Arbitration Weekly Round Up: 12th February to 18th February 2024

Delhi High Court Allegation of Bias Can't Be Raised After Award Has Been Passed Under S. 31, Delhi High Court Dismisses S. 34 Application Case Title: Allied-Dynamic Joint Venture vs Ircon International Ltd, Delhi The Delhi High Court bench comprising Justice Pratibha M. Singh held that objections regarding bias against an arbitrator, as outlined in Section 12(5) of the Arbitration and Conciliation Act, 1996, cannot be raised after the arbitrator has rendered a decision under Section 31. The single bench emphasized that once an award has been made, raising allegations of bias amounts to a waiver under Section 4 of the Arbitration Act. The High Court noted that the Agreement itself, under clause 72.2.3, provided a safeguard against bias by stipulating that if an employee is appointed as an arbitrator, he/she must not be connected with the work in question. Despite the Petitioner's claim of raising the issue of bias through letters, the High Court held that there was no formal adjudication or request for a change of arbitrator on grounds of bias by the Petitioner. Given these circumstances, it held that it would impermissible for the Petitioner to wait for the award to be rendered and then approach the High Court with allegations of bias against the arbitrator. Generic Exclusive Jurisdiction Clause In Agreement Doesn't Supersede Courts' Jurisdiction Of Arbitration Seat: Delhi High Court Case Title: Nitin Kwatra vs Stadhawk Services Pvt. Ltd. & Ors. The Delhi High Court single bench of Justice Sachin Datta held that even if the agreement specifies exclusive jurisdiction on a different court, courts having jurisdiction over the seat of arbitration retain supervisory authority over the arbitral process. Therefore, it held that the presence of a generic exclusive jurisdiction clause does not diminish Delhi courts' jurisdiction as the seat of arbitration. The High Court held that the jurisdiction of the courts overseeing the arbitration process is tied to the designated seat of arbitration. Even if a contract includes a clause conferring exclusive jurisdiction on a different court, when the arbitration clause specifies a venue, it held that this effectively designates the venue as the seat of arbitration. Therefore, the High Court held that courts having jurisdiction over the seat of arbitration retain supervisory authority over the arbitral process. It noted that the clause in the Letter of Agreement (LOA) purporting to confer exclusive jurisdiction was generic and did not specifically refer to arbitration proceedings. Consequently, it allowed the application under Section 11(6) of the Arbitration Act and appointed Praveen Pahuja as the sole arbitrator to adjudicate the disputes between the Petitioner and Respondent No. 1. 3. Absence Of Term “Seat” In Arbitration Clause, Exclusive Jurisdiction Can Be Derived From Intention Of Parties: Delhi High Court Dismisses Section 11(6) Application Case Title: Sanjay Kumar Verma vs Planning And Infrastructural Development Consultants Pvt. Ltd. The Delhi High Court bench comprising Justice Sanjeev Narula held that the intention of the parties to grant exclusive jurisdiction can be derived from the language of the arbitration clause even in the absence of the usage of the term “seat” in the arbitration clause. The bench held that if there is an agreement explicitly or impliedly stating a seat of arbitration, the exclusive jurisdiction is upon the court of the seat to appoint an arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996. Upon analyzing the language of the arbitration clause, the High Court concluded that it signified a mutual agreement designating Patna as the place of arbitration. Despite the absence of the explicit term 'seat' in the clause, the parties' intent to establish Patna as the arbitration venue was clear. This interpretation aligned with the principle of party autonomy enshrined in Section 20 of the Arbitration Act, which mandates honouring the parties' consensus on such matters. Therefore, the High Court determined that Patna was indeed the designated seat of arbitration, depriving it of jurisdiction to adjudicate the petition. 4. MSME Facilitation Council Can't Refer Enterprises To Arbitration For Contracts They Signed Before Registration Under MSME Act: Delhi H.C. Case Title: JKG Infratech Private Limited vs Larsen and Toubro Limited The Delhi High Court bench comprising Justice Prateek Jalan held that registration under the MSME Act is a prerequisite for availing its benefits, and such benefits cannot be claimed retrospectively for contracts entered into before registration. The bench held that the Micro and Small Enterprises Facilitation Council doesn't have the power to entertain the dispute under Section 18 of the MSME Act for the claims which arose before registration. Therefore, the Council was not...

Arbitration Weekly Round Up: 12th February to 18th February 2024

Rajesh Kumar

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