Arbitration Cases Weekly Round-Up: 12 June To 18 June, 2022

Court Can Pass An Order Of Interim Measures Under Section 9Of The A&C Act Against A Third Party: Reiterates Bombay High Court

Case Title: Choice Developers versus Pantnagar Pearl CHS Ltd. & Ors.

The Bombay High Court has reiterated that the Court is free to pass an order under Section 9 of the Arbitration and Conciliation Act, 1996 (A&C Act) to grant interim measures of protection against a third party who is impleaded in the petition filed under Section 9.

The Single Bench of Justice G.S. Kulkarni held that the minority members of a Society cannot act against the will of the majority members of the Society and obstruct the redevelopment work in the Society.

Gujarat High Court:

Claim Petition Without Verification, Writ Not Maintainable Against An Order Of Dismissal Of Claim: Gujarat High Court

Case Title: Pahal Engineers versus The Gujarat Water Supply and Sewerage Board

The High Court of Gujarat has held that a writ petition would not be maintainable against an order of the arbitral tribunal whereby it has rejected the claim of a party on the ground that its pleadings were without verification and affidavit to that effect.

The Single Bench of Justice Vaibhavi D. Nanavati held that once the arbitrator rejects the claims of a party that essentially means a final closure of its claims and the order of the arbitrator can be challenged under Section 34 of the Arbitration and Conciliation Act, 1996.

Proceedings Under Section 9 Of A&C Act Cannot Be Used For Enforcement Of The Conditions Of A Contract: Gujarat High Court

Case Title: Kanhai Foods Ltd versus A and HP Bakes

The Gujarat High Court has ruled that issues involving enforcement of the conditions of a Franchise Agreement cannot be the subject matter of an application for interim measures under Section 9 of the Arbitration and Conciliation Act, 1996.

The Bench, consisting of Justices N.V. Anjaria and Samir J. Dave, held that conditions of a contract can be enforced only when the rights of the parties are finally adjudged and crystallised by the Arbitrator.

Karnataka High Court:

Order Terminating The Arbitration Not Challenged; Can't File Section 8 Application Later: Karnataka High Court

Case Title: BEML Ltd. versus Prakash Parcel Services Ltd.

The High Court of Karnataka has held that a subsequent Section 8 application would be non-maintainable when the order of the arbitrator accepting objection to its jurisdiction was not challenged.

The Division Bench of Justice Alok Aradhe and Justice J.M. Khazi held that once the order of the arbitrator terminating the arbitral proceedings has attained finality, it would not be open for a party who did not lay any challenge to the order to contend that the dispute once again be referred to arbitration.

Punjab and Haryana High Court:

Even In The Absence Of An Arbitration Agreement, The Matter Can Be Referred To Arbitration Under Section 18 Of The MSMED Act: Punjab And Haryana High Court

Case Title: M/s SGM Packaging Industries versus M/s Goyal Plywood LLP

The Punjab and Haryana High Court has ruled that even in the absence of an arbitration agreement between the parties, the matter can be referred to arbitration under Section 18 of the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act).

The Single Bench of Justice Lisa Gill reiterated that the MSMED Act being a Special Act shall prevail over the Arbitration and Conciliation Act, 1996 (A&C Act).

Telangana High Court:

Application For Enforcement Of Arbitral Award Would Lie Only Before The Court Where Application Under Section 9 And/ Or Section 34Has Been Filed: Reiterates Telangana High Court

Case Title: M/s. India Media Services Private Limited versus M/s. SBPL Infrastructure Limited

The Telangana High Court has reiterated that in view of Section 42 of the Arbitration and Conciliation Act, 1996 (A&C Act), only the Court where an application under Section 9 and/or Section 34 has been filed would have the jurisdiction to entertain an application for enforcement of the arbitral award.

The Bench, consisting of Justices P. Naveen Rao and Sambasivarao Naidu, held that Section 42 of the A&C Act opens with a non-obstante clause and, therefore, even though an arbitral award is treated as a 'decree in fiction' by a Civil Court, Section 42 of the A&C Act would cover within its ambit all provisions dealing with execution of an award.

If 'Value of Commercial Dispute' Is More Than Rs. One Crore, Section 9 Application Under A&C Act Would Lie Only Before The Commercial Court: Telangana High Court

Case Title: Telangana State Tourism Development Corporation Limited versus M/s. A.A. Avocations Pvt. Ltd.

The Telangana High Court has ruled that if a dispute constitutes a 'commercial dispute' under Section 2 (1) (c) (vii) of the Commercial Courts Act, 2015, and the dispute is the subject matter of a domestic arbitration whose 'Specified Value' is more than Rs. One Crore, then an application under Section 9 of the Arbitration and Conciliation Act, 1996 (A&C Act) would lie only before the Commercial Court and not before the Civil Court.

The Bench, consisting of Justices P. Naveen Rao and Sambasivarao Naidu, held that to treat an immovable property as 'used' for commercial purposes, so as to fall within the ambit of Section 2 (1) (c) (vii) of the Commercial Courts Act, it is not necessary that the present lessee should commence commercial operations in the said property.

No Claim Certificate By Employee To Employer Under Compulsion Or Not, Issue Is Arbitrable: Telangana High Court

Case Title: M/s BPR Infrastructure Limited versus M/s. RITES Ltd. and Anr.

The Telangana High Court has ruled that the issue whether a no claim certificate furnished by a party to its employer was under compulsion or duress, or whether the said no claim certificate is valid, which would discharge the contract and debar the party from raising further claims, is an arbitrable dispute.

The Single Bench of Justice Ujjal Bhuyan held that in view of the decision of the Supreme Court in the case of Bharat Sanchar Nigam Limited versus M/s. Nortel Networks India Pvt. Limited (2021), the Court is only required to examine whether an arbitration agreement exists between the parties.