Arbitration Cases Weekly Round-Up: 9 October To 15 October, 2022

Period Of Limitation For Referring The Dispute To Arbitration Commences Only After The Failure Of Pre-Arbitration Mechanism: Delhi High Court

Case Title: Welspun Enterprises Ltd. versus NCC Ltd.

The High Court of Delhi has held that the period of limitation for referring the dispute to arbitration would only commence after the internal dispute resolution mechanism fails.

The bench of Justices Vibhu Bakhru and Amit Mahajan held that if the agreement between the parties provides for a pre-arbitration dispute resolution mechanism, a party cannot be expected to invoke arbitration unless the said mechanism fails, therefore, the limitation period cannot start prior to that.

Whether A Claim Is A 'Notified Claim' Under The Contract, Falls Outside The Scope Of Arbitration: Delhi High Court

Case Title: M/s Janta Associates and Co. Ltd. versus Indian Oil Foundation & Anr.

The Delhi High Court has ruled that the dispute whether a claim raised by a party is a 'Notified Claim' under the Contract, which can be referred to arbitration as per the arbitration clause, falls outside the scope of arbitration.

The Single Bench of Justice Vibhu Bakhru observed that as per the arbitration clause contained in the General Conditions of Contract (GCC), only disputes arising out of 'Notified Claims', as included in the Final Bill issued by the claimant, could be referred to arbitration. The Court held that the dispute whether the claims raised by the claimant were 'Notified Claims', falling within the scope of arbitration clause, could not be referred to arbitration.

Use Of The Word 'Can' In An Arbitration Clause Does Not Render It Ineffective, Intention To Be Looked Into: Delhi High Court

Case Title: Panasonic India Pvt. Ltd. versus Shah Aircon

The Delhi High Court has held that mere use of the word 'can' in an arbitration clause does not render it ineffective and the intention of the parties to go for arbitration is to be determined on a complete reading of the clause and relevant clauses.

The Bench of Justice Prateek Jalan reiterated that exclusive jurisdiction clause would override a venue clause, therefore, the court which has been conferred the exclusive jurisdiction will decide all arbitration applications arising out of the contract.

"Confirming Party" To A Contract, Who Is Not Signatory To The Arbitration Clause, Can Invoke Arbitration: Delhi High Court

Case Title: Ansal Properties & Infrastructure Ltd. & Anr. versus Dowager Maharanis Residential Accommodation Welfare & Amenities Trust & Anr.

The Delhi High Court has ruled that a confirming party to a Contract, who is not bound by the terms of the Contract and on whom no liability is affixed under the Contract, can be referred to arbitration even if he is not a signatory to the arbitration clause contained in the Contract.

The Single Bench of Justice Neena Bansal Krishna held that the fact that the party had signed the Agreement containing an arbitration clause, implied that it had consented to refer all the disputes under the Agreement to arbitration and that the party's implied consent to the arbitration clause could be inferred.

Delhi High Court Delineates Circumstances To Invoke "Group Of Companies"Doctrine

Case Title: Esha Kedia versus Milan R. Parekh & Ors.

The Delhi High Court has ruled that the plea that signatures to the MoU containing an arbitration clause were obtained by threat and coercion, cannot be considered while considering an application under Section 11 of the Arbitration and Conciliation Act, 1996 (A&C Act) for appointment of the Arbitrator.

The Single Bench of Justice Neena Bansal Krishna held that each Company is a separate legal entity which has separate legal rights and liabilities and hence, an agreement entered into by one of the Companies in a group, cannot be binding on the other members of the same group. However, the Court added that in certain exceptional circumstances, by invoking the concept of "Group of Companies", an arbitration agreement can be binding on the non-signatory Companies or a third party.

Punjab and Haryana High Court:

Execution Of Arbitral Award Is To Be Filed In The Seat Court And Not At The Place Of Land Acquired: Punjab and Haryana High Court

Case Title: NHAI versus Yashpreet Singh

The Punjab and Haryana High Court has held that execution of an arbitral award passed under the National Highways Act, 1956 is to be filed at the Seat Court and not where the acquired land is situated.

The bench of Justice Raj Mohan Singh held that once the seat of arbitral proceeding is fixed then only the court within whose jurisdiction the seat is situated would have the jurisdiction to decide all the applications arising out of the arbitration.