Arbitration Cases Weekly Round- Up: 26 June To 2 July 2023

Bombay High Court:

Absence Of A Specific Clause Under GAFTA Arbitration Rules Doesn’t Bar Arbitrator From Deciding The Challenge Made To Its Jurisdiction: Bombay High Court

Case Title: Arbaza Alimentos Ltda vs MAC Impex and others

The Bombay High Court has reiterated that a general reference to a standard form of contract would be enough for incorporation of an arbitration clause. The court was dealing with a petition seeking execution of a foreign arbitral award passed in the arbitral proceedings conducted under the ‘Grain and Feed Trade Association (GAFTA) Simple Disputes Arbitration Rules No.126.’

The bench of Justice Manish Pitale further dismissed the contention of the award-debtor that the arbitrator could not have pronounced upon its own jurisdiction since the ‘GAFTA Simple Disputes Arbitration Rules No.126’ do not provide a power to the arbitrator to decide his own jurisdiction. The bench said that a specific clause under the said Rules would not be necessary for deciding the challenge made to the jurisdiction of the arbitrator, as the said issue goes to the very root of the matter. It added that a decision on the said issue is necessary before proceeding to consider the claims / counter-claims raised by the parties, on merits.

Calcutta High Court:

Venue Would Be The ‘Seat’ Of Arbitration When There Is No Significant Contrary Indicia Present In The Agreement: Calcutta High Court

Case Title: Orissa Metaliks Pvt. Ltd. vs SBW Electro Mechanics Import Export Corporation

The High Court of Calcutta has held that venue would be the seat of arbitration when the agreement between the parties contains no significant contrary indicia.

The bench of Justice Krishna Rao also held that merely because the arbitration agreement does not clearly provide for the law governing the arbitration, it would not make the agreement ambiguous, vague or uncertain so to allow refusal of reference to arbitration under Section 45 of the Act. 

The Court held that judicial interference under Section 45 is not permitted, on grounds of agreement being null and void, inoperative or incapable of being performed arising out of objection regarding ambiguity as to the applicable law, as long as the intention of the parties to refer the dispute to arbitration is clear. 

Himachal Pradesh High Court:

S.19 MSME Act | Court Should Determine Whether Pre-Deposit Amount Is Actually Deposited By Appellant: Himachal Pradesh High Court

Case Title: M/s Pratap Industries Products vs M/s Hindustan Construction Company Ltd

The Himachal Pradesh High Court has directed the District Court, which stayed the execution of an arbitral award in exercise of its power under Micro, Small and Medium Enterprises Development Act, 2006 (MSME Act), to first determine whether Section 19 of the Act was complied with. The provision requires the party challenging the award to make a pre-deposit to the tune of 75% of the award. Justice Joytsna Rewal Dua said the District Court must see whether the pre-deposit amount is actually deposited.

Meghalaya High Court:

Meghalaya High Court Imposes ₹10L Cost On PWD For Unnecessary Litigation, Says "Voluminous Tomes" Won't Dissuade Judges From Looking Deep

Case Title: Public Works Department vs M/s BSC-CC & JV

The Meghalaya High Court while upholding an arbitral award has ordered the Public Works Department (National Highway) to pay a contractor Rs. 10 lakh over and above the award amount, saying that PWD put the contractor through unnecessary litigation.

The observations were made while hearing a challenge under Section 37 of the Arbitration and Conciliation Act, 1996 to an order dated May 17, 2023 passed by the Commercial Court, Shillong on a plea under Section 34 of the Act challenging an arbitral award rendered on July 27, 2021.