Supreme Court Annual Digest 2022- Arbitration [ With Parallel Citations]

ArbitrationAct, 1940- The powers exercised by the court under the provisions of the 1940 Act arejudicial powers and that the power to make an award "Rule of Court" is not amechanical power. (Para 127 (ii), 113) Secretaryof Govt. of Kerala Irrigation Department v. James Varghese, 2022 LiveLaw (SC) 447 : (2022) 9 SCC 593

Arbitration and Conciliation Act1996

Arbitration and Conciliation Act, 1996 - Appeal against Bombay HC judgment which dismissed appeal against interimaward of the Arbitral tribunal holding that JDIL was not a party to thearbitration agreement and must be deleted from the array of parties - Allowed -The interim award of the Arbitral Tribunal stands vitiated because of: (i) Thefailure of the arbitral tribunal to decide upon the application for discoveryand inspection filed by ONGC; (ii) The failure of the arbitral tribunal todetermine the legal foundation for the application of the group of companiesdoctrine; and (iii) The decision of the arbitral tribunal that it would decideupon the applications filed by ONGC only after the plea of jurisdiction wasdisposed of. Oil and Natural Gas Corporation Ltd. v. Discovery Enterprises Pvt. Ltd;2022 LiveLaw (SC) 416 : AIR 2022 SC 2080 : (2022) 8 SCC 42

Arbitrationand Conciliation Act 1996 - Can a person whois ineligible to be an arbitrator nominate another arbitrator? Supreme Courtrefers issue to larger bench. JSW SteelLimited v. South Western Railway, 2022LiveLaw (SC) 693

Arbitrationand Conciliation Act 1996 - Relief reated to tax concessions are notarbitrable. Shree Enterprise Coal Sales Pvt. Ltd. v.Union of India, 2022 LiveLaw (SC) 774

Arbitrator's fee

Arbitrationand Conciliation Act, 1996 - Arbitrator's feecap is Rs 30 lakhs, ceiling limit applicable to individual arbitrators, nottribunal as a whole. Oil andNatural Gas Corporation Ltd. v. Afcons Gunanusa JV, 2022LiveLaw (SC) 723 : AIR 2022 SC 4413

Arbitrationand Conciliation Act, 1996 - Arbitratorscannot unilaterally fix their fee as it violates party autonomy. Oil and Natural Gas Corporation Ltd. v.Afcons Gunanusa JV, 2022LiveLaw (SC) 723 : AIR 2022 SC 4413

Arbitrationand Conciliation Act, 1996 - Arbitratorsentitled to charge separate fee for claim & counter claim in arbitrationproceedings. Oil and Natural GasCorporation Ltd. v. Afcons Gunanusa JV, 2022LiveLaw (SC) 723 : AIR 2022 SC 4413

Arbitrationand Conciliation Act, 1996 - 'Holdpreliminary hearings to fix arbitrator's fee': Supreme Court issues directivesto govern fees of arbitrators. Oil andNatural Gas Corporation Ltd. v. Afcons Gunanusa JV, 2022LiveLaw (SC) 723 : AIR 2022 SC 4413

Execution of Arbitration awards against NHAI

Execution ofArbitration awards against NHAI - If the High Courts convert itself to theExecuting Court and entertain the writ petitions under Article 226 of theConstitution of India to execute the award passed by the ArbitralTribunal/Court, the High Courts would be flooded with the writ petitions toexecute awards passed by the learned Arbitrator/Arbitral Tribunal/ArbitralCourt - We disapprove the entertaining of such writ petitions under Article 226of the Constitution of India to execute the award passed by the learnedArbitral Tribunal/Court, without relegating the judgment creditor in whosefavour the award is passed to file an execution proceeding before the competentExecuting Court. (Para 6-7)NationalHighways Authority of India v. Sheetal Jaidev Vade, 2022LiveLaw (SC) 705 : AIR 2022 SC 3980

Interest

Arbitrationand Conciliation Act 1996 - Interest - Party notentitled to interest for the period during which the proceedings weredeliberately delayed-A party cannot be permitted to derive benefits from itsown lapses. [Para 12 to 14] ExecutiveEngineer (R and B) v. Gokul Chandra Kanungo, 2022LiveLaw (SC) 824 : AIR 2022 SC 4857

Jurisdiction

Arbitration and Conciliation Act, 1996 - Special leave petition against an order of the Calcutta High Court,allowing an Arbitration Petition under Section 11(6) of the Arbitration andConciliation Act, 1996 for appointment of an Arbitrator - Allowed - Calcutta HighCourt inherently lacks jurisdiction to entertain the application. RaviRanjan Developers Pvt. Ltd. v. Aditya Kumar Chatterjee, 2022 LiveLaw (SC) 329 : 2022 (5) SCALE 372

Arbitration and Conciliation Act, 1996 - Jurisdiction - When two or more Courts have jurisdiction to adjudicate disputesarising out of an arbitration agreement, the parties might, by agreement,decide to refer all disputes to any one Court to the exclusion of all otherCourts, which might otherwise have had jurisdiction to decide the disputes. Theparties cannot, however, by consent, confer jurisdiction on a Court whichinherently lacked jurisdiction. (Para 47) Ravi Ranjan Developers Pvt. Ltd. v. AdityaKumar Chatterjee, 2022 LiveLaw (SC) 329 : 2022 (5) SCALE 372

Revocation of Arbitration Clausesand Reopening of Awards Act, 1998 (Kerala)

Arbitration - Revocation of Arbitration Clauses andReopening of Awards Act, 1998 (Kerala) - The Act isliable to be held unconstitutional on the ground of encroachment upon thejudicial powers of the State - The Act has the effect of annulling the awardswhich have become "Rules of Court", is a transgression on the judicialfunctions of the State and therefore, violative of doctrine of "separation ofpowers". (Para 122, 127(iii)) Secretaryof Govt. of Kerala Irrigation Department v. James Varghese, 2022 LiveLaw (SC) 447 : 2022 (7) SCALE 327

Seat and Venue

Arbitration and Conciliation Act, 1996 - Only if the agreement of the parties was construed to provide forseat/place of arbitration in India, would Part-I of the 1996 Act be applicable.If the seat/place were outside India, Part-I would not apply, even though thevenue of a few sittings may have been in India, or the cause of action may havearisen in India. (Para 36) Ravi Ranjan Developers Pvt. Ltd. v. AdityaKumar Chatterjee, 2022 LiveLaw (SC) 329 : 2022 (5) SCALE 372

Arbitration and Conciliation Act, 1996 - Seat and Venue - Sittings at various places are relatable to venue. It cannot beequated with the seat of arbitration or place of arbitration, which has adifferent connotation. (Para 44, 45) Ravi Ranjan Developers Pvt. Ltd. v. AdityaKumar Chatterjee, 2022 LiveLaw (SC) 329 : 2022 (5) SCALE 372

Section 2(1)(e) - "Court"

Arbitrationand Conciliation Act, 1996; Sections 2(1)(e), 9, 14 and 34 - State Government can confer jurisdiction to hear applications underSections 9, 14 and 34 of the Arbitration and Conciliation Act, 1996, uponCommercial Courts which are subordinate to the rank of the Principal CivilJudge in the District - All applications or appeals arising out of arbitrationunder the provisions of Act, 1996, other than international commercialarbitration, shall be filed in and heard and disposed of by the CommercialCourts, exercising the territorial jurisdiction over such arbitration wheresuch commercial courts have been constituted.(Para 6-11) JayceeHousing Pvt. Ltd. v. Registrar (General), Orissa High Court, 2022 LiveLaw (SC) 860: 2022 (15) SCALE 213

Arbitrationand Conciliation Act,1996; Section 2(1)(e), 34 - In the absence of the High Court of Orissa having originaljurisdiction, the concerned District Court can be said to be `Court' - Theproceedings under Section 34 against the award passed by the Arbitrator shalllie before the concerned District Court, as defined under Section 2(e). Yashpal Chopra v. Union of India,2022LiveLaw (SC) 900

Section 2(1)(h) - "Party"

Arbitrationand Conciliation Act, 1996; Section 2(h), 7, 8, 16 - Group of companiesdoctrine- An arbitration agreement entered into by a company within a group ofcompanies, can bind its non-signatory affiliates or sister concerns if thecircumstances demonstrate a mutual intention of the parties to bind both thesignatory and affiliated, non-signatory parties - A non-signatory may be boundby the arbitration agreement where: (i) There exists a group of companies; and(ii) Parties have engaged in conduct or made statements indicating an intentionto bind a non-signatory - In deciding whether a company within a group ofcompanies which is not a signatory to arbitration agreement would nonethelessbe bound by it, the law considers the following factors: (i) The mutual intentof the parties; (ii) The relationship of a non-signatory to a party which is asignatory to the agreement; (iii) The commonality of the subject matter; (iv)The composite nature of the transaction; and (v) The performance of thecontract. (Para 18, 23, 26) Oil and Natural Gas Corporation v.Discovery Enterprises, 2022 LiveLaw SC 416 : AIR 2022 SC2080

Section 7 - Arbitration Agreement

Arbitrationand Conciliation Act, 1996; Section 7 - Partiesto the contract are free to agree on applicability of (1) proper law ofcontract, (2) proper law of arbitration agreement and (3) proper law of theconduct of arbitration. Parties to the contract also may agree for mattersexcluded from the purview of arbitration - Unless the effect of agreementresults in performance of an unlawful act, an agreement, which is otherwiselegal, cannot be held to be void and is binding between the parties. (Para 13.3) IndianOil Corporation Ltd. v. NCC Ltd., 2022LiveLaw (SC) 616

Arbitration and Conciliation Act, 1996; Section 7 - Principles governing what constitutes anarbitration agreement - Arbitration agreement should disclose a determinationand obligation on behalf of parties to refer disputes to arbitration - mere useof the word "arbitration" or "arbitrator" in a clause willnot make it an arbitration agreement, if it requires or contemplates a furtheror fresh consent of the parties for reference to arbitration. (Para 8-9) MahanadiCoalfields Ltd. v. IVRCL AMR Joint Venture, 2022LiveLaw (SC) 657

Arbitrationand Conciliation Act, 1996; Section 7, 11 - Section 7 of the Act does not mandate any particular form for thearbitration clause - Even if we were to assume that the subjectclause lackscertain essential characteristics of arbitration like "final andbinding" nature of the award, the parties have evinced clear intention torefer the dispute to arbitration and abide by the decision of the tribunal. Theparty autonomy to this effect, therefore, deserves to be protected - Thedeficiency of words in agreement which otherwise fortifies the intention of theparties to arbitrate their disputes, cannot legitimise the annulment ofarbitration clause - Courts to give greater emphasis to the substance of theclause, predicated upon the evident intent and objectives of the parties tochoose a specific form of dispute resolution to manage conflicts between them. (Para14-28) Babanrao Rajaram Pundv. Samarth Builders & Developers, 2022LiveLaw (SC) 747 : AIR 2022 SC 4161 : (2022) 9 SCC 691

Section 8 - Power to referparties to arbitration where there is an arbitration agreement

Arbitrationand Conciliation Act, 1996; Section 8, 11 - Group of Companies Doctrine - There is a clear need forhaving a relook at the doctrinal ingredients concerning the group of companiesdoctrine - Whether the phrase 'claiming through or under' in Sections 8 and 11could be interpreted to include 'Group of Companies' doctrine? Whether the'Group of companies' doctrine as expounded by Chloro Controls India PrivateLimited v. Severn Trent Water Purification Inc. (2013) 1 SCC 641 and subsequentjudgments are valid in law? - Issues referred to a larger bench. Cox andKings Ltd. v. SAP India, 2022 LiveLaw (SC) 455 : (2022) 8 SCC 1

Section 9 - Interim measures, etc., by Court.

Arbitrationand Conciliation Act, 1996; Section 9 - Proof of actual attempts to deal with, remove or dispose of theproperty with a view to defeat or delay the realisation of an impendingArbitral Award is not imperative for grant of relief under Section 9 - A strongpossibility of diminution of assets would suffice - The power under Section 9should not ordinarily be exercised ignoring the basic principles of procedurallaw as laid down in the CPC, but the technicalities of CPC cannot prevent theCourt from securing the ends of justice - If a strong prima facie case is madeout and the balance of convenience is in favour of interim relief beinggranted, the Court exercising power under Section 9 of the Arbitration Actshould not withhold relief on the mere technicality of absence of averments,incorporating the grounds for attachment before judgment under Order 38 Rule 5of the CPC. (Para 39-50) Essar HousePvt. Ltd. v. Arcellor Mittal Nippon Steel India Ltd., 2022LiveLaw (SC) 765 : AIR 2022 SC 4294

Section 11 - Appointment ofArbitrators

Arbitration andConciliation Act, 1996; Section 11 - Arbitration application decided anddisposed of after a period of four years by Telangana High Court - Very sorrystate of affairs - Registrar General of the High Court directed to submit adetailed report/statement pointing out how many Section 11 applications arepending before the High Court and from which year. Shree Vishnu Constructions v.Engineer in Chief Military Engineering Service, 2022 LiveLaw (SC) 345

Arbitrationand Conciliation Act, 1996; Section 11 - Court can undertake preliminary inquiry to ascertain if the dispute isarbitrable or falls under the excepted category in the agreement. (Para 7) Emaar IndiaLtd. v. Tarun Aggarwal Projects LLP, 2022LiveLaw (SC) 823 : AIR 2022 SC 4678

Arbitrationand Conciliation Act, 1996; Section 11 - Even if an aspect with regard to 'accord and satisfaction' of theclaims may/can be considered by the Court at the stage of deciding Section 11application, it is always advisable and appropriate that in cases of debatableand disputable facts, good reasonably arguable case, the same should be left tothe Arbitral Tribunal. (Para 13) Indian Oil Corporation Ltd. v. NCC Ltd., 2022LiveLaw (SC) 616

Arbitration andConciliation Act, 1996; Section 11 - The arbitration applications forappointment of an Arbitrator are required to be decided and disposed of at theearliest, otherwise the object and purpose of the Arbitration Act shall befrustrated. (Para 2) Shree Vishnu Constructions v. Engineer in Chief Military EngineeringService, 2022 LiveLaw (SC) 345

Arbitration and Conciliation Act, 1996; Section 11- While dealing with petition under Section 11, the Court by default wouldrefer the matter when contentions relating to non arbitrability are plainlyarguable. In such case, the issue of non arbitrability is left open to bedecided by the Arbitral Tribunal. (Para 11) Mohammed Masroor Shaikh v. BharatBhushan Gupta, 2022LiveLaw (SC) 120 : AIR 2022 SC 1126 : (2022) 4 SCC 156

Arbitrationand Conciliation Act, 1996; Section 11(5) - Even in theabsence of any arbitration agreement in writing between the parties, withconsent the parties may refer the dispute for arbitration and appoint a solearbitrator/arbitrators by mutual consent and parties may agree mutually on aprocedure for appointing an arbitrator or arbitrators even in the absence ofany written agreement. (Para 7.2) Swadesh Kumar Agarwal v. Dinesh Kumar Agarwal, 2022 LiveLaw (SC) 454 : AIR 2022 SC2193 : (2022) 10 SCC 235

Arbitrationand Conciliation Act, 1996; Section 11(5),11(6)- Delay in appointment of arbitrators - If the arbitrators are not appointed atthe earliest and the applications under Sections 11(5) and 11(6) of theArbitration Act are kept pending for a number of years, it will defeat theobject and purpose of the enactment of the Arbitration Act and it may lose thesignificance of an effective Alternative Dispute Resolution Mechanism. If theCommercial disputes are not resolved at the earliest, not only it would affectthe commercial relations between the parties but it would also affect economyof the country. Shree Vishnu Constructions v. Engineer in Chief Military EngineeringService, 2022 LiveLaw (SC) 523

Arbitrationand Conciliation Act, 1996; Section 11(5),11(6)- Directions issued to High Courts to dispose pending applications within 6months - Ensure that all pending applications under Sections 11(5) and 11(6) ofthe Arbitration Act and/or any other applications either for substitution ofarbitrator and/or change of arbitrator, which are pending for more than oneyear from the date of filing, must be decided within six months from today. ShreeVishnu Constructions v. Engineer in Chief Military Engineering Service, 2022 LiveLaw (SC) 523

Arbitration and ConciliationAct, 1996; Section11(6) - A party to the arbitration agreement can appoint anarbitrator even after an Arbitration Petition has been filed by the other partybefore the High Court for appointment of an arbitrator if the party has notbeen given due notice of the same. (Para 16) Durga Welding Works v. Chief Engineer, 2022 LiveLaw (SC) 9 : (2022) 3 SCC 98

Arbitrationand Conciliation Act, 1996; Section 11(6) - An applicationunder section 11(6) shall be maintainable only in a case where there is acontract between the parties containing the arbitration agreement and theappointment procedure is prescribed and is agreed upon in writing. (Para 6.2) Swadesh Kumar Agarwal v. Dinesh Kumar Agarwal, 2022 LiveLaw (SC) 454 : AIR 2022 SC2193 : (2022) 10 SCC 235

Arbitrationand Conciliation Act, 1996; Section 11(6) - The court at thereferral stage can interfere only when it is manifest that the claims are exfacie timebarred and dead, or there is no subsisting dispute. In the contextof issue of limitation period, it should be referred to the Arbitral Tribunal fordecision on merits. Similar would be the position in case of disputed"no-claim certificate" or defence on the plea of novation and"accord and satisfaction". Meenakshi SolarPower Pvt. Ltd. v. Abhyudaya Green Economic Zones Pvt. Ltd., 2022 LiveLaw (SC) 988

Arbitrationand Conciliation Act, 1996; Section 11(6) - Unless on the facet it is found that the dispute is not arbitrable andif it requires further/deeper consideration, the dispute with respect to thearbitrability should be left to the arbitrator. (Para 5.3) VGPMarine Kingdom Pvt. Ltd. v. Kay Ellen Arnold, 2022LiveLaw (SC) 914

Arbitrationand Conciliation Act; 1996; Section 11(6) - There cannot be two arbitration proceedings with respect to the samecontract/transaction-in the present case, earlier the dispute was referred toarbitration and the Arbitrator passed an award on whatever the claims weremade. Thereafter, a fresh arbitration proceeding was sought to be initiatedwith respect to some further claims, may be after final bill-The same isrightly refused (by the High Court) to be referred to arbitration in exerciseof Section 11(6) of the Act. TantiaConstructions v. Union of India, 2022LiveLaw (SC) 624

Arbitrationand Conciliation Act, 1996; Section 11(6) and 2(1)(e) - Anapplication under Section 11(6) of the A&C Act for appointment of anArbitrator/Arbitral Tribunal cannot be moved in any High Court in India,irrespective of its territorial jurisdiction. Section 11(6) of the A&C Acthas to be harmoniously read with Section 2(1)(e) of the A&C Act andconstrued to mean, a High Court which exercises superintendence/supervisoryjurisdiction over a Court within the meaning of Section 2(1)(e) of the A&CAct. It could never have been the intention of Section 11(6) of the A&C Actthat arbitration proceedings should be initiated in any High Court in India,irrespective of whether the Respondent resided or carried on business withinthe jurisdiction of that High Court, and irrespective of whether any part ofthe cause of action arose within the jurisdiction of that Court, to put anopponent at a disadvantage and steal a march over the opponent. RaviRanjan Developers Pvt. Ltd. v. Aditya Kumar Chatterjee, 2022 LiveLaw (SC) 329 : 2022 (5) SCALE 372

Arbitration andConciliation Act, 1996; Section 11(6), 7 - High Court order proceeds on an understanding that the Counsel forboth the sides did not dispute the fact that a clause of the Contract Agreementprovided for appointment of an arbitrator - An understanding of counsel, cannotbe regarded as a binding statement of law on the existence of an arbitrationagreement. (Para 18) MahanadiCoalfields Ltd. v. IVRCL AMR Joint Venture, 2022 LiveLaw (SC) 657

Section 12 - Grounds forChallenge

Arbitrationand Conciliation Act, 1996; Section12(5) read with Seventh Schedule - An arbitral tribunalconstituted as per an arbitration clause before the 2015 amendment to theArbitration and Conciliation Act 1996 will lose its mandate if it violates theneutrality clause under Section 12(5) read with the Seventh Schedule, which wereincorporated through the 2015 amendment. (Para 8, 9) ElloraPaper Mills Ltd. v. State of Madhya Pradesh, 2022 LiveLaw(SC) 8: AIR 2022 SC 280 : (2022) 3 SCC 1

Section 14 - Failure orImpossibility to Act

Arbitrationand Conciliation Act, 1996; Section 11(6),14(1)(a) -Once the arbitrator was appointed by mutual consent and it was alleged that themandate of the sole arbitrator stood terminated in view of section 14(1)(a),the application under section 11(6) to terminate the mandate of the arbitratorin view of section 14(1)(a) shall not be maintainable - The aggrieved party hasto approach the concerned "court" as per subsection (2) of section 14 of theAct. (Para 8) Swadesh Kumar Agarwalv. Dinesh Kumar Agarwal, 2022 LiveLaw (SC) 454 : AIR 2022 SC2193 : (2022) 10 SCC 235

Arbitrationand Conciliation Act, 1996; Section 11, 11(6A) - Though the Arbitral Tribunal may have jurisdiction and authority todecide the disputes including the question of jurisdiction andnonarbitrability, the same can also be considered by the Court at the stage ofdeciding Section 11 application if the facts are very clear and glaring and inview of the specific clauses in the agreement binding between the parties,whether the dispute is nonarbitrable and/or it falls within the exceptedclause. Even at the stage of deciding Section 11 application, the Court mayprima facie consider even the aspect with regard to 'accord and satisfaction'of the claims. (Para 13) Indian Oil Corporation Ltd. v. NCC Ltd., 2022LiveLaw (SC) 616

Section 15 - Termination ofMandate and Substitution of Arbitrator

Arbitrationand Conciliation Act, 1996; Section 12, 14(1)(a), 15(1)(a) - If thechallenge to the arbitrator is made on any of the grounds mentioned in section12 of the Act, the party aggrieved has to submit an appropriate applicationbefore the Arbitral Tribunal itself - Whenever there is a dispute and/orcontroversy that the mandate of the arbitrator is to be terminated on thegrounds mentioned in section 14(1)(a), such a controversy/dispute has to beraised before the concerned "court" only and after the decision by theconcerned "court" as defined under section 2(e) and ultimately it is held thatthe mandate of the arbitrator is terminated, thereafter, the arbitrator is tobe substituted accordingly, that too, according to the rules that wereapplicable to the initial appointment of the arbitrator - So far as thetermination of the mandate of the arbitrator and/or termination of theproceedings mentioned in other provisions like in section 15(1)(a) where hewithdraws from office for any reason; or (b) by or pursuant to an agreement ofthe parties, the dispute need not be raised before the concerned court -Thesame procedure is required to be followed which was followed at the time ofappointment of the sole arbitrator whose mandate is terminated and/or who isreplaced. (Para 6.7) Swadesh Kumar Agarwal v. Dinesh Kumar Agarwal, 2022 LiveLaw (SC) 454 : AIR 2022 SC2193 : (2022) 10 SCC 235

Section 16 - Competence ofArbitral Tribunal to rule on its Jurisdiction

Arbitrationand Conciliation Act, 1996; Section 16 - Party taking theplea of absence of jurisdiction is required to establish the grounds on whichit set about to establish its plea. (Para49) Oil and Natural Gas Corporation v.Discovery Enterprises, 2022 LiveLaw SC 416 : AIR 2022 SC2080

Arbitration and Conciliation Act, 1996; Section 16 - Party taking the plea of absence of jurisdiction is required toestablish the grounds on which it set about to establish its plea. (Para49) Oil and Natural Gas Corporation Ltd. v. Discovery Enterprises Pvt. Ltd;2022 LiveLaw (SC) 416 : AIR 2022 SC 2080 : (2022) 8 SCC 42

Arbitration and Conciliation Act, 1996; Section 16, 34, 37 - An appeal lies to the Court from the decision of the Arbitral Tribunalthat it lacks jurisdiction - Parliament has not specifically constricted thepowers of the court while considering an appeal under clause (a) of sub-section(2) of Section 37 by the grounds on which an award can be challenged underSection 34 - In the exercise of the appellate jurisdiction, the court must havedue deference to the grounds which have weighed with the tribunal in holdingthat it lacks jurisdiction having regard to the object and spirit underlyingthe statute which entrusts the arbitral tribunal with the power to rule on itsown jurisdiction - The decision of the tribunal that it lacks jurisdiction isnot conclusive because it is subject to an appellate remedy under Section37(2)(a). However, in the exercise of this appellate power, the court must bemindful of the fact that the statute has entrusted the arbitral tribunal withthe power to rule on its own jurisdiction with the purpose of facilitating theefficacy of arbitration as an institutional mechanism for the resolution ofdisputes. (Para 34 - 39) Oil and Natural Gas Corporation Ltd. v.Discovery Enterprises Pvt. Ltd; 2022 LiveLaw (SC) 416 : AIR 2022 SC 2080 : (2022) 8 SCC 42

Section 17 - Interim Measuresordered by Arbitral Tribunal

Arbitration and Conciliation Act, 1996;Section 17 - Appeal against Delhi HC order which confirmed theinterim order passed by Arbitral Tribunal directing the appellant to depositthe rental amount from March, 2020 onwards and up to December, 2021 - Partlyallowed - No order could have been passed by the Tribunal by way of interimmeasure on the applications filed under Section 17 of the Arbitration Act in acase where there is a serious dispute with respect to the liability of therental amounts to be paid, which is yet to be adjudicated upon and/orconsidered by the Arbitral Tribunal - The appellant will therefore have todeposit the entire rental amount except the period for which there was completeclosure due to lockdown. EvergreenLand Mark Pvt. Ltd. v. John Tinson and Company Pvt. Ltd; 2022 LiveLaw (SC) 389 : AIR 2022 SC 1930 : (2022) 7 SCC 757

Section 20 - Place of Arbitration

Arbitrationand Conciliation Act, 1996; Section 20 - The appointment ofa new arbitrator who holds the arbitration proceedings at a different locationwould not change the jurisdictional 'seat' already fixed by the earlier orfirst arbitrator. The place of arbitration in such an event should be treated asa venue where arbitration proceedings are held - Once the jurisdictional 'seat'of arbitration is fixed in terms of sub-section (2) of Section 20 of the Act,then, without the express mutual consent of the parties to the arbitration,'the seat' cannot be changed. (Para 29) BBR (India) Pvt. Ltd. v. S.P. SinglaConstructions, 2022 LiveLaw (SC) 493 : AIR 2022 SC 2673

Section 21 - Parties to suit mayapply for order of reference

ArbitrationAct, 1940; Section 21 - The word 'agree' in Section 21 of the Actrefers to consensus ad idem between the parties who take a considered decisionto forego their right of adjudication before a court where the suit is pending,and mutually agree to have the subject matter of the suit or part thereofadjudicated and decided by an arbitrator. (Para17) M.P. Rajya Tilhan Utpadak SahakariSangh Maryadit v. Modi Transport Service, 2022 LiveLaw (SC) 471 : 2022 (7) SCALE 762

ArbitrationAct, 1940; Section 21 -Distinction between the scope and functions of an arbitral tribunal and acommissioner - For submission to arbitration, there must be an arbitrationagreement or an agreement in terms of Section 21 of the Act that the differenceor dispute between the parties for which they intend to be determined in aquasi-judicial manner. Commissioners are appointed by the court. Appointmentmay be with consent of the parties, or even when there is objection to theappointment. Preexisting agreement or the requirement that the parties agreebefore the court, as is mandatory in case of arbitration, is not necessary whena court directs appointment of a commissioner. In the case of a reference to acommissioner, all that the parties expect from the commissioner is a valuation/examination of the subject matter referred, which he would do according to hisskill, knowledge and experience, which may be without taking any evidence orhearing argument. (Para 32) M.P. Rajya Tilhan Utpadak Sahakari SanghMaryadit v. Modi Transport Service, 2022 LiveLaw (SC) 471 : 2022 (7) SCALE 762

Section 23 - Statements of Claimand Defence

Arbitrationand Conciliation Act, 1996; Sections 23(2A), 34 - Counter-claim of aparty cannot be dismissed merely because the claims were not notified beforeinvoking the arbitration. National Highway Authority of India v.Transstroy (India) Ltd., 2022 LiveLaw (SC) 586 : 2022 (10) SCALE 429

Section30 - Grounds for setting aside award

Arbitration Act, 1940; Section30, 33 - Scope of interference by courts - A Court does not sit in appeal over an Awardpassed by an Arbitrator and the only grounds on which it can be challenged arethose that have been specified in Sections 30 and 33 of the Arbitration Act,namely, when there is an error on the face of the Award or when the learnedArbitrator has misconducted himself or the proceedings. (Para 10-15) AtlantaLtd. v. Union of India, 2022 LiveLaw (SC) 63 : (2022)3 SCC 739

Section 31 - Form and Contents ofArbitral Award

Arbitration and Conciliation Act, 1996; Section 31 - Post-award interest can be granted by an Arbitrator on the interestamount awarded. (Para 4-6) UHL Power Company Ltd. v. State of HimachalPradesh, 2022 LiveLaw (SC) 18 : (2022) 4 SCC 116

Arbitrationand Conciliation Act, 1996; Section 31(7) - Arbitral tribunalcan grant post-award interest on the sum of the award which also includes theinterest component - The word sum used under Section 31(7) includes theinterest awarded on the substantive claims, therefore, the post award interestwould be on both the amount awarded in respect of the substantive claims andthe interest awarded on such claims. Indian Oil Corporation v. U.B. Engineering, 2022 LiveLaw (SC) 409

Arbitrationand Conciliation Act, 1996; Section 31(7) - The arbitrator has the discretion to award post-award interest on apart of the 'sum' - The arbitrator has the discretion to determine the rate ofreasonable interest, the sum on which the interest is to be paid, that iswhether on the whole or any part of the principal amount, and the period forwhich payment of interest is to be made - whether it should be for the whole orany part of the period between the date on which the cause of action arose andthe date of the award - The arbitrator must exercise the discretionary power togrant post award interest reasonably and in good faith, taking into account allrelevant circumstances - The purpose of granting post-award interest is toensure that the award debtor does not delay the payment of the award. (Para18-22) Morgan Securities andCredits Pvt. Ltd. v. Videocon Industries Ltd., 2022LiveLaw (SC) 728 : AIR 2022 SC 4091

Arbitrationand Conciliation Act, 1996; Section 31(7)(a) - If there is anagreement between the parties to the contrary, the Arbitral Tribunal would loseits discretion to award interest and will have to be guided by the agreementbetween the parties - In the absence of such an agreement, the Arbitral Tribunalwould have a discretion to exercise its powers under clause (a) of subsection(7) of Section 31- The discretion is wide enough. (Para 14-18) Delhi Airport Metro Express Pvt. Ltd. v. Delhi MetroRail Corporation, 2022 LiveLaw (SC) 452 : AIR 2022 SC 2165 : (2022) 9 SCC 286

Arbitrationand Conciliation Act, 1996; Section 31(7)(a) - the section itself requires interest to be at such rate as the arbitraltribunal deems reasonable. When a discretion is vested to an arbitral tribunalto award interest at a rate which it deems reasonable, then a duty would becast upon the arbitral tribunal to give reasons as to how it deems the rate ofinterest to be reasonable - When the arbitral tribunal is empowered with such adiscretion, the arbitral tribunal would be required to apply its mind to thefacts of the case and decide as to whether the interest is payable on whole orany part of the money and also as to whether it is to be awarded to the wholeor any part of the period between the date on which the cause of action aroseand the date on which the award is made.Executive Engineer (R and B) v. Gokul Chandra Kanungo, 2022LiveLaw (SC) 824 : AIR 2022 SC 4857

Section 34 - Application for setting aside Arbitral Awards

Arbitrationand Conciliation Act, 1996; Section34 - An error in interpretation of a contract in a casewhere there is valid and lawful submission of arbitral disputes to an ArbitralTribunal is an error within jurisdiction. (Para 45) Indian Oil Corporation Ltd. v.Shree Ganesh Petroleum Rajgurunagar, 2022 LiveLaw (SC) 121 : (2022) 4 SCC 463

Arbitrationand Conciliation Act, 1996; Section 34 - Appeal againstPunjab & Haryana HC order which allowed to proceed under section 34 of theArbitration Act, 1996 without insistence for making pre-deposit of 75% of theawarded amount - Order passed by the High Court permitting the proceedingsunder section 34 of the Arbitration Act, 1996 without insistence for makingpredeposit of 75% of the awarded amount is unsustainable and the same deservesto be quashed and set aside. Tirupati Steels v. Shubh IndustrialComponent, 2022 LiveLaw (SC) 383 : AIR 2022 SC 1939

Arbitration and ConciliationAct, 1996; Section 34 -Arbitral award can be set aside by the court if the court finds the award isvitiated by patent illegality appearing on the face of the award - The awardshall not be set aside merely on the ground of erroneous application of law orby misappreciation of evidence. (Para 15)Haryana Urban Development Authority, Karnal v. M/s. MehtaConstruction Company, 2022 LiveLaw (SC) 348 : (2022) 5 SCC 432

Arbitration and Conciliation Act, 1996; Section34 - Limitation Act, 1961; Section 5 - Section 5 of Limitation Act is not applicableto condone the delay beyond the period prescribed under Section 34(3) of Act1996. Mahindra and Mahindra Financial Services Ltd. v. Maheshbhai TinabhaiRathod, 2022LiveLaw (SC) 5 : (2022) 4 SCC 162

Arbitration and Conciliation Act, 1996; Section 34 - Patent Illegality - An Arbitral Tribunal being a creature of contract, isbound to act in terms of the contract under which it is constituted. An awardcan be said to be patently illegal where the Arbitral Tribunal has failed toact in terms of the contract or has ignored the specific terms of a contract.(Para 44) Indian Oil Corporation Ltd. v. Shree Ganesh Petroleum Rajgurunagar, 2022 LiveLaw (SC) 121 : (2022) 4 SCC 463

Arbitration and Conciliation Act, 1996; Section 34- The Court does not sit in appeal over the award made by an Arbitral Tribunal.The Court does not ordinarily interfere with interpretation made by theArbitral Tribunal of a contractual provision, unless such interpretation ispatently unreasonable or perverse. Where a contractual provision is ambiguousor is capable of being interpreted in more ways than one, the Court cannotinterfere with the arbitral award, only because the Court is of the opinionthat another possible interpretation would have been a better one. (Para 46) IndianOil Corporation Ltd. v. Shree Ganesh Petroleum Rajgurunagar, 2022 LiveLaw (SC) 121 : (2022) 4 SCC 463

Arbitration and ConciliationAct, 1996; Section 34 -The court may condone delay of a period up to thirty days in filing of theobjections if it is satisfied that the applicant is prevented by sufficientcause from making an application under Section 34(1) of the Act. (Para 10) Haryana UrbanDevelopment Authority, Karnal v. M/s. Mehta Construction Company, 2022LiveLaw (SC) 348 : (2022) 5 SCC 432

Arbitration and ConciliationAct, 1996; Section34 - The principle that a court whiledeciding a petition under Section 34 of the Arbitration and Conciliation Acthas no jurisdiction to remand the matter to the Arbitrator for a fresh decisionwould be applicable where the Appellate Court decides the application underSection 34 of the Act on merits - Even in a case where the award is set asideunder Section 34 of the Act on whatever the grounds which may be availableunder Section 34 of the Act, in that case the parties can still agree for thefresh arbitration may be by the same arbitrator - When both the parties agreedto set aside the award and to remit the matter to the learned Sole Arbitratorfor fresh reasoned Award, it is not open to contend that the matter may not beand/or ought not to have been remanded to the same sole arbitrator. (Para 8) Mutha Construction v. Strategic BrandSolutions (I) Pvt. Ltd., 2022LiveLaw (SC) 163

Arbitration and Conciliation Act, 1996; Section34(4) - A harmonious readingof Section 31, 34(1), 34(2A) and 34(4) of the Arbitration and Conciliation Act,1996, make it clear that in appropriate cases, on the request made by a party,Court can give an opportunity to the arbitrator to resume the arbitral proceedingsfor giving reasons or to fill up the gaps in the reasoning in support of afinding, which is already rendered in the award. But at the same time, when itprima facie appears that there is a patent illegality in the award itself, bynot recording a finding on a contentious issue, in such cases, Court may notaccede to the request of a party for giving an opportunity to the ArbitralTribunal to resume the arbitral proceedings. (Para 21) I-Pay Clearing Services Pvt. Ltd.v. ICICI Bank Ltd. 2022 LiveLaw (SC) 2 : AIR 2022 SC 301 : (2022) 3 SCC 121

Arbitration and Conciliation Act, 1996; Section34(4) - If there are nofindings on the contentious issues in the award or if any findings are recordedignoring the material evidence on record, the same are acceptable grounds forsetting aside the award itself. Under guise of either additional reasons orfilling up the gaps in the reasoning, the power conferred on the Court cannotbe relegated to the Arbitrator. In absence of any finding on contentious issue,no amount of reasons can cure the defect in the award. (Para 21) I-PayClearing Services Pvt. Ltd. v. ICICI Bank Ltd. 2022 LiveLaw (SC) 2 : AIR 2022 SC 301 : (2022) 3 SCC 121

Arbitration and Conciliation Act, 1996; Section34(4) - Merely because anapplication is filed under Section 34(4) of the Act by a party, it is notalways obligatory on the part of the Court to remit the matter to ArbitralTribunal. The discretionary power conferred under Section 34(4) of the Act, isto be exercised where there is inadequate reasoning or to fill up the gaps inthe reasoning, in support of the findings which are already recorded in theaward. Under guise of additional reasons and filling up the gaps in thereasoning, no award can be remitted to the Arbitrator, where there are nofindings on the contentious issues in the award. (Para 21) I-Pay Clearing Services Pvt. Ltd.v. ICICI Bank Ltd. 2022 LiveLaw (SC) 2: AIR 2022 SC 301 : (2022) 3 SCC 121

Arbitration and Conciliation Act, 1996; Section34(4) - The discretion vestedwith the Court for remitting the matter to Arbitral Tribunal to give anopportunity to resume the proceedings or not. The words "where it isappropriate" itself indicate that it is the discretion to be exercised by theCourt, to remit the matter when requested by a party. When application is filedunder Section 34(4) of the Act, the same is to be considered keeping in mindthe grounds raised in the application under Section 34(1) of the Act by theparty, who has questioned the award of the Arbitral Tribunal and the groundsraised in the application filed under Section 34(4) of the Act and the replythereto. (Para 21) I-Pay Clearing Services Pvt. Ltd. v. ICICI Bank Ltd. 2022 LiveLaw (SC) 2 : AIR 2022 SC 301 : (2022) 3 SCC 121

Arbitrationand Conciliation Act, 1996; Section 34, 37 - An award can be setaside only if the award is against the public policy of India. The award can beset aside under Sections 34/37 of the Arbitration Act, if the award is found tobe contrary to, (a) fundamental policy of Indian Law; or (b) the interest ofIndia; or (c) justice or morality; or (d) if it is patently illegal - HighCourt cannot enter into the merits of the claim in an appeal under Section 37. (Para 8) Haryana Tourism Ltd.v. Kandhari Beverages Ltd., 2022 LiveLaw (SC) 38 : (2022) 3 SCC 237

Arbitrationand Conciliation Act, 1996; Section 34, 37 - It would not be openfor the court in the proceedings under Section 34 or in the appeal underSection 37 to modify the award, the appropriate course to be adopted in suchevent is to set aside the award and remit the matter. (Para 40) National Highways Authorityof India v. P. Nagaraju @ Cheluvaiah, 2022 LiveLaw (SC) 584 : 2022 (9) SCALE 823

Arbitrationand Conciliation Act, 1996; Section 34, 37 - While examining theaward within the parameters permissible under Section 34 of Act, 1996 and whileexamining the determination of compensation as provided under Sections 26 and28 of the RFCTLARR Act, 2013, the concept of just compensation for the acquiredland should be kept in view while taking note of the award considering thesufficiency of the reasons given in the award for the ultimate conclusion. (Para 24) National Highways Authority ofIndia v. P. Nagaraju @ Cheluvaiah, 2022 LiveLaw (SC) 584 : 2022 (9) SCALE 823

Arbitrationand Conciliation Act, 1996; Section 34, 37 - Referenceto wrong provision, as long as power exists would not matter. Premier Sea Foods v. Caravel Shipping Services, 2022 LiveLaw (SC) 54

Arbitration and Conciliation Act, 1996; Section 34, 37 - The jurisdiction conferred on Courts under Section 34 of theArbitration Act is fairly narrow, when it comes to the scope of an appeal underSection 37 of the Arbitration Act, the jurisdiction of an Appellate Court inexamining an order, setting aside or refusing to set aside an award, is all themore circumscribed - if there are two plausible interpretations of the termsand conditions of the contract, then no fault can be found, if the learnedArbitrator proceeds to accept one interpretation as against the other. (Para 15-21) UHLPower Company Ltd. v. State of Himachal Pradesh, 2022 LiveLaw(SC) 18 : (2022) 4 SCC116

Section 37 - Appealable Orders

Arbitrationand Conciliation Act, 1996; Section 37 - The HighCourt has no jurisdiction to remand the matter to the same Arbitrator unless itis consented by both the parties that the matter be remanded to the sameArbitrator -The High Court either may relegate the parties for fresharbitration or to consider the appeal on merits on the basis of the materialavailable on record within the scope and ambit of the jurisdiction underSection 37. (Para 3) Dr. A. Parthasarathy v. E Springs AvenuesPvt. Ltd; 2022 LiveLaw (SC) 199

Arbitrationand Conciliation Act, 1996; Section 37 - Limitation Act, 1963; Section 3, 5 - The rightof appeal is a statutory right, subject to the laws of limitation. The law oflimitation is valid substantive law, which extinguishes the right to sue,and/or the right to appeal. Once an appeal is found to be barred by limitation,there can be no question of any obligation of the Court to consider the meritsof the case of the Appellant. State of Uttar Pradesh v. Satish ChandShivhare, 2022 LiveLaw (SC) 430

Arbitrationand Conciliation Act, 1996; Section 37 - Limitation Act, 1963; Section 3, 5 - The law oflimitation binds everybody including the Government. The usual explanation ofred tapism, pushing of files and the rigmarole of procedures cannot be acceptedas sufficient cause - A different yardstick for condonation of delay cannot belaid down because the government is involved. (Para 17) State of Uttar Pradesh v. Satish ChandShivhare, 2022 LiveLaw (SC) 430

Section 42 - Jurisdiction

Arbitration and Conciliation Act, 1996; Section 42 - The Section has obviously been enacted to prevent the parties frombeing dragged into proceedings in different Courts, when more than one Courthas jurisdiction. Where with respect to any arbitration agreement, anyapplication under Part I of the A&C Act has been made in a Court, thatCourt alone would have jurisdiction over the arbitral proceedings and allsubsequent applications arising out of that agreement, and the arbitralproceedings, would have to be made in that Court and in no other Court, unless,of course, the Court in which the first application had been instituted,inherently lacked jurisdiction to entertain that application. The Section whichstarts with a non obstante clause, is binding irrespective of any other law forthe time being in force, and irrespective of any other provision in Part I ofthe A&C Act. (Para 31) Ravi Ranjan Developers Pvt. Ltd. v. AdityaKumar Chatterjee, 2022 LiveLaw (SC) 329 : 2022 (5) SCALE 372

Arbitration and Conciliation Act, 1996; Section 42 and 11(6) - Section 42 cannot possibly have any application to an applicationunder Section 11(6), which necessarily has to be made before a High Court,unless the earlier application was also made in a High Court. (Para 32) RaviRanjan Developers Pvt. Ltd. v. Aditya Kumar Chatterjee, 2022 LiveLaw (SC) 329 : 2022 (5) SCALE 372

Nominal Index

1. Atlanta Ltd. v. Union of India, 2022 LiveLaw (SC)63 : (2022) 3SCC 739
2. BabanraoRajaram Pund v. Samarth Builders & Developers, 2022 LiveLaw (SC)747 : AIR2022 SC 4161 : (2022) 9 SCC 691
3. BBR (India) Pvt. Ltd. v. S.P. Singla Constructions, 2022 LiveLaw (SC)493 : AIR 2022SC 2673
4. Cox and Kings Ltd. v. SAP India, 2022 LiveLaw (SC)455 : (2022) 8SCC 1
5. Delhi Airport Metro Express Pvt. Ltd. v. Delhi Metro Rail Corporation, 2022 LiveLaw (SC)452 : AIR 2022SC 2165 : (2022) 9 SCC 286
6. Durga Welding Works v. Chief Engineer, 2022 LiveLaw (SC) 9 : (2022) 3 SCC 99
7. Ellora Paper Mills Ltd. v. State of Madhya Pradesh, 2022 LiveLaw (SC) 8 : AIR 2022 SC 280 : (2022) 3 SCC1
8. EmaarIndia Ltd. v. Tarun Aggarwal Projects LLP, 2022 LiveLaw (SC)823 : AIR2022 SC 4678
9. EssarHouse Pvt. Ltd. v. Arcellor Mittal Nippon Steel India Ltd., 2022 LiveLaw (SC)765 : AIR2022 SC 4294
10. Evergreen LandMark Pvt. Ltd. v. John Tinson and Company Pvt. Ltd. 2022 LiveLaw (SC)389 : AIR 2022SC 1930 : (2022) 7 SCC 757
11. ExecutiveEngineer (R and B) v. Gokul Chandra Kanungo, 2022 LiveLaw (SC)824 : AIR2022 SC 4857
12. Haryana Tourism Ltd. v. Kandhari Beverages Ltd., 2022 LiveLaw (SC)38 : (2022) 3SCC 237
13. Haryana Urban Development Authority v. Mehta Construction Company, 2022 LiveLaw (SC)348 : (2022) 5SCC 432
14. Indian Oil Corpn. Ltd v. U.B. Engineering Ltd; 2022 LiveLaw (SC)409
15. Indian Oil Corporation Ltd. v. NCC Ltd., 2022 LiveLaw (SC)616
16. Indian Oil Corporation Ltd. v. Shree Ganesh Petroleum Rajgurunagar, 2022 LiveLaw (SC)121 : (2022) 4SCC 463
17. I-Pay Clearing Services Pvt. Ltd. v. ICICI Bank Ltd., 2022 LiveLaw (SC) 2 : AIR 2022 SC 301 : (2022) 3 SCC121
18. JayceeHousing Pvt. Ltd. v. Registrar (General), Orissa High Court, 2022 LiveLaw (SC)860 : 2022(15) SCALE 213
19. JSW Steel Limited v. South Western Railway, 2022 LiveLaw (SC)693
20. Mahanadi Coalfields Ltd. v. IVRCL AMR Joint Venture, 2022 LiveLaw (SC)657
21. Mahindra & Mahindra v. Maheshbhai Tinabhai, 2022 LiveLaw (SC) 5 : (2022) 4 SCC 162
22. MeenakshiSolar Power Pvt. Ltd. v. Abhyudaya Green Economic Zones Pvt. Ltd., 2022 LiveLaw (SC)988
23. Mohammed Masroor Shaikh v. Bharat Bhushan Gupta, 2022 LiveLaw (SC)120 : AIR 2022SC 1226 : (2022) 4 SCC 156
24. MorganSecurities and Credits Pvt. Ltd. v. Videocon Industries Ltd., 2022 LiveLaw (SC)728 : AIR2022 SC 4091
25. National Highway Authority of India v. Transstroy(India) Ltd., 2022 LiveLaw (SC) 586 : 2022 (10) SCALE 429
26. National Highways Authority of India v. P.Nagaraju @ Cheluvaiah, 2022 LiveLaw (SC)584 : 2022 (9) SCALE 823
27. NationalHighways Authority of India v. Sheetal Jaidev Vade, 2022 LiveLaw (SC)705 : AIR 2022 SC 3980
28. Oiland Natural Gas Corporation Ltd. v. Afcons Gunanusa JV, 2022LiveLaw (SC) 723 : AIR 2022 SC 4413
29. Oil and Natural Gas Corporation Ltd. v. Discovery Enterprises Pvt. Ltd; 2022 LiveLaw (SC)416 : AIR 2022SC 2080 : (2022) 8 SCC 42
30. Premier Sea Foods v. Caravel Shipping Services, 2022 LiveLaw (SC)54
31. Ravi Ranjan Developers Pvt. Ltd. v. Aditya Kumar Chatterjee, 2022 LiveLaw (SC)329 : 2022 (5)SCALE 372
32. Secretary of Govt. of KeralaIrrigation Department v. James Varghese, 2022 LiveLaw (SC) 447 : (2022) 9 SCC 593
33. ShreeEnterprise Coal Sales Pvt. Ltd. v. Union of India, 2022 LiveLaw (SC)774
34. ShreeVishnu Constructions v. Engineer in Chief Military Engineering Service Service,2022 LiveLaw (SC)523
35. Shree Vishnu Constructions v. Military Engineering Service, 2022 LiveLaw (SC)345
36. Swadesh Kumar Agarwal v. Dinesh Kumar Agarwal, 2022 LiveLaw (SC)454 : (2022) 10SCC 235
37. Tantia Constructions v. Union of India, 2022 LiveLaw (SC)624
38. UHL Power Company v. State of H.P., 2022 LiveLaw (SC)18 : (2022) 4SCC 116
39. VGPMarine Kingdom Pvt. Ltd. v. Kay Ellen Arnold, 2022 LiveLaw (SC)914
40. YashpalChopra v. Union of India, 2022 LiveLaw (SC)900