Arbitration Cases Weekly Round-Up: March 5 To March 11, 2023

Bombay High Court: Arbitration Clause Can Be Invoked By Assignee Of Rights Under Contract: Bombay High Court Case Title: M/s. Siemens Factoring Pvt Ltd vs. Future Enterprises Pvt Ltd The Bombay High Court has ruled that an arbitration agreement is assignable, just as any other contract, and where the obligations and rights under an Agreement, containing an arbitration clause, are assigned in favour of an assignee, the remedy of arbitration would also stand assigned in its favour. The bench of Justice Bharati Dangre held that there was no need of separate execution of an arbitration agreement between the parties in view of the fact that all the rights in favour of the original party to the arbitration agreement (assignor) had been assigned in favour of the assignee/ claimant, and the said assignment was specifically acknowledged by the opposite party. Delhi High Court: Former CJI Justice N.V. Ramana Appointed As Arbitrator In Dispute Between DMRC And Arvind Techno Globe Case Title: Arvind Techno Globe JV vs. Delhi Metro Rail Corporation Ltd The Delhi High Court has referred the disputes between the Delhi Metro Rail Corporation Ltd (DMRC) and M/s Arvind Techno Globe (JV) in relation to a construction contract to arbitration, appointing Justice N.V. Ramana, former Chief Justice of India, as the Sole Arbitrator to adjudicate the disputes between the parties. The bench of Justice Chandra Dhari Singh was dealing with a petition filed under Section 11 of the Arbitration and Conciliation Act, 1996 (A&C Act) by the petitioner, Arvind Techno Globe, seeking appointment of an independent sole arbitrator. The petitioner argued that the DMRC, by asking the petitioner to choose an arbitrator from a panel of 5 names outlined by it, failed to appoint an independent arbitral tribunal in accordance with Section 12(5) of the A&C Act. Noting that the dispute before it was limited to the extent of appointment of an independent arbitrator, the Court appointed Justice N.V. Ramana as the Sole Arbitrator and referred the parties to arbitration. Delhi High Court Refers Claims Against Essel Group Companies under ‘Letters Of Comfort’ To Arbitration Case Title: Aditya Birla Finance Limited vs. Siti Networks Limited & Ors. The Delhi High Court has ruled that the statements made by a party in a ‘Letter of Comfort’, assuring the creditor that it shall ensure that the debtor repays the loan on the relevant due dates, are promissory in character and thus enforceable, even if they do not meet the requirement of Section 126 of the Indian Contract Act, 1872 which deals with the Contract of Guarantee. The bench of Justice V. Kameswar Rao thus referred the claim raised by the petitioner/ claimant, Aditya Birla Finance Ltd, seeking compliance with the ‘Letters of Comfort’ issued by Zee Entertainment Enterprises Ltd and Essel Corporate LLP, in relation to a loan availed by their group company, Siti Networks Ltd, to arbitration. The Court invoked the doctrine of ‘Group of Companies’ to refer the parties to arbitration, noting that Siti Networks, Zee Entertainment and Essel Corporate are part of the Essel Group of companies and are related parties. Delhi High Court Restrains Invocation of Bank Guarantee Since Party Had Arbitral Awards In Its Favour Under Contract Case Title: Hindustan Construction Co. Ltd. vs. National Hydro Electric Power Corporation Ltd The Delhi High Court has ruled that the existence of any dispute between the parties to the contract is not a ground for issuing an injunction to restrain the enforcement of an unconditional bank guarantee. The Court was dealing with a petition under Section 9 of the Arbitration and Conciliation Act, 1996 (A&C Act) seeking to restrain the opposite party from invoking/ encashing the Performance Bank Guarantee. The bench of Justice Chandra Dhari Singh held that since the petitioner had arbitral awards with respect to the Construction Project in its favour, where the counter-claims of the opposite party-who sought to invoke the bank guarantee-had been dismissed, there were special equities in petitioner’s favour, which is an exception to the rule that a bank must always honour the terms of an unconditional and irrevocable bank guarantee. Arbitrator Must Serve Sufficient Notice Before Proceeding Ex-Parte Against Party: Delhi High Court Case Title: M/s Mittal Pigments Pvt Ltd vs. M/s GAIL Gas Ltd The Delhi High Court has set aside an ex-parte Arbitral Award on the ground that the Arbitrator failed to issue proper communication to the party before proceeding ex-parte against it and that it failed to make adequate efforts to examine whether the absence of the party was with or without showing sufficient cause. The bench of Justice Chandra Dhari Singh held that under the Arbitration and Conciliation Act, 1996 (A&C Act), it has always been preferred and encouraged that an...

Arbitration Cases Weekly Round-Up: March 5 To March 11, 2023

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Arbitration Cases Weekly Round-Up: March 5 To March 11, 2023

Parina Katyal

This is a premium content Available exclusively to Our subscribers

INR 1099+GST

Tags

This is a premium content
Available exclusively to
Our subscribers