Arbitration Cases Weekly Round-Up: February 26 To March 4, 2023
Parina Katyal
5 March 2023 12:30 PM GMT
Bombay High Court: Clause Captioned As “Arbitration”, Doesn’t Conclusively Imply Mandatory Nature Of Arbitration: Bombay High Court Case Title: Nagreeka Indcon Products Pvt Ltd vs. Cargocare Logistics (India) Pvt Ltd The Bombay High Court has ruled that the use of the word ‘can’ in the relevant clause has the effect of qualifying Arbitration as a mode of settlement, and...
Bombay High Court:
Case Title: Nagreeka Indcon Products Pvt Ltd vs. Cargocare Logistics (India) Pvt Ltd
The Bombay High Court has ruled that the use of the word ‘can’ in the relevant clause has the effect of qualifying Arbitration as a mode of settlement, and the mere fact that a particular clause is captioned as “Arbitration”, does not conclusively imply the mandatory nature of arbitration when the option is left to the parties to settle their disputes through arbitration.
Calcutta High Court:
Case Title: Sarada Construction vs. Bhupendra Pramanik
The High Court of Calcutta has held that the A&C Act is a complete code in itself and it does not contain any provision for the review of an order passed under Section 11 of the Act. The Bench of Justice Shekhar B. Saraf held that power of review is a creature of statute and unlike the Supreme Court which has inherent power of review under Article 137 of the Constitution of India, no such power is conferred on the High Courts by the Constitution, therefore, it cannot review its order passed under Section 11 of the Act.
Delhi High Court:
Case Title: Shapoorji Pallonji and Company Private Limited vs. Union of India
The Delhi High Court has reiterated that when a person has itself become ineligible by operation of law to act as an arbitrator, it cannot nominate another person to act as arbitrator.
The bench of Justice Yashwant Varma was dealing with an arbitration clause which exclusively empowered the Chief Project Manager to appoint the arbitrator from a panel which was itself maintained by it. The Court concluded that the constitution of the Arbitral Tribunal, as contemplated by the arbitration clause, was clearly tainted by fundamental illegality.
Case Title: New Delhi Municipal Council vs. Decor India Pvt Ltd
The Delhi High Court has reiterated that though it is permissible to introduce an amendment in a petition filed under Section 34 of the Arbitration and Conciliation Act, 1996 (A&C Act), however, new grounds of challenge containing new material/ facts cannot be introduced when the said grounds were neither raised in the original petition under Section 34 nor before the Arbitral Tribunal.
Case Title: Tejpal Singh vs. Surinder Kumar Dewan
The Delhi High Court has ruled that since the party had failed to challenge the termination of the Collaboration Agreement in the first round of arbitral proceedings, the demolition of the structure built by it under the said Collaboration Agreement would not give it a fresh cause of action.
The bench of Justice Navin Chawla remarked that the cause of action for challenging the termination of the Collaboration Agreement and/or for claiming any relief under the said Collaboration Agreement, was available to the petitioner at the stage of the earlier arbitral proceedings.
Case Title: FIITJEE Ltd vs. Ashish Khare & Anr.
The Delhi High Court has reiterated that mere reference to a wrong provision or term of the agreement cannot invalidate the notice invoking arbitration, if otherwise such power or provision exists in the document executed between the parties.
The bench of Justice Navin Chawla remarked that since there was no dispute regarding the existence of an arbitration clause in the document executed between the parties, which was admittedly binding on them, merely because the claimant had referred to the wrong Agreement, the same will not invalidate the arbitration notice issued under Section 21 of the A&C Act.
Case Title: Municipal Corporation of Delhi vs. Narinder Kumar
The Delhi High Court has ruled that, as a necessary corollary of the provisions of Section 34 and Section 37 of the Arbitration and Conciliation Act, 1996 (A&C Act), what cannot be considered by the adjudicating Court under a Section 34 petition can certainly not be adjudicated upon by the appellate Court under Section 37.
The Court added that it has almost “Nil” scope of interference while dealing with a challenge against an order disposing of a Section 34 petition, unless there is something perverse, contrary to law and/or which actually shocks the conscience of the Court.
Gujarat High Court:
Case Title: Indian Bank (erstwhile Allahabad Bank) vs. Morris Samuel Christian
The Gujarat High Court has ruled that merely because the borrower is an MSME, it would not be governed by the provisions of the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act), including the arbitral mechanism envisaged under the said Act.
The bench of Justice Biren Vaishnav observed that though, as per the mechanism provided under the MSMED Act, the dispute between the supplier and the buyer of goods or services may be adjudicated through arbitration in accordance with the Arbitration and Conciliation Act, 1996 (A&C Act), however, the same does not contemplate adjudication of disputes arising from a loan transaction, which is the subject matter of a special Act such as the SARFAESI Act.
Himachal Pradesh High Court:
Award Passed By Unilaterally Appointed Arbitrator Is Void: Himachal Pradesh High Court
Case Title: Divisional Manager vs. Prem Lal
The Himachal Pradesh High Court has held that arbitral proceedings conducted by a unilaterally appointed arbitrator are void ab initio and the consequent award is non-est. The bench of Justice Jyotsana Rewal Dua held that an arbitration award passed by a unilaterally appointed sole arbitrator is not enforceable under Section 36 of the A&C Act.
Telangana High Court:
Case Title: Ranganath Properties Pvt. Ltd. vs. Phoenix Tech Zone Pvt. Ltd.
The High Court of Telangana has held that arbitration under Section 42 of the Special Economic Zones Act, 2005 would override a contractual arbitration clause entered into between the parties.
The bench of Chief Justice Ujjal Bhuyan held that Special Economic Zones Act, 2005 is a special legislation and Sections 42 and 51 of the Act gives it an overriding effect over other Acts. Section 42 of the Act provides for statutory arbitration wherein the arbitrator would be appointed by the Central Government; therefore, it would override the provisions of the Arbitration and Conciliation Act (A&C Act), the Court said. Thus, an application under Section 11 of the A&C Act for appointment of the arbitrator would not be maintainable.
