Arbitration Cases Weekly Round-Up: 18 December To 24 December, 2022
Parina Katyal
25 Dec 2022 11:01 AM GMT
Allahabad High Court: Section 9 Application, Against Cashing Unconditional BG; Court To Consider Only Terms Of BG: Allahabad High Court Case Title: U.P. Expressways Industrial Development Authority versus M/s. Sahakar Global Ltd. The Allahabad High Court has ruled that while dealing with an application under Section 9 of the Arbitration and Conciliation Act, 1996 (A&C...
Allahabad High Court:
Case Title: U.P. Expressways Industrial Development Authority versus M/s. Sahakar Global Ltd.
The Allahabad High Court has ruled that while dealing with an application under Section 9 of the Arbitration and Conciliation Act, 1996 (A&C Act), seeking to restrain the invocation or encashment of the Bank Guarantee, the Court is only required to consider the terms of the Bank Guarantee Agreement and not the conditions contained in the main Contract between the parties, in terms of which the guarantee was furnished.
The bench of Justices Attau Rahman Masoodi and Om Prakash Shukla held that while dealing with an application under Section 9, the Court is not required to interpret the contract and/or form a prima facie opinion as to whether the beneficiary of the Bank Guarantee has wrongfully invoked the Bank Guarantee. The Court ruled that such an exercise can only be done in a substantive proceeding before the Arbitral Tribunal.
Bombay High Court:
Case Title: J P Parekh & Son & Anr. versus Naseem Qureshi & Ors.
The Bombay High Court has reiterated that the power of the Court under Section 9 of the Arbitration and Conciliation Act, 1996 (A&C Act) to grant interim measures of protection, is wider than the power under the provisions of the Code of Civil Procedure, 1908 (CPC).
The bench of Justice Bharati Dangre concluded that the Court is empowered to pass an order under Section 9 of A&C Act granting the applicant's money claim, on the basis of an admitted claim or acknowledged liability.
Calcutta High Court:
Arbitral Tribunals Exercising Power U/S 17 Not Strictly Bound By CPC: Calcutta High Court
Case Title: Gainwell Commosales Pvt Ltd. versus Minsol Limited
The Calcutta High Court has held that the arbitral tribunals while exercising power under Section 17 of the A&C Act are not strictly bound by the technicalities of CPC.
The bench of Justice Shekhar B. Saraf held that the ambit of power given to the tribunals for grant of interim relief is to be guided by the basic principles of CPC, however, the strict technicalities cannot prevent the tribunal from securing the ends of justice.
Case Title: Oil India Limited versus Ashok Kumar Bajoria
The Calcutta High Court has held that criminal proceedings cannot be initiated for recovery of amount due under an arbitration award.
The bench of Justice Tirthankar Ghosh held that a party aggrieved by non-payment of amount due under a post award settlement agreement, should not resort to filing a criminal case by giving a civil dispute criminal colour, as the same is an abuse of the process of law. The Court held that the correct recourse for the party would be putting the award into execution.
Delhi High Court:
Case Title: National Highways Authority of India versus Lucknow Sitapur Expressway Ltd.
The High Court of Delhi has held that an order of the tribunal rejecting the application for impleading a party to arbitration is not an interim award but merely a procedural order, therefore, the same cannot be challenged under Section 34 of the Act.
The bench of Justice Yashwant Varma held that an arbitral tribunal, during the continuance of arbitral proceedings, passes many orders and for an order to fall within the rubric of interim award it has to necessarily have certain features. The Court held that for an order to be understood as an award, it has to be a decision on the merits of the dispute that conclusively determines a substantive claim, issue or question that exists between the parties.
Case Title: Welspun One Logistics Parks Fund I versus Mohit Verma & Ors.
The Delhi High Court has ruled that the dispute between the parties under an agreement titled as a "Non-Binding Term Sheet", can be referred to arbitration, holding that the Arbitration Clause contained in the said agreement was binding between the parties.
The bench of Justice Navin Chawla observed that though the nomenclature of the agreement was "Non-Binding Term Sheet", the Arbitration Clause contained in the agreement was specifically made binding on the parties. It held that whether the other covenants of the Term Sheet were non-enforceable, is not to be considered by the Court at the stage of considering an application under Section 11 of the Arbitration and Conciliation Act, 1996 (A&C Act).
Moratorium Under Companies Act, 2013, Parties Cannot Be Referred To Arbitration: Delhi High Court
Case Title: DLF Ltd. versus IL&FS Engineering and Construction Company
The Delhi High Court has ruled that the moratorium granted by the National Company Law Appellate Tribunal (NCLAT), staying the institution of suits and proceedings against the Corporate Debtor, after the resolution process is initiated against it under Sections 241 and 242 of the Companies Act, 2013, is akin to an order of moratorium passed under Section 14 of the Insolvency and Bankruptcy Code, 2016 (IBC). Thus, the bench of Justice V. Kameswar Rao held that in view of the moratorium issued by the NCLAT, the Corporate Debtor cannot be referred to arbitration.
The High Court dismissed the contentions raised by the applicant that since the resolution of IL&FS was initiated under Sections 241 and 242 of the Companies Act, 2013 and not under IBC, the rigours of Section 14 of the IBC were not attracted.
Case Title: Geo Chem Laboratories Pvt Ltd versus United India Insurance Co. Ltd.
The High Court of Delhi has held that when the scope of arbitration clause is limited to quantum of damages only in the eventuality that the liability to pay is admitted by the insurance company, there can be no arbitration if the liability is denied.
The bench of Justice V. Kameshwar Rao held that the suggestions given by the Surveyor in its report, though of substantial evidentiary value, are not binding on the insurance company.
Invoking CIRP Would Not Make The Dispute Non-Arbitrable: Delhi High Court
Case Title: Brilltech Engineers Pvt. Ltd. versus Shapoorji Pallonji and Co. Pvt Ltd.
The High Court of Delhi has held that the dispute would not become non-arbitrable merely because the petitioner, before filing the application for appointment of arbitrator, has filed a corporate insolvency application under Section 9 of the IBC.
The bench of Justice Neena Bansal Krishna held that it is settled position of law that jurisdiction of NCLT can be invoked only in respect of determined debts, however, merely because a petition has been filed by the petitioner asserting that a definite amount is payable by the respondent, would not imply that the claimed amount has been admitted.
Tripura High Court:
Execution Of Arbitration Awards; Section 47 Of CPC Not Applicable: Tripura High Court
Case Title: State of Tripura versus Ashes Deb
The High Court of Tripura has held that Section 47 of CPC which provides for certain questions to be determined by the executing Court, does not apply to execution of an arbitration award under the A&C Act.
The bench of Justice S.G. Chattopadhyay held that the executing court, exercising power under Section 36 of the Act, cannot entertain any objections against the award. The party can only challenge the award in terms of Section 34 of the A&C and no objection can be raised under Section 36 of the Act, the Court ruled.
