Arbitration Cases Weekly Round-Up: April 02 To April 08, 2023

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.

Calcutta High Court:

Facilitation Council Has Exclusive Jurisdiction To Arbitrate Claims After The Supplier’s Registration Under The MSMED Act: Calcutta High Court

Case Title: Marine Craft Engineers Pvt Ltd vs. Garden Reach Shipbuilders and Engineers Ltd

The Calcutta High Court has ruled that the date of execution of a contract between a buyer and a supplier under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) is irrelevant for the application of the provisions of the said Act. The Facilitation Council would have exclusive jurisdiction to decide on the reference, and to take up the dispute/ refer the same for arbitration under Section 18(4) of the MSMED Act, if the supplier’s claim relates to the goods or services supplied after the date of its registration under the MSMED Act, the Court held.

Delhi High Court:

Location Of Facilitation Council Under MSMED Act Would Remain The ‘Venue’ Of Arbitration When The Agreement Confers Jurisdiction On The Courts In A Different Place: Delhi High Court

Case Title: IRCON International vs. Pioneer Fabricators

The High Court of Delhi has held that the location of the Facilitation Council administering arbitration under Section 18 of the MSMED Act, 2006 would remain the ‘Venue’ of arbitration when the parties have conferred exclusive jurisdiction on a Court situated in a different place.

The bench of Justices V. Kameshwar Rao and Anoop Jairam Bhambhani held that by virtue of the provisions of the MSMED Act, only the procedure of constitution of the Arbitral Tribunal is obliterated and the same does not eclipse the agreement between the parties of foisting exclusive jurisdiction on a particular Court.

The Court disagreed with the view taken by a single bench in Ahluwalia Contracts v. Ozone Research, 2023 LiveLaw (Del) 114 wherein the Court had held that the location of the Facilitation Council would be the seat of arbitration despite the agreement between the parties conferring exclusive jurisdiction on a court in a different place.

Arbitral Tribunal’s Order Rejecting The Application For Impleadment Of Party Doesn’t Constitute An ‘Interim Award’: Delhi High Court

Case Title: Goyal Mg Gases Pvt Ltd vs. Panama Infrastructure Developers Pvt Ltd & Ors

The Delhi High Court has reiterated that a party who is a non-signatory to the arbitration agreement, can be impleaded as a necessary party in the arbitration proceedings.

The bench of Justices Najmi Waziri and Sudhir Kumar Jain further ruled that the Arbitral Tribunal’s order rejecting the application for impleadment of parties in the arbitral proceedings, does not constitute an ‘interim award’ under the Arbitration and Conciliation Act, 1996 (A&C Act), since it does not decide any substantive question of law or deal with the merits of the case.

Jharkhand High Court:

Deliberate Departure From Terms Of Contract May Tantamount To A Malafide Action By Arbitrator: Jharkhand High Court

Case Title: Central Coalfields Ltd vs. M/s Rajdhani Carriers Pvt Ltd

The Jharkhand High Court has reiterated that the arbitrator derives authority from the contract and thus, the award passed by him in manifest disregard to the terms of the contract would be arbitrary in nature. The bench of Justice Anubha Rawat Choudhary remarked that deliberate departure from the contract amounts not only to manifest disregard of its authority or misconduct on the part of the arbitrator, but it may also tantamount to a malafide action.

The Court, while dealing with an appeal filed under Section 37 of the Arbitration and Conciliation Act, 1996 (A&C Act) by the award debtor, rejected the argument raised by it that the Arbitrator was duty-bound to examine the point of limitation irrespective of any plea having been raised by it before the Arbitral Tribunal.