Arbitration Cases Weekly Round-Up [20th January-26th January 2025]

Update: 2025-01-28 13:00 GMT
Arbitration Cases Weekly Round-Up [20th January-26th January 2025]
  • whatsapp icon
Click the Play button to listen to article
story

Supreme Court Can HC Appoint Sole Arbitrator When Arbitration Clause Provides For Unilateral Appointment Of Arbitrator ? Supreme Court To Consider Case Detail : M/S R.S. CONSTRUCTION vs. BUILDING CONSTRUCTION DEPARTMENT SLP(C) No. 000979 - / 2025 The Supreme Court on Monday ( January 20) agreed to consider the issue of whether the High Court can appoint a sole arbitrator under...

Your free access to Live Law has expired
Please Subscribe for unlimited access to Live Law Archives, Weekly/Monthly Digest, Exclusive Notifications, Comments, Ad Free Version, Petition Copies, Judgement/Order Copies.

Supreme Court

Can HC Appoint Sole Arbitrator When Arbitration Clause Provides For Unilateral Appointment Of Arbitrator ? Supreme Court To Consider

Case Detail : M/S R.S. CONSTRUCTION vs. BUILDING CONSTRUCTION DEPARTMENT

SLP(C) No. 000979 - / 2025

The Supreme Court on Monday ( January 20) agreed to consider the issue of whether the High Court can appoint a sole arbitrator under the Arbitration and Conciliation Act 1996 if the arbitration agreement between parties provides for unilateral appointment in violation of the decision in CORE v. M/S ECI SPIC SMO MCML.

The bench of CJI Sanjiv Khanna and Justice Sanjay Kumar was hearing the challenge to the order of the Patna High Court which refused to appoint an arbitrator under S. 11(6) of the Arbitration and Conciliation Act 1996 in a tender-related dispute. Here, the petitioner who is a private party entered into a work contract with the Building Construction Department of Govt. of Bihar. The High Court ultimately rejected the request of appointing a sole arbitrator.

Arbitration Act | Courts' Jurisdiction Under Sections 34 and 37 Do Not Extend To Modifying Arbitral Award: Supreme Court Reiterates

Case Title: S. JAYALAKSHMI VERSUS THE SPECIAL DISTRICT REVENUE OFFICER & ORS.

Citation : 2025 LiveLaw (SC) 98

Recently, the Supreme Court affirmed the principle laid down in National Highways Authority of India vs. M. Hakeem & Another that the jurisdiction of the Courts under Sections 34 and 37 of the Arbitration & Conciliation Act, 1996 (1996 Act) will not extend to modifying an arbitral award.

The bench comprising Justices PS Narasimha and Manoj Misra was hearing the case dealing with the land acquisition compensation under the National Highways Act, 1956. Dissatisfied with the Arbitral Tribunal's decision to award land acquisition compensation @ ₹495/sq.m, the Appellant preferred application before the District Court under Section 34, which had modified the award and enhanced the compensation to be payable @ ₹4,500/sq.m with 9% interest.

Can Arbitral Awards Be Modified Under S. 34 & S.37 Of Arbitration Act? Supreme Court Refers To 5 Judge Bench

The Supreme Court today (January 23) referred to a 5 judge constitution bench the issue of whether Courts have the power to modify an arbitral award under S. 34 and 37 of the Arbitration and Conciliation Act, 1996.

The bench of CJI Sanjiv Khanna and Justices Sanjay Kumar and KV Viswanathan directed that while considering the scope of powers of the Court to modify arbitral awards, an examination of the scope and contours of S. 34 and 37 will also be needed. The Court would also need to see the extent to which modification powers can be given if such modification is allowed.

Notably, in February 2024, a bench of Justices Dipankar Dutta, K.V. Viswanathan, and Sandeep Mehta referred to the larger bench the question of whether the courts have the power to modify the arbitral award under Sections 34 or 37 of the Arbitration and Conciliation Act, 1996.

S. 16 Arbitration Act | Challenge To Arbitral Tribunal's Jurisdiction Impermissible After Submitting Statement Of Defence : Supreme Court

Case Title: M/S VIDYAWATI CONSTRUCTION COMPANY VERSUS UNION OF INDIA

Citation : 2025 LiveLaw (SC) 105

The Supreme Court affirmed the principle that the jurisdiction of the arbitral tribunal cannot be challenged after the submission of the statement of defence.

A bench of Justices Abhay S Oka and Ujjal Bhuyan was hearing a case in which the respondent had objected to the jurisdiction of the Arbitral Tribunal after submitting its statement of defence. The Arbitral Tribunal rejected the objection and subsequently passed an award. However, the District Judge set aside this award, and this decision was upheld by the Allahabad High Court. Taking reference to Section 16(2) of the Arbitration & Conciliation Act, 1996 ("Act"), the Appellant argued that the High Court erred in affirming the District Judge's decision to set aside the arbitral award. The Appellant contended that by accepting the appointment of the sole arbitrator and being allowed to modify its statement of defence, the Respondent waived its right to challenge the tribunal's jurisdiction after the statement of defence had been filed.

High Courts

Bombay High Court

Serving Signed Copy Of Award To Employee Of Party Does Not Constitute Valid Service U/S 31(5) Of Arbitration Act: Bombay High Court

Case Title: Health Care, Medical & General Stores Versus Amulya Investment,Through Proprietor Mr. Sameer G. Narvekar

Citation: 2025 LiveLaw (Bom) 23

The Bombay High Court bench of Justices A.S. Chandurkar and Rajesh S. Patil has held that service of a signed copy of an award on an employee of a party to an arbitration agreement is not a valid service under section 31(5) of the Arbitration Act.

The court at the outset noted that section 2(h) of the Arbitration Act defines the term party as a party to an arbitration agreement and referred to the judgment of the Supreme Court in Benarsi Krishna Committee & Ors. Vs. Karmyogi Shelters Pvt. Ltd.(2012) where it was held that a party under section 2(h) means only party to an arbitration agreement and not any agent or advocate acting on behalf of the party.

Calcutta High Court

Calcutta High Court Directs South Eastern Railway To Refund Additional 20% Surcharge Levied On Consignment

Case Title: Indian Oil Corporation Vs. Union of India

Case Number: F.M.A.T. No. 237 of 2017

The Calcutta High Court bench of Justice Sabyasachi Bhattacharyya and Justice Uday Kumar has held that an impugned judgment passed by the Railway Claims Tribunal, Kolkata whereby the appellant's claim for refund of 20% surcharge was refused is erroneous in law and perverse.

Court said that the tribunal overlooked the obvious legal effect of the Circulars and Goods Tariff documents before it, which were the only documents which would have any bearing on the adjudication. Thus the court allowed the claim for relaxation regarding an additional 20% surcharge incorporated by the Circular.

Chhattisgarh High Court

Additional Evidence Can Only Be Allowed In Exceptional Circumstances While Deciding Plea U/S 34 Of Arbitration Act: Chhattisgarh HC

Case Title: M/s Hira Carbonics Private Limited versus Kunwar Virendra Singh Patel and Anr.

Case Number: WP227 No. 8 of 2025

The Chhattisgarh High Court bench of Justice Rakesh Mohan Pandey has held that additional evidence not forming part of the arbitral record can be allowed to be given only in exceptional circumstances while hearing a petition under section 34 of the Arbitration Act.

The court noted that in Alpine Housing Development Corporation Pvt. Ltd.(supra) the Supreme Court held that ordinarily additional documents which are not part of the arbitration record cannot be permitted to be given by the court hearing the application under section 34 of the Arbitration Act. The proceedings under section 34 are summary proceedings and if additional evidence are permitted, the purpose of speedily disposing of the petition would be defeated.

Delhi High Court

Referral Courts At Post-Award Stage Must Protect Parties From Being Forced To Arbitrate Non-Arbitrable Claims: Delhi High Court

Case Title: M/s Jaiprakash Associates Limited v. M/s NHPC Limited

Citation: 2025 LiveLaw (Del) 66

The Delhi High Court bench of Justice Subramonium Prasad, while refusing to appoint an arbitrator in a Section 11 petition, has held that the referral court in a post-award stage must protect the parties from being forced to arbitrate when, after prime facie scrutiny of the facts the claims are found to be non-arbitrable. The court applied the 'eye of the needle' test, which allows the referral court to reject arbitration in exceptional circumstances where the claims are deadwood.

Issue Related To Existence Of Arbitration Agreement Cannot Be Decided Ex-Parte, Without Hearing Respondent: Delhi High Court

Case Title: WTC NOIDA DEVELOPMENT COMPANY PVT. LTD V. MS. ARTI KHATTAR & ORS.

Citation: 2025 LiveLaw (Del) 83

A Delhi High Court Bench of Justice Navin Chawla and Justice Shalinder Kaur held that the District Judge should not have decided the issue related to the existence of an arbitration agreement ex-parte, without calling upon the respondent to give its stand on the same.

The court observed that the arbitration agreement, by virtue of the presumption of separability, survives the principal contract in which it was contained. The Arbitration Agreement forming part of a contract is treated as an agreement independent of other terms of the contract. The question of whether the underlying agreement stands discharged itself may be a dispute arising out of or in relation to or under the substantive contract and would not be precluded from reference to arbitration.

[Arbitration Act] Application U/S 34 Without Award Copy Or Vakalatnama Is Merely A 'Stack Of Papers' Filed To Save Limitation: Delhi HC

Case Title: KGF COTTONS PVT LTD v. HALDIRAM SNACKS PVT LTD

Citation: 2025 LiveLaw (Del) 94

The Delhi High Court Bench of Justice Subramonium Prasad has held that a petition under Section 34 of the Arbitration Act, filed without the award itself, would not be a valid filing.

Justice Prasad stated that without the Award, the challenge would become meaningless because unless the award is perused by the court, it cannot adjudicate upon the appropriateness and correctness of the award. An application under Section 34 of the Act, filed without an award and admittedly without a vakalatmana, can only be a stack of papers filed only to save the limitation, he said.

Kerala High Court

'Arbitrator Can Only Decide On Point Which Is Referred To Tribunal, Not Entire Dispute': Kerala High Court

Case Title: M/S.BHAGEERATHA ENGINEERING LTD. V. STATE OF KERALA

Citation: 2025 LiveLaw (Ker) 41

The Kerala High Court Bench of Justice Dr A. K. Jayasankaran Nambiar and Justice Easwaran S. held that if the parties choose to refer to a singular point for arbitration, then the arbitral tribunal cannot proceed to decide on all disputes. On the contrary, if the parties agree to arbitrate on the entire disputes, then the arbitral tribunal shall have jurisdiction to decide the entire dispute and not a specific dispute.

The court noted that clause (b) of Section 28 of the Indian Contract Act, 1872, reveals that any agreement which extinguishes a right of a party in respect of a contract on expiry of a specified period to restrict the other party from enforcing the right, is void to that extent. Therefore, ex-facie Clause 25.2 of the Contract offends the provisions of Section 28(b) of the Contract Act, 1872. Additionally, the court relied on the judgment in Grasim Industries Ltd. v. State of Kerala (2018) and held that clause 25.2 provided in the agreement is void and cannot operate as a restraint for the initiation of the dispute between the parties.

Jharkhand High Court

Arbitral Tribunal Not Bound By Strict Rigors Of CPC, Amendment Permissible At Any Stage Of Proceedings: Jharkhand High Court

Case Title: Rites Ltd v. M/s Supreme BKB DECO JV

Case Number: W. P. (C) No. 311 of 2025

The Jharkhand High Court Bench of Justice Gautam Kumar Choudhary has held that the power under Articles 226 and 227 of the Constitution can be invoked for interfering with an interim order only in exceptionally rare cases.

Additionally, the court held that Arbitral Tribunals are not bound by the strict rigours of CPC and an amendment is permissible at any stage of the proceedings for the purpose of determining the real question in controversy between the parties.

The court relied on the judgment of the Apex Court in Serosoft Solutions Private Ltd. Vs. Dexter Capital Advisors Pvt. Ltd. (2022), wherein the court held that the power under Articles 226 and 227 of the Constitution can be invoked for interfering with an interim order only in exceptional rarity. Nevertheless, power exists and in exceptional circumstances, the said power can be invoked. However, an aperture and avenue for interference is a limited one.

Madras High Court

Award Passed After Inordinate And Unexplained Delay Can Be Set Aside U/S 34 Of Arbitration Act: Madras High Court

Case Title: M/s. Unique Builders Vs The Union of India

Citation: 2025 LiveLaw (Mad) 17

The Madras High Court bench of Justice P.B. Balaji has held that inordinate and unexplained delay in passing the arbitral award can be a ground to set it aside under section 34 of the Arbitration Act.

The primary question before the court was whether an arbitral award can be set aside on the ground that a significant time was taken by the Arbitrator in passing the award. The court noted that in Harji Engineering Works Private Limited v. Bharat Heavy Electricals Limited, (2009) the Delhi High Court while referring to the UNCITRAL guide held that arbitration aims to provide speedy justice and a substantial delay in passing the award would lead to the Arbitrator forgetting the crucial facts. An unexplained delay in passing the award could render the award contrary to public policy.

Orissa High Court

Violation Of Provisions Of Arbitration Act Or MSMED Act Can Be Adjudicated By Court U/S 34 Of Arbitration Act: Orissa High Court

Case Title: Rajdhani Coir V. Micro, Small Enterprises Facilitation Council, Nagpur, Maharashtra

Case Number: W.P.(C) No.22514 of 2022

An Orissa High Court bench of Justice K.R. Mohapatra has dismissed a writ petition upon holding that the petitioner, without availing the efficacious statutory remedy u/s 34 of the Arbitration Act had approached the Court under Articles 226 and 227 of the Constitution for which the Court was not inclined to exercise its discretionary power to entertain it.

Additionally, the court held that violation of any provisions of the Arbitration Act and/or the MSMED Act can be effectively adjudicated by the competent Court in an application under Section 34 of the Arbitration Act read with Section 19 of the MSMED Act.

Patna High Court

Procedural Impediments In Govt Machinery Not 'Sufficient Cause' For Condoning Delay In Filing Appeal U/S 37 Of Arbitration Act: Patna High Court

Case Title: The State of Bihar V. M/s Baba Hans Construction Pvt. Ltd.

Case Number: Miscellaneous Appeal No.679 of 2023

The Patna High Court Bench of Justice Ramesh Chand Malviya has held that procedural impediments in the government machinery are not a 'sufficient cause' for condoning the delay in filing the appeal.

The court observed that the discretion to condone the delay has to be exercised judiciously based on the facts and circumstances of each case and that, the expression 'sufficient cause' cannot be liberally interpreted, if based on the facts of the case it is evident that there has been negligence, inaction or lack of bonafides on the part of the petitioner. The term 'sufficient cause' means that the party should not have acted in a negligent manner or there was a want of bonafide on the part of the petitioner in view of the facts and circumstances of the case.

Punjab and Haryana High Court

Appeal U/S 37 Of Arbitration Act Not Maintainable Against Order Under O.VII R.10 CPC: Punjab And Haryana High Court

Case Title: Parsvnath Developers Limited vs. Brig. Devendra Singh Yadav and others

Case Number: FAO-CARB-28-2022(O&M)

The Punjab and Haryana High Court bench comprising of Justice Arun Palli and Justice Vikram Aggarwal has held that an appeal under Section 37 of the Arbitration and Conciliation Act, 1996 Act read with Section 13(1) of the Commercial Courts Act, 2015 is not maintainable against an order passed under Order VII Rule 10 of the CPC directing the return of a petition filed under Section 34 of the 1996 Act for presentation to the appropriate court.

Uttarakhand High Court

Concept Of Appointing Named Arbitrator Who Is An Interested Party Is No Longer Sustainable: Uttarakhand High Court

Case Title: M/s SPDD VDPPL JV and another v. State of Uttarakhand and others

Case Number: ARBITRATION PETITION NO. 78 OF 2023

The Uttarakhand High Court bench of Chief Justice G. Narendar has held that the concept of appointing a named Arbitrator, who himself is an interested party, is no longer sustainable.

The court relied on the judgment in Perkins Eastman Architects DPC and another vs. HSCC (India) Limited (2020) and held that in the light of the law declared by the Apex Court, the concept of named Arbitrator, who himself is an interested party, is no more sustainable. Thus, the court allowed the application and appointed an arbitrator.

Tags:    

Similar News