Arbitration Cases Weekly Round-Up: 14 to 20 August 2023

Arbitration Award Cannot Be Set Aside On Mere Possibility Of An Alternative View On Facts Or Interpretation Of Contract: Supreme Court

Case Title: Konkan Railway Corporation Limited vs Chenab Bridge Project Undertaking

The Supreme Court observed that Arbitration awards cannot be set aside on mere possibility of an alternative view on facts or interpretation of the contract. The jurisdiction under Section 34 of the Arbitration and Conciliation Act is exercised only to see if the Arbitral Tribunal’s view is perverse or manifestly arbitrary, the bench of CJI DY Chandrachud, Justices PS Narasimha and JB Pardiwala said.

High Courts:

Allahabad High Court:

Intention To Arbitrate Can Be Derived From Agreement Clauses Read With Letters Exchanged Between Parties: Allahabad High Court

Case Title: Anand Agarwal and Anr. vs Dr. Narendra Malhotra and Anr.

The Allahabad High Court has held that the intent of the parties to submit their dispute to arbitration can be derived from the clauses of their agreement read along with the letters exchanged between them.

Section 11 Application Not Maintainable If Objection To Jurisdiction Of Arbitrator Rejected By Arbitral Tribunal: Allahabad High Court

Case Title: Purvanchal Vidyut Vitaran Nigam Ltd. (Puvvnl) vs M/S Prabha Mvomni (Jv)

The Allahabad High Court has recently held that to challenge the jurisdiction of the arbitrator, once the same has been rejected by the Tribunal, the aggrieved party has to challenge the final award. Application under Section 11 of the Arbitration and Conciliation Act, 1996 before the High Court is not maintainable to that effect.

Calcutta High Court:

Application For Removal Of Arbitrator Must Be Made Before Same ‘Court’ As Envisaged In S.2 (i) (e) & S.42 Of Arbitration Act: Calcutta High Court

Case Title: M/s. Gammon Engineers and Contractors Pvt. Ltd. vs The State of West Bengal

The Calcutta High Court recently dismissed an application filed by M/S Gammon Engineers and Contractors Private Limited (“petitioners”) u/s 11(6), 14 and 15 of the Arbitration and Conciliation Act, 1996 (‘Act’), for removal of arbitrator while challenging their unilateral appointment. In dismissing the application, a single-bench of Justice Shekhar B Saraf held that a challenge for withdrawal/removal of arbitrator would not be maintainable before the High Court, since an earlier Section 9 application for interim relief had been filed before the Jalpaiguri District court.

Arbitration Clause Cannot Be Incorporated By Reference, Without Clear Intention Of Parties: Calcutta High Court

Case Title: Kobelco Construction Equipment India Private Limited vs Lara Mining & Anr.

The Calcutta High Court recently dismissed applications for interim relief filed by Kobelco Construction Equipment India Private Limited under Section 9 of the Arbitration and Conciliation Act, 1996 (“Act”).

The single-bench of Justice Moushumi Bhattacharya dismissed the prayer for an interim injunction on the respondents, holding that the petitioners could not be allowed to incorporate an arbitration clause by-reference from the ‘Master’ agreement to the ‘Settlement’ agreement in the absence of unambiguous intention of both parties.

Delhi High Court:

Equilibrium Is Disturbed Where The Party Drawing Up The Panel Of Arbitrator Is Given A Further Right To Accord Its “Confirmation” To Nomination Made By Other Party: Delhi High Court

Case Title: Steelman Telecom Limited vs Power Grid Corporation of India Limited

The Delhi High Court has held that the equilibrium is disturbed where the party drawing up the panel of arbitrator is given a further right to accord its “confirmation” to nomination made by the other party. The bench of Justice Sachin Datta held that in terms of the judgment of the Supreme Court in Central Organisation for Railway Electrification (CORE), the appointment of an arbitrator from a panel maintained by the other party is not invalid as it seeks to counterbalance the right of one party to draw a panel of arbitrator with the right of the other party to make the appointment from such a panel, however, it must be a broad panel as held by the Apex Court in Voestalpine Schienen.

Designation Of Venue Would Override A Generic ‘Exclusive Jurisdiction’ Clause: Delhi High Court

Case Title: Reliance Infrastructure Ltd vs Madhyanchal Vidhyut Vitran Nigam Ltd

The High Court of Delhi has held that a venue where the arbitral proceedings were anchored is essentially the ‘seat of arbitration’ and it would override a generic exclusive jurisdiction clause. It held that a generic exclusive jurisdiction clause is not a contrary indicia that prevents the venue from becoming the seat of arbitration.

Pre-Arbitration Reference To DRC Would Not Be A Bar To Appointment Of Arbitrator When The Chief Engineer Has Failed To Respond To Notice Of Dispute: Delhi High Court

Case Title: Y.K. Goyal vs Delhi Urban Shelter Improvement Board

The High Court of Delhi has held that in a multi-tier dispute resolution clause which provides for pre-arbitration reference to Dispute Resolution Committee (DRC), the failure to refer the dispute to DRC would not be a ground to refuse appointment of arbitrator when the Chief Engineer against whose decision an appeal was to be filed before DRC failed to respond to notice of dispute.

Clause Restricting Right To Invoke Arbitration To Only 6 Months Invalid; Cannot Restrict To Period Lesser Than Provided Under Limitation Act: Delhi HC Reiterates

Case Title: M/s G.S. Express Pvt Ltd vs NTPC Ltd

The High Court of Delhi has reiterated that an arbitration clause that restricts the right of a party to invoke arbitration to a mere 6 months is invalid. The bench of Justice Yogesh Khanna held that the right to invoke arbitration cannot be restricted to a period lesser than that provided under the Limitation Act, 1963.

Karnataka High Court:

Objection To Civil Suit In View Of Arbitration Clause To Be Raised Before Court Of First Instance: Karnataka High Court

Case Title: Nova Medical Centres Pvt Ltd vs Sowmya & Anr.

The Karnataka High Court has set aside a trial court order dismissing a suit filed by Nova Medical Centers Pvt Ltd. on the premise that the dispute is arbitrable. Court noted that the defendant had failed to raise objection as to the jurisdiction of Civil Court.