Arbitration Weekly Round Up: 19th February To 25th February 2024

Supreme Court Whether Courts Can Modify Arbitral Award U/S 34 or 37 of Arbitration Act? Supreme Court Refers To Larger Bench The Supreme Court has referred to the larger bench the question of whether the courts have the power to modify the arbitral award under Sections 34 or 37 of the Arbitration and Conciliation Act, 1996. “Whether or not the Courts in exercise of power under sections 34 or 37 of the Arbitration and Conciliation Act, 1996 are empowered to modify an arbitral award is a question which frequently arises in proceedings not only before this Court but also before the High Courts and the District Courts.”, the Supreme Court frames the question. Delhi High Court Party Agreeing To Constitute Arbitral Tribunal Forfeits Right To Oppose Appointment Based On Non-Fulfilment Of Pre-Arbitral Process: Delhi High Court Case Title: Surya Alloy Industries Ltd Vs Union Of India And Anr. The Delhi High Court single bench of Justice Sachin Datta held that once a party has agreed to constituting an arbitral tribunal, it is precluded from subsequently opposing the appointment of an arbitrator based on the alleged non-fulfillment of pre-arbitral steps. The High Court noted that the Respondents agreed to constitute the arbitral tribunal in a letter. It noted that Respondents' request for waiver of clause 12(5) of the Arbitration Act and after the Petitioner's refusal do so, the Respondents were obligated, as per the arbitration agreement, to send a panel of arbitrators to the Petitioner within 60 days from the demand for arbitration. The High Court held that this crucial step was not been taken by the Respondents. Arbitration Clause Does Not Cease With Contract Termination, It Is An Independent Agreement: Delhi High Court Allows S. 11 Application Case Title: M/S S.K Agencies vs M/S DFM Foods The Delhi High Court single bench of Justice Sachin Datta dismissed the notion that the arbitration clause would cease to exist with the termination of the contract. The bench emphasized that the arbitration clause, as part of the contract, should be treated as an independent agreement. he High Court noted that the arbitral tribunal holds the primary authority to determine questions of non-arbitrability. It held that unless a dispute is manifestly or ex facie non-arbitrable, the general rule is to refer the dispute to arbitration, echoing the maxim "When in doubt, do refer". The High Court highlighted that the dispute centered around the interpretation of clause 3 in the agreement, The Petitioner asserted that, based on contractual provisions and the conduct of the parties, there was no automatic termination of the agreements. Conversely, the Respondent contended that the agreement dated 22.12.2018 automatically expired on 24.07.2019 by virtue of clause 3, rendering the petitioner's subsequent claims outside the scope of the arbitration agreement. The High Court held that this should be adjudicated by a duly constituted arbitral tribunal, emphasizing that it was beyond the court's purview to interpret contractual provisions or delve into aspects influencing the merits of the parties' respective cases. Seat Of Arbitration Inferred By Contractual Clauses & Conduct Of Parties, Venue Is Considered Seat In Absence Of Other Indications: Delhi High Court Case Title: M/S Axalta Coating Systems India Pvt. Ltd. Vs M/S Madhuban Motors Pvt. Ltd. The Delhi High Court single bench of Justice Anup Jairam Bhambhani held that mere expression of "place of arbitration" does not automatically indicate the seat and the determination of the seat should be inferred from other clauses in the agreement and the conduct of the parties. The bench held that the seat was in Delhi as the contract clause specified that the venue for arbitral proceedings would be in New Delhi, and it vested exclusive jurisdiction in the courts of law in Delhi for all disputes arising from the Supply Agreement. The High Court referred to the decision of the Supreme Court in Ravi Ranjan Developers Pvt. Ltd. vs Aditya Kumar Chatterjee and noted that mere mention of a place in an arbitration clause does not inherently result in that place becoming the seat of arbitration. Secondly, parties, while having the discretion to refer disputes to a specific court to the exclusion of others, must do so in accordance with sections 11(6) and 20(1) of the Arbitration Act. Arbitration Clause In Unstamped Letter Of Intent Is Valid, Independent And Binding Agreement; Delhi High Court Allows Section 11 Petition Case Title: Swashbuckler Hospitality Pvt. Ltd. vs Avdesh Mittal & Anr. The Delhi High Court single bench of Justice Dinesh Kumar Sharma rejected an argument that a letter of intent was a non-binding agreement and noted that the arbitration agreement contained in the letter of intent should be treated as an independent and binding agreement. Further, it held that the...

Arbitration Weekly Round Up: 19th February To 25th February 2024

Rajesh Kumar

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