Arbitration Cases Weekly Round-Up: March 12 To March 18, 2023
Parina Katyal
19 March 2023 9:30 AM GMT
Bombay High Court: Arbitrator’s Direction For Disclosure Of Not Relevant Information Is An Order Under S. 19 And Not 17 Of Arbitration Act: Bombay High Court Case Title: Sara Chemicals and Consultants vs. Deepak Nitrite Ltd The Bombay High Court has ruled that no appeal is maintainable under Section 37 of the Arbitration and Conciliation Act, 1996 (A&C Act) against the...
Bombay High Court:
Case Title: Sara Chemicals and Consultants vs. Deepak Nitrite Ltd
The Bombay High Court has ruled that no appeal is maintainable under Section 37 of the Arbitration and Conciliation Act, 1996 (A&C Act) against the order of the Arbitral Tribunal directing the party to disclose the contents of sealed envelope submitted by it at the time of tendering of evidence, since the same did not relate to the subject matter of arbitration nor was it a subject matter of the claim/counter claim raised by the parties and thus, it fell outside the purview of Section 17.
Case Title: Mantras Green Resources Ltd. & Ors. vs. Canara Bank
The Bombay High Court has reiterated that the Recovery of Debts and Bankruptcy Act, 1993 (RDB Act) bars the jurisdiction of the Civil Court only in respect of the applications filed by banks/ financial institutions for recovery of debt, however, it does not bar the jurisdiction of the Civil Court to try a suit filed by the borrower.
The bench of Justice Bharati Dangre remarked that even though a remedy is available to the borrower to file a counterclaim in the application filed by the bank/financial institution before the Debt Recovery Tribunal (DRT), the same does not bar the borrower to file a civil suit raising an independent claim against the bank/financial institution.
Calcutta High Court:
Case Title: Cholamandalam Investment & Finance Company Ltd vs. Amrapali Enterprises
The High Court of Calcutta has deprecated the practice of banking and financial institutions unilaterally appointing the arbitrator. It refused to enforce an award passed by an arbitrator that was unilaterally appointed by the petitioner.
The bench of Justice Shekhar B. Saraf has held that an arbitration award passed by a unilaterally appointed arbitration is non-est and its enforcement would be refused under Section 36 of the A&C Act even if the award was not set aside under Section 34.
Delhi High Court:
Case Title: Devas Employees Mauritius Pvt. Ltd vs. Antrix Corporation Limited & Ors.
The Delhi High Court on Friday dismissed an appeal against single judge’s order setting aside a 2015 arbitral award by which Antrix Corporation Limited, commercial and marketing arm of ISRO, was required to pay US$ 562.2 million to Devas Multimedia Private Limited over wrongful repudiation of a contract.
A division bench of Chief Justice Satish and Justice Subramonium Prasad in its judgment on the appeal moved by Devas Employees Mauritius Private Limited said it is "well established" that Devas was incorporated with fraudulent intentions so that it could enter into the agreement with Antrix.
Case Title: Delhi Airport Metro Express Private Limited vs Delhi Metro Rail Corporation Ltd
The Delhi High Court on Friday directed the Union of India and Delhi government to forthwith attend to Delhi Metro Rail Corporation (DMRC)'s request for extension of sovereign guarantee or subordinate debt to enable it make payment of dues to Reliance Infra-owned Delhi Airport Metro Express Private Limited (DAMEPL) under the 2017 arbitral award.
Case Title: Delhi Airport Metro Express Private Limited vs Delhi Metro Rail Corporation Ltd
The Delhi High Court on Friday observed that the Union of India and Delhi Government are in complete control of affairs of Delhi Metro Rail Corporation (DMRC) and must be commanded to take appropriate steps to enable the corporation to meet the obligation of making payment of dues to Reliance Infra-owned Delhi Airport Metro Express Private Limited (DAMEPL) under a 2017 arbitral award. Lifting the corporate veil, Justice Yashwant Varma observed that the governments cannot shirk from their liability to abide by binding judgments, decrees and awards.
Case Title: Yash Deep Builders vs. Sushil Kumar Singh
The High Court of Delhi has held that the scope of Section 9 of the A&C Act does not envisage relief in the nature that would restore a contract which already stands terminated. The bench of Justice Chandra Dhari Singh held that the Court while exercising powers under Section 9 of the A&C Act cannot direct specific performance of a determinable contract. It held that a contract, which in its nature is determinable, cannot be specifically enforced under Section 14(d) of the Specific Reliefs Act, therefore, the Court cannot do something that is statutorily prohibited.
Case Title: Chadha Motor Transport Company Pvt Ltd vs. Barinderjit Singh Sahni
The Delhi High Court has ruled that, merely because the defendant participated in a civil suit filed by the plaintiff, he cannot be said to have waived his right to invoke arbitration with respect to all future litigation between the parties under the Agreement.
The bench of Justice Neena Bansal Krishna held that participation of a party in a civil suit instituted by a partner, would not debar the party from initiating independent proceedings by way of arbitration, seeking independent remedies under the Partnership Deed.
Case Title: Prime Interglobe Pvt Ltd vs. Super Milk Products Pvt Ltd
The Delhi High Court has ruled that the Arbitral Tribunal’s order rejecting a party’s request to file counter claims on the ground of delay, does not foreclose its right to invoke arbitration seeking independent reference of its claims.
The bench of Justice Prateek Jalan remarked that, when arbitration proceedings are invoked at the instance of one party, it is generally open to the other party to file its counter-claims in the same proceedings. However, this does not per se signify that the Court has also referred the claims of the prospective counter-claimant to arbitration, so as to bar its right to assert its claims at a future date.
Case Title: Bawana Infra Development Pvt Ltd vs. Delhi State Industrial & Infrastructure Development Corporation Limited (DSIIDC)
The Delhi High Court has ruled that Section 31 (7) (a) of the Arbitration and Conciliation Act, 1996 (A&C Act), which deals with the Arbitrator’s discretion while awarding interest in respect of the pre-reference period, applies only where there is no agreement between the parties with respect to the rate of interest to be awarded.
The bench of Justice Chandra Dhari Singh remarked that the Arbitral Tribunal may not resort to Section 31(7)(b), while awarding post-award interest, when express provisions regarding the rate of interest are present in the agreement between the parties.
Case Title: M/s. Modi Construction Company vs. M/s Ircon International Ltd
The Delhi High Court, while dealing with a petition filed under Section 34 of the Arbitration and Conciliation Act, 1996 (A&C Act), has rejected the contentions raised by the petitioner that the Award of the Majority Tribunal declaring the Clause providing for compound interest as null, was perverse since there were no pleadings made by the opposite party in its Statement of Defence seeking the said declaration.
While holding that it is within the domain of the Arbitrator to interpret the terms of the contract, the bench of Justice Neena Bansal Krishna upheld the Majority Award and the findings made by the Majority Tribunal that since the relevant Clause providing for compound interest did not specify the rate of interest, the entire clause was void under Section 29 of the Indian Contract Act, 1872.
Case Title: Amazing Research Laboratories vs. Krishna Pharma
The High Court of Delhi has held that an arbitration award that is passed in violation of the provisions of the Indian Contracts Act, 1872 would be liable to be set aside as suffering from patent illegality.
The bench of Neena Bansal Krishna partially set aside an arbitration award that was passed in contravention of Sections 59-61 of the Indian Contracts Act, 1872. The Court explained the law of apportionment of funds vis-à-vis a running and non-mutual account.
Case Title: M/s Kuldeep Kumar Contractor vs. Hindustan Prefab Limited
The Delhi High Court has ruled that, while dealing with a petition filed under Section 11 of the Arbitration and Conciliation Act, 1996 (A&C Act), if the arbitration clause between the parties in the Special Conditions of Contract (SCC), which does not contain the mandate of a pre-arbitral procedure, is claimed to be overridden by another arbitration clause existing in the General Conditions of Contract (GCC), which mandates following a pre-arbitral mechanism, the same must be adjudicated by the Arbitral Tribunal as per the Kompetenz-Kompetenz principle.
The bench of Justice Chandra Dhari Singh also remarked that a ‘No-Claim Declaration’ given by a party would not extinguish its remedy to invoke arbitration under the arbitration clauses contained in the agreements or render the arbitration agreement void, in view of the Doctrine of Severability.
