Arbitration Cases Weekly Round-Up: 21 August To 27 August, 2022

Interim Relief Under Section 9 Of A&C Act - Incidental To Recovery Of Possession OfProperty; Small Causes Court Alone Would Have Jurisdiction: Bombay High Court

Case Title: BXIN Office Parks India Pvt. Ltd. versus Kailasa Urja Pvt. Ltd.

The Bombay High Court has ruled that reliefs which are incidental to the possession of the licensed premises cannot be sought in an application for interim measures under Section 9 of the Arbitration and Conciliation Act, 1996 (A&C Act), in view of the exclusive jurisdiction conferred on the Court of Small Causes under Section 41 of the Presidency Small Cause Courts Act, 1882 (PSCC Act).

The Single Bench of Justice G.S. Kulkarni reiterated that the bar contained in Section 41 of the PSCC Act applies not only to a suit for recovery of possession of immovable property but also to all other incidental reliefs which can be claimed by a party in a suit for recovery of possession and hence, the jurisdiction to grant such incidental reliefs would also lie with the Small Causes Court.

Mere Erroneous Application Of Law; Award Need Not Be Set Aside: Bombay High Court

Case Title: National Highways Authority of India versus The Additional Commissioner, Nagpur and Ors.

The Bombay High Court has reiterated that when the court is convinced that the Arbitrator has erred only on specific issues and that the arbitral award is otherwise sustainable, the court is not mandatorily required to set aside the entire award under Section 34 of the Arbitration and Conciliation Act, 1996 (A&C Act).

The Single Bench of Justice Manish Pitale ruled that though the arbitral award granting interest to land owners on enhanced compensation from the date of the notification for acquisition, and not from the date of taking possession, is contrary to the mandate of Section 3H (5) of the National Highways Act, 1956 (NHA); however, it constituted a mere erroneous application of the law and hence, the award cannot be said aside on the said ground.

Calcutta High Court:

Unilateral Appointment Of Arbitrator; Calcutta High Court Replaces With A New Arbitrator

Case Title: Yashovardhan Sinha HUF versus Satyatej Vyapaar Pvt. Ltd.

The Calcutta High Court has held that an arbitration clause does not come to an end merely because it provides for an illegal method of appointment of arbitrator and the courts can remove the illegal portion and retain the remaining clause to give effect to the intention of the parties to submit their dispute to arbitration.

The Bench of Justice Shekhar B. Saraf further held that the Court while exercising powers under Section 14 of the A&C Act for appointing a substitute arbitrator will be guided by the principles of Section 11 of the Act, therefore, the Court may refuse substitution when it finds that the issue itself is not arbitrable or falls under one of the categories wherein the dispute is not required to be sent for arbitration.

Delhi High Court:

Unilateral Constitution Of A Narrow Panel Of Arbitrators Violates Impartiality: Delhi HighCourt

Case Title: Overnite Express Ltd versus DMRC

Citation: 2022 LiveLaw (Del) 801

The High Court of Delhi has held that the power conferred on one party to unilaterally choose names from a panel of arbitrators and forwarding it to the other party to select its arbitrator from those names is violative of the principle of impartiality in arbitration.

The Bench of Justice Neena Bansal Krishna held that such a unilateral exercise of power creates space for suspicion regardless of the merit of the selected arbitrators who happen to be retired District Judges.

Madras High Court:

Arbitrator Appointed Under MSCS Act; Fixation Of Fees Is Subject To A&C Act: Madras High Court

Case Title: Air Corporation Employees Co-operative Credit Society Ltd. versus Registrar of Co-operative Societies

Citation: 2022 LiveLaw (Mad) 369

The Madras High Court has ruled that the power of the Central Registrar to appoint an arbitrator and fix the fees of arbitration under the Multi State Co-operative Societies Act, 2002 (MSCS Act), is subject to the provisions of the Arbitration and Conciliation Act, 1996 (A&C Act).

Holding that there is no provision under the MSCS Act where an exemption has been provided with respect to Section 38 of the A&C Act, which requires the parties to equally bear the advance costs to be deposited before the Arbitral Tribunal, the Single Bench of Justice C. Saravanan set aside the order of the State Registrar directing the petitioner to pay the fees and expenses to the Arbitrator.