Arbitration Cases Weekly Round- Up: 19 June To 25 June 2023

High Courts:

Calcutta High Court:

S. 8 Application Filed Along With The Written Statement In Suit; Can’t Be Presumed That Party Waived Its Right To Refer Dispute For Arbitration: Calcutta High Court Reiterates

Case Title: Nemai Chandra Roy Karmakar alias Nemai Roy vs Sarada Construction

The Calcutta High Court has ruled that it is the duty of the defendant to file the application under Section 8 of the Arbitration and Conciliation Act, 1996 seeking arbitral reference, before filing the first statement in a suit. However, the court remarked that filing of a Section 8 application along with the written statement cannot lead to any presumption that the defendant has waived its right of referring the dispute for arbitration.

The bench of Justice Bibhas Ranjan De further held that a document which is not duly stamped, or being compulsorily registerable is not registered, cannot be acted upon by the Court.

Order Under S. 16 Of A&C Act Can Be Challenged Under Article 227 Only On Exceptional Circumstances: Calcutta High Court Reiterates

Case Title: M.D. Creations & Others vs Ashok Kumar Gupta

The Calcutta High Court has reiterated that the remedy under Article 227 of the Constitution of India against the order of the Arbitral Tribunal rejecting the challenge to its jurisdiction under Section 16 of the Arbitration and Conciliation Act, 1996 (A&C Act), can be invoked only on ground of the Arbitrator’s patent lack in inherent jurisdiction, or exceptional circumstances, or ‘bad faith’ on part of the other party.

Himachal Pradesh High Court:

Supplying Copies Of Award Certified By MSME Council To The Parties, Not Fair: Himachal Pradesh High Court

Case Title: M/s Sterkem Pharma Private Limited vs Symbiosis Pharmaceuticals Private Limited and Ors.

The Himachal Pradesh High Court has ruled that it is the bounden duty of the Arbitrator appointed by the Facilitation Council under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) to issue signed copies of the arbitral award to the parties irrespective of the fact whether the parties have contested the proceedings or were proceeded ex-parte.

The court has deprecated the practice of the Facilitation Council supplying a copy of the award certified by the Council itself to the concerned parties. The court said that the same is not in consonance with the procedure mandated under Section 31(5) of the Arbitration and Conciliation Act, 1996 (A&C Act) as well as the MSMED Act. It added that the arbitral award is to be made available to the parties by the Arbitrator himself in accordance with the provisions of Section 31(5) of the A&C Act.

National Company Law Appellate Tribunal (NCLAT):

IBC | Sec. 9 Petition For Implementation Of Arbitral Award Is Not Maintainable: NCLAT Chennai

Case Title: M/s KK Ropeways Limited vs M/s Billion Smiles Hospitality

The National Company Law Appellate Tribunal (“NCLAT”), Chennai Bench, comprising of Justice M. Venugopal (Chairperson) and Ms. Shreesha Merla (Technical Member), while adjudicating an appeal filed in M/s. KK Ropeways Limited v M/s. Billion Smiles Hospitality, has held that a petition filed under Section 9 of IBC for implementation of an Arbitral Award is not maintainable and not in tune with the objective of IBC. The Bench has further held that arbitration and IBC proceedings cannot go on together.