Arbitration Cases Weekly Round-Up: 18 December To 24 December, 2022

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 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: Court Empowered To Grant Money Claim Under Section 9 Of A&C Act On Basis Of Admitted Claim: 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. Criminal Proceedings Cannot Be Initiated For Recovery Of Amount Due Under The Arbitration Award: Calcutta High Court 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: Order Rejecting Application For Impleading Third Party Is Not An Interim Arbitration Award: 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. Dispute Between Parties Under A "Non-Binding Term Sheet" Can Be Referred To Arbitration: Delhi High Court 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). ...

Arbitration Cases Weekly Round-Up: 18 December To 24 December, 2022

Parina Katyal

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