Arbitration Cases Weekly Round-Up: 17 July To 23 July, 2022

There Cannot Be Two Arbitration Proceedings With Respect To Same Contract/ Transaction: Supreme Court

Case Title: M/S Tantia Constructions Limited v. Union Of India

Citation: 2022 LiveLaw (SC) 624

Observing that it is of the "firm opinion that there cannot be two arbitration proceedings with respect to the same contract/transaction", the Supreme Court stated that when a dispute has earlier been referred to arbitration and an award was passed on the claims made, then it is "rightful" to refuse to refer to arbitration- in exercise of Section 11(6) of the 1996 Arbitration Act- a fresh arbitration proceeding sought to be initiated with respect to some further claims.

Section 11(6A) Arbitration Act Does Not Prevent Courts From Considering Issue Of Arbitrability: Supreme Court

Case Title: Indian Oil Corporation Limited vs NCC Limited

Citation: 2022 LiveLaw (SC) 616

Despite the insertion of Section 11(6A) in the Arbitration and Conciliation Act 1996, the Courts are not denuded of the power to examine the issue of non-arbitrability and jurisdiction at the stage of considering application of appointment of arbitrators under Section 11, held the Supreme Court recently.

Court While Deciding 'Section 11' Application Seeking Appointment Of Arbitrator Can Consider Whether Dispute Falls Within 'Excepted Clause' : Supreme Court

Case Title: Indian Oil Corporation Limited vs NCC Limited

Citation: 2022 LiveLaw (SC) 616

The Supreme Court held that, at the stage of deciding application for appointment of arbitrator, a Court can consider whether the dispute falls within the excepted clause.

The Court observed that the question of jurisdiction and non-arbitrability can be considered by a Court at the stage of deciding an application under Section 11 of Arbitration and Conciliation Act if the facts are very clear and glaring.

Bombay High Court:

An Enabling Clause Does Not Constitute A Binding Arbitration Agreement Between The Parties: Bombay High Court

Case Title: Derivados Consulting Pvt. Ltd. versus Pramara Promotions Pvt. Ltd.

The Bombay High Court has ruled that once the parties have agreed to use the word 'may', the parties have conferred a discretion to enter into an arbitration agreement in the future; and that such an enabling clause does not constitute any binding arbitration agreement between the parties.

The Single Bench of Justice G. S. Kulkarni held that the use of the word "may" does not bring about any arbitration agreement between the parties, when tested on the touchstone of Section 7(1) of the Arbitration and Conciliation Act, 1996 (A&C Act), which defines the arbitration agreement

Calcutta High Court:

No Claim Certificate Is Invalid If It Is A Pre-Condition To The Release Of Final Payment: Calcutta High Court

Cast Title: West Bengal Tourism Development Corporation Ltd. v. Supratik Banerjee and Anr.

The Calcutta High Court has held that a discharge voucher or No Claim Certificate would be invalid on account of 'Coercion' if it is submitted as a pre-condition to the release of final payment.

The Bench of Justice Krishna Rao held that a situation where the employer denies the payment of dues to the contractor unless it submits an undertaking to the employer not to make any further claims would fulfil the ingredients of Section 15 of the Indian Contract Act and the obtained undertaking would be invalid.

Delhi High Court:

The Arbitrator Cannot Award A Lumpsum Amount As Against Specified Claims Without Adjudicating The Claims: Delhi High Court

Case Title: Kanti Bijlee Utpadan Nigam Ltd. v. Paltech Cooling Towers & Equipments Ltd.

Citation: 2022 LiveLaw (Del) 692

The High Court of Delhi has held that an award wherein a lumpsum amount is awarded against the specified claims without adjudication of the claims is unsustainable.

The Bench of Justice Vibhu Bakhru held that an arbitral tribunal cannot award a lumpsum amount against specified claims of a party merely to meet the ends of justice.

Non-Applicability Of Section 9 Of The A&C Act Can't Be Presumed If Parties Opted For Foreign-Seated Institutional Arbitration: Delhi High Court

Case Title: Shanghai Electric Group Co. Ltd. v. Reliance Infrastructure Ltd.

Citation: 2022 LiveLaw (Del) 683

The High Court of Delhi has held that merely because the parties have chosen a foreign-seated institutional arbitration under the UNCITRAL Law, they cannot be presumed to have entered into an agreement to exclude the applicability of Section 9 of the A&C Act as provided under the proviso to Section 2(2) of the A&C Act.

The Bench of Justice Sanjiv Narula held that the words "an agreement to the contrary" appearing under Section 2(2) cannot be presumed or interpreted on the mere assertion of a party but the same must be clearly borne out of the agreement between the parties.

Application Under Section 9 Of The A&C Act For Pre-Award Relief Can Be Filed In A Court Where The Assets Of The Respondent Are Located: Delhi High Court

Case Title: Shanghai Electric Group Co. Ltd. v. Reliance Infrastructure Ltd.

Citation: 2022 LiveLaw (Del) 682

The High Court of Delhi has held that an application under Section 9 of the A&C Act for pre-award relief can also be filed before the Court where the assets of the respondent are located.

The Bench of Justice Sanjeev Narula held that the Court for the purpose of Section 9 application in a foreign seated arbitration would be as provided under Section 47 of the A&C Act.

CPC Contemplates Execution Of A Foreign Decree And Not An Order: Delhi High Court

Case Title: Shanghai Electric Group Co. Ltd. v. Reliance Infrastructure Ltd.

Citation: 2022 LiveLaw (Del) 681

The High Court of Delhi has held that remedy before the foreign arbitral tribunal would not be inefficacious when the bulk of the assets of a party are located in India as the interim order in a foreign-seated arbitration is not enforceable under the A&C Act.

The Bench of Justice Sanjeev Narula also held that an interim award passed in arbitration with seat in India is enforceable under Section 17(2) of the Act, however, there is no provision in the Act for the enforcement of an interim order passed in a foreign seated arbitration, therefore, any meaningful interim relief related to assets located in India can only be granted by Indian Courts.

The Rejection Of An Application Under Section 34 Of The A&C Act Cannot Be Construed To Mean That The Court Has Concurred With The View Of The Arbitral Tribunal: Delhi High Court

Case Title: Glitter Overseas and Ors. v. MMTC Ltd.

Citation: 2022 LiveLaw (Del) 664

The High Court of Delhi has held that merely because the challenge to an arbitral award is dismissed by the Court exercising powers under Section 34 of the A&C Act would not mean that the court has concurred with the view of the arbitral tribunal.

Gujarat High Court:

A Party Can Withdraw Its Consent For Reference To Arbitration Under Section 89 Of The CPC Any Time Before The Court Acts Upon Such Consent: Gujarat High Court

Case Title: Krishna Calibration Services v. Jasmin Bharat Patel

The Gujarat High Court has held that a party can withdraw its consent for reference to arbitration under Section 89 of CPC any time before the court has acted upon such a reference.

Jharkhand High Court:

Similar Matters Pending Before The Facilitation Council Under The MSME Act; Parties Can Be Referred To Arbitration: Jharkhand High Court

Case Title: M/s National Collateral Management Services Limited versus M/s Maa Diwri Rice Mill Pvt. Ltd.

The Jharkhand High Court has ruled that merely because one of the parties has approached the Facilitation Council under the Micro, Small and Medium Enterprises Development Act, 2006 (MSME Act) for adjudication of a similar dispute, the application for appointment of arbitrator cannot be held to be not maintainable.

The Single Bench of Justice Sujit Narayan Prasad held that in view of the arbitration agreement between the parties, even if similar matters were pending before the Facilitation Council under the MSME Act, the same cannot be a ground for holding the application for appointment of arbitrator as not maintainable.

Karnataka High Court:

Constitution Of Arbitral Tribunal Does Not Restrict Application For Interim Relief If "Entertained" By The Court : Karnataka High Court Reiterates The Law

Case Title: Godolphine India Private Limited versus UM Projects LLP

The Karnataka High Court has ruled that the restriction contained under Section 9(3) of the Arbitration and Conciliation Act, 1996 would not apply once an application under Section 9(1) for interim measures has been "entertained" by the Court before the appointment of the arbitrator.

Once The Right To Refer The Dispute To Arbitration Is Waived By A Party, It Cannot Be Reclaimed: Karnataka High Court

Case Title: Y Harish and Anr. versus Y Satish and Ors

The Karnataka High Court has ruled that if a party has disputed the arbitrability of a dispute raised by the opposite party, in its reply to the notice invoking the arbitration clause, it is deemed to have waived its right to seek the reference of the dispute to arbitration.

The Single Bench of Justice Sachin Shankar Magadum held that the right of the party to refer the dispute to arbitration cannot be kept in the sleeve and be used at will.