Arbitration Cases Weekly Round-Up: 31 July To 06 August 2023

Calcutta High Court: Without Pre-Deposit U/S 19 MSMED Act, Application U/S 34 Arbitration Act Remains 'Stillborn’ For Purpose Of Stay: Calcutta High Court Case Title: The Board of Major Port Authority for the Shyama Prasad Mookerjee Port, Kolkata. vs Marine Craft Engineers Private Limited The Calcutta High Court recently dismissed an application filed by the Board of Major Port Authority for the Shyama Prasad Mookerjee Port, Kolkata, for staying the operation of an arbitral award passed by the West Bengal State Micro Small Enterprises Facilitation Council (MSME Council). In refuting the petitioner’s contention that filing an application under Section 34 of the Arbitration & Conciliation Act, 1996 (1996 Act) would be sufficient for the Court to deliberate on the question of stay, a single bench of Justice Moushumi Bhattacharya held, that in the absence of a pre-deposit of 75% of the award, in compliance with Section 19 of the MSMED Act, the application under Section 34 of the 1996 Act would remain “stillborn” for the purpose of stay of the award. Arbitration Act | Admitted Facts Don’t Breach ‘Twin-Benchmark’ Of Fraud Or Corruption: Calcutta High Court Declines Stay Of Award Case Title: The West Bengal Small Industries Development Corporation Limited WBSIDC vs Kaushalya Infrastructure Development Corporation Limited KIDCO The Calcutta High Court has dismissed a plea filed by petitioners West Bengal Small Industries Development Corporation Limited (“WBSIDC”) for unconditional stay of an arbitral award passed against it in 2019, on the grounds of fraud and corruption, under Section 36(3) of the Arbitration & Conciliation Act, 1996 (“Act”). The single-bench of Justice Moushumi Bhattacharya observed that the petitioners had not managed to discharge their burden under the statute, and that there was no fraud or corruption in the present case, which would satisfy the twin-benchmark under the second proviso to Section 36(3) of the Act. Delhi High Court: Arbitration Act| Alleged Liquidity Crunch Of Award Debtor Not Sufficient Cause Under Order XXI Rule 26 CPC To Grant Stay Of Enforcement Of Award: Delhi High Court Case Title: B L Kashyap and Sons Ltd vs Emaar India Ltd The Delhi High Court has ruled that alleged liquidity crunch of the award debtor cannot be a sufficient cause under Order XXI Rule 26(1) of the Code of Civil Procedure, 1908 (CPC) to grant stay of the enforcement proceedings in relation to an arbitral award. The bench of Justice Yogesh Khanna made the observation while hearing a plea seeking modification of the court’s order in the execution petition filed by the award holder, where the court had directed the award debtor to deposit the entire award amount of Rs.165 crores. The award debtor sought to modify the court’s order so as to enable him to furnish bank guarantee instead of cash deposit, on the ground that the same shall lead to liquidity crunch in its company. Delhi High Court Upholds Arbitral Award Passed Against SpiceJet In Favour Of Its Former Promoter Kalanithi Maran Case Title: SpiceJet Limited vs Kal Airways Pvt Ltd & Ors. The Delhi High Court has upheld the 2018 arbitral award passed in favour of Kalanithi Maran, former promoter of SpiceJet, and his firm Kal Airways Pvt Ltd, in a share transfer dispute with the airline and its current promoter, Ajay Singh. The bench of Justice Chandra Dhari Singh has also dismissed Maran’s challenge to the award where his claim for damages and restitution of 58.46% shareholding in SpiceJet was rejected by the Tribunal. Himachal Pradesh High Court: Arbitration | Written Consent By Parties Need Not Be In Writing For Extending Arbitral Period: Himachal Pradesh High Court Case Title: Balak Ram vs NHAI The Himachal Pradesh High Court has clarified the interpretation of Section 29A(3) of the Arbitration and Conciliation Act, 1996 and maintained that consent from the parties to extend the arbitral period need not be expressly stated in writing. Instead, consent can be inferred from the parties’ acts and conduct during the arbitration proceedings, it emphasised.

Arbitration Cases Weekly Round-Up: 31 July To 06 August 2023

Parina Katyal

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