Arbitration Cases Weekly Round-Up: 29 January To 4 February, 2023

Bombay High Court: Court Not Powerless To Appoint Appropriate Arbitral Tribunal, Even If Party Forfeits Its Right Under Arbitration Clause: Bombay High Court Case Title: PSP Projects Limited versus Bhiwandi Nizampur City Municipal Corp The Bombay High Court has ruled that even if a party’s right to appoint its nominee in the Arbitral Tribunal as per the arbitration clause, is forfeited because it failed to exercise its right within the statutory period after receiving the notice invoking arbitration, it would not render the Court powerless to appoint an appropriate Arbitral Tribunal, after considering the nature of the disputes. Calcutta High Court: Question Of ‘Accord And Satisfaction’ Cannot Be Determined Under Section 11 Of The A&C Act: Calcutta High Court Case Title: Jhajjar K.T. Transco Pvt Ltd versus Oriental Insurance Company The High Court of Calcutta has held that the jurisdiction of the Court under Section 11 of the A&C Act is limited to examination of the existence of the arbitration clause and determination of an arbitrable dispute. The bench of Justice Shekhar B. Saraf relied on the judgment in Mayavati Trading v. Pradyvat Deb Burman (2019) to hold that a Court exercising powers under Section 11 of the A&C Act cannot determine the question of ‘accord and satisfaction’ in view of Section 11(6A) of the Act. Delhi High Court: Delhi High Court Upholds Use Of Rule Of Contra Proferentem By Arbitrator While Interpreting Contract Case Title: Flowmore Ltd versus Skipper Ltd The Delhi High Court has ruled that, if the arbitrator uses a contract executed between the parties to determine a dispute, the clauses of the contract should, in principle, be construed contra proferentem, i.e., the clauses should be interpreted against the party that drafted it. The bench of Justice Chandra Dhari Singh remarked that the rule of contra proferentem can be regarded as a ‘general canon’ of interpretation that exists independently of national legal systems. ONGC V. Afcons By SC Will Not Affect Fee Already Fixed By Arbitration Tribunal: Delhi High Court Case Title: NHAI versus IJM Gayatri JV The Supreme Court in ONGC v. Afcons, 2022 LiveLaw (SC) 723 has held that maximum fees that an arbitrator can charge on a claim is Rs. 30 Lakhs. The High Court of Delhi was considering a situation wherein the fees was fixed in terms of the earlier law. The petitioner challenged the fees so fixed as violative of the Supreme Court order. The bench of Justice Neena Bansal Krishna held that the maximum amount that an arbitrator could charge was Rs. 49, 87, 500/- in terms of the judgment of the Delhi High Court in Rail Vikas Nigam Ltd. v. Simplex Infrastructure Ltd (2020) before the Supreme Court reduced this amount to Rs. 30 Lakhs in its judgement in ONGC, however, the Supreme Court had not stayed the judgement in Rail Vikas, therefore, it was the prevailing law before the judgment in ONGC was delivered. ‘Seat’ Of Arbitration Would Be Where Facilitation Council Under MSMED Act Conducted Arbitral Proceedings Delhi High Court Case Title: Ozone Research & Applications (I) Pvt Ltd versus Ahluwalia Contracts (India) Ltd The Delhi High Court has ruled that the ‘Seat’ of arbitration would be the place where the Facilitation Council under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) has conducted the arbitral proceedings as per the provisions of Section 18(4) of the MSMED Act. The bench of Justice Prateek Jalan remarked that since there was no arbitration agreement between the parties containing a jurisdiction clause, and since the Facilitation Council under the MSMED Act had assumed jurisdiction and rendered the arbitral award in Nagpur where the supplier was located, in view of Section 18(4), therefore, the seat of arbitration was in Nagpur. Talks Of Settlement Between Parties After Arbitrator Enters Upon Reference, Would Not Stop Limitation For Passing Award: Delhi High Court Case Title: M/s Raj Chawla and Co. Stock & Share Brokers versus M/s Nine Media & Information Services Ltd. & Anr. The Delhi High Court has reiterated that since the the amended provisions of Section 29A (1) of the Arbitration and Conciliation Act, 1996 (A&C Act) are essentially procedural in character, they would apply even to arbitrations pending on the date the amended provision was brought into force. The bench of Justice Yashwant Varma remarked that talks of settlement between the parties once the Arbitrator enters upon reference, would not stop the limitation period prescribed under Section 29A for passing an arbitral award. A Final Relief Cannot Be Granted Under Section 9 Of Arbitration and Conciliation Act, 1996: Delhi High Court Case Title: GMR Pochanpalli Expressways Limited versus NHAI The High Court of Delhi has held that the Court cannot grant a relief which is final in nature ...

Arbitration Cases Weekly Round-Up: 29 January To 4 February, 2023

Parina Katyal

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