Arbitration Weekly Round-Up: 18th March to 24th March 2024
Ausaf Ayyub
26 March 2024 4:00 PM GMT
Supreme Court General Reference Won't Have Effect Of Incorporating Arbitration Clause In Another Contract, Specific Reference Needed : Supreme Court Case Title: NBCC (INDIA) LIMITED VERSUS ZILLION INFRA PROJECTS PVT.LTD. Citation : 2024 LiveLaw (SC) 246 The Supreme Court reiterated that a dispute cannot be referred to arbitration based on the arbitration clause contained...
Supreme Court
Case Title: NBCC (INDIA) LIMITED VERSUS ZILLION INFRA PROJECTS PVT.LTD.
Citation : 2024 LiveLaw (SC) 246
The Supreme Court reiterated that a dispute cannot be referred to arbitration based on the arbitration clause contained in another contract unless a specific reference was made in the main contract to incorporate the arbitration clause into the main contract.
Reversing the findings of the High Court, the Bench Comprising Justices B.R. Gavai and Sandeep Mehta held that unless a specific reference is made in the main contract to incorporate the arbitration clause of another contract then the parties are bound to settle their dispute through the mode of settlement agreed to in the main contract.
High Courts
Allahabad High Court
Case Title: - State Of U.P. And 5 Others vs Rajveer Singh And Another
Case Number: APPEAL UNDER SECTION 37 OF ARBITRATION AND CONCILIATION ACT 1996 DEFECTIVE No. - 619 of 2023.
The Allahabad High Court single bench of Justice Shekhar B. Saraf held that Section 5 of the Limitation Act does not encompass long delays, and condonation can only be granted in exceptional cases where the appellant acted in a bona fide manner and not negligently.
Case Title: Smt. Sudha vs Union Of India And 3 Others.
Case Number: - APPEAL UNDER SECTION 37 OF ARBITRATION AND CONCILIATION ACT 1996 No. - 271 of 2022
The Allahabad High Court single bench of Justice Shekhar B. Saraf set aside an order under Section 34 of the Arbitration and Conciliation Act, 1996 passed by the District Judge, noting that the judge failed to give due consideration to Appellant's assertion regarding the non-receipt of the signed copy of the arbitral award. Since the limitation period for Section 34 commences upon the receipt of signed award copy, the bench held that it was incumbent on the judge to note the date on which the signed copy was received by the Appellant.
Bombay High Court
Case Title: Era International v. Aditya Birla Global Trading India Pvt. Ltd, Commercial Arbitration Petition (L) No. 27638 of 2023
The High Court of Bombay has held that that provisions of Section 12(5) r/w 7th Schedule of the A&C Act also apply to Institutional Arbitrations.
The bench of Justice Bharati Dangre held that rules of an arbitral institution cannot override the provisions of the A&C Act. It held that even if parties agree to institutional arbitration, it does not exclude the Court's power to decide on the termination of an arbitrator's mandate if a controversy arises regarding the grounds mentioned in Section 14(1)(a).
Case Title: Mahavir Enterprise vs Chandravati Sunder Salian.
Case Number: COMMERCIAL ARBITRATION APPLICATION NO.15 OF 2023.
The Bombay High Court single bench of Justice Bharati Dangre held that claims that are clearly time-barred must not be entertained, as doing so would perpetuate injustice rather than serving justice. The High Court held that even the slightest doubt regarding the timeliness of a claim warrants its referral to arbitration, as interfering in such matters would encroach upon the tribunal's jurisdiction.
Case Title: M/s.Paresh Construction & Foundation Ltd. vs Hindustan Petroleum Corp. Ltd.
Case Number: ARBITRATION APPLICATION (L) NO.18473 OF 2023 WITH ARBITRATION PETITION NO.13 OF 2023
The Bombay High Court single bench of Justice Bharti Dangre held although there might be an impression that with the legal termination of the arbitral tribunal's mandate upon the expiration of one year from the reference entry, as per Section 29A of the Arbitration and Conciliation Act 1996 there might be a technical difficulty. However, it held that such technicalities should not thwart the overarching objective of the proceedings.
Case Title: M/s. Balmer Lawrie & Co.Ltd vs M/s. Shilpi Engineering Pvt.Ltd.
Case Number: INTERIM APPLICATION (L) NO. 779 OF 2024 IN COMMERCIAL ARBITRATION PETITION NO. 1131 OF 2018.
The Bombay High Court single bench of Justice R.I. Chagla held that where the arbitral award is in the nature of money decree, there is a requirement for deposit of 100% of the awarded amount for grant of stay. Further, it held that there is no distinction in the application of parameters between stays sought under Section 36(3) and Section 37 of the Arbitration Act, as neither provision specifies such differentiation
Calcutta High Court
Case Title: SRMB Srijan Limited vs Great Eastern Energy Corporation Limited.
Case Number: IA No: GA 1 of 2022 In A.P.- COM 281 of 2024
The Calcutta High Court single bench of Justice Moushumi Bhattacharya held that for an unconditional stay of an arbitral award on pretext of fraud, there should prima facie case of fraud which should be evident on the face of the record without the necessity of a detailed or through examination. The bench held that fraud must be evident and reprehensible, with a substantial impact on the outcome of the arbitration proceedings.
Case Title: Praxair India Pvt. Ltd. vs Steel Authority of India Ltd.
Case Number: A.P. COM 41 of 2024.
The Calcutta High Court single bench of Justice Moushumi Bhattacharya held that the word “Court” in Section 29A of the Arbitration and Conciliation Act, 1996 for extension of the mandate of the arbitrator takes the character of the appointing authority under Section 11 of the Arbitration Act. Therefore, it held that can only be the Court which has the power to appoint an arbitrator under Section 11.
Case Title: The Secretary, E & NF Railway Junior Co-operative Credit Society Limited, Eastern Railway vs Sri Jyotish Chandra Sarkar & Anr.
Case Number: C.O. No. 3243 of 2013
The Calcutta High Court single bench of Justice Prasenjit Biswas held that disputes concerning the management, constitution, or business of the society, between the society and its members or those claiming through them, are subject to arbitration under Section 84 of the Multi-State Co-operative Societies Act, 2002. Therefore, it set aside orders of District Consumer Disputes Redressal Forum and the State Consumer Disputes Redressal Commission for entertaining the complaint.
Delhi High Court
Case Title: M/s Fortuna Skill Management Pvt Ltd v. M/s Jaina Marketing and Associates
Citation: 2024 LiveLaw (Del) 348
The High Court of Delhi has held that an arbitral tribunal cannot be faulted for disallowing additional evidence at the fag end especially when the document was already in possession of the party.
The bench of Justice Prateek Jalan also held that arbitral tribunal is not strictly bound by the Indian Evidence Act.
Case Title: Alka Sachdeva vs Bhasin Infotech And Infrastructure Pvt. Ltd.
Citation: 2024 LiveLaw (Del) 335
The Delhi High Court single bench of Justice Prateek Jalan dismissed the contention that a party can waive its right to object to the arbitrator's appointment through its conduct. It underscored that any waiver under Section 12(5) of the Arbitration and Conciliation Act must be explicit and in writing. It noted that there is no room for implying a waiver of rights under Section 12(5) through conduct or any other means. Even if a party participates in arbitral proceedings without explicitly objecting to the arbitrator's appointment, it cannot be construed as a waiver of its rights under Section 12(5) of the Arbitration Act.
Case Title: Ved Contracts Pvt Ltd Vs Indian Oil Corporation Ltd.
Citation: 2024 LiveLaw (Del) 336
The Delhi High Court single bench of Justice Anup Jairam Bhambhani held that if there are no clear indications to the contrary, the venue specified in an arbitration clause should be considered as the seat of arbitral proceedings. It underscored importance of discerning the intention of the parties by examining the entirety of the contract's terms.
One Party Cannot Appoint 2/3rd Of The Arbitral Tribunal: Delhi High Court
Case Title: Apex Buldsys Limited v. IRCON International Ltd
Citation: 2024 LiveLaw (Del) 341
The High Court of Delhi has held that a panel for appointment of arbitrator cannot be restricted to mere 3 names as it would violate broad-based representation. Moreover, one party cannot appoint 2/3rd members of the arbitral tribunal as it would violate principles of neutrality and counter-balancing.
The bench of Justice Dinesh Kumar Sharma also held that a petition under Section 11 cannot be dismissed on ground of non-service of Section 21 notice if the earlier petition under Section 11 was disposed of with directions to treat that petition as Section 21 notice itself.
Case Title: Avdhesh Mittal Vs Deepak Vig.
Citation: 2024 LiveLaw (Del) 342
The Delhi High Court single bench of Justice Manoj Kumar Ohri held that the delivery of a signed copy of the arbitral award to a party isn't merely procedural but confers a substantive right upon them to challenge the award within the statutory period. The bench held that the presumption of deemed service under Section 3 of the Arbitration Act is rebuttable and can be negated if a party establishes that delivery of the written communication could not have been effected despite fulfilling the conditions under Section 3.
Case Title: Srf Limited Vs Jonson Rubber Industries Limited.
Citation: 2024 LiveLaw (Del) 343
The Delhi High Court single bench of Justice Prathibha M. Singh held that the tax invoices explicitly containing the arbitration clause and parties without raising any dispute concerning it are legally bound by the arbitration clause.
“In the present case, the parties have a running account which is not in dispute. Two purchase orders may have been placed by the Respondent and various invoices may have been issued by the Petitioner. These invoices clearly state that the terms and conditions listed at the back are applicable. Considering that the parties are in regular business dealings with each other, it cannot be said prima facie that the rear of the invoice was not supplied to the Respondent.”
Case Title: Maj. Pankaj Rai vs M/s Niit Ltd.
Citation: 2024 LiveLaw (Del) 349
The Delhi High Court single bench comprising Justice Prateek Jalan held that once an arbitration award has been acknowledged to be fully and finally settled by both the parties, it cannot be challenged on the basis of one-sided nature of the arbitration agreement.
Case Title: CG Engineering Company Vs Ircon Infrastructure And Services Limited (Ircon Isl) And Anr.
Citation: 2024 LiveLaw (Del) 345
The Delhi High Court single bench of Justice Dinesh Kumar Sharma held that arbitral tribunal should generally be the primary authority to determine non-arbitrability, except in cases where claims were manifestly and ex facie non-arbitrable. It held that Sub-lease Agreement excluded the disputes related to public premise from arbitration, therefore, making them non-arbitrable.
Case Title: Spml Infra Limited vs Ntpc Limited
Citation: 2024 LiveLaw (Del) 353
The Delhi High Court single bench of Justice Prateek Jalan held that failure to file a copy of arbitral award renders the filing under Section 34 of the Arbitration and Conciliation Act, 1996 incomplete. The bench held that without the copy of the challenged award, it is impossible to consider the grounds to set aside the arbitral award.
Case Title: M/s Upper India Trading Co. Pvt. Ltd Vs M/s Hero Fincorp Ltd
Citation: 2024 LiveLaw (Del) 359
The Delhi High Court single bench of Justice Jasmeet Singh held aside an arbitral award noting that the arbitrator was unilaterally appointed by the Respondent. The bench held that that the unilateral appointment of the Sole Arbitrator by Respondent was non-est in law, as it contravened Section 12(5) read with the Seventh Schedule of the Arbitration and Conciliation Act, 1996.
Gauhati High Court
Case Title: M/s Barpeta Agro Infra vs The Union Of India And 2 Others
Case Number: Arb.P./51/2023
The Gauhati High Court single bench of Justice Michael Zothankhuma held that panel/appointment of the serving/retired officials of the Railways, as members of the Arbitral Tribunal, is hit by Section 12(5) and the 7th Schedule of the Arbitration and Conciliation Act.
Case Title: M/S Trideep Changmai Vs Micro and Small Enterprises Facilitation Council And Anr
Case Number: Case No. : WP(C)/5029/2021
The Gauhati High Court single bench of Kaushik Goswami dismissed a writ petition noting that when a dispute arises regarding payment under Micro, Small and Medium Enterprises Development Act, 2006, the mechanism under Section 18 shall be followed to resolve the dispute by way of a conciliation proceeding, failing which arbitration proceeding as prescribed under Section 18 to be conducted.
Himachal Pradesh High Court
Case Title: Chander Prabha vs LAC & Anr.
Case Number: Arb. Case No. 303 of 2024.
The Himachal Pradesh High Court single bench of Justice Sushil Kukreja held that when a statute envisages an authority, be it an Arbitrator, to do a particular act in a particular manner and in a prescribed time schedule, then the onus is upon the said authority/Arbitrator to perform the task entrusted to it within the time schedule prescribed in the statute. It held that the Divisional Commissioner, acting as an arbitrator under National Highways Act, 1956, despite the completion of pleadings granted adjournments to the proceedings.
Madhya Pradesh High Court
Case Title: M/S Banco Construction Pvt Ltd Vs Narmada Extrusions Ltd
Case Number: ARBITRATION CASE No. 40 of 2022.
The Madhya Pradesh High Court single bench of Justice Anand Phatak held that proceedings under Section 138 of the Negotiable Instruments Act regarding dishonoring of cheques and arbitration are two proceedings moving in different jurisdictional realm and they are parallel in nature rather than overlapping. It held that “both may continue because scope of Section 138 of the N.I. Act is confined to the dishonoured cheques, whereas dispute between the parties appears to be such deep and exact depth can only be fathomed by the arbitrator where parties would have all opportunities to canvas their cause.”
Orissa High Court
The Orissa High Court single bench of Justice KR Mohapatra held that Micro & Small Enterprises Facilitation Council doesn't have power to entertain an application with regard to the maintainability of the reference at the conciliation stage under Micro, Small And Medium Enterprises Development Act, 2006. It held that question of maintainability can only be adjudicated if arbitration is taken up by the Council.
Rajasthan High Court
Case Title: Akha Ram and Others vs National Highway Authority Of India and Others.
Case Number: S.B. Civil Misc. Appeal No. 1805/2023.
The Rajasthan High Court single bench of Justice Rekha Borana held that determination of compensation under National Highways Act, 1956 can be challenged before the arbitrator appointment by the Central Government. The bench held that challenges to such determination fall under the Arbitration and Conciliation Act, 1996.
Telangana High Court
Case Title: M/S Sms Limited vs Uranium Corporation Of India Limited
Case Number: ARBITRATION APPLICATION No.175 of 2023.
The Telangana High Court single bench of Chief Justice Alok Aradhe held that the question of whether the claims of a party are barred by limitation is a matter that necessitates adjudication by the Arbitral Tribunal. Considering the provisions outlined in Section 16 of the Arbitration and Conciliation Act and the legislative intent to curtail judicial interference at the pre-reference stage, the bench held that the issue of limitation falls within the purview of the Arbitral Tribunal for adjudication.
