Arbitration Monthly Round Up- April 2023

Supreme Court: Arbitration Agreement In Unstamped Contract Which Is Exigible To Stamp Duty Not Enforceable: Supreme Court Holds By 3:2 Majority Case Title: M/s. N.N. Global Mercantile Pvt Ltd vs M/s. Indo Unique Flame Ltd & Ors A Constitution Bench of the Supreme Court, on Tuesday, answered the reference, which pertains to the issue - whether the arbitration clause in a contract, which is required to be registered and stamped, but is not registered and stamped, is valid and enforceable. A 5-Judge Bench, comprising Justice K.M. Joseph, Justice Ajay Rastogi, Justice Aniruddha Bose, Justice Hrishikesh Roy and Justice C.T. Ravikumar decided the issue by 3:2 majority. Justice Joseph in concurrence with Justice Bose and Justice Ravikumar decided that "an instrument which is exigible to stamp duty may contain an arbitration clause and which is not stamped cannot be said to be a contract enforceable in law within the meaning of S. 2(h) of the Contract Act and is not enforceable under S 2(g) of the Contract Act”. Limited Scrutiny of Court Under Section 11 Of Arbitration Act Through The “Eye Of The Needle”, Is Necessary And Compelling: Supreme Court Case Title: NTPC Ltd vs M/s SPML Infra Ltd The Supreme Court has ruled that the court while exercising jurisdiction under Section 11(6) of the Arbitration and Conciliation Act, 1996 (A&C Act) is not expected to act mechanically, and that the limited scrutiny of the court at the pre-reference stage, through the “eye of the needle”, is necessary and compelling. The bench comprising Chief Justice DY Chandrachud and Justice PS Narasimha remarked that the same is intertwined with the duty of the referral court to protect the parties from being forced to arbitrate when the matter is demonstrably non-arbitrable, adding that same is a legitimate interference by courts to refuse reference in order to prevent wastage of public and private resources. Arbitration | Section 34 Application Must Be Filed Within 90 Days Limitation To Claim Exclusion Of Period When Court Remain Closed: Supreme Court Case Title: Bhimashankar Sahakari Sakkare Karkhane Niyamita vs Walchandnagar Industries Ltd. (WIL) The Supreme Court has held that an application under Section 34 of Arbitration and Conciliation Act, 1996 must be filed within “prescribed period” of limitation i.e., 90 days, for seeking benefit of exclusion of period during which the Court remained closed from computation of limitation period. Supreme Court Deprecates Practice Of Filing Applications In Disposed Of SLPs To Side-Step Arbitration Process Case Title: Narsi Creation Pvt Ltd and Anr. vs State of Uttar Pradesh and Ors. The Supreme Court has reiterated that the courts normally ought not interfere with arbitral proceedings, especially till the time an award is not passed. The top court has deprecated the practice of filing applications in disposed of Special Leave Petitions (SLPs) in order to side-step the arbitration process, adding that the said applications must not be entertained by the court. High Courts: Bombay High Court: Limited Remedy Available Under S. 34 Of A&C Act Against Award Of Compensation Under NHA, Is Not A Ground To Invoke HC’s Writ Jurisdiction: Bombay High Court Case Title: M/s Omanand Industries & Anr. vs The Secretary to the Government of India, Ministry of Road Transport and Highways The Bombay High Court has ruled that though the scope for challenging the compensation awarded by the Arbitrator to the landowners under Section 3-G (5) of the National Highways Act, 1956 (NHA) is limited to the parameters provided under Section 34 of the Arbitration and Conciliation Act, 1996 (A & C Act), the same cannot be a ground to invoke the High Court’s writ jurisdiction under Article 226 of the Constitution of India. The bench of Justice Avinash G. Gharote dismissed the contention of the landowners that since the Court under Section 34 of A&C Act has no power to modify the award or substitute a new award for further enhancement of the compensation than what was awarded by the Arbitrator, the petitioners were rendered remediless. Whether A Signed Copy Or Certified Copy Of The Award, Purpose Of S. 31(5) of A&C Act Is To Inform The Party: Bombay High Court Case Title: Rahul S/o Omprakash Gandhi vs The Akola Janta Commercial Co-Operative Bank Limited The Bombay High Court has ruled that the purpose of Section 31(5) of the Arbitration and Conciliation Act, 1996 (A&C Act), which provides for delivery of the signed copy of the arbitral award, is of imparting knowledge to the party regarding the contents of the award, and to make the party aware that the limitation to raise a challenge has started to run. The court held that the said knowledge/information is equally available to the party, when it receives the certified copy of the award signed by the Arbitrator. Thus, the Court remarked that...

Arbitration Monthly Round Up- April 2023

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