Arbitration Monthly Round-Up: October 2023

Supreme Court Arbitration | Awarding Claim For Loss Of Profit Without Substantial Evidence Is In Conflict With Public Policy Of India: Supreme Court Case Title: M/S UNIBROS v. ALL INDIA RADIO, ARISING OUT OF SLP (CIVIL) NO. 8791/2020 Citation: 2023 LiveLaw (SC) 918 Recently, the Supreme Court, while rendering an arbitral award as patently illegal and being in conflict with the “public policy of India”, held that a claim for damages cannot as a matter of course result in an arbitral award without proof of the claimant having suffered injury. The present decision emphasised the importance of substantial evidence in awarding claims for loss of profit. “A claim for damages, whether general or special, cannot as a matter of course result in an award without proof of the claimant having suffered injury. The arbitral award in question, in our opinion, is patently illegal in that it is based on no evidence and is, thus, outrightly perverse; therefore, again, it is in conflict with the “public policy of India” as contemplated by section 34(2)(b) of the Act.,” Justices S. Ravindra Bhat and Dipankar Datta. Arbitrator Won't Become Ineligible By Unilaterally Revising Fee; Mandate Can't Be Terminated On Grounds Not Mentioned In Schedule : Supreme Court Case Title: M/S CHENNAI METRO RAIL LIMITED vs. M/S TRANSTONNELSTROY AFCONS JV, C.A. No. 4591/2023 Citation : 2023 LiveLaw (SC) 909 In a notable judgment, the Supreme Court has held that unilateral revision of fee by an arbitral tribunal, though not permissible, will not terminate its mandate on the ground of ineligibility as per Section 12 of the Arbitration and Conciliation Act 1996. Although the Supreme Court has held in Oil and Natural Gas Corporation Ltd. vs Afcons Gunanusa JV 2022 LiveLaw (SC) 723 that the arbitrators should revise the fee only in consultation with the parties and should not do it unilaterally, a bench comprising Justices S Ravindra Bhat and Aravind Kumar held in the present case that a breach of the rule laid down in ONGC will not render the arbitrator ineligible. The bench categorically held that only the grounds specified in the Fifth and Seventh Schedule of the Arbitration and Conciliation Act can be considered to determine the ineligibility of an arbitrator. The ineligibility of the arbitrator must be something "going to the root of the jurisdiction, divesting the authority of the tribunal, thus terminating the mandate of the arbitrator", the judgment authored by Justice Bhat said. High Courts Allahabad High Court Arbitration Award Execution, Can File Anywhere, Bar Under Section 42 Not Applicable: Allahabad High Court Reiterates Case Title: Madhyanchal Vidyut Vitran Nigam Ltd v. Shashi Cable, Matters under Article 227 No. 3384 of 2023 The High Court of Allahabad has held that a petition for the execution of the arbitral award can be enforced anywhere in the country, where the assets of the award debtor are located. The bench of Justice Pankaj Bhatia held that Section 42 of the A&C Act which bars any petition in any Court other than the Court where the first petition in relation to arbitration agreement was filed does not apply to petitions for the enforcement of the arbitration award. It relied on the judgment of the Supreme Court in Sundaram Finance and Cheran Properties to arrive at the above conclusion. Award Holder Has The Choice To File An Execution Petition At The Place Of His Choice: Allahabad High Court Reiterates Case Title: Bharat Petroleum Corporation Ltd v. Anoop Kumar Modi, Matters under Article 227 No. 2704 of 2023 Neutral Citation: 2023:AHC-LKO: 68875 The Allahabad High Court has held that it is the choice of the award holder to file an execution petition at the place of its choice and it need not necessarily approach the Court where the award was passed. The bench of Justice Pankaj Bhatia also held that merely because Section 16 of the Commercial Courts Act which provides for amendment to CPC does not include Order 21 within the amended provisions, it would not mean that the Commercial Court would not have the inherent jurisdiction to execute an arbitral award. It held that words ‘applications’ under Section 10(3) of the Commercial Courts Act would include the application for execution of the arbitral award in terms of Section 36 of the A&C Act. Calcutta High Court Must Be Wary Of Unnecessary Judicial Interference At Every Stage Of Arbitral Process: Calcutta HC Upholds Arbitral Award In Favor Of Reliance Infra Case: Damodar Valley Corporation v Reliance Infrastructure Limited Citation: 2023 LiveLaw (Cal) 306 In a landmark 255-page judgement, the Calcutta High Court has upheld an arbitral award in favor of Reliance Infrastructure (“RIL”), arising out of a deal struck with the Damodar Valley Corporation (“DVC”) for construction of thermal power plants in Raghunathpur. ...

Arbitration Monthly Round-Up: October 2023

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