Annual Digest of Arbitration Cases : 2023 (Part -II)
Ausaf Ayyub
8 Jan 2024 6:50 AM GMT
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...
Supreme Court
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.
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.
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.
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.
Case Title: M/s S.D. Shinde vs Govt. of Maharashtra & Ors.
The Supreme Court, while restoring an arbitral award passed in 1997 which was set aside by the Trial Court and the High Court under the Indian Arbitration Act, 1940, has emphasised that the court's jurisdiction under Section 30/33 of the 1940 Act never extended beyond discerning whether the award discloses an “error apparent on the face of the award” or not.
Case Title: Hindustan Construction Company Limited vs National Highways Authority of India
The Supreme Court held that a dissenting opinion cannot be treated as an award if the majority award is set aside. In this case, a three-member arbitration tribunal passed an award in a dispute between Hindustan Construction Company Limited and National Highways Authority of India.
Case Title: M/S CHENNAI METRO RAIL LIMITED vs. M/S TRANSTONNELSTROY AFCONS JV, C.A. No. 4591/2023
Citation : 2023 LiveLaw (SC) 909
In a notable judgment, the Supreme Court has held that unilateral revision of fee by an arbitral tribunal, though not permissible, will not terminate its mandate on the ground of ineligibility as per Section 12 of the Arbitration and Conciliation Act 1996.
Although the Supreme Court has held in Oil and Natural Gas Corporation Ltd. vs Afcons Gunanusa JV 2022 LiveLaw (SC) 723 that the arbitrators should revise the fee only in consultation with the parties and should not do it unilaterally, a bench comprising Justices S Ravindra Bhat and Aravind Kumar held in the present case that a breach of the rule laid down in ONGC will not render the arbitrator ineligible.
The bench categorically held that only the grounds specified in the Fifth and Seventh Schedule of the Arbitration and Conciliation Act can be considered to determine the ineligibility of an arbitrator. The ineligibility of the arbitrator must be something "going to the root of the jurisdiction, divesting the authority of the tribunal, thus terminating the mandate of the arbitrator", the judgment authored by Justice Bhat said.
Case Title: USS Alliance versus State of Uttar Pradesh
The Supreme Court has observed that the starting point for the limitation under Section 34(3) Arbitration and Conciliation Act, in case of suo moto correction of the award, would be the date on which the correction was made and the corrected award is received by the party.
Once the arbitral award has been amended or corrected, it is the corrected award which has to be challenged and not the original award, the bench of Justices Sanjiv Khanna and M M Sundresh observed.
Case Title: TATA Sons Pvt Ltd versus Siva Industries and Holdings Ltd
The Supreme Court has held that the time limit of twelve months as prescribed in Section 29A of Arbitration and Conciliation Act is not applicable for international commercial arbitration.
"In terms of the amended provisions of Section 29A, arbitral tribunals in international commercial arbitrations are only expected to make an endeavor to complete the proceedings within twelve months from the date of competition of pleadings and are not bound to abide by the time limit prescribed for domestic arbitrations.", the bench of CJI D Y Chandrachud and Justice P S Narasimha observed.
International Judgments
Case Title: SONG LIHUA v. LEE CHEE HON, CONSTRUCTION AND ARBITRATION PROCEEDINGS NO. 111 OF 2022
Citation: [2023] HKCFI 2540
The Hong Kong Court of First Instance has refused enforcement of a Mainland (China) award on the ground that one of the members of the arbitral tribunal failed to meaningfully engage with the arbitral proceedings.
The bench of Judge Mimmie Chan found that enforcing a Mainland award with a tribunal member absent during significant proceedings would violate Hong Kong's 'Public Policy' and principles of natural justice, as seen from an objective standpoint.
The Court also reiterated that mere confirmation of the award by the Mainland Court (Seat Court) would not preclude the Court where the award is sought to be enforced to deny its enforcement on the ground that it results in the violation of the public policy of the enforcing Court. It held that the public policy of the seat Court and the enforcing Court could be different.
High Courts
Allahabad High Court
Case Title: National Highway Authority Of India, Through Its Project Director v. Smt. Sampata Devi And 2 Others [Appeal Under Section 37 Of Arbitration And Conciliation Act 1996 Defective No. - 53 of 2023]
The Allahabad High Court has held that no special concession can be granted to government bodies for condoning delay under Commercial Courts Act, 2015 if sufficient cause is not shown in application for delay condonation.
Following the judgement of the Supreme Court in Government of Maharashtra vs. M/s Borse Brothers Engineers and Contractors, Justice Om Prakash Shukla held that appeal under Section 37 of the Arbitration and Conciliation Act, 1996 should be filed within 60 days from date of order under Section 13(1A) of the Commercial Courts Act, 2015. The Court held that in rare cases, where the specified value is less than Rs. 3 lakhs, the limitation period under Articles 116 and 117 of the Limitation Act would be applicable to the appeals, as the case may be.
The Court further held that Section 5 of the Limitation Act would apply to arbitration appeals under Section 37 of the Act of 1996. However, even 'sufficient cause' made out under Section 5 of the Limitation Act is “not elastic enough to cover long delays” as there is no right to have delays condoned. The Court held that only short delays by way of exception can be condoned, and that too when the party has acted in a bona fide manner and not negligently.
Case Title: Gurucharan Das vs Tribhuvan Pal & Ors.
The Allahabad High Court recently dismissed an application for the appointment of an arbitrator filed under Section 11(4) of the Arbitration and Conciliation Act, 2016 holding that such application being filed after 20 years of occurrence of dispute is barred by delay and laches.
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.
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.
Case Title: Agra Development Authority Agra vs. M/s Baba Construction Pvt Ltd
The High Court of Allahabad has held that when the arbitration clause covers all the disputes arising out of the contract within its ambit then the scope of the arbitrator cannot be limited to decide only a particular dispute.
The bench of Justices Prashant Kumar and Manoj Kumar Gupta held that all the disputes that have arisen before the appointment of the arbitrator can be referred to him for adjudication as the claim for damages which has been made prior to invocation of arbitration, becomes a dispute within the meaning of the provisions of 1996 Act and the arbitrator's jurisdiction cannot be confined to a particular dispute.
Case Title: Madhyanchal Vidyut Vitran Nigam Ltd v. Shashi Cable, Matters under Article 227 No. 3384 of 2023
The High Court of Allahabad has held that a petition for the execution of the arbitral award can be enforced anywhere in the country, where the assets of the award debtor are located.
The bench of Justice Pankaj Bhatia held that Section 42 of the A&C Act which bars any petition in any Court other than the Court where the first petition in relation to arbitration agreement was filed does not apply to petitions for the enforcement of the arbitration award. It relied on the judgment of the Supreme Court in Sundaram Finance and Cheran Properties to arrive at the above conclusion.
Case Title: Bharat Petroleum Corporation Ltd v. Anoop Kumar Modi, Matters under Article 227 No. 2704 of 2023
Neutral Citation: 2023:AHC-LKO: 68875
The Allahabad High Court has held that it is the choice of the award holder to file an execution petition at the place of its choice and it need not necessarily approach the Court where the award was passed.
The bench of Justice Pankaj Bhatia also held that merely because Section 16 of the Commercial Courts Act which provides for amendment to CPC does not include Order 21 within the amended provisions, it would not mean that the Commercial Court would not have the inherent jurisdiction to execute an arbitral award. It held that words 'applications' under Section 10(3) of the Commercial Courts Act would include the application for execution of the arbitral award in terms of Section 36 of the A&C Act.
Case Title: Chandra Kishori v. Union Of India Thru. Chairman Of National Highway Authority Of India And 2 Others [Appeal Under Section 37 Of Arbitration And Conciliation Act 1996 No. - 55 of 2022]
The Allahabad High Court held that the Court adjudicating upon arbitral award under Section 34 of the Arbitration and Conciliation Act, 1996 has the power to recalculate compensation awarded under the National Highway Authority of India Act, 1956.
The bench comprising of Justice Jaspreet Singh held that if the calculation of compensation is patently illegal and the award is against the public policy of India, the Court under Section 34 ought to interfere and set aside the award.
Bombay High Court:
Dispute Between Service Providers Can't Be Referred to Arbitration: Bombay High Court
Case Title: World Phone Internet Services Pvt. Ltd. versus One OTT Intertainment Ltd. In Centre
Case Title: Edufocus International Education LLP versus Yashovardhan Birla & Ors.
Clause Contained In The Tax Invoice Amounts To An Arbitration Clause: Bombay High Court
Case Title: Bennett Coleman & Co. Ltd versus MAD (India) Pvt Ltd
Case Title: Deepti Prakash Ghate versus NKGSB Co. Op. Bank Ltd
Case Title: TLG India Pvt Ltd versus Rebel Foods Pvt Ltd
Case Title: Thomas Cook (India) Limited versus Red Apple Chandrarat Travel
Case Title: Zenobia Poonawala versus Rustom Ginwalla & Ors.
Case Title: Bajaj Electricals Limited versus Chanda S. Khetawat & Anr.
Case Title: Mahaveer Realities & Ors. vs Shirish J. Shah
Case Title: 22Light vs OESPL Pvt Ltd
Case Title: Nagreeka Indcon Products Pvt Ltd vs. Cargocare Logistics (India) Pvt Ltd
Arbitration Clause Can Be Invoked By Assignee Of Rights Under Contract: Bombay High Court
Case Title: M/s. Siemens Factoring Pvt Ltd vs. Future Enterprises Pvt Ltd
Case Title: Sara Chemicals and Consultants vs. Deepak Nitrite Ltd
Case Title: Mantras Green Resources Ltd. & Ors. vs. Canara Bank
Case Title: Hanuman Motors Pvt Ltd & Anr. vs. M/s Tata Motors Finance Ltd
Case Title: National Textile Corporation Ltd vs. Elixir Engineering Pvt Ltd & Anr.
Case Title: John Peter Fernandes vs. Saraswati Ramchandra Ghanate (since deceased) & Ors.
Case Title: Ramona Pinto v. Deputy Commissioner of Income Tax, Income Tax Appeal No. 2610 of 2018
Amount Received In Satisfaction Of The Inheritance Rights Is Not A Taxable Income: Bombay High Court
Case Title: Ramona Pinto v. Deputy Commissioner of Income Tax, Income Tax Appeal No. 2610 of 2018
Case Title: PSP Projects Limited versus Bhiwandi Nizampur City Municipal Corp
The Bombay High Court has ruled that even if a party's right to appoint its nominee in the Arbitral Tribunal as per the arbitration clause, is forfeited because it failed to exercise its right within the statutory period after receiving the notice invoking arbitration, it would not render the Court powerless to appoint an appropriate Arbitral Tribunal, after considering the nature of the disputes.
SPA Which Gives Option To Resell Shares To Vendor, Not A 'Forward Contract': Bombay High Court
Case Title: Percept Finserve Pvt Ltd & Anr. versus Edelweiss Financial Services Ltd
The Bombay High Court has ruled that a Share Purchase Agreement (SPA), which gives an option to the purchaser to require the seller/vendor to repurchase the shares on the occurrence of a contingency, does not constitute a 'forward contract' and thus, the same is enforceable.
Upholding the order of the Single Judge where it had set aside the arbitral award, the Division Bench held that merely because the contract contains a “put option” in respect of securities, the contract cannot be termed as a trade or contract in derivatives. Thus, the Court held that the option contemplated under the SPA was not prohibited in law.
Case Title: BST Textile Mills Pvt Ltd versus The Cotton Corporation of India Ltd
The Bombay High Court has ruled that the arbitrator cannot be said to have committed a jurisdictional error by allowing a consolidated Statement of Claims (SoC), without the consent of the opposite party/ award debtor, in view of the fact that specific claims pertaining to each of the nine contracts were placed distinctly in the Statement of Claims and the award debtor also chose to file a consolidated counter claim pertaining to all the nine contracts.
Case Title: Quess Corp versus Netcore Cloud Pvt Ltd
The Bombay High Court has ruled that there is no clash of interest involved where the Arbitrator had acted as a counsel and represented the Advocate representing the opposite party, in another unrelated matter for some other client.
The bench of Justice Bharati Dangre concluded that the disqualification connection, contemplated under Item 3 of Schedule VII of the Arbitration and Conciliation Act, 1996 (A&C Act), must be between the Arbitrator and the litigant. Thus, where the Arbitrator had accepted a brief from the respondent's counsel for some other client, the same will not amount to per se disqualification or ineligibility, the Court ruled.
Case Title: Kalpesh Shantikumar Mehta & Ors. versus NKGSB Co-op. Bank Ltd & Anr.
The Bombay High Court has ruled that reference of more than two arbitrations to the same arbitrator under Section 84 of the Multi-State Cooperative Societies Act, 2002 (MSCS Act), involving the same Co-operative Bank, would not fall foul of clause 22 of Schedule V of the Arbitration and Conciliation Act, 1996 (A&C Act).
Noting that in the statutory arbitration contemplated under the MSCS Act, the arbitrator is appointed by the Central Registrar/Commissioner of Cooperative Societies under Section 84 (4) of the MSCS Act, the bench of Justice Bharati Dangre held that the embargo created under clause 22 comes into picture only when the Arbitrator is appointed by one of the parties or an affiliate of one of the parties.
Calcutta High court:
Case: Damodar Valley Corporation v Reliance Infrastructure Limited
Citation: 2023 LiveLaw (Cal) 306
In a landmark 255-page judgement, the Calcutta High Court has upheld an arbitral award in favor of Reliance Infrastructure (“RIL”), arising out of a deal struck with the Damodar Valley Corporation (“DVC”) for construction of thermal power plants in Raghunathpur.
In upholding the award passed by a panel of three arbitrators, a single-bench of Justice Shekhar B Saraf noted that India is in dire need of Arbitration reform due to increased judicial interference at every stage. It held:
“Arbitration has been envisaged as a mechanism of dispute resolution which is free from the clutches of redundancy, inefficiency, and delay that plague our litigation system. It seems that arbitration process in India itself is finding it hard to bear the weight of the increasing judicial interference at every stage of the process. This not only impacts the viability of arbitration as a dispute resolution mechanism, but further demotes India's standing as a business friendly destination in a globalised world. There is dire need of arbitration reform in India. This reform must not only reflect in the legislation itself, but also in the mind-set of all the stakeholders.”
Case Title: Uphealth Holdings Inc versus Glocal Healthcare Systems Pvt. Ltd. & Ors.
The Calcutta High Court has allowed the application filed under Section 9 of the Arbitration and Conciliation Act, 1996 (A&C Act), seeking interim measures granted by the Emergency Arbitrator under the ICC Arbitration Rules.
The bench of Justice Ravi Krishan Kapur noted that the A&C Act does not provide for enforcement of orders passed by an Emergency Arbitrator in cases of a foreign seated arbitration. However, it observed that both the parties had participated in the proceeding before the Emergency Arbitrator and had agreed to be bound by its order, which was well-reasoned and elaborate. Thus, the Court concluded that the order of the Emergency Arbitrator can be taken into account at the stage of considering a Section 9 application.
Case Title: Spectrum Infra Ventures v. WBSMEFC, WPA No. 11265 of 2023
The High Court of Calcutta has held that an arbitration award passed under MSMED Act cannot be challenged in a writ petition merely on the ground that the petitioner's request for adjournment was refused by the arbitrator.
The bench of Sabyasachi Bhattacharyya held that a party aggrieved by an award passed under MSMED Act has to challenge it under Section 34 of the A&C Act r/w Section 19 of the MSMED Act and the remedy of writ petition to challenge such award would not be available unless it is shown that the award has resulted in the failure of justice.
The Court held that if a party was given a hearing by the arbitral tribunal and despite the opportunity the party chose not to put up a defence and sought adjournment which was refused by the arbitral tribunal then the consequent award cannot be challenged under Article 226 of the Constitution on the ground of suffering from vice of violation of natural justice.
It held that the party aggrieved by such an award can challenge it under Section 34(2)(a)(iii) on the ground that it was not given sufficient opportunity to prove its case, however, the limited scrutiny permissible under writ jurisdiction in view of availability of an alternative remedy does not permit the writ court to examine it unless it results in palpable violation of the law or patent arbitrariness.
Case Title: Sarada Construction vs. Bhupendra Pramanik
The High Court of Calcutta has held that the A&C Act is a complete code in itself and it does not contain any provision for the review of an order passed under Section 11 of the Act. The Bench of Justice Shekhar B. Saraf held that power of review is a creature of statute and unlike the Supreme Court which has inherent power of review under Article 137 of the Constitution of India, no such power is conferred on the High Courts by the Constitution, therefore, it cannot review its order passed under Section 11 of the Act.
Case Title: Cholamandalam Investment & Finance Company Ltd vs. Amrapali Enterprises
The High Court of Calcutta has deprecated the practice of banking and financial institutions unilaterally appointing the arbitrator. It refused to enforce an award passed by an arbitrator that was unilaterally appointed by the petitioner.
The bench of Justice Shekhar B. Saraf has held that an arbitration award passed by a unilaterally appointed arbitration is non-est and its enforcement would be refused under Section 36 of the A&C Act even if the award was not set aside under Section 34.
Case Title: Union of India and Anr. vs Rashmi Metaliks Limited
The Calcutta High Court unconditionally stayed an award granted in favour of the South Eastern Railways (“SER”) under the Arbitration & Conciliation Act, 1996 on grounds of fraud and corruption perpetrated by collusion between the parties in obtaining the impugned award.
Case Title: Uphealth Holdings Inc. vs Glocal Healthcare Systems Pvt Ltd
The Calcutta High Court has held that an order of the Emergency Arbitrator in a foreign-seated arbitration, while not directly enforceable under the Arbitration and Conciliation Act (A&C Act) due to the absence of a provision akin to Section 17(2) of the Act in Part II, should nonetheless be considered by the Court as a supplemental factor under Section 9 of the Act.
Case Title: The Board of Major Port Authority for the Shyama Prasad Mookerjee Port, Kolkata. vs Marine Craft Engineers Private Limited
The Calcutta High Court recently dismissed an application filed by the Board of Major Port Authority for the Shyama Prasad Mookerjee Port, Kolkata, for staying the operation of an arbitral award passed by the West Bengal State Micro Small Enterprises Facilitation Council (MSME Council).
In refuting the petitioner's contention that filing an application under Section 34 of the Arbitration & Conciliation Act, 1996 (1996 Act) would be sufficient for the Court to deliberate on the question of stay, a single bench of Justice Moushumi Bhattacharya held, that in the absence of a pre-deposit of 75% of the award, in compliance with Section 19 of the MSMED Act, the application under Section 34 of the 1996 Act would remain “stillborn” for the purpose of stay of the award.
Case Title: The West Bengal Small Industries Development Corporation Limited WBSIDC vs Kaushalya Infrastructure Development Corporation Limited KIDCO
The Calcutta High Court has dismissed a plea filed by petitioners West Bengal Small Industries Development Corporation Limited (“WBSIDC”) for unconditional stay of an arbitral award passed against it in 2019, on the grounds of fraud and corruption, under Section 36(3) of the Arbitration & Conciliation Act, 1996 (“Act”).
The single-bench of Justice Moushumi Bhattacharya observed that the petitioners had not managed to discharge their burden under the statute, and that there was no fraud or corruption in the present case, which would satisfy the twin-benchmark under the second proviso to Section 36(3) of the Act.
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.
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.
Case Title: Case: Uphealth Holdings Inc. vs Glocal Healthcare Systems Pvt Ltd & Ors.
The Calcutta High Court while exercising its admiralty jurisdiction, recently allowed an application for interim relief by Uphealth Holdings Inc. a wholly owned subsidiary of Uphealth Inc., a US-based healthcare company under section 9 of the Arbitration & Conciliation Act, 1996. Justice Ravi Kishan Kapur observed that the applicant had made out a prima facie case for interim relief regarding an arbitrable dispute over its Share-Purchase Agreement (“SPA”) with the respondent.
Case: Prathyusha- AMR JV vs Orissa Steel Expressway Private Limited
Citation: 2023 LiveLaw (Cal) 304
The Calcutta High Court has recently allowed applications for appointment of arbitrator u/s 11 and for interim protection u/s 9(1) of the Arbitration & Conciliation Act, 1996 (“Act”) by Prathyusha- AMR, a Joint Venture.
In allowing the plea for appointment of an arbitrator u/s 11 of the Act, a single-bench of Justice Moushumi Bhattacharya noted that “a turning point” in negotiations between the parties may 're-vitalise' limitation in order to sustain a 'live claim.'
Case Title: Prathyusha – AMR JV v. Orissa Expressway Pvt Ltd, AP 863 of 2022
The High Court of Calcutta has held that the Court exercising powers under Section 9 of the A&C Act is not strictly bound by the provisions of interim relief contained under Code of Civil Procedure, 1908.
The bench of Justice Moushumi Bhattarcharya held that unlike O. XXXVIII R. 5 of CPC wherein the party seeking relief has to discharge the onus of showing that the other party seeks to obstruct or delay the execution of any decree by disposing of the entirety or part of the property or intends to remove the same from the local limits of the jurisdiction of the Court, Section 9 of the A&C Act does not require the petitioner to show that the opposite party will dissipate the subject matter of the arbitration.
Case Title: Power Mech Projects Limited v. BHEL, AP 444 of 2023
The High Court of Calcutta has held that if one letter with the necessary stamp is part of the correspondence forming the contract, the entire contract is deemed duly stamped.
The bench of Justice Moushumi Bhattacharya held that where a contract or agreement of any kind is effected by correspondence consisting of two or more letters and if any one of the letters is properly stamped the contract or agreement shall be deemed to be duly stamped in view of proviso (c) to Section 35 of the Indian Stamps Act.
The Court held that proviso (c) to Section 35 relieves a party from the statutory obligation of stamping each and every letter or document forming part of the correspondence where one of the letters is properly stamped.
Case Title: Power Mech Projects Limited v. BHEL, AP 444 of 2023
The High Court of Calcutta has held that absence of arbitration clause in the main agreement is immaterial when it specifically incorporates another agreement containing arbitration clause.
The bench of Justice Moushumi Bhattacharya held that Section 7(5) of the A&C Act allows incorporation of the arbitration agreement by reference and a case wherein the main agreement specifically incorporates the earlier agreements containing arbitration clause, the situation would squarely be covered by the said Section.
Case Title: Jhajjar K.T. Transco Pvt Ltd versus Oriental Insurance Company
The High Court of Calcutta has held that the jurisdiction of the Court under Section 11 of the A&C Act is limited to examination of the existence of the arbitration clause and determination of an arbitrable dispute.
The bench of Justice Shekhar B. Saraf relied on the judgment in Mayavati Trading v. Pradyvat Deb Burman (2019) to hold that a Court exercising powers under Section 11 of the A&C Act cannot determine the question of 'accord and satisfaction' in view of Section 11(6A) of the Act.
Case Title: Jagrati Trade Services Pvt Ltd versus Deepak Bhargava & Ors.
The Calcutta High Court has ruled that, post the Amendment Act of 2015, the powers of the Arbitrator to grant interim measures under Section 17 of the Arbitration and Conciliation Act, 1996 (A&C Act), is pari passu with the powers of the Court under Section 9 of the Act.
The bench of Justice Shekhar B. Saraf remarked that the test applicable for granting interim protection under Section 9 would also apply to test the validity of an order passed by the Arbitrator under Section 17.
Case Title: McLeod Russel India Limited versus Aditya Birla Finance Limited
The High Court of Calcutta has held that filing of pleadings before the arbitral tribunal and agreeing to the jurisdiction of the tribunal therein satisfies the requirement of 'express agreement' given under the proviso to Section 12(5) of the Act.
The bench of Justice Moushumi Bhattacharya held that if a party, which was aware of the position of law qua the invalidity of the unilateral appointment of arbitrator, participates in the arbitral proceedings for a considerable period of time and obtains the benefit of the order of the tribunal, it cannot later turn around and challenge the appointment of the arbitrator.
Case Title: McLeod Russel India Limited versus Aditya Birla Finance Limited
The High Court of Calcutta has held that all unilateral appointments of arbitrator are not invalid per se unless the arbitrator's relationship falls within the Seventh Schedule to the A&C Act.
The bench of Justice Moushumi Bhattacharya distinguished between an arbitration clause that permits unilateral appointment of arbitrator and a clause that provides for arbitration before some person in charge of one of the parties or right of that person to delegate his function to a third party. The Court held that only in the latter scenario the persona designata would not just himself be ineligible to act as an arbitrator but would also be precluded from appointing someone else on its behalf.
Case Title: Sarada Construction versus Bhupendra Pramanik
The High Court of Calcutta that the A&C Act is a complete code in itself and it does not contain any provision for the review of an order passed under Section 11 of the Act.
The Bench of Justice Shekhar B. Saraf held that power of review is a creature of statute and unlike the Supreme Court which has inherent power of review under Article 137 of the Constitution of India, no such power is conferred on the High Courts by the Constitution, therefore, it cannot review its order passed under Section 11 of the Act.
Delhi High Court:
Delhi High Court Sets Aside Arbitration Award Passed In Defiance Of Supreme Court Order
Case Title: Unison Hotel v. Value Line Interiors
Citation: 2023 LiveLaw (Del) 1051
The High Court of Delhi has set aside an arbitral award for having been passed in defiance of the order of the Supreme Court. It held that such an award would be against the public policy and that if the arbitral tribunal is allowed to defy the order of the Supreme Court, it would violate principle of Judicial discipline.
The bench of Justices Sanjeev Sachdeva and Manoj Jain held that when the Supreme Court grants liberty to a party, to file an application before the arbitral tribunal to take its statement of defence and counter-claim on record within a specified time, the tribunal ought to wait till the expiry of the said period before passing the award without taking the statement of defence and counter-claim on record.
The Court held that if the arbitral tribunal without waiting for the expiry of the period granted by the Apex Court, the same would result in denying the party an opportunity to present its case and the award would fall foul of Section 34(2)(iii) of the A&C Act. It held that indeed the it would be the discretion of the tribunal to allow or disallow the application on its own merits, however, the tribunal cannot proceed before the period of liberty granted by the Supreme Court expires.
Case Title: Govind Singh versus Satya Group Pvt Ltd
The High Court of Delhi has held that mere participation in the arbitration proceedings cannot be considered to be waiver of Section 12(5) that provides for ineligibility of arbitrator.
The bench of Justices Vibhu Bakhru and Amit Mahajan held that applicability of Section 12(5) can only be waived off by an express agreement and not by the conduct of parties. The Court held that the objection to challenge an arbitration award on the ground of ineligibility of arbitrator due to his unilateral appointment can be raised regardless of no such objection being taken before the arbitrator.
Case Title: Raj Kumar Gupta versus M/s Narang Constructions & Financiers Pvt Ltd
The Delhi High Court has ruled that non-attestation of the affidavit accompanying the application filed under Section 34 of the Arbitration and Conciliation Act, 1996 (A&C Act) is a mere procedural irregularity. Thus, it cannot be treated as fatal to the institution of the suit, the bench of Justice Neena Bansal Krishna concluded. The Court held that the application cannot be considered as non-est for the purpose of computing limitation under Section 34 (3).
Case Titled: M/s Fermina Developers Private Limited versus Indiabulls
The Delhi High Court has ruled that the dispute between the parties, relating to whether the petitioner/debtor had made a default in repaying the loan, empowering the respondent/creditor to proceed under Section 13 of the SARFAESI Act, involved the determination of debt. Thus, the dispute fell within the scope of adjudication contemplated under Section 13 of the SARFAESI Act and it cannot be referred to arbitration, the bench of Justice Yashwant Varma held.
Case Title: Sanghvi Movers Ltd. versus Vivid Solaire Energy Pvt Ltd
The Delhi High Court has ruled that the parties would be governed by the arbitration clause contained in the Contract, even though the arbitration clause is not specifically incorporated in the purchase orders.
The bench of Justice Mini Pushkarna held that the purchase order was not independent of the Contract and that the parties clearly intended the Contract to be the main agreement. Thus, the Court concluded that the parties would be governed by the arbitration clause contained in the Contract.
Case Title: M/s Liberty Footwear Company versus M/s Liberty International
The Delhi High Court has reiterated that disputes relating to subordinate rights in personam arising from rights in rem are arbitrable. Thus, the bench of Justice Navin Chawla concluded that the dispute whether a partner can use the partnership firm's trade mark for his own sole proprietorship concern, can be referred to arbitration.
The Court further ruled that merely because a Statute specifies which Civil Court is to adjudicate a dispute, is not enough to infer the implicit non-arbitrability of such dispute.
Case Title: Oil and Natural Gas Corporation versus Joint Venture Of M/s Sai Rama Engineering Enterprises (SREE) & M/s Megha Engineering & Infrastructure Limited (MEIL)
The Delhi High Court has ruled that an application to set aside an arbitral award under Section 34 of the Arbitration and Conciliation Act, 1996 (A&C Act) does not cease to be an application merely because the applicant has not complied with certain procedural requirements. The bench of Justices Vibhu Bakhru and Purushaindra Kumar Kaurav held that filing an affidavit in support of an application and the statement of truth by way of an affidavit, are procedural requirements. In absence of these requirements, the application cannot be treated as non est, the Court said.
The Court added that though filing of a court fee is necessary, however, the defect in not filing the court fee along with the application can be cured and it would not render the application invalid.
Court Has No Jurisdiction To Review Order Passed Under Section 11 of A&C Act: Delhi High Court
Case Title: M/s Diamond Entertainment Technologies Private Limited & Ors. versus Religare Finvest Limited
The Delhi High Court has reiterated that orders passed in an application filed under Section 11 of the Arbitration and Conciliation Act, 1996 (A&C) cannot be reviewed since there is no provision of review contained in the A&C Act.
The bench of Justice Neena Bansal Krishna, while dismissing a review petition filed against the arbitral reference made under Section 11, held that in view of the decision of Apex Court in M.D. Frozen Foods Exports Pvt Ltd versus Hero Fincorp Ltd. (2017), disputes covered under the SARFAESI Act in respect of which proceedings under the SARFAESI Act are initiated, can be referred to arbitration.
Case Title: Union of India & Anr. versus Alcon Builders and Engineer Pvt. Ltd
The Delhi High Court has ruled that the mandate contained in Section 31(3) of the Arbitration and Conciliation Act, 1996 (A&C Act), as per which an arbitral award shall state the reasons on which it is based, must pervade every aspect of the award, including the award of costs.
“Awarding costs by a stroke of the pen, without stating reasons therefor, would fly in the face of section 31(3), apart from being opposed to well accepted canons of fairness and justice”, the bench of Justice Anup Jairam Bhambhani remarked. The Court thus set aside the award of costs made against the award debtor, holding that the same was arbitrary since it was unreasoned and did not contain any quantification.
Case Title: Monika Oli versus M/s CL Educate Ltd.
The Delhi High Court has ruled that delivery of arbitral award, to be effective under the Arbitration and Conciliation Act, 1996 (A&C Act), must be made to a person who has direct knowledge of the arbitral proceedings. The bench of Justice Chandra Dhari Singh remarked that the word 'party' in Section 34(3) of the A&C Act means party to the arbitral proceedings and does not include an agent of the party as well.
The Court further held that, delivery of the arbitral award to the employee of an entity in which the award debtor is a shareholder but the arbitral dispute does not pertain to that entity, would not constitute as proper delivery in terms of the A&C Act.
Case Title: Bright Simons versus Sproxil Inc & Anr.
The Delhi High Court has ruled that merely because the arbitrator had wrongly applied the .IN Domain Name Dispute Resolution Policy (INDRP Policy), while adjudication a dispute over domain names under the said Policy, the award cannot be set aside in the absence of perversity.
The bench of Justice Chandra Dhari Singh ruled that the terminology used by the arbitrator in the award, that the party had failed to prove its claim “beyond doubt”, cannot be equated with the legal term 'beyond reasonable doubt', as is used in the criminal trial. Thus, the Court rejected the argument that the standard of proof imposed by the arbitrator violated the fundamental principles of Indian law.
Case Title: Hindustan Zinc Ltd versus National Research Development Corporation
The High Court of Delhi has held that objections available under Section 47 of CPC cannot be considered by a Court at the time of enforcement of an arbitration award under Section 36 of the Arbitration and Conciliation Act, 1996 (A&C Act).
The bench of Justice Vashwant Varma held that though under the Arbitration Act, 1940, the Arbitral Award was required to be made a rule of the Court and a decree, but Section 36 of the Arbitration Act, 1996, confers the Arbitral Award with a status of a decree to be enforced in the same manner as if it were a decree of the Court. However, the deeming fiction is limited for the purpose of enforcement and not to make it a decree for all purposes. Thus, the objections that can be raised against a decree at the enforcement stage would not apply to an arbitration award which is a deemed decree only, the Court said
Arbitration Clause Continues To Operate Even After Dissolution Of Partnership: Delhi High Court
Case Title: M/s Shyamjee Prepaid Services versus M/s Top Steels & Mrs. Renu Devi & Anr.
The Delhi High Court has ruled that an arbitration clause contained in a contract executed with a partnership firm, will continue in effect even after the death of a partner causes the dissolution of the partnership.
The bench of Justice Chandra Dhari Singh held that the Court has the power to conduct a procedural review of its order passed under Section 11 of the Arbitration and Conciliation Act, 1996 (A&C Act). It further remarked that the Courts' competence to review Section 11 orders is unaffected by substantive concerns like a Tribunal's jurisdiction or the authenticity of evidence.
Case Title: Chabbras Associates versus HSCC India Limited
The High Court of Delhi has held that an application for the appointment of an arbitrator under Section 11 of the A&C Act would be premature if it is filed without compliance with the pre-arbitration internal dispute resolution mechanism stipulated under the agreement.
The bench of Justice Navin Chawla held that when the agreement provides for a multi-tier dispute resolution process in the form of reference of dispute, firstly, to some internal authorities and on being dissatisfied, to invoke arbitration, then the parties cannot directly approach the court for the appointment of arbitrator without exhausting the remedy given under the contract.
Case Title: CASA2 STAYS PVT LTD vs BBH COMMUNICATIONS INDIA PVT LTD
The High Court of Delhi has held that the principles of natural justice are not violated when the opportunity to make oral submissions on an issue was granted but not availed by the party. It held that no party has the absolute right to insist on his convenience in every respect.
Case Title: Amit Guglani vs L&T Housing Finance
The Delhi High Court has held that Section 21 notice is a mandatory pre-requisite for invoking jurisdiction of the Arbitrator under Section 21 of the A&C Act.
Case Title: Amit Guglani vs L&T Housing Finance
The Delhi High Court has held that when there are two interconnected agreements with conflicting arbitration clauses, the arbitration clause contained in the main/umbrella agreement should be given primacy over the other clause.
Case Title: Liberty Footwear Co. vs Liberty Shoes Ltd
The Delhi High Court has decided that if a petition under Section 9 is submitted to any court other than the one where the initial application was made, Section 42 of the A&C Act will prevent it.
Case Title: National Seeds Corporation Ltd vs Ram Avtar Gupta
The Delhi High Court has held that Section 14 of the Limitation Act, which provides for exclusion of time consumed in civil proceedings initiated before a Court not having the jurisdiction, applies to proceedings under Section 34 of the A&C Act.
Case Title: Ministry of Youth Affairs and Sports vs ERNST and YOUNG PVT LTD
The Delhi High Court has reiterated that a Section 34 petition filed unaccompanied by the impugned award and without the statement of truth would not constitute a valid filing.
Case Title: Ministry of Youth Affairs and Sports vs ERNST and YOUNG PVT LTD
The Delhi High Court has held that an email sent by the arbitral tribunal to the parties wherein the scanned copy of the signed award is attached constitutes a valid delivery of the award under Section 31(5) of the A&C Act.
Case Title: Splendor Landbase Ltd vs Aparna Ashram Society
The Delhi High Court has held that the Court exercising power under Section 11 of the A&C Act has the power to issue time bound directions to Collector of Stamps to decide on unstamped arbitration agreements to ensure that the mandate of Section 11(13) of the A&C Act that provides for expeditious disposal of Section 11 petition should not be defeated.
Case Title: Landmark Property Development and Company Limited & ORS. vs Ansal Properties & Infrastructure Limited & Ors.
The Delhi High Court has directed release of over Rs. 16 Crores deposited with the court Registry, in favour of the Landmark Group in the execution petition filed by it seeking enforcement of the arbitral award passed against the Ansal Group.
In 2018, an Arbitral Tribunal had awarded a sum of Rs. 46.01 Crores in favour of the Landmark Group against the Ansals in a dispute between the two business groups.
Case Title: Mrs. Vinnu Goel vs Mr. Santosh Goel and Ors.
The High Court of Delhi has held that all the members of the families would be bound by the terms and conditions of a settlement agreement executed between the heads of the two branches of families if they have signed the said agreement that pertains to the properties owned by them.
The bench of Justice Navin Chawla held that a party appending its signature on an MoU is bound by the terms and conditions of such an agreement, including the arbitration agreement. It held that a party cannot escape the agreement merely on the ground that it was not expressly made a party under the agreement.
Case Title: B L Kashyap and Sons Ltd vs Emaar India Ltd
The Delhi High Court has ruled that alleged liquidity crunch of the award debtor cannot be a sufficient cause under Order XXI Rule 26(1) of the Code of Civil Procedure, 1908 (CPC) to grant stay of the enforcement proceedings in relation to an arbitral award.
The bench of Justice Yogesh Khanna made the observation while hearing a plea seeking modification of the court's order in the execution petition filed by the award holder, where the court had directed the award debtor to deposit the entire award amount of Rs.165 crores. The award debtor sought to modify the court's order so as to enable him to furnish bank guarantee instead of cash deposit, on the ground that the same shall lead to liquidity crunch in its company.
Case Title: Shapoorji Pallonji and Company Private Limited vs. Union of India
The Delhi High Court has reiterated that when a person has itself become ineligible by operation of law to act as an arbitrator, it cannot nominate another person to act as arbitrator.
The bench of Justice Yashwant Varma was dealing with an arbitration clause which exclusively empowered the Chief Project Manager to appoint the arbitrator from a panel which was itself maintained by it. The Court concluded that the constitution of the Arbitral Tribunal, as contemplated by the arbitration clause, was clearly tainted by fundamental illegality.
Case Title: New Delhi Municipal Council vs. Decor India Pvt Ltd
The Delhi High Court has reiterated that though it is permissible to introduce an amendment in a petition filed under Section 34 of the Arbitration and Conciliation Act, 1996 (A&C Act), however, new grounds of challenge containing new material/ facts cannot be introduced when the said grounds were neither raised in the original petition under Section 34 nor before the Arbitral Tribunal.
Case Title: Tejpal Singh vs. Surinder Kumar Dewan
The Delhi High Court has ruled that since the party had failed to challenge the termination of the Collaboration Agreement in the first round of arbitral proceedings, the demolition of the structure built by it under the said Collaboration Agreement would not give it a fresh cause of action.
The bench of Justice Navin Chawla remarked that the cause of action for challenging the termination of the Collaboration Agreement and/or for claiming any relief under the said Collaboration Agreement, was available to the petitioner at the stage of the earlier arbitral proceedings.
Case Title: FIITJEE Ltd vs. Ashish Khare & Anr.
The Delhi High Court has reiterated that mere reference to a wrong provision or term of the agreement cannot invalidate the notice invoking arbitration, if otherwise such power or provision exists in the document executed between the parties.
The bench of Justice Navin Chawla remarked that since there was no dispute regarding the existence of an arbitration clause in the document executed between the parties, which was admittedly binding on them, merely because the claimant had referred to the wrong Agreement, the same will not invalidate the arbitration notice issued under Section 21 of the A&C Act.
Case Title: Municipal Corporation of Delhi vs. Narinder Kumar
The Delhi High Court has ruled that, as a necessary corollary of the provisions of Section 34 and Section 37 of the Arbitration and Conciliation Act, 1996 (A&C Act), what cannot be considered by the adjudicating Court under a Section 34 petition can certainly not be adjudicated upon by the appellate Court under Section 37.
The Court added that it has almost “Nil” scope of interference while dealing with a challenge against an order disposing of a Section 34 petition, unless there is something perverse, contrary to law and/or which actually shocks the conscience of the Court.
Case Title: Arvind Techno Globe JV vs. Delhi Metro Rail Corporation Ltd
The Delhi High Court has referred the disputes between the Delhi Metro Rail Corporation Ltd (DMRC) and M/s Arvind Techno Globe (JV) in relation to a construction contract to arbitration, appointing Justice N.V. Ramana, former Chief Justice of India, as the Sole Arbitrator to adjudicate the disputes between the parties.
The bench of Justice Chandra Dhari Singh was dealing with a petition filed under Section 11 of the Arbitration and Conciliation Act, 1996 (A&C Act) by the petitioner, Arvind Techno Globe, seeking appointment of an independent sole arbitrator. The petitioner argued that the DMRC, by asking the petitioner to choose an arbitrator from a panel of 5 names outlined by it, failed to appoint an independent arbitral tribunal in accordance with Section 12(5) of the A&C Act.
Noting that the dispute before it was limited to the extent of appointment of an independent arbitrator, the Court appointed Justice N.V. Ramana as the Sole Arbitrator and referred the parties to arbitration.
Case Title: Aditya Birla Finance Limited vs. Siti Networks Limited & Ors.
The Delhi High Court has ruled that the statements made by a party in a 'Letter of Comfort', assuring the creditor that it shall ensure that the debtor repays the loan on the relevant due dates, are promissory in character and thus enforceable, even if they do not meet the requirement of Section 126 of the Indian Contract Act, 1872 which deals with the Contract of Guarantee.
The bench of Justice V. Kameswar Rao thus referred the claim raised by the petitioner/ claimant, Aditya Birla Finance Ltd, seeking compliance with the 'Letters of Comfort' issued by Zee Entertainment Enterprises Ltd and Essel Corporate LLP, in relation to a loan availed by their group company, Siti Networks Ltd, to arbitration.
The Court invoked the doctrine of 'Group of Companies' to refer the parties to arbitration, noting that Siti Networks, Zee Entertainment and Essel Corporate are part of the Essel Group of companies and are related parties.
Case Title: Hindustan Construction Co. Ltd. vs. National Hydro Electric Power Corporation Ltd
The Delhi High Court has ruled that the existence of any dispute between the parties to the contract is not a ground for issuing an injunction to restrain the enforcement of an unconditional bank guarantee. The Court was dealing with a petition under Section 9 of the Arbitration and Conciliation Act, 1996 (A&C Act) seeking to restrain the opposite party from invoking/ encashing the Performance Bank Guarantee.
The bench of Justice Chandra Dhari Singh held that since the petitioner had arbitral awards with respect to the Construction Project in its favour, where the counter-claims of the opposite party-who sought to invoke the bank guarantee-had been dismissed, there were special equities in petitioner's favour, which is an exception to the rule that a bank must always honour the terms of an unconditional and irrevocable bank guarantee.
Arbitrator Must Serve Sufficient Notice Before Proceeding Ex-Parte Against Party: Delhi High Court
Case Title: M/s Mittal Pigments Pvt Ltd vs. M/s GAIL Gas Ltd
The Delhi High Court has set aside an ex-parte Arbitral Award on the ground that the Arbitrator failed to issue proper communication to the party before proceeding ex-parte against it and that it failed to make adequate efforts to examine whether the absence of the party was with or without showing sufficient cause.
The bench of Justice Chandra Dhari Singh held that under the Arbitration and Conciliation Act, 1996 (A&C Act), it has always been preferred and encouraged that an Arbitrator provides a pre-emptory notice to any party against whom it is seeking to proceed ex-parte, even though the same has not been stipulated under the A&C Act in clear terms.
Case Title: NHAI vs. Patel-KNR (JV)
The High Court of Delhi has held that a petition filed under Section 34 of the A&C Act is not a valid filing if it is filed without or in anticipation of the final approval. The bench of Justice Navin Chawla was dealing with a petition by National Highways Authority of India (NHAI) challenging an arbitration award passed against it, however, admittedly the petition was filed by its counsel in anticipation of its final approval. Moreover, the petition was not accompanied by a copy of the award and the date of the impugned award was also wrongly mentioned at certain places.
The Court thus held that a petition which is filed in anticipation of the final approval and without the copy of the award and vakalatnama, and with several other defects regarding the statement of truth, is a non-est filing.
Case Title: ITD Cementation India Limited vs. SSJV-ZVS Joint Venture
The High Court of Delhi has held that all the members of a 'joint venture (JV)' are jointly and severally liable to the third parties with which the JV enters into an agreement.
The bench of Justice Yashwant Varma held that a JV is a quasi-partnership wherein two or more entities may come together and jointly undertake a particular transaction or contract for mutual profit. It held the parties to a JV agreement may provide for different rights or obligations amongst themselves, however, this arrangement inter se parties would not have any effect on the right of a third party to proceed jointly or severally against any individual member of the JV.
The Court also held that when the JV is made a party before an arbitral tribunal, all its members are bound by the result of the arbitral award and there is no requirement to separately array individual members.
Case Title: Newton Engineering and Chemicals Ltd vs. UEM India Pvt Ltd
The Delhi High Court has ruled that the issue whether the disputes between the parties have arisen under the Memorandum of Understanding (MoU) containing an arbitration clause, or the subsequent work orders issued to the party, which are devoid of any arbitration clause, or whether they are related to both, can be looked into by the Arbitrator who can rule on his own jurisdiction in terms of Section 16 of the Arbitration and Conciliation Act, 1996 (A&C Act).
Case Title: Devas Employees Mauritius Pvt. Ltd vs. Antrix Corporation Limited & Ors.
The Delhi High Court on Friday dismissed an appeal against single judge's order setting aside a 2015 arbitral award by which Antrix Corporation Limited, commercial and marketing arm of ISRO, was required to pay US$ 562.2 million to Devas Multimedia Private Limited over wrongful repudiation of a contract.
A division bench of Chief Justice Satish and Justice Subramonium Prasad in its judgment on the appeal moved by Devas Employees Mauritius Private Limited said it is "well established" that Devas was incorporated with fraudulent intentions so that it could enter into the agreement with Antrix.
Case Title: Delhi Airport Metro Express Private Limited vs Delhi Metro Rail Corporation Ltd
The Delhi High Court on Friday directed the Union of India and Delhi government to forthwith attend to Delhi Metro Rail Corporation (DMRC)'s request for extension of sovereign guarantee or subordinate debt to enable it make payment of dues to Reliance Infra-owned Delhi Airport Metro Express Private Limited (DAMEPL) under the 2017 arbitral award.
Case Title: Delhi Airport Metro Express Private Limited vs Delhi Metro Rail Corporation Ltd
The Delhi High Court on Friday observed that the Union of India and Delhi Government are in complete control of affairs of Delhi Metro Rail Corporation (DMRC) and must be commanded to take appropriate steps to enable the corporation to meet the obligation of making payment of dues to Reliance Infra-owned Delhi Airport Metro Express Private Limited (DAMEPL) under a 2017 arbitral award. Lifting the corporate veil, Justice Yashwant Varma observed that the governments cannot shirk from their liability to abide by binding judgments, decrees and awards.
Case Title: Yash Deep Builders vs. Sushil Kumar Singh
The High Court of Delhi has held that the scope of Section 9 of the A&C Act does not envisage relief in the nature that would restore a contract which already stands terminated. The bench of Justice Chandra Dhari Singh held that the Court while exercising powers under Section 9 of the A&C Act cannot direct specific performance of a determinable contract. It held that a contract, which in its nature is determinable, cannot be specifically enforced under Section 14(d) of the Specific Reliefs Act, therefore, the Court cannot do something that is statutorily prohibited.
Case Title: Chadha Motor Transport Company Pvt Ltd vs. Barinderjit Singh Sahni
The Delhi High Court has ruled that, merely because the defendant participated in a civil suit filed by the plaintiff, he cannot be said to have waived his right to invoke arbitration with respect to all future litigation between the parties under the Agreement.
The bench of Justice Neena Bansal Krishna held that participation of a party in a civil suit instituted by a partner, would not debar the party from initiating independent proceedings by way of arbitration, seeking independent remedies under the Partnership Deed.
Case Title: Prime Interglobe Pvt Ltd vs. Super Milk Products Pvt Ltd
The Delhi High Court has ruled that the Arbitral Tribunal's order rejecting a party's request to file counter claims on the ground of delay, does not foreclose its right to invoke arbitration seeking independent reference of its claims.
The bench of Justice Prateek Jalan remarked that, when arbitration proceedings are invoked at the instance of one party, it is generally open to the other party to file its counter-claims in the same proceedings. However, this does not per se signify that the Court has also referred the claims of the prospective counter-claimant to arbitration, so as to bar its right to assert its claims at a future date.
Case Title: Bawana Infra Development Pvt Ltd vs. Delhi State Industrial & Infrastructure Development Corporation Limited (DSIIDC)
The Delhi High Court has ruled that Section 31 (7) (a) of the Arbitration and Conciliation Act, 1996 (A&C Act), which deals with the Arbitrator's discretion while awarding interest in respect of the pre-reference period, applies only where there is no agreement between the parties with respect to the rate of interest to be awarded.
The bench of Justice Chandra Dhari Singh remarked that the Arbitral Tribunal may not resort to Section 31(7)(b), while awarding post-award interest, when express provisions regarding the rate of interest are present in the agreement between the parties.
Case Title: M/s. Modi Construction Company vs. M/s Ircon International Ltd
The Delhi High Court, while dealing with a petition filed under Section 34 of the Arbitration and Conciliation Act, 1996 (A&C Act), has rejected the contentions raised by the petitioner that the Award of the Majority Tribunal declaring the Clause providing for compound interest as null, was perverse since there were no pleadings made by the opposite party in its Statement of Defence seeking the said declaration.
While holding that it is within the domain of the Arbitrator to interpret the terms of the contract, the bench of Justice Neena Bansal Krishna upheld the Majority Award and the findings made by the Majority Tribunal that since the relevant Clause providing for compound interest did not specify the rate of interest, the entire clause was void under Section 29 of the Indian Contract Act, 1872.
Case Title: Amazing Research Laboratories vs. Krishna Pharma
The High Court of Delhi has held that an arbitration award that is passed in violation of the provisions of the Indian Contracts Act, 1872 would be liable to be set aside as suffering from patent illegality.
The bench of Neena Bansal Krishna partially set aside an arbitration award that was passed in contravention of Sections 59-61 of the Indian Contracts Act, 1872. The Court explained the law of apportionment of funds vis-à-vis a running and non-mutual account.
Case Title: M/s Kuldeep Kumar Contractor vs. Hindustan Prefab Limited
The Delhi High Court has ruled that, while dealing with a petition filed under Section 11 of the Arbitration and Conciliation Act, 1996 (A&C Act), if the arbitration clause between the parties in the Special Conditions of Contract (SCC), which does not contain the mandate of a pre-arbitral procedure, is claimed to be overridden by another arbitration clause existing in the General Conditions of Contract (GCC), which mandates following a pre-arbitral mechanism, the same must be adjudicated by the Arbitral Tribunal as per the Kompetenz-Kompetenz principle.
The bench of Justice Chandra Dhari Singh also remarked that a 'No-Claim Declaration' given by a party would not extinguish its remedy to invoke arbitration under the arbitration clauses contained in the agreements or render the arbitration agreement void, in view of the Doctrine of Severability.
Case Title: Delhi Airport Metro Express Pvt Ltd vs. Delhi Metro Rail Corporation Ltd
Seeking a review of Delhi High Court's recent decision on the execution petition filed by Reliance Infra-promoted Delhi Airport Metro Express Private Limited (DAMEPL), the Delhi Metro Rail Corporation (DMRC) has told the court that the attachment of its statutory expenses will result in immediate stoppage of the entire metro network in National Capital Region and cause inconvenience to more than 50 Lakh commuters.
Justice Yashwant Varma has listed the matter for hearing on March 29. "Let both the Union as well as Ld. Counsel representing the GNCTD obtain appropriate instructions in respect of directions as framed in the order of 17 March, 2023, in the meanwhile," said the court.
Case Title: Municipal Corporation of Delhi vs. Natraj Construction Company
The Delhi High Court has ruled that, in view of Section 28 of the Indian Contract Act, 1872, a party cannot be permitted to restrict the period of limitation for invoking arbitration, in contravention to the limitation period provided by law. The Court observed that a lesser period of limitation provided under the Contract between the parties would be hit by Section 28.
Noting that the limitation period for invoking arbitration under the A&C Act is three years, as prescribed under Article 137 of the Limitation Act, 1963, the bench of Justice Manoj Kumar Ohri remarked that the appellant cannot be permitted to rely on the relevant clause of the Contract and restrict the period of limitation for invoking arbitration to 120 days.
Case Title: Antique Art Export Pvt Ltd vs. United India Insurance Company Ltd
The Delhi High Court has ruled that the High Court exercises a judicial function under Section 11 (6) of the Arbitration and Conciliation Act, 1996 (A&C Act), and thus while dealing with a petition filed under Section 11 for appointment of Arbitrator, the High Court can determine the issue of maintainability of a petition on any ground, including on territorial jurisdiction or res judicata.
Case Title: NHAI vs. M/s AE Tollway Ltd.
The Delhi High Court has ruled that the Apex Court's decision in Oil and Natural Gas (ONGC) vs Afcons Gunanusa JV (2022), where it had interpreted the Fourth Schedule of the Arbitration and Conciliation Act, 1996 (A&C Act), clearly requires party autonomy to be given paramount importance.
The bench of Justice Prateek Jalan remarked that though in ONGC (2022), it was held that the term “sum in dispute” in the Fourth Schedule shall be considered separately for the claim and counter-claim, the Arbitral Tribunal was in error in fixing the arbitral fees separately for the claims and counter-claims, contrary to the express Agreement between the parties.
Case Title: GTM Builders and Promoters Pvt Ltd vs. Sneh Development Pvt Ltd
The Delhi High Court has reiterated that mere existence of an arbitration agreement or arbitration clause would not be sufficient to refer the parties to arbitration and that even in the presence of an arbitration agreement, the court may decline to refer the parties to arbitration if the dispute does not correlate to the said agreement.
While dealing with a petition filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 (A&C Act), the Court observed that in the guise of seeking reference to an arbitrator, the petitioner was seeking recovery of the costs that it had been directed to pay as compensation to the homebuyers by the National Consumer Disputes Redressal Commission (NCDRC).
While dismissing the petition, the Court remarked that while adjudicating a Section 11 petition, a court shall endeavour to evaluate whether the party has made out a prima facie arbitrable case or not.
Case Title: NTPC Ltd vs. Larsen and Toubro Limited & Anr.
The Delhi High Court has ruled that where a party has filed an application seeking to update/revise its counter claims before the Arbitral Tribunal, intending to primarily alter/change the amount of the counter-claims, the said application was, in effect, an application for amendment of the counter-claims, even though it was termed as an 'updation application'.
Referring to the provisions of Section 23(3) of the Arbitration and Conciliation Act, 1996, the bench of Justice V. Kameswar Rao held that the Tribunal was within its right to reject the application for updation / revision, which in effect was for amendment of the counter-claims, on the ground that the same was filed belatedly.
Case Title: Inox Air Products Pvt Ltd vs. Air Liquide North India Pvt Ltd
The High Court of Delhi has held that recourse to Section 34(4) of the A&C Act cannot be taken to permit the arbitral tribunal to consider the material evidence which it earlier failed to consider.
The bench of Justice Prateek Jalan held that Section 34(4) of the A&C Act empowers the Court deciding an application under Section 34(1) of the Act to adjourn the challenge proceedings and remit the matter back to the arbitral tribunal to allow it to eliminate the ground of the challenge. However, this power can only be exercised to allow the tribunal to provide for gaps in the reasoning or cure any other curable defect. The same does not extend to allow the tribunal to give a new finding or a fresh decision, the Court ruled.
Case Title: Goyal Mg Gases Pvt Ltd vs. Panama Infrastructure Developers Pvt Ltd & Ors.
The Delhi High Court has reiterated that a party who is a non-signatory to the arbitration agreement, can be impleaded as a necessary party in the arbitration proceedings.
The bench of Justices Najmi Waziri and Sudhir Kumar Jain further ruled that the Arbitral Tribunal's order rejecting the application for impleadment of parties in the arbitral proceedings, does not constitute an 'interim award' under the Arbitration and Conciliation Act, 1996 (A&C Act), since it does not decide any substantive question of law or deal with the merits of the case.
Case Title: SpiceJet Limited vs Kal Airways Pvt Ltd & Ors.
The Delhi High Court has upheld the 2018 arbitral award passed in favour of Kalanithi Maran, former promoter of SpiceJet, and his firm Kal Airways Pvt Ltd, in a share transfer dispute with the airline and its current promoter, Ajay Singh. The bench of Justice Chandra Dhari Singh has also dismissed Maran's challenge to the award where his claim for damages and restitution of 58.46% shareholding in SpiceJet was rejected by the Tribunal.
Case Title: NHAI vs Trichy Thanjavur Expressway Ltd
The High Court of Delhi has held that the recourse to Section 34(4) of the A&C Act, that grants court the authority to remit an arbitral award to the Arbitral Tribunal, can only be taken for correcting the curable defects such as filling the gaps in reasoning, correct typographical and arithmetical errors and not to allow the tribunal to do a review of the award.
Case Title: NHAI vs Trichy Thanjavur Expressway Ltd
The Delhi High Court has held that the Courts exercising powers under Section 34 of the A&C Act has the power to partially set aside an arbitration award to strike off the offending portion of the award while retaining the remaining award.
Case Title: Splendor Landbase Ltd vs Aparna Ashram Society
The Delhi High Court while reiterating that it is mandatory for the Court exercising power under Section 11 of the A&C Act to impound the non-stamped or insufficiently stamped agreement held that the Court can itself collect the deficient/requisite stamp duty under Section 35 of the Stamps Act, 1899 and enable deposit of the requisite stamp duty along with penalty as contemplated under proviso (a) to Section 35 of the Stamp Act.
Case Title: Splendor Landbase Ltd vs Aparna Ashram Society
The Delhi High Court has held that the true or certified copy of the agreement containing the arbitration agreement would be sufficient for the purpose of Section 11 petition when on the face of it, the same is duly stamped and a statement to this effect is made in the petition under Section 11 of the Act, and the same is not controverted by the opposite party.
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.
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.
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.
Case Title: Gannon Dunkerley and Co Ltd vs Zillion Infraprojects Pvt Ltd,
The High Court of Delhi has held that a contractor cannot deny payments to the 'Sub-contractor' merely on the ground that the contract is on back-to-back basis and it has not received the payments from the main employer.
Case Title: NHAI vs M/s. T.K. Toll Private Limited
The High Court of Delhi has held that a supplementary agreement executed by a contractor whereby it agrees to forego its claims cannot preclude him from claiming damages against the employer if the execution of such agreement was a pre-condition to the issuance of PCC necessary for collection of toll taxes in BOT contracts.
Case Title: Jaiprakash Associates Limited vs MSEFC
The High Court of Delhi has held that an issue whether an agreement is in the nature of works contract and the consequent issue of applicability of MSMED Act to such contracts is to be decided by the arbitrator.
Case Title: National Projects Constructions Corporation Ltd vs M/s Interstate Construction
The High Court of Delhi has held that the arbitrator cannot add the amount of pre-reference interest to the principal amount while determining pendente lite interest as the same would amount to levying interest on a compounded basis. It held that the principal amount has to remain static throughout.
Case Title: Asset Reconstruction Company India Ltd v. ATS Infrastructure Limited, ARB. A. (COMM) 7 of 2022
Citation: 2023 LiveLaw (Del) 1185
The High Court of Delhi has held that the arbitral tribunal has no jurisdiction to create security on a property over which a charge is created in favour of a third party.
The bench of Justice Yogesh Khanna modified an interim order of the arbitral tribunal passed under Section 17 of the A&C Act to the extent to which the order created security on the property on which a charge was already created in favour of a third party which was not present before the arbitral tribunal.
The Court also held that that registration of charge makes the charge holder a secured creditor and puts it in a preferential position as compared to all other unsecured creditors.
Case Title: H.P. Cotton Textile Mills Ltd v. The Oriental Insurance Company Limited, OMP (ENF.) (COMM.) 123/2019
Citation: 2023 LiveLaw (Del) 1188
While dismissing a second execution petition filed in respect of “unsatisfied” claims in an Arbitral Award, the Delhi High Court has held that a court cannot go behind the Award in execution proceedings and enable decree holder to fill gaps in producing evidence.
Considering that the cost statement in question was made subject to certification by the Arbitral Tribunal but no proof of payment was forthcoming from the decree holder, Justice Manoj Kumar Ohri observed,
“…the decree holder cannot, under the garb of this execution petition, seek a claim that was not quantified in the award due to failure of the parties to furnish proof”.
Case Title: Vasudev Garg v. Embassay Commercial Project
Citation: 2023 LiveLaw (Del) 1049
The High Court of Delhi has held that the venue of arbitration would actually be the seat of arbitration when the agreement does not contain any contrary indicia. It held that clause proving for venue of arbitration would have a superseding effect over a clause providing for exclusive jurisdiction on any other Court if the parties have expressly made the latter subject to the former.
The bench of Justice Yogesh Khanna held that if the agreement contains a venue clause as well as an exclusive jurisdiction clause, however, the clause providing for exclusive jurisdiction is made subject to the venue clause, then reference to courts of exclusive jurisdiction is reduced to the adjudication of disputes other than those covered by the arbitration/venue clause.
The Court also held that accrual of cause of action howsoever trivial or significant, would not be relevant for determining the jurisdiction of the Court when the agreement provides a specific seat of arbitration.
Case Title: SIMPLOT INDIA LLC v. HIMALAYA FOOD INTERNATIONAL LIMITED
Citation: 2023 LiveLaw (Del) 938
The Delhi High Court is set to examine whether the enforcement of a foreign arbitration award can be denied due to the non-stamping of the arbitration agreement.
The bench of Justice Manoj Kumar Ohri has issued notice on a plea seeking to raise objection to the enforcement of the Singapore seated foreign arbitration award under Section 48 of the A&C Act.
The award debtor raised objections to the enforcement of the foreign seated arbitration award on the ground of non-stamping of the arbitration agreement. It contended that the underlying arbitration agreement, being unstamped, is not considered "valid" under Indian law, which governs the agreement. It relied upon the recent judgment of the Constitution bench of the Supreme Court in N.N. Global, wherein the Court held that an unstamped arbitration agreement is deemed "unenforceable," "invalid," "bereft of life," "non-est," and cannot be "acted upon" by a Court at the stage of referring disputes under Section 11 of the Arbitration Act, to contend that the findings regarding the invalidity of an unstamped agreement should also apply to proceedings for the enforcement of foreign awards under Part – II of the Arbitration Act.
Case Title: IRCON INTERNATIONAL LIMITED V. DMRC
Citation: 2023 LiveLaw (Del) 943
The Delhi High Court has held that no compensation can be awarded for the prolongation of the contract if the contractor did not reserve its right to such compensation at the time of the seeking Extension of Time (EOT).
Justice Manoj Kumar Ohri's bench upheld the Arbitral Tribunal's interpretation. They ruled that the Tribunal's decision, which denied the prolongation cost due to the Contractor's failure to reserve this right during the EOT request, and because the EOT was granted without financial implications, is a plausible view which does not warrant intervention by the Court using its powers under Section 34 of the A&C Act.
Case Title: M/s SVK Infrastructures v. Delhi Tourism and Transportation Development Corporation Ltd
Citation: 2023 LiveLaw (Del) 968
The Delhi High Court has held that no stamp duty is payable on an instrument which is executed by, or on behalf of or in favour the government.
The bench of Justice Rekha Palli held that the recent judgment by the Constitution Bench of the Supreme Court in N.N. Global would have no application to an agreement executed by or on behalf or in favour of the government. It held that the Court exercising powers under Section 11 of the A&C Act would not refuse to appoint arbitrator once it ascertained that instrument falls within the exception created by the stamps act for government.
The Court also held that once the entity which had executed the agreement containing arbitration clause has been acquired by another entity, the acquiring party would step in the shoes of the executing party, therefore, it can invoke the arbitration clause.
Case Title: Taleda Square Pvt Ltd v. Rail Land Development Authority
Citation: 2023 LiveLaw (Del) 967
The Delhi High Court has held that an arbitration clause wherein one of the contracting party has the power to appoint the 2/3rd members of the arbitral tribunal and compels the other party to choose its nominee arbitrator from a narrow panel of only 5 names is not enforceable in law.
The bench of Justice Rekha Palli held that a narrow panel of 5 arbitrator with a further power to the party which has drawn the panel to nominee 2/3rd members of the arbitral tribunal is against the principles of 'counter-balancing' as envisaged by the Apex Court in the case of Voestalpine Schienen.
Case Title: Dr. Vivek Jain v. PrepLadder Pvt Ltd
Citation: 2023 LiveLaw (Del) 964
The Delhi High Court has held that a Court exercising powers under Section 9 of the A&C Act to secure the amount in dispute or for ordering attachment before award draws sustenance broadly from the principles of Order XXXVIII Rule 5 of CPC.
The bench of Justice Yashvant Varma has held that the under Section 9 of the A&C Act, the Court would not order securing the sum in dispute in absence of necessary pleading and allegations that the respondent is making an attempt to defeat any Award that may be ultimately rendered in favour of the petitioner. It held that the Court would not grant such a relief unless the pre-conditions for grant of relief under Order XXXVIII of CPC are broadly satisfied by the petitioner.
Case Title: Zakir Hussain v. Sunshine Agrisystem Pvt Ltd, OMP (COMM) 249 of 2021
The High Court of Delhi has held that an award which blatantly misapplies the provisions of the Contract Law resulting in a perverse interpretation of the law, is liable to be set aside.
The bench of Justice Neena Bansal Krishna set aside an arbitral award wherein the arbitrator has misconstrued the law of reciprocal promises and bailment under the Indian Contract Act. It held that misapplication of the substantive law goes to the root of the matter and leads to a miscarriage of justice.
Case Title: Zakir Hussain v. Sunshine Agrisystem Pvt Ltd, OMP (COMM) 249 of 2021
The High Court of Delhi has held that an arbitrator should not refuse to take on record any additional material evidence merely on the ground of certain procedural ground such as non-payment of costs by the party tendering such evidence.
The bench of Justice Neena Bansal Krishna held that failure of the arbitrator to take on record important additional evidence merely on procedural grounds would be a ground to set aside the award. It held that such a decision would not just be violative of the principle of natural justice but also amounts to patent illegality. It also held that if a document is sought to be brought on record before the commencement of cross examination for that party, it would not result in any prejudice to the other party as it would have amble opportunity to address the documents in the rebuttal evidence.
The Court also explained the difference between 'material facts' and 'material particulars' to hold that it is only a material fact that must be present in the pleading and the absence of which would deny the party to lead an evidence on such a fact, however, a material particular, which is used to provide a material fact, need not be specifically mentioned in the pleading. It held when a material fact has been pleaded, an evidence in the form of a material particular cannot be refused on the ground of lack of pleading.
Case Title: Zakir Hussain v. Sunshine Agrisystem Pvt Ltd
Citation: 2023 LiveLaw (Del) 956
The Delhi High Court has held that the provisions of Uttar Pradesh Regulation of Cold Storages Act, 1976 does not exclude the remedy of arbitration.
The bench of Justice Neena Bansal Krishna held that the bar to arbitration or civil jurisdiction by necessary implication would apply only when the alternative remedy is a Complete Code in itself or provides a special statutory right or protection that the civil court or arbitral tribunal may not be able to grant.
It held that the Act of 1976, upon a holistic reading, does not provide any special right, remedy or procedure that cannot be sought before a civil court or arbitral tribunal as it merely provides that an informal mechanism for settlement of disputes under the Act, 1976 and there is neither any explicit or implied ouster of arbitral jurisdiction.
Case Title: BSNL v. Vihaan Networks Limited
Citation: 2023 LiveLaw (Del) 955
The Delhi High Court has held that A party is liable to be compensated for the costs of preparatory work carried out at the instance of the employer even when the final purchase order is not issued in its favour.
The bench of Justice Sachin Datta upheld an arbitral award wherein the arbitral tribunal had awarded compensation to a party on the ground that it had carried out certain preparatory works upon the instructions of the employer, therefore, it is liable to be compensated when the employer decides to not issue the final purchase order. It held that in such a scenario, the aggrieved party would have the right under Section 70 of the Indian Contract Act to claim compensation and mere absence of a concluded contract between the parties would be inconsequential.
No Fresh Adjudication Can Take Place For Any Claim That Was Made Part Of Resolution Plan: Delhi HC
Case IOCL v. Arcelor Mittal Nippon Steel India Limited
Citation: 2023 LiveLaw (Del) 954
The Delhi High Court has held that once a resolution plan is approved by the CoC and the adjudicating authority, it results in the extinguishment of all the existing claims that any party may have against the corporate debtor and no fresh adjudication can take place for any claim that was made part of the resolution plan.
The bench of Justice Yashwant Varma held that IBC does not contemplate matters being left inchoate but presses one to accept the seal of finality and quietude which stands attached to the approval of a Resolution Plan.
Case Title: BSNL v. Vihaan Networks Limited
Citation: 2023 LiveLaw (Del) 953
The Delhi High Court has held that absence of a contract would not deprive the contractor from a reasonable remuneration for the work performed.
The bench of Justice Sachin Datta held that the principle of quantum meruit is enshrined under Section 70 of the Indian Contract Act which demands that a party which has done work and incurred expenses at the instance of another party must be reimbursed notwithstanding the lack of a contract between them.
Case IOCL v. Arcelor Mittal Nippon Steel India Limited
Citation: 2023 LiveLaw (Del) 951
The Delhi High Court has held that any claim that has been settled under the resolution plan, even though at a nominal value of Rs. 1 only, would become non-arbitrable once the resolution plan is approved by CoC and affirmed by the adjudicating authority under the IBC.
The bench of Justice Yashwant Varma held that the doctrine of clean slate demands that the successful resolution applicant begins on a clean slate and is only bound to meet the claims that formed part of the resolution plan and cannot be burdened with the duty to defend or oppose claims which are either not factored in the Resolution Plan nor can it be left to fend off actions that may be brought with respect to alleged or asserted dues of the corporate debtor which were not admitted.
Award On Damages Cannot Be Sustained Just On Penalty Clause In Agreement: Delhi High Court
Case Title: Sudershan Kumar Bhayana (Deceased) v. Vinod Seth (Deceased)
Citation: 2023 LiveLaw (Del) 924
The Delhi High Court has held that an award of damages based on no evidence of loss cannot be sustained on the basis of a penalty clause in the agreement.
The bench of Justices Vibhu Bakhru and Amit Mahajan held that mere presence of a clause providing for liquidated damages does not dispense with the requirement of proof of loss from a party claiming damages.
The Court held that a party claiming damages for breach of contract has to plead and prove that as a consequence of such breach, it has suffered the damages and that mere presence of a penalty or liquidated damages clause would not entitle it to such damages unless the damages suffered are incapable of being proved.
Case Title: ATC Telecom Infrastructure Pvt Ltd v. BSNL
Citation: 2023 LiveLaw (Del) 1099
The Delhi High Court has held that the Court exercising powers under Section 29A of the A&C Act is empowered to extend the mandate of the arbitrator even in cases where the application seeking extension of time is not made within the time limit fixed for the making of the award.
The bench of Justice Sachin Datta held that the purport of Section 29A of the A&C Act is clearly not to tie the hands of the parties or the court, and prevent extension of time even where warranted, simply because the petition under Section 29A(4) of the A&C Act came to be filed a few days after expiration of the deadline contemplated under Section 29A(1) or Section 29A(3) of the A&C Act.
Case Title: Bharti Airtel v. Jamshed Khan
Citation: 2023 LiveLaw (Del) 1113
The Delhi High Court has held that the Court exercising powers under Section 34 of the A&C Act cannot allow claims which were disallowed/rejected by the arbitral tribunal.
The bench of Justices Suresh Kumar Kait and Neena Bansal Krishna held that Section 34 of the A&C Act does not permit the Court to rewrite an arbitral award and the Court can either set aside or upheld the arbitral award.
The Court also observed that the Court would have the power to partially set aside an arbitral award upon a severable issue, however, it would not be competent to modify the arbitral award by allowing a claim that was disallowed by the arbitral tribunal.
Case Title: ANR International Pvt Ltd v. Mahavir Singhal
Citation: 2023 LiveLaw (Del) 1081
The Delhi High Court has held that Section 8 of the A&C Act is mandatory in nature meaning thereby that the Court is bound to refer the dispute to arbitration when there exists a valid arbitration agreement between the parties and the respondent makes an application for reference to arbitration before submitting its written statement before the Court.
The bench of Justices V. Kameshwar Rao and Mr. Anoop Kumar Mendiratta held that the Court cannot refuse to refer the dispute to arbitration merely on the ground that the defendant had initially, in reply to Section 21 notice, denied the existence of the arbitration agreement.
The Court held that the arbitration clause does not ceases to exist on mere denial by party and such a denial would not preclude that party from later making an application under Section 8 of the A&C Act for reference of the dispute to arbitration.
The Court held that the doctrine of approbation and reprobation cannot be invoked against the respondent to decline reference to arbitration when the plaintiff does not dispute the existence of the arbitration agreement.
Case Title: National Projects Constructions Corporation Ltd v. AAC India Pvt Ltd
Citation: 2023 LiveLaw (Del) 1083
The Delhi High Court has reiterated that the Court exercising powers under Section 34 of the A&C Act cannot modify an arbitral award. It held that the Court can either uphold the award or set aside any finding, however, the Court is powerless to modify the award by allowing a relief that was disallowed by the arbitral tribunal.
The bench of Justices Yashwant Varma and Dharmesh Sharma also held that where damage or loss is difficult or impossible to prove, the tribunal is empowered to award liquidated amount stipulated in the contract, if it is a genuine pre-estimate of damage or loss, or reasonable compensation for the said amount loss or damage. The claim for LD in such cases is well within the purview of Section 74 of the Indian Contract Act, 1872.
Case Title: Viridian Development Managers Pvt Ltd v. RPS Infrastructure Limited
Citation: 2023 LiveLaw (Del) 1090
The Delhi High Court has held that once the licence is revoked by the licensor, any use of the mark by the ex-licensee would amount to an infringement of the trademark and would deceive the public, inasmuch as the public would be led to believe that the ex-licensee is still connected with the licensor.
The bench of Justice Sachin Datta held that an ex-licensee cannot be allowed to use the mark after termination of license. Further, the licensor has a right and duty to ensure the consistency of the goods or services being sold and advertised under its mark and take action against any infringement of the mark.
The Court held that the Court exercising powers under Section 9 of the A&C Act cannot examine the legality of the termination of the license agreement as it would be the for the arbitral tribunal to decide and compensate the aggrieved party if the termination is found to be illegal.
Case Title: HDA Flavours Pvt Ltd v. Daddy's Hospitality Pvt Ltd.
Citation: 2023 LiveLaw (Del) 1093
Justice Sachin Datta of the Delhi High Court recently granted relief to “34 Chowringhee Lane” acquirer-HDA Flavours Pvt. Ltd., ruling that the Arbitrator, while dealing with a Section 17 application, should not have interdicted it from creating new franchisees.
“A blanket embargo on the appellant from creating any new franchisee or entering into such business agreements as may be appropriate for the advancement of business, may result in denuding the value of the business on account of stagnation/depletion in market share.”
Case Title: Madhu Sudan Sharma v. Omaxe Ltd, RFA 823/2019
The High Court of Delhi has held that once a party has duly taken objection to the jurisdiction of the Court to entertain the suit due to the presence of the arbitration clause between the parties in its written statement, it would be sufficient compliance of Section 8 of the A&C Act and there is no need for a separate application.
The bench of Justice C. Hari Shankar held that once an arbitration clause has been extracted by a party in its written submission to object to the jurisdiction of the Court, the mere fact that the party did not separately request that the dispute between the parties be referred to arbitration, would be of little consequence.
It held that once the arbitration clause had been extracted, it would be too hyper technical to hold that, for want of a separate request to refer the dispute between the parties to arbitration, there was no compliance with Section 8(1) of the 1996 Act.
Case Title: Madhu Sudan Sharma v. Omaxe Ltd, RFA 823/2019
The High Court of Delhi has held that a party cannot be deemed to have waived off its right to arbitration merely because it continued to contest the suit when it had specifically raised objection to the maintainability of the suit due to the presence of the arbitration agreement.
The bench of Justice C. Hari Shankar held that when a party takes a specific objection predicated on Section 8 in the application under Order XXXVII Rule 3(5) seeking leave to defend the suit and that objection, thereafter, is reiterated in the written statement and arguments. It cannot be said that the party has waived the right to arbitration.
Case Title: Madhu Sudan Sharma v. Omaxe Ltd, RFA 823/2019
The High Court of Delhi has held that an objection regarding non-maintainability of the suit due to the presence of the arbitration agreement cannot be considered to be raised belatedly in terms of Section 8 of the A&C Act when it was taken in the application under Order XXXVII Rule 3(5) for grant of leave to defend the suit.
The bench of Justice C. Hari Shankar held that in terms of Section 8 of the A&C Act an application to refer the dispute to arbitration has to be made not later than submitting the first statement on the substance of the dispute. It held that the first statement on the substance of the dispute is the written statement, ergo, a Section 8 application can be made with or before the filing of the written submission.
The Court held that an application for leave to defend the suit is a step prior to the filing of the written submission, therefore, the objection taken under the said application cannot be considered to be belated.
Case Title: Skypower Solar India Pvt Ltd v. Sterling and Wilson International FZE, FAO(OS)(COMM) 29 of 2022
The High Court of Delhi has held that the Court exercising powers under Section 9 of the A&C Act would not order furnishing of Bank Guarantee (BG) to secure the claims of a party pending the arbitration proceedings, unless it shown that the order party is alienating its assets or acting in a manner that would frustrate the enforcement of the Arbitral Award.
The bench of Justices Vibhu Bakhru and Amit Mahajan held that an order under Section 9 directing furnishing bank guarantee to secure the claims is akin to an order of attachment before judgment as provided under Order XXXVIII Rule 5 of CPC. It held that the Court under Section 9 of the A&C Act is not unduly bound by texts of CPC, however, it cannot pass any order in disregard to the principles of CPC.
The Court held that a Court while ordering security for the amount in dispute in the arbitration, it has to ascertain that whether the petitioner has a prima facie case, balance of convenience, and if the respondent is acting in a manner that would defeat the realization of the award.
Case Title: Raghunath Builders Pvt. Ltd. v. Anant Raj Limited, FAO (OS) (COMM) 220/2017
A Division Bench of the Delhi High Court recently allowed restoration of an arbitral award, noting that it was not within the scope of the Single Judge u/s 34 of A&C Act to re-interpret the contract between the parties and substitute the finding of the Arbitrator's despite it being plausible and well-reasoned.
The court referred to Ssangyong Engineering and Construction Co. Ltd. v. NHAI and said:
“…a change that has been brought in by the Amendment Act, 2015 is that the construction of the terms of a contract is primarily for an arbitrator to decide, unless the arbitrator construes the contract in a manner that no fair-minded or reasonable person would; in short that the arbitrator's view is not even a possible view to take”.
Applying the test laid down in Associate Builders v. DDA on the scope of interference u/s 34 on the ground of 'public policy', it was observed that the Arbitrator had given a plausible interpretation to the contract terms which was not against 'public policy' and did not shock the conscience of the court.
Case Title: Babu Lal and Anr. v. Cholamandalam Investment and Finance Company Ltd. and Anr., FAO (COMM) 135/2023
A Division Bench of the Delhi High Court has reiterated that a party interested in the dispute cannot unilaterally appoint an Arbitrator, and if any Award is passed as a result of such unilateral appointment, the same would be a nullity.
The Bench, comprising Justices Sanjeev Sachdeva and Manoj Jain, noted that the respondents' nomination of the Arbitrator was without reference to the court in terms of Section 11 of A&C Act.
Moreover, the respondents had merely intimated the appellants about appointment of the Arbitrator, without concurring from them.
Referring to the Supreme Court's decision in Perkins Eastman Architects DPC and Anr. v. HSCC (India) Ltd., the Bench opined that reference of an arbitral dispute must be to an independent person.
“…an award rendered by an ineligible Arbitrator would be a nullity as has been held by a Coordinate Bench of this Court in Kotak Mahindra Bank Ltd. vs. Narendra Kumar Prajapat”.
Case Title: ArcelorMittal Nippon Steel India Limited v. GAIL (India) Limited, O.M.P.(I) (COMM.) 353/2023
The Delhi High Court recently denied urgent interim relief to leading steel manufacturer-ArcelorMittal Nippon Steel (petitioner) in a claim against GAIL India Ltd., observing that the scope of enquiry u/s 9 of A&C Act was limited to prima facie examination of the issue, which was not established in the petitioner's favour.
The petitioner had approached the court seeking stay over a Notice issued by GAIL, statedly to terminate the LNG Sale and Purchase Agreement (LSPA) entered by the two. It further sought directions for GAIL to deliver LNG in accordance with the LSPA.
Case Title: Aman Hospitality Pvt Ltd v. Orient Lites, FAO 222 of 2020
The High Court of Delhi has held that a party cannot challenge an arbitral award on the ground that the tribunal went beyond the scope of reference when it admittedly did not raise any objection when the alleged breach was first committed by the tribunal.
The bench of Justice Dharmesh Sharma held that the tribunal's decision to include certain invoices in the claim cannot be challenged under Section 34 as being beyond the reference to arbitration when no such objection was raised before the arbitral tribunal.
The Court held that supplies made prior to the date of the agreement would be governed by the arbitration clause in the agreement if the parties made verbal and written modifications to the agreement to include those supplies to settle their running accounts.
Case Title: Italian Thai Development v. NTPC Ltd, OMP(COMM) 343 of 2022
The High Court of Delhi has held that the Court cannot grant unconditional stay on the award under Section 36(3) unless a prima facie case is made out that making of the award is marred by fraud.
The bench of Justice Manoj Kumar Ohri refused to grant a stay in favour of a foreign entity with no roots in India. The Court observed that it has no assets that can be offered as security for securing stay on enforcement of the arbitral award. Moreover, it was not willing to deposit even part of the arbitral award and insisted on an unconditional stay which was not permissible since a case of fraud was not made out.
Case Title: Metal Engineering and Forging Company v. Central Warehousing Corporation, FAO(COMM) 5 of 2023
The High Court of Delhi has held that it would be difficult for any party claiming loss of goodwill to prove or establish the same with any mathematical precision.
The bench of Justices Vibhu Bakhru and Justice Amit Mahajan upheld an arbitral award wherein the arbitrator allowed a party to retain certain amount as penalty, being the genuine pre-estimate of the loss of goodwill without any proof of quantum of actual loss suffered by it.
Delhi High Court Upholds Use Of Rule Of Contra Proferentem By Arbitrator While Interpreting Contract
Case Title: Flowmore Ltd versus Skipper Ltd
The Delhi High Court has ruled that, if the arbitrator uses a contract executed between the parties to determine a dispute, the clauses of the contract should, in principle, be construed contra proferentem, i.e., the clauses should be interpreted against the party that drafted it.
The bench of Justice Chandra Dhari Singh remarked that the rule of contra proferentem can be regarded as a 'general canon' of interpretation that exists independently of national legal systems.
ONGC V. Afcons By SC Will Not Affect Fee Already Fixed By Arbitration Tribunal: Delhi High Court
Case Title: NHAI versus IJM Gayatri JV
The Supreme Court in ONGC v. Afcons, 2022 LiveLaw (SC) 723 has held that maximum fees that an arbitrator can charge on a claim is Rs. 30 Lakhs.
The High Court of Delhi was considering a situation wherein the fees was fixed in terms of the earlier law. The petitioner challenged the fees so fixed as violative of the Supreme Court order.
The bench of Justice Neena Bansal Krishna held that the maximum amount that an arbitrator could charge was Rs. 49, 87, 500/- in terms of the judgment of the Delhi High Court in Rail Vikas Nigam Ltd. v. Simplex Infrastructure Ltd (2020) before the Supreme Court reduced this amount to Rs. 30 Lakhs in its judgement in ONGC, however, the Supreme Court had not stayed the judgement in Rail Vikas, therefore, it was the prevailing law before the judgment in ONGC was delivered.
Case Title: Ozone Research & Applications (I) Pvt Ltd versus Ahluwalia Contracts (India) Ltd
The Delhi High Court has ruled that the 'Seat' of arbitration would be the place where the Facilitation Council under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) has conducted the arbitral proceedings as per the provisions of Section 18(4) of the MSMED Act.
The bench of Justice Prateek Jalan remarked that since there was no arbitration agreement between the parties containing a jurisdiction clause, and since the Facilitation Council under the MSMED Act had assumed jurisdiction and rendered the arbitral award in Nagpur where the supplier was located, in view of Section 18(4), therefore, the seat of arbitration was in Nagpur.
Case Title: M/s Raj Chawla and Co. Stock & Share Brokers versus M/s Nine Media & Information Services Ltd. & Anr.
The Delhi High Court has reiterated that since the the amended provisions of Section 29A (1) of the Arbitration and Conciliation Act, 1996 (A&C Act) are essentially procedural in character, they would apply even to arbitrations pending on the date the amended provision was brought into force.
The bench of Justice Yashwant Varma remarked that talks of settlement between the parties once the Arbitrator enters upon reference, would not stop the limitation period prescribed under Section 29A for passing an arbitral award.
Case Title: GMR Pochanpalli Expressways Limited versus NHAI
The High Court of Delhi has held that the Court cannot grant a relief which is final in nature in an application under Section 9 of the A&C Act.
The bench of Justice Chandra Dhari Singh held that relief contemplated under Section 9 of the Act is only interim in nature i.e., 'in the intervening time' or 'provisional' and it has to be in aid of the enforcement of the award and subject to the final relief given in the award. The Court refused to injunct the respondent from withholding the payment on account of alleged delay as the Court observed that the relief claimed by the petitioner was final in nature as it was neither subject to any award or in aid of any enforcement.
The Court further reiterated that the court cannot either enforce an award, in the garb of interim relief, under Section 9 of the Act or grant an interim relief which is beyond the reliefs granted under the award.
Case Title: Pink City Expressways Pvt Ltd versus Aaron Security & Services Pvt Ltd
The Delhi High Court has upheld the arbitral reference made to a common Sole Arbitrator as well as a common State of Claims filed before the Arbitral Tribunal, with respect to a dispute arising under two separate agreements, considering the fact that the agreements were closely interlinked and contained identical Arbitration Clauses, stipulating same conditions.
The bench of Justice Prathiba M. Singh remarked that the services the respondent/claimant was providing under the two agreements, were connected services. Considering the 'allied nature' of the two contracts and the common conditions of the Arbitration Clauses, the filing of a common claim petition before the Arbitral Tribunal cannot be faulted with, the Court said.
Case Title: Delhi State Industrial and Infrastructure Development Corporation versus Sukumar Chand Jain
The High Court of Delhi has held that a no-claim certificate is given under coercion if it was in a pre-printed form and a pre-condition to the release of payment under the final bill.
The bench of Justices Vibhu Bakhru and Amit Mahajan held that the dispute between the parties cannot be said to be settled by accord and satisfaction on account of no-claim certificate given by the contractor, if the employer, as a matter of practice, requires all the contractors to furnish a pre-printed no-claim certificate as a pre-condition to release of payment under the final bill
Agreement To Explore Conciliation Before Arbitration, Only Directory In Nature: Delhi High Court
Case Title: M/s Oasis Projects Ltd versus Managing Director, National Highway and Infrastructure Development Corporation Ltd (NHIDCL)
The Delhi High Court has ruled that the agreement between the parties to explore conciliation before resorting to arbitration, is not mandatory in nature. The Court took note that as per Section 77 of the Arbitration and Conciliation Act, 1996 (A&C Act), in cases of urgency, arbitral proceedings can be initiated even when conciliation proceedings are pending for preserving the party's rights.
The bench of Justice Navin Chawla concluded that, in terms of Section 77, the petitioner was justified in initiating arbitration for preserving its rights, without going through conciliation, despite the fact that the arbitration clause provided for prior conciliation.
Case Title: Kidde India Ltd versus National Thermal Power Corporation Ltd
The Delhi High Court has ruled that the limitation period within which a party is required to approach the court for seeking constitution of the arbitral tribunal, cannot be conflated with the limitation period for invoking the arbitration agreement. Thus, any delay by the party in taking further steps for constitution of an arbitral tribunal, will not render the party's substantive claims as barred by limitation.
Sec 34 Petition Is Not Non-Est, Even If Award Is Not Filed In A Separate Folder: Delhi High Court
Case Title: Ambrosia Corner House Pvt Ltd versus Hangro S Foods
The Delhi High Court has ruled that the error committed by the petitioner/award debtor in not filing the documents, including the copy of the Arbitral Award challenged by it, in a separate e-folder, as prescribed in the Delhi High Court (Original Side) Rules, 2018, would not render the petition filed by it under Section 34 of the Arbitration and Conciliation Act, 1996 (A&C Act) as non-est.
The bench of Justice Navin Chawla remarked that a more liberal approach must be adopted by the Court while considering whether the filing should be treated as 'non-est.'
Case Title: HP Cotton Textile Mills Ltd versus Oriental Insurance Company Ltd
The Delhi High Court has ruled that appeal against the order of the High Court, passed under Section 36 of the Arbitration and Conciliation Act, 1996 (A&C Act), is not maintainable under Section 13(1A) of the Commercial Courts Act, 2015, since it is not one of the orders enumerated under Order XLIII of the Code of Civil Procedure, 1908 (CPC), from which an appeal would lie.
Case Title: University of Delhi versus M/s Kalra Electricals
The Delhi High Court has ruled that information and clarification sought by the Arbitral Tribunal on matters and dispute arising under other contracts, which do not form a part of the arbitral reference, will not alone make them the subject of arbitral proceedings.
The bench of Justice Anup Jairam Bhambhani remarked that the letter issued by the Arbitrator, seeking information and clarification as to whether payments were released to the claimant under other contracts, which were not inter-related with the contract under consideration, was neither a direction nor an order made by the Arbitrator, and it was merely an effort to seek clarification on certain matters.
Case Title: Delhi Airport Metro Express Private Limited versus Delhi Metro Rail Corporation Ltd
The Delhi High Court on Friday issued notice to the Union of India and Delhi Government in the ongoing case concerning payment of unpaid dues of arbitral award to Reliance Infrastructure-promoted Delhi Airport Metro Express Private Ltd (DAMEPL) by Delhi Metro Rail Corporation (DMRC).
Justice Yashwant Varma impleaded Union of India through Ministry of Housing and Urban Affairs and Delhi Government through its Chief Secretary in DAMEPL's petition seeking enforcement of the arbitration award dated May 11, 2017.
Case Title: Bharat Heavy Electricals Ltd versus M/s Zillion Infraprojects Pvt Ltd
The Delhi High Court has ruled that the Arbitral Tribunal has the power under Section 31(6) of the Arbitration and Conciliation Act, 1996 (A&C Act) to pass an interim Award on the basis of the admissions made by a party before the Interim Resolution Professional (IRP) in the CIRP proceedings initiated under the Insolvency and Bankruptcy Code, 2016 (IBC) against the opposite party.
Dismissing the argument of the appellant that the admissions made before the IRP cannot be treated as an admission in the arbitral proceedings, the bench of Justices Suresh Kumar Kait and Neena Bansal Krishna remarked that Order XII Rule 6 of the Code of Civil Procedure, 1908 (CPC) is couched in the widest terms and the same permits considering the admissions made in the pleadings before the Court or “otherwise”.
Case Title: M/s. Indiabulls Housing Finance Ltd & Anr. versus Shipra Estate Ltd
The Delhi High Court has ruled that the Arbitrator has no jurisdiction to set aside the sale notice issued by the secured creditor under Section 13(4) of the SARFAESI Act, 2002, seeking to enforce its “security interest”.
The bench of Justice Anup Jairam Bhambhani remarked that the matter of a notice issued under Section 13(4) of the SARFAESI Act is not arbitrable at all, and thus, the Arbitrator does not have the option to exercise any discretion under Section 17 of the Arbitration and Conciliation Act, 1996 (A&C Act) in relation to the said matter.
Since a specific right is vested in a “secured creditor” to enforce a “security interest”, by issuance of a sale notice under Section 13(4) of the SARFAESI Act, that specific right cannot be ousted by an order made by an arbitral tribunal, the Court held.
Case Title: D Narasimha Rao & Ors versus Revanta Multi State CGHS Ltd & Anr.
The Delhi High Court has held that the Central Registrar is not divested of its authority and jurisdiction to appoint an Arbitral Tribunal in terms of Section 84 (4) of the Multi-State Cooperative Societies Act, 2002 (MSCS Act), when a dispute pertaining to a multi-state cooperative society is sought to be referred to arbitration under Section 84 of the Act.
The bench of Justice Yashwant Varma remarked that as per the direction issued by the Central Government under the Notification dated 24th February, 2003, the Registrar of Co-operative Societies of States is contemporaneously empowered to refer matters to arbitration, however, the same does not denude the jurisdiction of the Central Registrar.
Thus, the Court concluded that initiation of proceedings for constitution of an Arbitral Tribunal by the petitioner, by issuing a notice to the Central Registrar, did not suffer from a manifest illegality.
Case Title: Sunil Kumar Chandra versus M/s Spire Techpark Pvt Ltd
The Delhi High Court has reiterated that where there is any inconsistency between the two clauses of a same instrument/document, the former clause shall prevail over the latter one.
The bench of Justice Chandra Dhari Singh concluded that the former clause (arbitration clause), under which the parties agreed to resolve “any” dispute arising under the agreement through arbitration, shall have a prevailing effect over the latter clause, which was not clear as no clear and unambiguous meaning was given regarding what kind of disputes shall be referred to the courts in the specified jurisdiction.
Case Title: Asad Mueed & Anr versus Hammad Ahmed & Ors.
The Delhi High Court has ruled that the power of the Arbitral Tribunal to grant interim measures under Section 17 of the Arbitration and Conciliation Act, 1996 (A&C Act), is not inferior to the power of a court under Section 9.
The bench of Justice Yashwant Varma remarked that though Section 9(3) of the A&C Act is not an ouster clause, it still requires the court to consider whether its intervention is warranted after the Arbitral Tribunal has been constituted and is in seisin of the dispute.
Case Title: Shapoorji Pallonji and Company Private Limited versus Union of India
The Delhi High Court has reiterated that when a person has itself become ineligible by operation of law to act as an arbitrator, it cannot nominate another person to act as arbitrator.
The bench of Justice Yashwant Varma was dealing with an arbitration clause which exclusively empowered the Chief Project Manager to appoint the arbitrator from a panel which was itself maintained by it.
The Court observed that the arbitration clause did not bestow a right on any of the parties to the dispute to independently choose their nominee from the panel maintained by the Chief Project Manager. Further, the composition of the panel itself was left to the sole discretion of the Chief Project Manager.
The bench thus concluded that the constitution of the Arbitral Tribunal, as contemplated by the arbitration clause, was clearly tainted by fundamental illegality.
Case Title: New Delhi Municipal Council versus Decor India Pvt Ltd
The Delhi High Court has reiterated that though it is permissible to introduce an amendment in a petition filed under Section 34 of the Arbitration and Conciliation Act, 1996 (A&C Act), however, new grounds of challenge containing new material/ facts cannot be introduced when the said grounds were neither raised in the original petition under Section 34 nor before the Arbitral Tribunal.
While dismissing the application seeking to raise additional grounds to challenge the arbitral award, the bench of Justice Yashwant Varma remarked that the proposed amendments sought to be made by the petitioner, NDMC, failed to meet the tests propounded by the Supreme Court in State of Maharashtra vs. Hindustan Construction Co. Ltd (2010), i.e., the amendments being warranted due to existence of very peculiar circumstances of the case and in the interest of justice.
Case Title: Tejpal Singh versus Surinder Kumar Dewan
The Delhi High Court has ruled that since the party had failed to challenge the termination of the Collaboration Agreement in the first round of arbitral proceedings, the demolition of the structure built by it under the said Collaboration Agreement would not give it a fresh cause of action.
The bench of Justice Navin Chawla remarked that the cause of action for challenging the termination of the Collaboration Agreement and/or for claiming any relief under the said Collaboration Agreement, was available to the petitioner at the stage of the earlier arbitral proceedings.
LL Citation: 2023 LiveLaw (Guj) 168
Case Title: Anupam Industries Ltd. versus State Level Industry Facilitation Council
LL Citation: 2023 LiveLaw (Guj) 168
Case Title: Indian Bank (erstwhile Allahabad Bank) vs. Morris Samuel Christian
Gujarat High Court Invalidates Arbitral Awards Due To Unilateral Arbitrator Appointment By NBFCs
LL Citation: 2023 Livelaw (Guj) 171
Case Title: Pahal Engineers versus Gujarat Water Supply and Sewerage Board
The Gujarat High Court has ruled that failure to abide by the procedural laws would not be fatal to the arbitral proceedings and thus, the Arbitral Tribunal was not justified in dismissing the claim petition/ statement of claims solely on the ground that it was not verified as contemplated under Order VI Rule 15 of the Code of Civil Procedure, 1908 (CPC).
Case Title: Indian Bank (erstwhile Allahabad Bank) versus Morris Samuel Christian
The Gujarat High Court has ruled that merely because the borrower is an MSME, it would not be governed by the provisions of the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act), including the arbitral mechanism envisaged under the said Act.
The bench of Justice Biren Vaishnav observed that though, as per the mechanism provided under the MSMED Act, the dispute between the supplier and the buyer of goods or services may be adjudicated through arbitration in accordance with the Arbitration and Conciliation Act, 1996 (A&C Act), however, the same does not contemplate adjudication of disputes arising from a loan transaction, which is the subject matter of a special Act such as the SARFAESI Act.
Himachal Pradesh High Court:
Award Passed By Unilaterally Appointed Arbitrator Is Void: Himachal Pradesh High Court
Case Title: Divisional Manager vs. Prem Lal
The Himachal Pradesh High Court has held that arbitral proceedings conducted by a unilaterally appointed arbitrator are void ab initio and the consequent award is non-est. The bench of Justice Jyotsana Rewal Dua held that an arbitration award passed by a unilaterally appointed sole arbitrator is not enforceable under Section 36 of the A&C Act.
Case Title: Ganga Ram vs. Special Land Acquisition Officer
The High Court of Himachal Pradesh has held that the arbitration proceedings under the National Highways Act, 1956 are governed by the Arbitration and Conciliation Act, 1996, thus, the arbitrator so appointed by the Central Government under Section 3G(a) of the National Highways Act is bound to follow the provisions of the A&C Act.
The bench of Justice Sushil Kukreja held that in terms of Section 29(A) of the A&C Act, the arbitrator is mandated to deliver an award within 1 year from the date of entering reference and non-compliance with this provision will result in the termination of the mandate of the arbitrator. The Court held that the same provision also applies to a statutory arbitration governed by the A&C Act, thus, the mandate of the arbitrator under National Highways Act will stand terminated if the award is not delivered within the stipulated time-period.
Case Title: Balak Ram vs NHAI
The Himachal Pradesh High Court has clarified the interpretation of Section 29A(3) of the Arbitration and Conciliation Act, 1996 and maintained that consent from the parties to extend the arbitral period need not be expressly stated in writing. Instead, consent can be inferred from the parties' acts and conduct during the arbitration proceedings, it emphasised.
Case Title: M/s Kundlas Loh Udhyog vs M/s SRMB Srijan Pvt Ltd.
The Himachal Pradesh High Court has stayed the arbitration proceedings that were unilaterally commenced by a party without complying/fulfilling the precondition of negotiation as mandated by the terms of the agreement between the parties. The bench of Justice Tarlok Singh Chauhan observed that when the dispute resolution clause in the agreement mandates the parties to explore negotiation before resorting to arbitration, and the arbitration would commence only on the failure of the negotiation, the parties have to act in terms of the agreement and not directly invoke the arbitration.
Jammu & Kashmir and Ladakh High Court
Case Title: CRP FOOD IMPORT-EXPORT v. KASHMIR KESAR MART,
Citation: 2023 LiveLaw (JKL) 270
Case Title: A K Engineers and Contractors Pvt Ltd v. Union Territory of J&K
Citation: 2023 LiveLaw (JKL) 283
The Jammu & Kashmir and Ladakh High Court has held that the arbitration clause contained in the original contract would also govern any dispute arising out of an additional work carried out without execution of a formal agreement.
The bench of Chief Justice N. Kotiswas Singh held that when a contractor, initially tasked with constructing a single-lane bridge, is subsequently directed by the employer to expand the scope to build a two-lane bridge without formalizing a new agreement or amending the original contract, the terms of the initial contract, including the arbitration clause, extend to cover the additional work.
Jharkhand High Court:
Case Title: The State Project Director v. National Printers, LPA No. 505 of 2019
LL Citation: 2023 LiveLaw (Jha) 53
The Jharkhand High Court has held that an order passed by the MSEF Council dismissing a reference made under Section 18 of the MSMED Act as not maintainable, without conducting the conciliation or the consequent arbitral proceedings, is not an award which can be challenged under Section 34 of the A&C Act r/w Section 19 of the MSMED Act.
The bench of Justices Shree Chandrashekhar and Anubha Rawat Choudhary held that since the alternative remedy under Section 34 is not available in such a case, the aggrieved party can challenge the order of the MSEF Council directly in a writ petition.
The Court also held that an application under Section 18 of the MSMED Act can also be filed for the recovery of the interest amount only even if the principal amount has been paid, though belatedly. It held that once the liability to pay under the MSMED Act crystallizes, it is not erased by mere payment of the principal amount without the due interest, therefore, an application for the recovery of the interest only is maintainable.
Karnataka High Court:
Case Title: Karnataka State Highways Improvement Project AND M/s. KMC - VDB (JV)
Case No: WRIT PETITION NO. 29440 OF 2019
The Karnataka High Court has held that an arbitral award which does not deal with either movable property or immovable property, but awards damages payable to the award holder, does not attract stamp duty under the Karnataka Stamp Act, 1957.
Justice R Nataraj thus dismissed a petition challenging an order of the trial court rejecting its application seeking to impound the award of the arbitrator for non-payment of stamp duty by the respondent.
Case Title: Karnataka State Highways Improvement Project AND M/s. KMC - VDB (JV), W.P. No. 29440 of 2019
The Karnataka High Court has held that an arbitral award which does not deal with either movable property or immovable property, but awards damages payable to the award holder, does not attract stamp duty under the Karnataka Stamp Act, 1957.
Justice R Nataraj thus dismissed a petition challenging an order of the trial court rejecting its application seeking to impound the award of the arbitrator for non-payment of stamp duty by the respondent.
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.
Kerala High Court:
Case Title: Southern Railway versus M.R. Ramakrishnan
The Kerala High Court recently held that the Court situated within the territorial jurisdiction of the seat or place of arbitration alone will have the jurisdiction to entertain an application filed under Section 34 of the Arbitration and Conciliation Act, 1996.
A single bench of Justice K Babu observed that the term “subject-matter of arbitration” in the definition of “court” in Section 2(1)(e) of the Act, refers to the Court having supervisory control over the arbitration proceedings. This would mean the Court where the seat or place of arbitration is will have jurisdiction to entertain a challenge to the arbitral award under Section 34 of the Act.
Madras High Court:
MSEF Council's Order Without Following Due Procedure Can't Be Termed As Award: Madras High Court
Case Title: Feeback Infra Pvt Ltd v. MSEF Council, Chennai – W.P. No. 25062 of 2023
Citation: 2023 LiveLaw (Mad) 302
The High Court of Madras has held that an order passed by the MSEF Council without issuing notice of arbitration, opportunity to parties file their pleadings and recording evidence as per the provisions of A&C Act cannot be termed as award.
The bench of Justice S. Sounthar held that since such an order is not an award, it need not be challenged under Section 34 of the A&C Act r/w Section 19 of the MSMED Act as otherwise, the party aggrieved by such an order would have to deposit 75% of the awarded amount which would imbalance the equities.
Case Title: M/s. Radha Meditech versus M/s Cook India Medical Devices Pvt Ltd
While disposing of a Section 11 application for the appointment of an arbitrator filed under the Arbitration and Conciliation Act, the Madras High Court followed the procedure adopted by the Supreme Court in Bharat Sanchar Nigam Limited and another Vs. Nortel Networks India Private Limited. In the above case, the Supreme Court had held that when there is no vestige of doubt that the claim was ex facie time barred, it must be referred to arbitration. However, when there was even the slightest of doubt, the rule was to refer to arbitration.
Non - Signatory Can Be Referred To Arbitration Under 'Doctrine Of Alter Ego': Madras High Court
Case Title: Vatsala Jagannathan & Anr. versus Tristar Accommodations & Ors.
The Madras High Court has ruled that non-signatories to arbitration agreement can be referred to arbitration by invoking the 'doctrine of alter ego' only in exceptional cases where there is convincing evidence that the non-signatory is the 'alter ego' of the signatory.
The bench of Justice Senthilkumar Ramamoorthy remarked that the doctrine of alter ego is applied in exceptional circumstances by piercing the corporate veil of the signatory Company in order to determine who lurked behind it at the relevant point of time.
Case Title: M/s. Transtonnelstroy – Afcons (JV) versus M/s.Chennai Metro Rail Ltd
While granting relief to the Chennai Metro Rail Limited (CMRL), the Madras High Court has noted that while an arbitral tribunal, which consists of experts in the field, is at liberty to apply its own knowledge and understanding to arrive at a conclusion, it should always allow the parties involved to present their case.
Case Title: Hina Suneet Sharma & Anr. versus M/s Nissan Renault Financial Services India Pvt Ltd
The Madras High Court has ruled that even if a party has failed to challenge the unilateral appointment of the Arbitrator under Section 13 of the Arbitration and Conciliation Act, 1996 (A&C Act) before the Arbitral Tribunal, it would not take away its right to challenge the award under Section 34 of the A&C Act on the ground that the Arbitrator was unilaterally appointed.
The bench of Justice Krishnan Ramasamy reiterated that if any award is passed in violation of the provisions of the A&C Act, the same would be against the public policy of India.
Orissa High Court:
Case Title: National Aluminium Company Ltd vs Orissa Coal Chem Pvt Ltd.
The High Court of Orissa has held that the failure of the MSEF Council to refer the parties to 'Conciliation' as provided under Section 18(2) of the MSMED Act renders the award passed by it under Section 18(3) susceptible to setting aside under Section 34 of the A&C Act.
Punjab & Haryana High Court:
Case Title: M/s Simplex Infrastructure Ltd. & Anr. versus M/s J.P. Singla Engineers and Contractor
The Punjab and Haryana High Court has ruled that where the liability to pay dues under a Contract is admitted by the parties, the dispute between them relating to non-payment cannot be said to be a dispute that 'arose out of' or 'in connection with' the Contract and thus, it cannot be referred to arbitration. The bench of Justice Nidhi Gupta ruled that it was a simple case of non- payment of the final amount due under the Contract.
Rajasthan High Court:
Case Title: Kapil Jain & Ors. vs Khosla Electronics Pvt Ltd
The Rajasthan High Court at Jaipur recently allowed an application under Section 11 of the Arbitration and Conciliation Act, 1996 for appointment of an arbitrator, on the ground that the Lease Agreement entered between the parties provided the mechanism to resolve the dispute by 'friendly consultation' and the respondent did not participate and make any effort to resolve the dispute by way of 'friendly consultation'.
Telangana High Court:
Case Title: Ranganath Properties Pvt. Ltd. versus Phoenix Tech Zone Pvt. Ltd. Arbitration Application No. 72 of 2022
The High Court of Telangana has held that arbitration under Section 42 of the Special Economic Zones Act, 2005 would override a contractual arbitration clause entered into between the parties.
The bench of Chief Justice Ujjal Bhuyan held that Special Economic Zones Act, 2005 is a special legislation and Sections 42 and 51 of the Act gives it an overriding act over other acts and Section 42 of the Act provides for statutory arbitration wherein the arbitrator would be appointed by the Central Government, therefore, it would override the provisions of the Arbitration and Conciliation Act and application under Section 11 of the A&C Act for the appointment of the arbitrator would not be maintainable.
The Court held that when the special legislation provides for a mechanism for the appointment of the arbitrator, the same has to be followed and recourse to Section 11 would be a defect of jurisdiction that cannot be cured even by the consent of the parties, thus, the petition for the appointment of the arbitrator would not be maintainable merely because the parties had initially subjected themselves to the contractual arbitration clause.
Case Title: Union of India v. B.R. Enterprises, CMA 1007/2008
The High Court of Telangana has set aside an order of the District Court passed under Section 34 of the A&C Act by which the Ld. Additional Chief Judge, City Civil Court, Hyderabad had modified an arbitral award.
The bench of Justice M.G. Priyadarsini held that the Ld. Court committed an irregularity in modifying the amount of compensation awarded by the arbitrator. It held that the Court went beyond the scope of Section 34.
Case Title: Ranganath Properties Pvt. Ltd. vs. Phoenix Tech Zone Pvt. Ltd.
The High Court of Telangana has held that arbitration under Section 42 of the Special Economic Zones Act, 2005 would override a contractual arbitration clause entered into between the parties.
The bench of Chief Justice Ujjal Bhuyan held that Special Economic Zones Act, 2005 is a special legislation and Sections 42 and 51 of the Act gives it an overriding effect over other Acts. Section 42 of the Act provides for statutory arbitration wherein the arbitrator would be appointed by the Central Government; therefore, it would override the provisions of the Arbitration and Conciliation Act (A&C Act), the Court said. Thus, an application under Section 11 of the A&C Act for appointment of the arbitrator would not be maintainable.
Case Title: M/s. Sri Rama Constructions vs. M/s. Max Infra (I) Ltd
The Telangana High Court has ruled that once a decision is made in an application filed under Section 34 of the Arbitration and Conciliation Act, 1996 (A&C Act), the Court has no power to remit the matter back to the Arbitrator under Section 34(4).
The bench of Justices P. Naveen Rao and J. Sreenivas Rao observed that since the Arbitrator had failed to frame an issue on the counter-claims made by the party and had failed to consider all the documents filed before him, the award was not sustainable and was set aside under Section 34. After the said decision was made in the Section 34 application, the issue of remitting the matter to the Arbitrator does not arise, the Court said.
