Arbitration Weekly Round-up: 15th to 21st July, 2024
Rajesh Kumar
24 July 2024 3:30 AM GMT
Supreme Court of India
Case Title: SBI GENERAL INSURANCE CO. LTD. Versus KRISH SPINNING
Citation: 2024 LiveLaw (SC) 489
The Supreme Court held that while deciding a Section 11(6) petition for an appointment of an arbitrator, the referral courts must not conduct an intricate evidentiary enquiry into the question of whether the claims raised by the applicant are time-barred and should leave that question for determination by the arbitrator. The Court said that the referral court should limit its enquiry to examining whether the Section 11(6) application has been filed within the period of limitation of three years or not.
Arbitration | Dispute Regarding Full & Final Settlement Of Contract Is Arbitrable : Supreme Court
Case Title: SBI GENERAL INSURANCE CO. LTD. Versus KRISH SPINNING
Citation: 2024 LiveLaw (SC) 489
The Supreme Court held that if any dispute arises as to whether a contract has been discharged or not, such a dispute is arbitrable. “Once the contract has been discharged by performance, neither any right to seek performance, nor any obligation to perform remains under it. However, whether there has been a discharge of contract or not is a mixed question of law and fact, and if any dispute arises as to whether a contract has been discharged or not, such a dispute is arbitrable as per the mechanism prescribed under the arbitration agreement contained in the underlying contract.”, the Court said.
Case Title: Elfit Arabia & Anr v. Concept Hotel BARONS Limited & Ors
Citation: 2024 LiveLaw (SC) 494
The Supreme Court recently observed that initiation of proceedings under the Negotiable Instruments Act, 1881 for cheque dishonour does not constitute continuing cause of action for initiating arbitration under the Arbitration and Conciliation Act, 1996 (A&C Act). A bench of Chief Justice of India DY Chandrachud, Justice JB Pardiwala, and Justice Manoj Misra dismissed an arbitration petition seeking the appointment of an arbitrator eleven years after cheques were dishonoured, on the ground that the claims were barred by limitation.
Calcutta High Court
Case Title: K2V2 Hospitality Llp Vs Limton Electro Optics Pvt. Ltd. And Ors.
Case Number: AP/472/2023
The Calcutta High Court bench of Justice Sabyasachi Bhattacharyya has held allowed composite reference of two companies to arbitration noting that the two arbitration agreements refer to the self-same demised property. Moreover, it noted that both the agreements were entered into by the same proposed lessee with two co-owners of the self-same property. The bench held that: “if two different references were to be made, there would be ample scope of conflict of decision pertaining to the self-same subject matter between the co-owners of the self-same property.”
2063 Crore Arbitral Award: Calcutta High Court Directs West Bengal Government, WBIDC To Pay Amount
Case Title: Government of West Bengal & Anr. Versus Essex Development Investments (Mauritius) Ltd.
Case Number: A.P. (COM) 28 of 2023 with IA No. G.A. (COM) 1 of 2024
The Calcutta High Court bench of Justice Krishna Rao has rejected the petition made under Section 36 of the Arbitration and Conciliation Act, 1996 by the West Bengal Government and West Bengal Industrial Development Corporation claiming fraud in making of the arbitral award. The bench noted that the arbitral tribunal arrived upon the findings after considering the materials placed before it and the submissions made by the respective parties.
Case Title: Uphealth Holdings Inc Vs Glocal Healthcare Systems Pvt Ltd And Ors and Connected Matters
Case Number: AP-COM/490/2024 IA NO: GA-COM/1/2024, GA-COM /8/2024 and Connected Matters
The Calcutta High Court bench of Justice Sabyasachi Bhattacharyya has held that original applications related to International Commercial Arbitration are to be entertained by the Single Judge of the Commercial Division.
Arbitral Award In Violation Of Contractual Bar Is Patently Illegal: Calcutta High Court
Case Title: Union Of India Vs M/S J K Enterprise
Case Number: AP/105/2021 IA NO: GA/1/2021, GA/2/2021
The Calcutta High Court bench of Justice Sabyasachi Bhattacharyya has held that an arbitral award in violation of a bar contained in the contract is beyond the arbitrator's jurisdiction. The bench held that such an award categorically vitiated under Section 34(2)(a)(iv) of the Arbitration and Conciliation Act, 1996, as well as by patent illegality as envisaged in Sub-section (2-A) of Section 34.
Case Title: Future Market Networks Ltd. Vs Laxmi Pat Surana & Anr
Case Number: AP-COM/135/2024 (Old Case No. AP/698/2016)
The Calcutta High Court bench of Justice Subhendu Samanta has held that the Supreme Court's observations regarding the interpretation of "three months" in Section 34(3) of the Arbitration and Conciliation Act, 1996 as 90 days in various cases were not the ratio decidendi but obiter dicta. The bench held that the period of limitation must be computed based on calendar months, therefore, the period of limitation in Section 34(3) would be three months excluding the date of receipt of the arbitral award.
Case Title: The Incoda Vs The General Manager, Metro Railway And Anr.
Case Number: AP/611/2022
The Calcutta High Court bench of Justice Sabyasachi Bhattacharyya has held that the invocation of arbitration after the period defined in the arbitration clause doesn't frustrate the intention of the parties to refer disputes to arbitration. The bench held that the outer limit stipulated in the arbitration clause for invocation of arbitration if failed by the claimant, does not constitute a waiver or a deliberate relinquishment of the claim by the claimant.
Delhi High Court
Case Title: Mukesh Udeshi vs Jindal Steel Power Ltd. and Anr.
Citation: 2024 LiveLaw (Del) 788
The Delhi High Court single bench of Justice Pratibha M. Singh held that only parties to an arbitration agreement can challenge the award under Section 34 of the Arbitration and Conciliation Act, 1996. It was further held that 3rd-party beneficiaries of domain names in India, who are impacted by the arbitral award, lack the standing to challenge the award.
Case Title: Reliance Communications Limited Vs Unique Identification Authority of India
Citation: 2024 LiveLaw (Del) 784
The Delhi High Court bench of Justice C. Hari Shankar has dismissed a petition filed by Reliance Communications under Section 34 of the Arbitration and Conciliation Act, 1996 noting that the arbitrator correctly divided the total number of call seconds by 60 to determine the number of call minutes. The bench noted that the company is not entitled to a whole minute if the call lasted only part of a minute.
Case Title: Welspun Enterprises Ltd Vs Kasthuri Infra Projects Pvt Ltd
Citation: 2024 LiveLaw (Del) 792
The Delhi High Court bench of Justice C. Hari Shankar has held that once an Arbitral Tribunal is in place, ordinarily a court should refrain from dealing with the matter even for the purposes of passing interlocutory orders unless the order is demonstrably one which cannot await the application of mind by the Arbitral Tribunal. The bench held that: “. If party is able to convince the Court that by the time the application is taken up by the Arbitral Tribunal, the prejudice that may result would be irreparable, it may be justified for the Court to take up the matter even when the Arbitral Tribunal is in seisin of the disputes.”
Case Title: The Deputy Commissioner Of Police Vs Score Information Technologies Ltd
Citation: 2024 LiveLaw (Del) 789
The Delhi High Court bench of Justice Vibhu Bakhru and Justice Tara Vitasta Ganju has held that the arbitral tribunal may exercise its power to award compensation for breach if a Contract has become incapable of specific performance. Further, the bench held that the interpretation of a contract is a matter for an arbitrator to determine. It held that even if such interpretation gives rise to an erroneous application of the law, the courts will generally not interfere unless the error is palpably perverse or illegal and goes to the root of the matter.
Disobedience Of Interim Measures Due To Insolvency Proceedings Is Not Contempt: Delhi High Court
Case Title: Mr Rajan Chadha & Anr Vs Mr Sanjay Arora & Anr.
Citation: 2024 LiveLaw (Del) 790
The Delhi High Court bench of Justice Mini Pushkarna has held that disobedience of interim measures granted under Section 9 of the Arbitration and Conciliation Act, 1996 due to insolvency proceedings does not warrant contempt charges. The bench held that if the disobedience results from circumstances beyond the contemnor's control, such as financial constraints or ongoing disputes that impact compliance, contempt charges are not justified.
Case Title: Indian Railway Catering And Tourism Corporation Ltd. Vs M/S Deepak And Co
Citation: 2024 LiveLaw (Del) 799
The Delhi High Court bench of Justice Jasmeet Singh has held that findings made by an arbitrator which are consistent with the documentary evidence and admissions made during cross-examination are reasonable and not perverse. The High Court referred to the decision of the Supreme Court in Associate Builders v. DDA (2015) 3 SCC 49 where the Supreme Court held that the grounds for setting aside an arbitral award under Section 34(2)(a) of the Arbitration Act do not encompass the merits of the award. Instead, they are limited to issues such as public policy and procedural fairness.
Case Title: Assets Care And Reconstruction Enterprise Limited Vs Domus Greens Private Limited & Ors.
Citation: 2024 LiveLaw (Del) 803 Case Number: ARB. A. (COMM.) 78/2022 & I.A. 18317/2022, I.A. 1455/2023
The Delhi High Court bench of Justice Jasmeet Singh has held that a third party, whose rights for a registered charge are affected by an arbitral award, can challenge such award under Section 37 of the Arbitration and Conciliation Act, 1996. The bench held that: “the appellant herein has charge duly registered in its favour and that being the position, the charge in favour of the appellant cannot be diluted/interfered as done by the impugned orders and more so in the absence of the appellant being put to prior notice.”
Case Title: M/S Kotak Mahindra Prime Ltd Vs Manav Sethi & Anr.
Citation: 2024 LiveLaw (Del) 805
The Delhi High Court bench of Justice C. Hari Shankar has held that a Section 11(6) petition under Arbitration and Conciliation Act, 1996 is not maintainable unless it is preceded in the first instance by a Section 21 notice. The bench noted that the notice serves the crucial purpose of informing the opposing party about the claims asserted, allowing for potential acceptance, clarification of claims, assertion of defenses, or identification of counter-claims.
Case Title: Nishesh Ranjan and Anr. vs Indiabulls Housing Finance Ltd. and Anr.
Citation: 2024 LiveLaw (Del) 807
The Delhi High Court single bench of Justice Pratibha M. Singh held that in a composite transaction involving multiple interlinked agreements, courts should assess the intention to arbitrate holistically and refer disputes to arbitration even if some agreements lack explicit arbitration clauses.
Case Title: Gae Projects (P) Ltd. Vs Ge T&D India Ltd. (Formerly Alstom T&D India Ltd.)
Citation: 2024 LiveLaw (Del) 810
The Delhi High Court bench of Justice Neena Bansal Krishna has held that claims of coercion or economic duress in a settlement agreement require examination by an arbitrator to determine their validity. The bench held that the Arbitrator's summary dismissal of the claimant's plea and the termination of arbitration proceedings without a trial were improper.
Case Title: M/S Ktc India Pvt. Ltd Vs Randhir Brar & Ors
Citation: 2024 LiveLaw (Del) 809
The Delhi High Court bench of Justice Prateek Jalan has held that “subsequent shareholders,” each holding a specific number of shares and having the right to exit the company under defined conditions while undertaking individual rights and obligations, do not qualify as an "association or body of individuals" under Section 2(1)(f)(iii) of the Arbitration and Conciliation Act, 1996. Therefore, the High Court classified the arbitration as “international commercial arbitration” because one of the shareholders was a national and habitual resident of a country outside India.
Case Title: M/S Ktc India Pvt. Ltd Vs Randhir Brar & Ors
Citation: 2024 LiveLaw (Del) 809
The Delhi High Court bench of Justice Prateek Jalan has held that “subsequent shareholders,” each holding a specific number of shares and having the right to exit the company under defined conditions while undertaking individual rights and obligations, do not qualify as an "association or body of individuals" under Section 2(1)(f)(iii) of the Arbitration and Conciliation Act, 1996. Therefore, the High Court classified the arbitration as “international commercial arbitration” because one of the shareholders was a national and habitual resident of a country outside India.
Case Title: M/S Ramacivil India Constructions Pvt. Ltd. Vs Union Of India
Citation: 2024 LiveLaw (Del) 808
The Delhi High Court bench of Justice C. Hari Shankar has held that the Decree Holder is not entitled to interest on the amount deposited by the Judgment Debtor for the period between the date of deposit and the date of release permitted by the court. The bench held that the entitlement to interest does not extend to the period between the deposit and the withdrawal application if the deposit was unconditional and available for withdrawal without any impediment.
Jammu and Kashmir High Court
Case Title: M/s Tata Power Solar vs UT of J&K and Ors.
Case Number: Arb P No. 36/2023
The Jammu and Kashmir High Court bench of Chief Justice N. Kotiswar Singh has held that a dispute predominantly civil but involving elements of criminality is not automatically excluded from arbitration. The bench noted that unless there is a specific allegation of the parties engaging in an agreement amounting to criminal conspiracy, there should be no blanket prohibition on referring such disputes to arbitration.
Telangana High Court
Case Title: Yakkanti Adinarayana Reddy vs. Yakkanti Adinarayana Reddy
Case Number: C.R.P.NO.1516 OF 2024
The Telangana High Court has clarified the procedural requirements for invoking arbitration under Section 8(1) of the Arbitration and Conciliation Act, 1996. The court held that a formal application for referring parties to arbitration must be filed before submitting the first statement on the substance of the dispute, typically the written statement in a suit.
Orissa High Court
Case Title: Birla Institute of Management & Technology (BIMTECH), Gothapatna, Bhubaneswar vs M/s. Fiberfill Interiors & Constructions, U.P.
Citation: 2024 LiveLaw (Ori) 60
The Orissa High Court bench of Justice Sanjay Kumar Mishra has held that held that since the Arbitration Act is silent on the aspect of filing an application before the executing court to stay the operation of execution proceedings initiated under Section 36(1) of the Arbitration Act, the provisions of the CPC would be followed for this purpose.
Bombay High Court
Case Title: Shankar Vithoba Desai And Ors Vs Gauri Associates And Anr.
Case Number: COMM. ARBITRATION APPLICATION (L.) NO. 21070 OF 2023
The Bombay High Court bench of Justice Somasekhar Sundaresan has held that individual members of the Society cannot be considered signatories to the arbitration agreement under Section 7 of the Arbitration Act, as they do not individually participate in its formation or execution of arbitration clause.
Courts Can't Constantly Interfere And Micro-Manage Arbitral Proceedings: Bombay High Court
Case Title: Ambrish H. Soni vs Mr Chetan Narendra Dhakan & Ors.
Case Number: Arbitration Petition No. 100 Of 2024 with Commercial Arbitration Petition (L) No. 33385 of 2023
The Bombay High Court bench of Justice Arif S. Doctor has held that the court cannot constantly interfere with and micromanage proceedings which are pending before Arbitral Tribunals. The bench held that the scope of judicial interference under Section 37(2)(b) of the Arbitration Act is limited in nature.
Rajasthan High Court
Case Title: Emeraldstone Management Sia vs Mamta Hygiene Products Pvt Ltd
Case Number: S.B. Arbitration Application No. 40/2020
The Rajasthan High Court bench of Dr. Justice Nupur Bhati has ordered the director of a company to one month of civil imprisonment for failing to disclose its assets in the enforcement of a foreign arbitral award.
