Arbitration Cases Weekly Round-Up: 18 To 24 September 2023

'Every Arbitrator May Not Be Legally Trained, Some Decisions Are Based On Equity' : Supreme Court Explains Scope Of Judicial Interference In Arbitral Awards

Case Title: Batliboi Environmental Engineers Limited vs Hindustan Petroleum Corporation Ltd and Anr.

The Supreme Court bench comprising Justice Sanjiv Khanna and Justice M.M. Sundresh, has held that while setting aside an arbitral award for being violative of Section 28(3) of the Arbitration and Conciliation Act, 1996, it must be considered that the Arbitrator is empowered to interpret the contract terms reasonably.

High Courts:

Andhra Pradesh High Court:

Execution Petition For Arbitration Award Would Lie Only Before The Designated Commercial Courts: Andhra Pradesh High Court

Case Title: Obulapuram Mining Company vs R.K. Mining Pvt Ltd

The High Court of Andhra Pradesh has held that an execution petition for an arbitration award can only lie before the designated Commercial Courts and no other Court viz., Civil/District Court can entertain such an application.

Delhi High Court:

Arbitration Clause In Loan Restructuring Agreement, Liability Is Transferred To New Agreements, Binding On Parties: Delhi High Court

Case Title: DD Global Capital vs SE Investment Ltd

The High Court of Delhi has held that when earlier loan agreement liabilities are transferred through an agreement, the subsequent loan agreements' arbitration clauses become binding on the parties.

Whether The Arbitration Agreement Is Vitiated By Fraud Should Be Left To The Wisdom Of The Arbitrator: Delhi High Court Reiterates

Case Title: JRA Infratech vs Engineering Projects (India) Ltd

The High Court of Delhi has reiterated that a question as to whether the arbitration agreement is vitiated by fraud should be left to the wisdom of the arbitrator who will be free to decide the same on the basis of the evidence and the Court exercising power under Section 11 of the A&C Act should not get into such a finding.

Liquidated Damages Provided In The Agreement Cannot Be Awarded To A Party In Absence Of The Proof Of Actual Loss: Delhi High Court

Case Title: Vivek Khanna vs OYO Apartments Investment

The High Court of Delhi has held that the sum agreed by the parties as liquidated damages would not dispense with the requirement of proof by the party claiming liquidated damages that it actually suffered a loss. The bench of Justice Manoj Kumar Ohri held that a sum ascertained as liquidated damages in the contract is not in the nature of penalty, but is a pre-estimate of loss estimated by parties to be likely suffered in the event of breach of contract.

Madras High Court:

Fees Fixed By The Arbitrator Can’t Be Challenged, After Unconditional Acceptance By The Party: Madras High Court

Case Title: EDAC Engineering vs Industrial Fans (India) Pvt Ltd

The High Court of Madras has held that once a party has unconditionally accepted the fees fixed by the arbitral tribunal during the arbitral proceeding, it cannot later challenge the fees of the arbitral tribunal by filing a petition under Section 39(2) of the A&C Act.

Moratorium Under IBC Does Not Bar Payment Of Fees To Arbitrator Due Prior To Moratorium: Madras High Court

Case Title: EDAC Engineering vs Industrial Fans (India) Pvt Ltd

The High Court of Madras has held that the moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016 does not affect the payment of fees to the arbitrator for the award passed before the moratorium was declared.

Fees To Arbitrator Has To Be Treated On Parity With The Fees Of The Liquidator And Must Be Given A Preferential Status In Terms Of Priority Of Dues: Madras High Court

Case Title: EDAC Engineering vs Industrial Fans (India) Pvt Ltd

The High Court of Madras has held that the fees to arbitrator has to be treated on parity with the fees of the liquidator and must be given a preferential status in terms of priority of dues.