Supreme Court: Mere Use Of Words "Arbitration" Or "Arbitrator" In A Clause Won't Make It Arbitration Agreement: Supreme Court Case Title: Mahanadi Coalfields Ltd. versus IVRCL AMR Joint Venture Citation: 2022 LiveLaw (SC) 657 The Supreme Court observed that an arbitration agreement should disclose a determination and obligation on behalf of the parties to refer the...
Supreme Court:
Case Title: Mahanadi Coalfields Ltd. versus IVRCL AMR Joint Venture
Citation: 2022 LiveLaw (SC) 657
The Supreme Court observed that an arbitration agreement should disclose a determination and obligation on behalf of the parties to refer the disputes to arbitration.
The Bench comprising Justices DY Chandrachud and AS Bopanna noted that mere use of the word "arbitration" or "arbitrator" in a clause will not make it an arbitration agreement, if it requires or contemplates a further or fresh consent of the parties for reference to arbitration.
Arbitrators Cannot Unilaterally Fix Their Fee As It Violates Party Autonomy : Supreme Court
Case Title: Oil and Natural Gas Corporation Ltd. vs Afcons Gunanusa JV
Citation: 2022 LiveLaw (SC) 723
In a significant judgment, the Supreme Court on Tuesday held that arbitrators do not have the power to unilaterally fix their fees without the consent of the parties.
The Court further held that the fee scale prescribed under the 4th schedule of the Arbitration and Conciliation Act 1996 is not mandatory.
Case Title: Oil and Natural Gas Corporation Ltd. vs Afcons Gunanusa JV
Citation: 2022 LiveLaw (SC) 723
The Supreme Court held that the ceiling of Rs 30,00,000 in entry at Serial No 6 of the Fourth Schedule of the Arbitration and Conciliation Act is applicable to the sum of base amount and the variable amount, and not just the variable amount.
This means that the highest fee payable shall be Rs 30,00,000, the bench comprising Justices DY Chandrachud, Surya Kant and Sanjiv Khanna observed.
The court also held that the ceiling is applicable to each individual arbitrator, and not the arbitral tribunal as a whole, where it consists of three or more arbitrators.
Case Title: Oil and Natural Gas Corporation Ltd. vs Afcons Gunanusa JV
Citation: 2022 LiveLaw (SC) 723
The Supreme Court held that the term 'sum in dispute' in the Fourth Schedule of the Arbitration Act refers to the sum in dispute in a claim and counter-claim separately, and not cumulatively.
"Arbitrators shall be entitled to charge a separate fee for the claim and the counter-claim in an ad hoc arbitration proceeding, and the fee ceiling contained in the Fourth Schedule will separately apply to both, when the fee structure of the Fourth schedule has been made applicable to the ad hoc arbitration", the majority judgment authored by Justice DY Chandrachud held.
High Courts:
Andhra Pradesh High Court:
Case Title: M/s. Dalapathi Constructions versus The State of Andhra Pradesh & Ors.
The Andhra Pradesh High Court has ruled that a reference to the Facilitation Council under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) for conciliation and subsequent arbitration, is not barred on account of the presence of an arbitration agreement between the parties.
The Single Bench of Justice R. Raghunandan Rao held that even if the arbitration agreement between the parties provides for a different method of constituting an Arbitral Tribunal, the party can be referred to the Facilitation Council under Section 18 of the MSMED Act for recovery of its dues.
Bombay High Court:
Case Title: Ashok Palav Coop. Housing Society Ltd. versus Pankaj Bhagubhai Desai & Anr
The Bombay High Court has ruled that the Arbitral Tribunal is not a Civil Court within the meaning and purview of the Code of Civil Procedure, 1908 and thus, the arbitral proceedings cannot be said to be barred under Section 79 of the Real Estate (Regulation and Development) Act, 2016 (RERA Act).
The Single Bench of Justice G.S. Kulkarni held that the bar of Section 79 of the RERA Act would not apply to an Arbitral Tribunal and thus, the Arbitral Tribunal is not barred from passing an order of injunction under Section 17 of the Arbitration and Conciliation Act, 1996 (A&C Act).
Case Title: BXIN Office Parks India Pvt. Ltd. versus Kailasa Urja Pvt. Ltd.
The Bombay High Court has ruled that reliefs which are incidental to the possession of the licensed premises cannot be sought in an application for interim measures under Section 9 of the Arbitration and Conciliation Act, 1996 (A&C Act), in view of the exclusive jurisdiction conferred on the Court of Small Causes under Section 41 of the Presidency Small Cause Courts Act, 1882 (PSCC Act).
The Single Bench of Justice G.S. Kulkarni reiterated that the bar contained in Section 41 of the PSCC Act applies not only to a suit for recovery of possession of immovable property but also to all other incidental reliefs which can be claimed by a party in a suit for recovery of possession and hence, the jurisdiction to grant such incidental reliefs would also lie with the Small Causes Court.
Mere Erroneous Application Of Law; Award Need Not Be Set Aside: Bombay High Court
Case Title: National Highways Authority of India versus The Additional Commissioner, Nagpur and Ors.
The Bombay High Court has reiterated that when the court is convinced that the Arbitrator has erred only on specific issues and that the arbitral award is otherwise sustainable, the court is not mandatorily required to set aside the entire award under Section 34 of the Arbitration and Conciliation Act, 1996 (A&C Act).
The Single Bench of Justice Manish Pitale ruled that though the arbitral award granting interest to land owners on enhanced compensation from the date of the notification for acquisition, and not from the date of taking possession, is contrary to the mandate of Section 3H (5) of the National Highways Act, 1956 (NHA); however, it constituted a mere erroneous application of the law and hence, the award cannot be said aside on the said ground.
Case Title: Vishwajit Sud & Co. versus L & T Stec JV, Mumbai
The Bombay High Court has ruled that once a settlement is arrived at by the parties, the contract between the parties stands discharged by mutual agreement and hence, the dispute arising under the said contract is a deadwood which cannot be referred to arbitration.
The Single Bench of Justice G.S. Kulkarni held that a party cannot be allowed to resurrect the dead issues and foist an unwarranted arbitration after the contract between them stood discharged by a complete accord and satisfaction in terms of the settlement agreement arrived between them.
Case Title: Relcon Infroprojects Ltd. & Anr. versus Ridhi Sidhi Sadan, Unit of Shree Ridhi Co.op. Housing Society Ltd. & Ors.
The Bombay High Court has ruled that merely because a notice under Section 21 of the Arbitration and Conciliation Act, 1996 (A&C Act) to refer the disputes to arbitration is issued by a party, the Court is not barred from exercising jurisdiction under Section 9 of the A&C Act for interim measures. The Court added that it is not constrained to refer the parties to arbitration and convert the proceedings under Section 9 into an application under Section 17 of the A&C Act, to be adjudicated by the arbitral tribunal.
The Single Bench of Justice G.S. Kulkarni reiterated that when an application under Section 9 has already been taken up for consideration, the question of examining whether the remedy under Section 17 is efficacious or not would not arise.
Calcutta High Court:
Clause"Every Effort" To Arbitrate; Must Be Referred To Arbitration: Calcutta High Court
Case Title: Manika Sett versus Sett Iron Foundry and Ors
The Calcutta High Court has ruled that it is the intention of the parties that has to be deciphered while determining whether or not the parties must be referred to arbitration.
The Single Bench of Justice Shekhar B. Saraf held that where the arbitration clause between the parties provided that "every effort" should be made by them to settle the dispute by arbitration, the term "every effort" expanded the scope and ambit of the arbitration clause, and clearly conveyed the intention to refer the disputes to arbitration.
Conduct Of The Parties Can't Substitute Arbitration Agreement: Calcutta High Court
Case Title: Eastern Coalfields Ltd. versus RREPL-KIPL (JV)
The Calcutta High Court has held that the Court while exercising powers under Section 11 of the A&C Act is bound to examine the existence of the arbitration agreement, in absence of the agreement, it cannot refer the parties to arbitration merely because the respondent did not raise objections.
The Bench of Justice Bebangshu Basak held that the conduct of the parties is not a substitute for an arbitration agreement.
Case Title: Steel Authority of India versus Vizag Seaport Pvt. Ltd.
Citation: 2022 LiveLaw (Cal) 293
The High Court of Calcutta has held that the arbitral tribunal cannot award demurrage charges on the basis of Major Ports Act, 1963 when the contract between the parties has no provision for such damages.
The Bench of Justice Krishna Rao held that an arbitral award wherein the tribunal has awarded demurrage charges in absence of any provision in the agreement for levy of such charge would be vitiated by patent illegality.
Unilateral Appointment Of Arbitrator; Calcutta High Court Replaces With A New Arbitrator
Case Title: Yashovardhan Sinha HUF versus Satyatej Vyapaar Pvt. Ltd.
The Calcutta High Court has held that an arbitration clause does not come to an end merely because it provides for an illegal method of appointment of arbitrator and the courts can remove the illegal portion and retain the remaining clause to give effect to the intention of the parties to submit their dispute to arbitration.
The Bench of Justice Shekhar B. Saraf further held that the Court while exercising powers under Section 14 of the A&C Act for appointing a substitute arbitrator will be guided by the principles of Section 11 of the Act, therefore, the Court may refuse substitution when it finds that the issue itself is not arbitrable or falls under one of the categories wherein the dispute is not required to be sent for arbitration.
Arbitral Award With Contradictory Findings Is Liable To Be Set Aside: Calcutta High Court
Case Title: State of West Bengal v. Tapas Kumar Hazra, AP 1036 of 2011
The High Court of Calcutta has held that an arbitral award wherein the arbitrator has given contradictory findings is liable to be set aside.
The Bench of Justice Krishna Rao reiterated that an arbitral award wherein no reasons are given for arriving at a particular finding is also liable to be set aside
Delhi High Court:
Remedy Under RERA Act Is Not A Bar For Initiation Of Arbitration: Delhi High Court
Case Title: Priyanka Taksh Sood & Ors. versus Sunworld Residency Pvt. Ltd. & Anr.
Citation: 2022 LiveLaw (Del) 752
The Delhi High Court has ruled that the dispute involving refund of payment under the 'Flat Buyer Agreement' from a real estate developer is arbitrable and is not barred by the existence of a concurrent remedy under the Real Estate (Regulation and Development) Act, 2016 (RERA Act).
The Single Bench of Justice Sanjeev Narula held that the remedies available under the RERA Act are in addition to, and not in supersession of, the remedies available under the Arbitration and Conciliation Act, 1996 (A&C Act), and that the application of concurrent remedies under the A&C Act is not barred under the RERA Act.
Arbitral Tribunal Has The Power To Vacate/Modify Its Earlier Order: Delhi High Court
Case Title: Airport Authority of India (Kolkata Airport) versus TDI International Ltd.
Citation: 2022 LiveLaw (Del) 750
The High Court of Delhi has held that the arbitral tribunal would be guided by the principles of O. 39 R. 1&2 of CPC while considering the issue of vacation/modification of an interim order.
The Bench of Justice Sanjeev Narula held that the tribunal does not have the power of substantive review of its order, however, it does have the power to vacate or modify the conditions of the interim order.
Supersession Of The Arbitration Clause Must Not Be Inferred Lightly: Delhi High Court
Case Title: Shristi Infrastructure Development Corporation Ltd. versus Ircon International Limited
Citation: 2022 LiveLaw (Del) 778
The Delhi High Court has ruled that in view of the principle of 'when in doubt, do refer', as enunciated by the Supreme Court, if there is an arbitration agreement between the parties, which is sought to be negated by a party by citing other provisions of a contract, which requires interpretation of the contract, the Court must lean towards referring the matter to arbitration.
The Single Bench of Justice Anup Jairam Bhambhani held that an arbitration agreement embedded in a contract is always considered a separate and severable clause, and that the supersession of the arbitration clause must not be inferred lightly.
Case Title: M/s Scholastic India Pvt. Ltd. & Anr. versus Kanta Batra
Citation: 2022 LiveLaw (Del) 763
The Delhi High Court has ruled that the arbitral award cannot be set aside on the ground that the material relied upon by the Arbitral Tribunal does not measure up to the standards under the Indian Evidence Act, 1872.
The Bench, consisting of Justices Vibhu Bakhru and Amit Mahajan, held that an award passed by the Arbitral Tribunal, by relying upon the Bank Account statements and the Income Tax Return furnished by the Claimant, cannot be said to be an unreasoned award or an award based on no evidence.
Unilateral Constitution Of A Narrow Panel Of Arbitrators Violates Impartiality: Delhi High Court
Case Title: Overnite Express Ltd versus DMRC
Citation: 2022 LiveLaw (Del) 801
The High Court of Delhi has held that the power conferred on one party to unilaterally choose names from a panel of arbitrators and forwarding it to the other party to select its arbitrator from those names is violative of the principle of impartiality in arbitration.
The Bench of Justice Neena Bansal Krishna held that such a unilateral exercise of power creates space for suspicion regardless of the merit of the selected arbitrators who happen to be retired District Judges.
Case Title: Royal Orchids versus Kulbir Singh Kohli & Anr.
The Delhi High Court has ruled that a MOU which is in the nature of a commercial transaction between two private parties is by its very nature determinable and hence, the said MOU can be terminated even in the absence of any termination clause contained in it.
The Single Bench of Justice Mini Pushkarna held that since the MOU was not capable of specific performance due to the statutory bar contained in Section 14 (d) of the Specific Relief Act, 1963, the party was not entitled to any interim relief under Section 9 of the Arbitration and Conciliation Act, 1996 (A&C Act).
Case Title: Piyush Kumar Dutt versus Vishal Mega Mart Pvt. Ltd.
Citation: 2022 LiveLaw (Del) 749
The High Court of Delhi has held that an arbitration clause contained in the annexure to the main agreement would be binding on the parties to that agreement.
The Bench of Justice Neena Bansal Krishna held that in view of Section 11(6-A) the justiciability of claims and the defences can only be determined through adjudication by the arbitrator.
Case Title: Buildmyinfra Private Limited versus Gyan Prakash Mishra
Citation: 2022 LiveLaw (Del) 734
The Delhi High Court has ruled that even if the Agreement containing an Arbitration Clause has not been signed by a party to the dispute, the parties can still be referred to Arbitration.
The Single Bench of Justice Prateek Jalan held that it is not necessary for the written document to be signed by all the parties, as long as the existence of an arbitration agreement can be culled out from the exchange of letters or other means of communication between the parties.
Case Title: Shyama Power India Ltd. versus Haryana Vidyut Prasaran Nigam Ltd.
Citation: 2022 LiveLaw (Del) 733
The High Court of Delhi has held that the arbitrator cannot reject the claim of a party for refund of Liquidated Damages (LD) as barred by time if it was inextricably linked to the issue of Extension of Time (EOT) on which the decision of the competent authority was pending.
The Bench of Justice Vibhu Bakhru held that the period of limitation for the purpose of refund of LD would only begin from the date of the decision on the issue of EOT if the imposition of LD was contingent upon the EOT.
Gauhati High Court:
Case Title: S.R. Engineering Construction versus The Commander Works Engineer
Citation: 2022 LiveLaw (Gau) 56
The Gauhati High Court has held that dismissal of the claim on the ground of locus standi without the opportunity to bring necessary documents on merit and hearing the claims on merit is violation of Section 18 of the A&C Act that provides for equal treatment for parties.
The Bench of Justice Devashis Baruah was hearing an appeal against the order of the lower court passed under Section 34 of the A&C Act whereby the Court rejected the challenge petition of the appellant.
Jammu and Kashmir & Ladakh High Court
Case Title: Anita Mehta v. Gulkand Hues Pvt. Ltd. Arb. P. No. 6 of 2020
The Jammu and Kashmir and Ladakh High Court has held that an application for rejection of a plaint cannot be considered to be the first statement on the substance of the dispute as it is merely an incidental procedural proceeding.
The Bench of Chief Justice held that mere filing of an application for rejection of plaint would not debar a party from subsequently filing an application under Section 8 of the A&C Act as the party cannot be presumed to have given up on its right to arbitration. Similarly, it cannot preclude the party from filing an application for appointment of arbitrator.
The Court that an application for rejecting a plaint is on the basis of the averments made in the plaint and no defence or any document filed in defence is to be examined in deciding an application, therefore, it cannot be treated as submission of the first statement on the merit of the dispute.
Jharkhand High Court:
Case Title: Case Title: National Collateral Management Services Ltd versus Kunk Bihari Food Processing Pvt. Ltd.
The High Court of Jharkhand has held that merely because a reference on the same issue is pending before the MSME Council under Section 18 of the MSMED Act, the same is not a bar to the application under Section 11 of the A&C Act for the appointment of the arbitrator.
The Bench of Justice Sujit Narayan Prasad has held that the High Court while exercising powers under Section 11 of the Act is only required to see if there is an arbitration clause between the parties and an objection regarding the pendency of a reference before the MSME Council on the same matter is not to be looked into at that stage.
Case Title: M/s R.K. Mineral Development Pvt. Ltd. versus Hindalco Industries Ltd.
Citation: 2022 LiveLaw (Jha) 80
The Jharkhand High Court has held that merely because exclusive jurisdiction has been conferred on a different court, the same cannot amount to contrary indicia and the venue of arbitration would still be the seat of arbitration.
The Bench of Justice Sujit Narayan Prasad held that exclusive jurisdiction clause cannot supersede the designation of venue/seat of arbitration.
Kerala High Court:
Case Title: Flemingo Duty Free Shop Private Ltd. versus Airports Authority of India
The Kerala High Court has ruled that allegation of bias cannot be raised as a ground to seek substitution of Arbitrator under Section 29A of the Arbitration and Conciliation Act, 1996 (A&C Act).
The Single Bench of Justice Sathish Ninan held that there is a stark difference between the substitution of an Arbitrator under Section 15(2) and the substitution of the Arbitrator under Section 29A (6) and hence, the request for substitution of an Arbitrator on the ground of bias will not come within the scope of substitution under Section 29A (6) of the A&C Act.
Madhya Pradesh High Court:
Case Title: State of Madhya Pradesh versus Nidhi Industries
Citation: 2022 LiveLaw (MP) 193
The Madhya Pradesh High Court has held that it is mandatory for a High Court to issue notice of application under Section 11 of the A&C Act and non-compliance of which would vitiate the entire proceeding for appointment of arbitrator.
Case Title: Chokhi Dhani versus JS Construction
The Madhya Pradesh High Court has held that if the agreement between the parties provides for certain qualifications of an arbitrator, then the appointment must be made in accordance with those qualifications only.
The Bench of Justice Subodh Abhyankar further held that an application filed under Order 7 Rule 11 of CPC challenging the jurisdiction of the arbitrator is to be treated as the application under Section 16 of the A&C Act as the nomenclature of an application is inconsequential but what is averred and the prayer/relief sought therein is relevant.
Madras High Court
Case Title: M/s. Chennai Water Desalination Ltd. versus Chennai Metropolitan Water Supply and Sewerage Board (CMWSSB)
Citation: 2022 Livelaw (Mad) 346
The Madras High Court has ruled that limitation is a facet of public policy, and hence, an arbitral award which is incorrect qua limitation is hit by Section 34(2)(b)(ii), read with Clause (ii) of Explanation 1 to Section 34(2)(b)(ii) of the Arbitration and Conciliation Act, 1996 (A&C Act).
The Single Bench of Justice M. Sundar held that, in view of the principle laid down by the Supreme Court in Voltas Limited versus Rolta India Limited (2014), if the counter claimant before an Arbitral Tribunal has invoked the arbitration clause, then, the date of such invocation would be the relevant date to decide the limitation period for raising the counter claim.
Arbitrator Appointed Under MSCS Act;Fixation Of Fees Is Subject To A&C Act: Madras High Court
Case Title: Air Corporation Employees Co-operative Credit Society Ltd. versus Registrar of Co-operative Societies
Citation: 2022 LiveLaw (Mad) 369
The Madras High Court has ruled that the power of the Central Registrar to appoint an arbitrator and fix the fees of arbitration under the Multi State Co-operative Societies Act, 2002 (MSCS Act), is subject to the provisions of the Arbitration and Conciliation Act, 1996 (A&C Act).
Holding that there is no provision under the MSCS Act where an exemption has been provided with respect to Section 38 of the A&C Act, which requires the parties to equally bear the advance costs to be deposited before the Arbitral Tribunal, the Single Bench of Justice C. Saravanan set aside the order of the State Registrar directing the petitioner to pay the fees and expenses to the Arbitrator.
Orissa High Court:
Case Title: Faridabad Gurgaon Minerals versus Orissa Mining Corporation Ltd.
The Orissa High Court has ruled that there is no requirement under Section 34(3) of the Arbitration and Conciliation Act, 1996 (A&C Act) to file a separate application for condonation of delay in filing an application to set aside an arbitral award under Section 34 of the A&C Act, since the prescribed and the extended periods are both provided under Section 34 of the A&C Act.
The Single Bench of Justice Arindam Sinha held that the Supreme Court in the case of State of Bihar versus Bihar Rajya Bhumi Vikas Bank Samiti (2018) has declared the law and has interpreted the provisions of Section 34 (5) of the A&C Act, which requires a party to issue a prior notice to the opposite party before filing an application to set aside an arbitral award, as being directory in nature and not mandatory.
Case Title: Birla Institute of Management versus Fiberfill Interiors & Constructions
The Orissa High Court has held that a mere reply to the notice of arbitration would not save the period of limitation for filing the counter-claim(s).
The Court held that the date on which the counterclaim is filed before the arbitrator would be the relevant date for determining the date of stopping of the period of limitation unless the respondent had issued a separate notice of arbitration raising the counter-claims, then the limitation would be computed as on the date of that notice.
Patna High Court:
Case Title: Fulena Construction Pvt. Ltd. versus The State of Bihar
Citation: 2022 LiveLaw (Pat) 21
The High Court of Patna has held that arbitration clause is not a bar to the maintainability of a writ petition when the liability to pay is not disputed by the respondent.
The Division Bench of Justice Chakradhari Sharan Singh and Justice Madhresh Prasad held that once the liability to pay is admitted by the respondent, there remains no dispute that can be referred to arbitration, therefore, the arbitration clause would no longer be a bar to the writ petition.
Telangana High Court:
Case Title: ITC Limited- International Business versus Wide Ocean Shipping Service Ltd.
The Telangana High Court has ruled that where the Arbitral Tribunal has passed a foreign arbitral award after denying the request of a party for oral hearing, the said arbitral award is contrary to the fundamental policy of Indian law as it is in conflict with the basic notions of justice and hence, it cannot be enforced in India.
The Bench, consisting of Justices P. Naveen Rao and Sambasivarao Naidu, held that a person has a right of fair hearing and that a request for oral hearing cannot be refused by the Arbitral Tribunal merely on the ground that the claims involved are modest.
Case Title: D. Ravinder Reddy versus Smt. C. Geethanjali
Recently, the Telangana High Court observed that existence of a "Contingent Contract" cannot be decided in the limited jurisdiction of Courts under Section 11 of Arbitration Act.
Justice K. Lakshman, placing reliance on Supreme Court decision in Vidya Drolia v. Durga Trading Corporation (2021) observed that the scope of interference by the Courts under Section 11 of Arbitration Act is extremely limited.