Arbitration Weekly Round-Up [18th November To 24th November, 2024]
Mohd Talha Hasan
26 Nov 2024 6:45 PM IST
![Arbitration Weekly Round-Up [18th November To 24th November, 2024]](https://www.livelaw.in/h-upload/2024/05/24/750x450_541379-weekly-round-up-arbitration.webp "Arbitration Weekly Round-Up [18th November To 24th November, 2024]")
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.
“The scope of inquiry under Section 11 of the Act, 1996 is limited to ascertaining the prima facie existence of an arbitration agreement. In the present case, the High Court exceeded this limited scope by undertaking a detailed examination of the factual matrix. The High Court erroneously proceeded to assess the auditor's report in detail and dismissed the arbitration application. In our view, such an approach does not give effect to the legislative intent behind the 2015 amendment to the Act, 1996 which limited the judicial scrutiny at the stage of Section 11 solely to the prima facie determination of the existence of an arbitration agreement.”, the bench comprising Chief Justice DY Chandrachud and Justices JB Pardiwala and Manoj Misra said.
High Courts
Allahbad High Court
Since Award Is A Deemed Decree, Execution Can Be Initiated Anywhere Where Decree Can Be Executed: Allahabad High Court
Case Title: National Highway Authority Of India And Another Versus Jagpal Singh And 2 Others
Case Reference: 2024:AHC:175916
The Allahabad High Court bench of Justice Neeraj Tiwari affirmed that the enforcement of an award through its execution can be initiated anywhere in the country where the decree can be executed and there is no requirement of obtaining a transfer of the decree from the Court which would have jurisdiction over the arbitral proceeding
Whether Non-Signatory Bound By Arbitration Agreement Can Be Decided By Tribunal, Not Referral Court U/S 11 Of Arbitration Act: Allahabad HC
Case Title: Ram Taulan Yadav And Another versus Himanshu Kesarwani And 2 Others
Case Reference: ARBITRATION AND CONCILI. APPL.U/S11(4) No. - 95 of 2023
The Allahabad High Court bench of Justice Manoj Kumar Gupta affirmed that referral court under section 11 of the Arbitration Act stage cannot examine as to whether the non-signatory is bound by the arbitration agreement or not. Such an issue requires factual determination which can be decided by the arbitral tribunal under section 16 of the Arbitration Act.
Calcutta High Court
Calcutta High Court Injuncts State Govt, WBIDC From Disposing Of Property In KMC Area Over Essex Arbitral Award Case
Case Title: ESSEX DEVELOPMENT INVESTMENTS MAURITIUS LIMITED VS GOVERNMENT OF WEST BENGAL AND ANOTHER
Case Reference: EC-COM/447/2024
The Calcutta High Court bench of Justice Shampa Sarkar has injuncted the West Bengal Government and WBIDC from disposing of subject matter of the Award in the execution petition filed by the award-holder in Essex case.
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
Court U/S 45 Of Arbitration Act Must Refer Parties To Arbitration Unless Agreement Is Void Or Inoperative: Delhi High Court
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.
Objections On Capacity Of Party To Initiate Arbitration Must Be Addressed Before Tribunal, Not While Appointing Arbitrator: Delhi HC
Case Title: Kanwar Singh Yadav vs. Delhi Tourism and Transport Development Corporation Limited
Citation: 2024 LiveLaw (Del) 1247
The Delhi High Court bench of Justice Sachin Datta has held that the objections as regards the capacity of the party to initiate arbitration is an aspect which is necessarily required to be gone into the arbitration proceedings, however, the same could not preclude the constitution of an Arbitral Tribunal. The court held that a party may raise appropriate jurisdictional/preliminary objections before the Arbitral Tribunal as regards the maintainability of the arbitration and/or the arbitrability of the claim.
Court U/S 34 Of Arbitration Act Cannot Re-Appreciate Evidence And Substitute Arbitrator's Conclusion: Delhi High Court
Case Title: In-Time Garments Pvt. Ltd. versus HSPS Textile Pvt. Ltd.
Citation: 2024 LiveLaw (Del) 1257
The Delhi High Court bench of Justice Subramonium Prasad affirmed that under Section 34 of the Arbitration Act the Court cannot re-appreciate evidence and substitute its own conclusion to the one arrived at by the Arbitrator even though a different conclusion can be arrived at on re-appreciating evidence
Plausible View Taken By Arbitrator Based On Facts Of Case Cannot Be Interfered With U/S 34 Of Arbitration Act: Delhi High Court
Case Title: Netaji Subhash Institute Of Technology Versus M/S Surya Engineers & Another
Citation: 2024 LiveLaw (Del) 1263
The Delhi High Court bench of Justice Jasmeet Singh affirmed that once an arbitrator has taken a plausible view based on the facts of the case, such a view cannot be interfered with under section 34 of the Arbitration Act.
Merit Based Review Of Arbitral Award Is Impermissible Under Section 37 Of Arbitration Act: Delhi High Court
Case Title: Dr. R.N. Gupta Technical Educational Society versus M/s Intec Capital Ltd.
Citation: 2024 LiveLaw (Del) 1269
The Delhi High Court bench of Justices Vibhu Bakhru and Sachin Datta affirmed that the scope of jurisdiction under Section 34 and Section 37 of the Act is not akin to normal appellate jurisdiction. It is well-settled that that a merit based review of an arbitral award involving reappraisal of factual findings is impermissible. The mere possibility of an alternative view on facts or interpretation of the contract does not entitle courts to reverse the findings of the Arbitral Tribunal.
Case Title: M/s BPL Limited v. M/s Morgan Securities & Credits Pvt. Ltd.
Case Number: FAO(OS)(COMM) NO. 46/2019
The Delhi High Court bench of Justice Yashwant Varma and Justice Dharmesh Sharma, while hearing a review petition of an appeal filed by the appellant u/s 37(1)(b) of the A&C Act read with Section 13 of the Commercial Court Act observed that the exuberant interest rate charged in the commercial world depends upon the transparency of the terms and conditions of the contract entered into. The bench further observed that the arbitral tribunal imposing a high interest rate cannot be said to violate the fundamental policy of Indian laws.
Court's Supervisory Role Over Arbitral Proceedings Would Be Determined As Per CPC If No Neutral Location Is Specified: Delhi High Court
Case Title: M/S Srinivasa Construction Corporation Pvt Ltd Versus Irrigation Works Circle, Through Superintendent Engineer District, Uttar Pradesh
Citation: 2024 LiveLaw (Del) 1273
The Delhi High Court bench of Justice Jasmeet Singh affirmed that if there is a neutral location specified in the contract data, that location would be the place of arbitration and the court having supervisory jurisdiction over the place would have jurisdiction. If no such location is specified, the provisions of the CPC from sections 16 to 20 would be attracted for determining the supervisory jurisdiction of the court.
Arbitration Clause From Another Contract Can Be Incorporated Into Contract Only By Specific Reference: Delhi High Court
Case Title: Unthinkable Solutions LLP Versus Ejohri Jewels Hub Pvt Ltd
Citation: 2024 LiveLaw (Del) 1274
The Delhi High Court bench of Justice Subramonium Prasad affirmed that the arbitration clause from another contract can be incorporated into the contract when there is a clear intention that arbitration clause contained in another contract would also be incorporated in the contract by which the disputes would be resolved.
Award In Which Damages Are Awarded In Absence Of Proven Loss Or Injury Can Be Set Aside U/S 34 On Grounds Of Patent Illegality: Delhi HC
Case Title: Indian Oil Corporation Ltd. Versus M/s Fiberfill Engineers
Citation: 2024 LiveLaw (Del) 1281
The Delhi High Court bench of Justices Vibhu Bakhru and Sachin Datta has held that awarding damages by Arbitrator in the absence of proven injury or loss qualifies to be a patent illegality under section 34 of the Arbitration Act. Such an award is liable to be set aside under section 34.
Himachal Pradesh High Court
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.
Himachal Pradesh High Court Reiterates Limited Scope Of Court Intervention U/S 34 & 37 Of Arbitration & Conciliation Act
Case Title: National Highways Authority of India vs. Devi Ram & Others
Citation: 2024:HHC:11447
The Himachal Pradesh High Court bench of Justice Virender Singh has reiterated that the scope of interference with arbitral awards under Sections 34 and 37 of the Arbitration and Conciliation Act, 1996, is narrow and not akin to appellate jurisdiction. Courts may only interfere if the award exhibits patent illegality or arbitrariness that goes to the root of the matter.
Jammu and Kashmir and Ladakh High Court
Case Title: M/s Mir Associates Construction Company Vs. Superintending Engineer Hydraulic Circle Doda and Anr.
Citation: 2024 LiveLaw (JKL) 313
The Jammu & Kashmir and Ladakh High Court bench of Chief Justice Tashi Rabstan affirmed that when the arbitration clause is found to be foul with the amended section 12(5) of the Arbitration Act, the appointment of the arbitrator would be beyond the pale of the arbitration agreement. In such eventuality, the court can be approached under section 14 of the Arbitration Act for seeking substitution of the arbitrator.
Case Title: M/s Pardeep Electricals and Building Pvt. Ltd. Vs. Union of India and Ors.
Citation: 2024 LiveLaw (JKL) 314
The Jammu & Kashmir and Ladakh High Court bench of Chief Justice Tashi Rabstan has held that once the statutory remedy under contract is exhausted, arbitration clause can be invoked and appointment of the arbitrator can be sought under section 11 of the Arbitration Act.In this case, the respondent had to constitute Dispute resolution Board (DRB) within 30 days after execution of the contract for resolving any dispute arising between the parties but no DRB was constituted.
Madhya Pradesh High Court
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.
Punjab and Haryana High Court
Case Title: Active Promoters Private Limited vs. Desh Raj and Others
Case Number: FAO-CARB-3-2020 (O&M)
The Punjab and Haryana High Court bench of Justices Arun Palli and Vikram Aggarwal has reiterated that the scope of interference with an arbitral award under Section 34 of the Arbitration and Conciliation Act, 1996, is narrow, and the appellate jurisdiction under Section 37 is even more circumscribed. The court reiterated that jurisdiction under Section 34 and Section 37 of the Act is not akin to normal appellate jurisdiction. It held that interference with an arbitral award is permissible only if it conflicts with public policy or is patently illegal. The court reiterated that an award should not be set aside simply based on an alternative interpretation of the agreement.
Whether Claim Is Barred By Res Judicata Cannot Be Decided By Court At S.11 Stage Of Arbitration Act: P&H High Court
Case Title: M/s Rise Projects Private Limited Versus Municipal Corporation, Faridabad
Case Reference: ARB-108-2020
The Punjab and Haryana High Court bench of Justice Survir Sehgal affirmed that the question whether a claim is barred by res judicata, does not arise for consideration in a proceedings under Section 11 of the Arbitration Act. Such an issue will have to be examined by the arbitral tribunal under section 16 of the Act.
S.12(5) Of Arbitration Act Would Be Applicable To Arbitral Proceedings Which Commenced Before 2015 Amendment Act: P&H High Court
Case Title: SP Singla Constructions Pvt. Ltd. Vs. State of Haryana and others
Case Reference: ARB-337-2017 (O&M)
The Punjab and Haryana High Court bench of Justice Suvir Sehgal has held that the provision of Section 12(5) of the Arbitration Act would applicable to arbitral proceedings which were initiated prior to 2015 Amendment came into force and continued thereafter.
Rajasthan High Court
Referral Court Has Limited Role U/S 11 Of Arbitration Act To Verify Existence Of Arbitration Agreement: Rajasthan High Court
Case Title: PME Power Solutions (India) Ltd.Versus Airen Metals Pvt. Ltd
Citation: 2024 (LiveLaw) Raj 352
The Rajasthan High Court bench of Justice Sudesh Bansal affirmed that the scope of arbitration application, in view of Section 11(6A) of the Arbitration Act, 1996 is confined and limited to the extent of examining the existence of arbitration agreement between the parties for resolution of dispute.
Unless Appointment Of Arbitrator Under Arbitration Clause Is Ex-Facie Valid, Jurisdiction Of Court U/S 11(6) Cannot Be Barred: Rajasthan HC
Case Title: Surendra Sarda S/o Late Shri Kanhaiyalal Sharda Versus Shri Maheshwari Samaj and Ors.
Citation: 2024 (LiveLaw) Raj 351
The Rajasthan High Court bench of Justice Sudesh Bansal affirmed that unless the appointment of the arbitrator is ex facie valid and such appointment satisfies the Court exercising jurisdiction under Section 11(6) of the Arbitration Act, acceptance of such appointment as a fait accompli to debar the jurisdiction under Section 11(6) cannot be countenanced in law.
