Arbitration Cases Monthly Round-Up: February 2023

High Courts Bombay High Court: Court Not Powerless To Appoint Appropriate Arbitral Tribunal, Even If Party Forfeits Its Right Under Arbitration Clause: Bombay High Court Case Title: PSP Projects Limited versus Bhiwandi Nizampur City Municipal Corp The Bombay High Court has ruled that even if a party’s right to appoint its nominee in the Arbitral Tribunal as per the arbitration clause, is forfeited because it failed to exercise its right within the statutory period after receiving the notice invoking arbitration, it would not render the Court powerless to appoint an appropriate Arbitral Tribunal, after considering the nature of the disputes. SPA Which Gives Option To Resell Shares To Vendor, Not A ‘Forward Contract’: Bombay High Court Case Title: Percept Finserve Pvt Ltd & Anr. versus Edelweiss Financial Services Ltd The Bombay High Court has ruled that a Share Purchase Agreement (SPA), which gives an option to the purchaser to require the seller/vendor to repurchase the shares on the occurrence of a contingency, does not constitute a ‘forward contract’ and thus, the same is enforceable. Upholding the order of the Single Judge where it had set aside the arbitral award, the Division Bench held that merely because the contract contains a “put option” in respect of securities, the contract cannot be termed as a trade or contract in derivatives. Thus, the Court held that the option contemplated under the SPA was not prohibited in law. No Jurisdictional Error By Arbitrator In Allowing Consolidated SoC Containing Specific Claims Under Different Contracts: Bombay High Court Case Title: BST Textile Mills Pvt Ltd versus The Cotton Corporation of India Ltd The Bombay High Court has ruled that the arbitrator cannot be said to have committed a jurisdictional error by allowing a consolidated Statement of Claims (SoC), without the consent of the opposite party/ award debtor, in view of the fact that specific claims pertaining to each of the nine contracts were placed distinctly in the Statement of Claims and the award debtor also chose to file a consolidated counter claim pertaining to all the nine contracts. Arbitrator Who Accepted Brief Of Party’s Lawyer In An Unrelated Matter, No Clash of Interest Involved: Bombay High Court Case Title: Quess Corp versus Netcore Cloud Pvt Ltd The Bombay High Court has ruled that there is no clash of interest involved where the Arbitrator had acted as a counsel and represented the Advocate representing the opposite party, in another unrelated matter for some other client. The bench of Justice Bharati Dangre concluded that the disqualification connection, contemplated under Item 3 of Schedule VII of the Arbitration and Conciliation Act, 1996 (A&C Act), must be between the Arbitrator and the litigant. Thus, where the Arbitrator had accepted a brief from the respondent’s counsel for some other client, the same will not amount to per se disqualification or ineligibility, the Court ruled. Multiple Arbitrations By Arbitrator Involving The Same Co-operative Bank Under S. 84 Of MSCS Act; Not A Disqualification: Bombay High Court Case Title: Kalpesh Shantikumar Mehta & Ors. versus NKGSB Co-op. Bank Ltd & Anr. The Bombay High Court has ruled that reference of more than two arbitrations to the same arbitrator under Section 84 of the Multi-State Cooperative Societies Act, 2002 (MSCS Act), involving the same Co-operative Bank, would not fall foul of clause 22 of Schedule V of the Arbitration and Conciliation Act, 1996 (A&C Act). Noting that in the statutory arbitration contemplated under the MSCS Act, the arbitrator is appointed by the Central Registrar/Commissioner of Cooperative Societies under Section 84 (4) of the MSCS Act, the bench of Justice Bharati Dangre held that the embargo created under clause 22 comes into picture only when the Arbitrator is appointed by one of the parties or an affiliate of one of the parties. Calcutta High court: Question Of ‘Accord And Satisfaction’ Cannot Be Determined Under Section 11 Of The A&C Act: Calcutta High Court Case Title: Jhajjar K.T. Transco Pvt Ltd versus Oriental Insurance Company The High Court of Calcutta has held that the jurisdiction of the Court under Section 11 of the A&C Act is limited to examination of the existence of the arbitration clause and determination of an arbitrable dispute. The bench of Justice Shekhar B. Saraf relied on the judgment in Mayavati Trading v. Pradyvat Deb Burman (2019) to hold that a Court exercising powers under Section 11 of the A&C Act cannot determine the question of ‘accord and satisfaction’ in view of Section 11(6A) of the Act. Arbitrator’s Power To Grant Interim Measures Is pari passu With Court’s Powers Under S. 9 Of Arbitration Act: Calcutta High Court Case Title: Jagrati Trade Services Pvt Ltd versus Deepak Bhargava & Ors. The Calcutta High Court has ruled that, post ...

Arbitration Cases Monthly Round-Up: February 2023

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