Arbitration Weekly Digest 11th November-17 th November 2024
Mohd Malik Chauhan
21 Nov 2024 7:10 PM IST
Supreme Court
S. 11(6) A&C Act | Referral Courts Should Limit Its Enquiry To Prima Facie Existence Of Arbitration Agreement : Supreme Court
Case Title: GOQII TECHNOLOGIES PRIVATE LIMITED VERSUS SOKRATI TECHNOLOGIES PRIVATE LIMITED,
Citation : 2024 LiveLaw (SC) 891
In a recent decision, the Supreme Court reiterated that the referral courts under Section 11(6) of the Arbitration & Conciliation Act, 1996 (“Act”) should refrain from conducting an in-depth factual analysis of the dispute. Instead, their role is confined to assessing the prima facie existence of an arbitration agreement.
High Courts
Bombay High Court
Party Can Waive Arbitrator's Ineligibility U/S 12(5) Of Arbitration Act By Express Agreement In Writing: Bombay High Court
Case Title: M/S. TRULY PEST SOLUTION PRIVATE LIMITED VS. PRINCIPAL CHIEF MECHANICAL ENGINEERING
Citation: 2024 LiveLaw (Bom) 583
The Bombay High Court bench of Justice Rajesh S. Patil affirmed that once an ineligibility to act as Arbitrator is waived by an express agreement in writing under proviso to section 12(5) of the Arbitration Act, waiving party is prohibited from claiming ineligibility of the Arbitrator for the first time under section 34 of the Arbitration Act. In this case, the petitioner had waived the ineligibility of the arbitrator by sending a signed letter.
High Court As Court Of Record Can Recall Or Review Orders Passed U/S 11 Of Arbitration Act: Bombay High Court
Case Title: Shailesh Ranka and others Vs. Windsor Machines Limited and another
Citation: 2024 LiveLaw (Bom) 585
The Bombay High Court bench of Justice Manish Pitale has held that the moment it becomes clear that the power under Section 11(6) of the Arbitration Act is being exercised by the “High Court” and not by an authority in the form of the “Chief Justice or any person or institution designated by him”, there can be no confusion about the fact that as a constitutional court and court of record, this Court can exercise power of review even in the context of order passed under Section 11 of the Arbitration Act. In this case, the court passed the impugned order in which application under section 11 of the Arbitration Act was dismissed by misconstruing the facts of the case.
Calcutta High Court
Award In Which Vital Evidence Are Not Considered Can Be Set Aside On Grounds Of Patent Illegality U/S 34: Calcutta HC
Case Title: MINTECH GLOBAL PRIVATE LIMITED VS KESORAM INDUSTRIES LIMITED – CEMENTDIVISION
Citation: 2024 LiveLaw (Cal) 237
The Calcutta High Court bench of Justice Sabyasachi Bhattacharyya affirmed that there cannot be any quarrel with the proposition that if there is a perversity in the award insofar as the non-consideration of vital evidence is concerned, the same tantamounts to violation of the fundamental policy of Indian Law as well as gives rise to a patent illegality, which is a sufficient ground for interference under Section 34 of the Arbitration Act.
Chhattisgarh High Court
Enforcement Of Foreign Award Cannot Be Refused U/S 48 Of Arbitration Act Unless It Is Against Public Policy: Chhattisgarh HC
Case Title: Bulk Trading S.A. Having versus Mahendra Sponge And Power Ltd.
Case Reference: ARBAP No. 9 of 2023 and ARBAP No. 10 of 2023
The Chhattisgarh High Court bench of Justice Deepak Kumar Tiwari has held that enforcement of a foreign award cannot be refused under section 48 of the Arbitration Act unless it is shown that the award is against the public policy of India. The court further observed that even during Covid-19 pandemic, the Banking Sector continued to provide essential services and in the Notification, said Sector is under exception, so the award(s) could not be said to be contrary to public policy of India.
Delhi High Court
Scope Of Review U/S 37 Is Limited To Ascertaining Compliance With S. 34 Of Arbitration Act: Delhi High Court
Case Title: Bharat Broadband Network Ltd v. Paramount Communications Ltd
Citation: 2024 LiveLaw (Del) 1222
The Delhi High Court bench of Justices Rekha Palli and Saurabh Banerjee affirmed that the Court under section 37 of the Arbitration Act cannot undertake an independent assessment of the merits of the award, and must only ascertain that the exercise of power by the Court under Section 34 has not exceeded the scope of the provision
Case Title: HR BUILDERS THROUGH GPA HOLDER V. DELHI AGRICULTURAL MARKETING BOARD
Citation: 2024 LiveLaw (Del) 1223
The Delhi High Court bench of Justice Sachin Datta has held that inordinate and unexplained delay in passing an award from the date of the conclusion of the pleadings can be a ground to set it aside under section 34 of the Arbitration Act. In this case, the award was passed after more than 2 years from the conclusion of the arguments.
Award Cannot Be Set Aside U/S 34 Of Arbitration Act If View Taken By Arbitrator Is A Plausible View: Delhi High Court
Case Title: RUDRA BUILDWELL PVT LTD. v. REALWORTH INDIA PVT LTD
Citation: 2024 LiveLaw (Del) 1224
The Delhi High Court bench of Justice Sachin Datta has held that conduct of the parties has to be seen before granting equitable relief for specific performance of the contract. If the conduct of the parties does not demonstrate that the party claiming relief is ready and willing to perform his part of the contract then the relief under the Specific Relief Act cannot be granted. The court in this case refused to set aside the award under section 34 of the Arbitration Act on the ground that the Arbitrator had taken a plausible view based on the facts and circumstances of the case.
De-Jure Ineligibility To Act As Arbitrator U/S 12(5) Of Arbitration Act Can Be Waived Only By Express Agreement In Writing: Delhi High Court
Case Title:N.S. ASSOCIATES PVT. LTD. versus THE LIFE INSURANCE CORPORATION OF INDIA
Citation: 2024 LiveLaw (Del) 1226
The Delhi High Court bench of Justice Sachin Datta affirmed that de jure ineligibility to act as an arbitrator can only be waived, after dispute having arisen, by the parties by an express agreement in writing under proviso to section 12(5) of the Arbitration Act. The court further observed that this waiver is different from section 4 of the Act which can be waived even by conduct.
Forfeiture Of Earnest Money Deposit Requires Proof Of Actual Loss: Delhi High Court
Case Title: Adani Enterprises Limited vs. Shri Somnath Fabrics Private Limited
Citation: 2024 LiveLaw (Del) 1227
The Delhi High Court bench of Justice Sachin Datta has upheld the Arbitral Award wherein the Tribunal had ordered a refund of Earnest Money Deposit (EMD) as the petitioner had failed to prove any actual loss. The court, in light of Sections 73 and 74 of the Indian Contract Act, observed that forfeiture of the EMD requires proof of actual loss.
Arbitral Award Without Rationale For Damages Is Ex Facie Contrary To Settled Law, Can Be Set Aside: Delhi High Court
Case Title: M/s Travel2Agent.com & Ors. vs. M/s Spice Jet Ltd.
Citation: 2024 LiveLaw (Del) 1230
The Delhi High Court bench of Justice Sachin Datta has observed that any award of damages, on the touch stone of Section 73 of the Indian Contract Act, must be predicated on actual loss suffered. The court set aside the award for not disclosing the rationale for damages and, on this count, held that the award was ex facie contrary to settled law and in manifest disregard of the material/evidence on record.
Case Title: GAS AUTHORITY OF INDIA LTD versus SAW PIPES LTD
Citation: 2024 LiveLaw (Del) 1231
The Delhi High Court bench of Justices Vibhhu Bakhru and Sachin Datta affirmed that the explicit terms of a contract are always the final word with regard to the intention of the parties. The multi-clause contract inter se the parties has, thus, to be understood and interpreted in a manner that any view, on a particular clause of the contract, should not do violence to another part of the contract. In this case, the court while hearing appeal under section 37 of the Arbitration Act upheld the impugned judgment passed by the court under section 34 of the Arbitration Act.
Scope Of Examination U/S 11 Of Arbitration Act Confined To Existence Of Arbitration Agreement: Delhi High Court
Case Title: SURESH KUMAR KAKKAR & ANR versus M/S ANSAL PROPERTIES AND INFRASTRUCTURE LIMITED & ANR.
Citation: 2024 LiveLaw (Del) 1234
The Delhi High Court bench of Justice Sachin Datta affirmed that when a non-signatory person or entity is arrayed as a party at Section 8 or Section 11 stage of the Arbitration Act, the referral court should prima facie determine the validity or existence of the arbitration agreement, as the case may be, and complex issue like whether the non-signatory is bound by the arbitration agreement must be left for the Arbitral Tribunal to decide.
Case Title: JKR Techno Engineers Pvt Ltd v. JMD Limited
Citation: 2024 LiveLaw (Del) 1237
The Delhi High Court bench comprising of Justice Subramonium Prasad, while hearing a Section 11 petition, has held that the petitioner's claim cannot be treated as dead one simply because they spent time on bona fide court proceedings before a court without jurisdiction.
Case Title: BALAJI STEEL TRADE versus FLUDOR BENIN S.A. AND ORS
Citation: 2024 LiveLaw (Del) 1239
The Delhi High Court bench of Justice Dinesh Kumar Sharma affirmed that Section 45 of the Arbitration Act casts a statutory mandate on Courts to refer parties to an arbitration agreement to arbitration. The only limited exception carved in Section 45 is if the Court is of the prima facie opinion that the arbitration agreement is (a) null and void; or (b) in-operative; or (c) incapable of being performed. Unless such grounds are made out, the Court has no discretion but to refer the parties to arbitration.
Pre-Requirement Of Conciliation Before Invoking Arbitration Can't Prevent Filing Of Application U/S 11 Of Arbitration Act: Delhi High Court
Case Title:CENTAURUS GREEN ENERGY PRIVATE LIMITED versus RAJSHREE EDUCATIONAL TRUST
Citation: 2024 LiveLaw (Del) 1245
The Delhi High Court bench of Justice Subramonium Prasad has held that pre requirement of conciliation in an arbitration clause before invoking the arbitration cannot be a bar to file an application under section 11 of the Arbitration Act seeking appointment of an Arbitrator.
Himachal Pradesh High Court
Award Cannot Be Set Aside On Grounds Of Mere Illegality Unless Patent Illegality Is Established U/S 34 Of Arbitration Act: Himachal Pradesh HC
Case Title: National Highway Authority of India Versus Rajesh Kaptyaksh and Ors.
Citation: 2024 LiveLaw (HP) 74
The Himachal Pradesh High Court bench of Ms. Justice Jyotsna Rewal Dua, affirmed that 'patent illegality' in the award calls for interference under section 34 of the Arbitration Act but a mere illegality is not patent illegality. It ought to be apparent on the face of the award and not the one which is culled out by way of a long drawn analysis of pleadings and evidence.
Deposit Of Awarded Amount In Court Registry Sufficient To Extinguish Liability Arising Under Award: Himachal Pradesh High Court
Case Title: Oriental Insurance Company Versus Kuldip Dogra
Citation: 2024 LiveLaw (HP) 76
The Himachal Pradesh High Court bench of Mr. Justice Bipin Chander Negi has held that the deposit of awarded amount in pursuance of an order of the court into the court registry would be equivalent to payment under section 31 of the Arbitration Act. This will extinguish the liability arising under the award for which execution petition would then not be maintainable.
While Hearing Appeal U/S 37 Of Arbitration Act, Court Must Confine Itself To Grounds U/S 34 Of Arbitration Act: Himachal Pradesh HC
Case Title: National Highway Authority of India.Versus Vishesar (Since deceased) through LRs.
Citation: 2024 LiveLaw (HP) 77
The Himachal Pradesh High Court bench of Ms. Justice Jyotsna Rewal Dua affirmed that supervisory role of Courts is very restricted in dealing with appeals under Section 37 of the Arbitration Act. Scope of interference in a petition under Section 34 of the Act is very narrow. Jurisdiction under Section 37 of the Act is narrower.Therefore, Courts must be very conservative while dealing with arbitral awards and confine themselves to the grounds strictly available under Section 34 of the Act.
Madhya Pradesh High Court
Plea Of Limitation Shall Be Deemed To Be Waived If Not Raised Before Arbitrator U/S 16 Of Arbitration Act: Madhya Pradesh High Court
Case Title: M/S. UMA SHANKAR MISHRA Versus UNION OF INDIA
Case Reference: ARBITRATION APPEAL NO.24/2021
The Madhya Pradesh High Court bench of Justice Subodh Abhyankar affirmed that plea of limitation cannot be allowed to be raised first time under section 34 of the Arbitration Act if no such plea was taken before the Arbitrator under section 16 of the Act. The court further observed that it shall be deemed to have been waived as per section 4 of the Act.
Award Can Be Set Aside U/S 34 Of Arbitration Act If Arbitrator Travels Beyond Arbitration Agreement: Madhya Pradesh HC
Case Title: UNITED INDIA INSURANCE CO. LTD. AND OTHERS Versus RATLAM SYENTHETIC ROPE MANUFACTURING COMPANY THROUGH SMT. REKHA AND OTHERS
Case Reference: ARBITRATION APPEAL No. 8 of 2018
The Madhya Pradesh High Court bench of Justice Subodh Abhyankar affirmed that if arbitrator travels beyond the terms of the arbitration agreement while passing an award, such an award is liable to be set aside under section 34 of the Arbitration Act.
Odisha High Court
MSME Council Award Can Be Challenged Only U/S 34 Of Arbitration Act, Not Under Articles 226 Or 227: Orissa High Court
Case Title: AES India (Pvt.) Ltd. vs. State of Odisha & Ors.
Case Number: W.A No.968 of 2024
The Odisha High Court bench of Chief Justice Chakradhari Sharan Singh and Justice Murahari Sri Raman has upheld that an arbitral award passed by the Micro and Small Enterprises Facilitation Council (MSEFC) could only be challenged in accordance with Section 34 of the Arbitration and Conciliation Act, 1996, as mandated by Section 19 of the MSMED Act. The court held that the Single Judge had rightly declined to entertain the challenge to the award under Article 226/227 of the Constitution, as such proceedings are impermissible when statutory remedies are available.
Sikkim High Court
Arbitration Agreement Remains Valid Even If Underlying Contract Is Terminated: Sikkim High Court
Case Title: State of Sikkim Versus M/s Tashi Delek Gaming Solutions (P) Ltd.
Case Reference: Arb. A. No. 02 of 2016
The Sikkim High Court bench of Chief Justice Biswanath Somadder and Justice Bhaskar Raj Pradhan affirmed that it is well settled that if the contract containing arbitration clause is rendered invalid or void, it does not affect the arbitration agreement. The arbitration agreement would continue to exist and the validity of which will be decided by the Arbitral Tribunal under section 16 of the Arbitration Act.
