Arbitration Monthly Round Up: February 2024

Supreme Court Court May Refuse To Appoint Arbitral Tribunal If S.11(6) Petition Is Barred By Limitation Or Claim Is Ex-Facie Time Barred : Supreme Court Case Title: M/s Arif Azim Co. Ltd. Versus M/s Aptech Ltd., ARBITRATION PETITION NO. 29 OF 2023 In a recent ruling, the Supreme Court held that the Limitation Act, 1963 is applicable to proceedings for appointment of arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996 ("A&C Act"), and a Court may refuse to make a reference if the claims, on the date of commencement of arbitration proceedings, are ex-facie barred. "...there is no doubt as to the applicability of the Limitation Act, 1963 to arbitration proceedings in general and that of Article 137 of the Limitation Act, 1963 to a petition under Section 11(6) of the Act, 1996 in particular", said the Bench of CJI DY Chandrachud and Justices JB Pardiwala, Manoj Misra. 2. Parliament Should Consider Amending Arbitration Act To Prescribe Limitation Period To File S.11 Application : Supreme Court Case Details: M/S Arif Azim Co Ltd v. M/S Aptech Ltd. Arbitration Petition No. 29 of 2023 In a recent verdict, the Supreme Court delved into the crucial question of whether the Limitation Act, 1963 is applicable to applications for the appointment of arbitrators under Section 11(6) of the Arbitration and Conciliation Act, 1996. The court highlighted the absence of a statutory prescription regarding the time limit for such applications and expressed concerns about the unduly long three-year period allowed for filing under Article 137 of the Limitation Act. While recognizing the legislative vacuum, the court urged Parliament to consider amending the Act to prescribe a specific limitation period for filing applications under Section 11(6). The decision emphasized the need for expeditious resolution of commercial disputes and addressed the potential impact of the absence of a time-bound framework. In its concluding part, the Court observed : “ 94. … this Court while dealing with similar issues in many other matters has observed that the applicability of Section 137 to applications under Section 11(6) of the Act, 1996 is a result of legislative vacuum as there is no statutory prescription regarding the time limit. We would again like to reiterate that the period of three years is an unduly long period for filing an application under Section 11 of the Act, 1996 and goes against the very spirit of the Act, 1996 which provides for expeditious resolution of commercial disputes within a time-bound manner. Various amendments to the Act, 1996 have been made over the years so as to ensure that arbitration proceedings are conducted and concluded expeditiously. We are of the considered opinion that the Parliament should consider bringing an amendment to the Act, 1996 prescribing a specific period of limitation within which a party may move the court for making an application for appointment of arbitrators under Section 11 of the Act, 1996…” Opined Justice Pardiwala. Whether Courts Can Modify Arbitral Award U/S 34 or 37 of Arbitration Act? Supreme Court Refers To Larger Bench The Supreme Court has referred to the larger bench the question of whether the courts have the power to modify the arbitral award under Sections 34 or 37 of the Arbitration and Conciliation Act, 1996. “Whether or not the Courts in exercise of power under sections 34 or 37 of the Arbitration and Conciliation Act, 1996 are empowered to modify an arbitral award is a question which frequently arises in proceedings not only before this Court but also before the High Courts and the District Courts.”, the Supreme Court frames the question. Delhi High Court Delhi High Court Dismisses Writ Petition, Permits Petitioner To Avail Remedy Under S. 37 Of Arbitration Act Case Title: Shri Balaji Enterprises & Ors vs Reserve Bank Of India & Anr. Citation: 2024 LiveLaw (Del) 134 The Delhi High Court bench comprising Justice Subramonium Prasad held that the aggrieved party should avail the alternate remedy available under the Arbitration and Conciliation Act, 1996 before approaching the court under Article 226 unless there are extraordinary or exceptional circumstances. Further, the bench held that the remedy available to a party under Article 226 is not absolute and is at the discretion of the High Court. 6. It is well settled that High Courts do not entertain writs in cases where an equally efficacious alternate remedy is available to the aggrieved party and the aggrieved person has approached the High Court without availing of the said remedy. 5. Claims Related To Company Are Arbitrable Even Though It Is Non-Signatory To Arbitration Agreement, Delhi High Court Reinforces GOC Doctrine Case Title: M/s Opuskart Enterprises & Ors vs Kaushal Kishore Tyagi The Delhi High Court bench comprising Justice Pratibha M. Singh held that...

Arbitration Monthly Round Up: February 2024

Rajesh Kumar

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