Annual Digest of Arbitration Cases : 2023 (Part -II)

Supreme Court Will The Mandate Of The Tribunal Terminate Under Section 29A Unless Extended During Its Subsistence? Supreme Court To Examine The Supreme Court is set to examine an important issue related to the arbitration law that whether the mandate of the tribunal terminates upon the expiry of the time provided under Section 29A unless extended during its subsistence. The bench of Justices Sanjiv Khanna and S.V.N. Bhatti has issued notice in an SLP filed against the order of the Calcutta High Court wherein the High Court held that the mandate of the arbitrator terminates upon the expiry of the time period provided under Section 29A unless it is extended during its subsistence. The High Court had held that in terms of Section 29-A(1) and an award shall be made by the arbitral tribunal within a period of 12 months from the date of completion of pleadings, further under sub-section (3), the parties may, by consent, extend the period by another 6 months. It held that in terms of Section 29(A)(4), the mandate of the tribunal stands terminated if it fails to make an award within the specified time period and any application seeking extension of time must be made during that period only and not afterwards. Court Can Examine If Arbitration Clause Is Arbitrary & Violates Article 14 While Considering S.11(6) Application: Supreme Court Case Title: Lombardi Engineering Ltd v. State of Uttarakhand Citation: 2023 LiveLaw (SC) 958 In a significant judgment, the Supreme Court held that a clause in an arbitration agreement which is not in consonance with the Constitution cannot be enforced. The Court further held that it can examine if the arbitration clauses are manifestly arbitrary and violative of Article 14 of the Constitution while considering an application for appointment of arbitrator. A bench comprising Chief Justice of India DY Chandrachud, Justices JB Pardiwala and Manoj Misra was deciding an application filed by Lombardi Engineering Ltd., a Swiss company, under Section 11(6) of the Arbitration and Conciliation Act 1996 seeking appointment of arbitrator in a dispute with the State of Uttarakhand. The company filed the application before the Supreme Court taking objection to two clauses in the arbitration agreement - one, the condition that 7% of the total claim must be pre-deposited for invoking the arbitration clause; two, the discretion vested with the Principal Secretary/Secretary (Irrigation) to appoint a sole arbitrator. Arbitration | Awarding Claim For Loss Of Profit Without Substantial Evidence Is In Conflict With Public Policy Of India: Supreme Court Case Title: M/S UNIBROS v. ALL INDIA RADIO, ARISING OUT OF SLP (CIVIL) NO. 8791/2020 Citation: 2023 LiveLaw (SC) 918 Recently, the Supreme Court, while rendering an arbitral award as patently illegal and being in conflict with the “public policy of India”, held that a claim for damages cannot as a matter of course result in an arbitral award without proof of the claimant having suffered injury. The present decision emphasised the importance of substantial evidence in awarding claims for loss of profit. “A claim for damages, whether general or special, cannot as a matter of course result in an award without proof of the claimant having suffered injury. The arbitral award in question, in our opinion, is patently illegal in that it is based on no evidence and is, thus, outrightly perverse; therefore, again, it is in conflict with the “public policy of India” as contemplated by section 34(2)(b) of the Act.,” Justices S. Ravindra Bhat and Dipankar Datta. Court Has No Power To Modify Award Under S. 34 Arbitration & Conciliation Act : Supreme Court Case Title: Larsen Air Conditioning and Refrigeration Company vs Union of India The Supreme Court reiterated that a court, under Section 34 of the Arbitration and Conciliation Act, has no power to modify an arbitration award. The limited and extremely circumscribed jurisdiction of the court under Section 34 of the Act, permits the court to interfere with an award, sans the grounds of patent illegality, the bench of Justices S Ravindra Bhat and Dipankar Datta said. 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. Supreme Court Restores 1997 Arbitral Award Passed Under 1940 Act; Criticises HC & Trial Court For “Appellate Review” ...

Annual Digest of Arbitration Cases : 2023 (Part -II)

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Annual Digest of Arbitration Cases : 2023 (Part -II)

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