held that the High Court while exercising powers under Section 11 of the Act is only required to see if there is an arbitration clause between the parties and an objection regarding the pendency of a reference before the MSME Council on the same matter is not to be looked into at that stage.

Madhya Pradesh High Court:

Notice Of Proceeding Under Section 11 Of The A&C Act Is A Mandatory Requirement: Madhya Pradesh High Court

Case Title: State of Madhya Pradesh versus Nidhi Industries

Citation: 2022 LiveLaw (MP) 193

The Madhya Pradesh High Court has held that it is mandatory for a High Court to issue notice of application under Section 11 of the A&C Act and non-compliance of which would vitiate the entire proceeding for appointment of arbitrator.

Telangana High Court:

Request For Oral Hearing Cannot Be Denied by The Arbitral Tribunal On The Ground That The Claims Involved Are Modest: Telangana High Court

Case Title: ITC Limited- International Business versus Wide Ocean Shipping Service Ltd.

The Telangana High Court has ruled that where the Arbitral Tribunal has passed a foreign arbitral award after denying the request of a party for oral hearing, the said arbitral award is contrary to the fundamental policy of Indian law as it is in conflict with the basic notions of justice and hence, it cannot be enforced in India.

The Bench, consisting of Justices P. Naveen Rao and Sambasivarao Naidu, held that a person has a right of fair hearing and that a request for oral hearing cannot be refused by the Arbitral Tribunal merely on the ground that the claims involved are modest.

Existence Of Contingent Contract U/S 31 Of Contract Act Is A Dispute To Be Referred To Arbitration: Telangana High Court

Case Title: D. Ravinder Reddy versus Smt. C. Geethanjali

Recently, the Telangana High Court observed that existence of a "Contingent Contract" cannot be decided in the limited jurisdiction of Courts under Section 11 of Arbitration Act.

Justice K. Lakshman, placing reliance on Supreme Court decision in Vidya Drolia v. Durga Trading Corporation (2021) observed that the scope of interference by the Courts under Section 11 of Arbitration Act is extremely limited.