Arbitration Cases Weekly Round-Up: March 26 To April 01, 2023

Allahabad High Court: When Arbitration Clause Covers All The Disputes, Jurisdiction Can’t Be Limited To A Particular Dispute: Allahabad High Court Case Title: Agra Development Authority Agra vs. M/s Baba Construction Pvt Ltd The High Court of Allahabad has held that when the arbitration clause covers all the disputes arising out of the contract within its ambit then the scope of the arbitrator cannot be limited to decide only a particular dispute. The bench of Justices Prashant Kumar and Manoj Kumar Gupta held that all the disputes that have arisen before the appointment of the arbitrator can be referred to him for adjudication as the claim for damages which has been made prior to invocation of arbitration, becomes a dispute within the meaning of the provisions of 1996 Act and the arbitrator’s jurisdiction cannot be confined to a particular dispute. Bombay High Court: Arbitrator Can’t Apply Principles Of Equity In Absence of Authorization of Parties: Bombay High Court Case Title: John Peter Fernandes vs. Saraswati Ramchandra Ghanate (since deceased) & Ors. The Bombay High Court has reiterated that the doctrine of severability can apply to arbitral awards, so long as the objectionable part can be segregated. The Court added that if the award is partially set aside by applying the doctrine of severability, the same would not amount to modification or correction of the errors of the arbitrator. The bench of Justice Manish Pitale further held that the Arbitral Tribunal cannot decided an issue in violation of the terms of the agreement between the parties, by applying the principles of equity. Delhi High Court: Court May Decline To Refer Parties To Arbitration If Dispute Doesn’t Correlate To Arbitration Agreement: Delhi High Court Reiterates Case Title: GTM Builders and Promoters Pvt Ltd vs. Sneh Development Pvt Ltd The Delhi High Court has reiterated that mere existence of an arbitration agreement or arbitration clause would not be sufficient to refer the parties to arbitration and that even in the presence of an arbitration agreement, the court may decline to refer the parties to arbitration if the dispute does not correlate to the said agreement. While dealing with a petition filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 (A&C Act), the Court observed that in the guise of seeking reference to an arbitrator, the petitioner was seeking recovery of the costs that it had been directed to pay as compensation to the homebuyers by the National Consumer Disputes Redressal Commission (NCDRC). While dismissing the petition, the Court remarked that while adjudicating a Section 11 petition, a court shall endeavour to evaluate whether the party has made out a prima facie arbitrable case or not. ‘Updation Application’ Seeking To Change The Amount Of Counter-Claims In Arbitral Proceedings, Is An Application For ‘Amendment’: Delhi High Court Case Title: NTPC Ltd vs. Larsen and Toubro Limited & Anr. The Delhi High Court has ruled that where a party has filed an application seeking to update/revise its counter claims before the Arbitral Tribunal, intending to primarily alter/change the amount of the counter-claims, the said application was, in effect, an application for amendment of the counter-claims, even though it was termed as an ‘updation application’. Referring to the provisions of Section 23(3) of the Arbitration and Conciliation Act, 1996, the bench of Justice V. Kameswar Rao held that the Tribunal was within its right to reject the application for updation / revision, which in effect was for amendment of the counter-claims, on the ground that the same was filed belatedly. Recourse To Section 34(4) Of The A&C Act Can’t Be Opted For Consideration Of New Material Evidence: Delhi High Court Case Title: Inox Air Products Pvt Ltd vs. Air Liquide North India Pvt Ltd The High Court of Delhi has held that recourse to Section 34(4) of the A&C Act cannot be taken to permit the arbitral tribunal to consider the material evidence which it earlier failed to consider. The bench of Justice Prateek Jalan held that Section 34(4) of the A&C Act empowers the Court deciding an application under Section 34(1) of the Act to adjourn the challenge proceedings and remit the matter back to the arbitral tribunal to allow it to eliminate the ground of the challenge. However, this power can only be exercised to allow the tribunal to provide for gaps in the reasoning or cure any other curable defect. The same does not extend to allow the tribunal to give a new finding or a fresh decision, the Court ruled. Arbitral Tribunal’s Order Rejecting The Application For Impleadment Of Party Doesn’t Constitute An ‘Interim Award’: Delhi High Court Case Title: Goyal Mg Gases Pvt Ltd vs. Panama Infrastructure Developers Pvt Ltd & Ors. The Delhi High Court has reiterated that a party who is a...

Arbitration Cases Weekly Round-Up: March 26 To April 01, 2023

Parina Katyal

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