Arbitration Cases Weekly Round-Up: 27 November To 3 December, 2022

Participation In Arbitral Proceedings, Does Not Disentitle Party To Challenge Award On Ground Of Unilateral Appointment Of Arbitrator: Bombay High Court

Case Title: Naresh Kanayalal Rajwani & Ors. versus Kotak Mahindra Bank Limited & Anr.

The Bombay High Court has ruled that merely because a party participated in the arbitration proceedings, it is not disentitled from challenging the arbitral award on the ground that the arbitration proceedings were vitiated due to the unilateral appointment of the Arbitrator by the opposite party, falling foul of Section 12(5) read with the Seventh Schedule of the Arbitration and Conciliation Act, 1996 (A&C Act).

The bench of Justice Manish Pitale held that Section 12(5) of the A&C Act can be waived only in terms of the proviso to Section 12(5).

Arbitration Clause In An Agreement Can't Be Invoked For Another Agreement, Operating Independently: Bombay High Court

Case Title: JSW Steel Limited versus Bellary Oxygen Company Private Limited & Anr.

The Bombay High Court has ruled that mere reference to an Agreement containing an arbitration clause, in a subsequent Agreement, will not bring about a consequence envisaged under Section 7(5) of the Arbitration & Conciliation Act, 1996 (A&C Act), to the effect that the arbitration agreement would be incorporated into the subsequent Agreement.

The bench of Justice G.S. Kulkarni ruled that where the two Agreements operate independently, having no interconnection, the applicant cannot overcome the specific exclusion of an arbitration agreement in the second Agreement, by invoking the arbitration agreement contained in the first Agreement.

Delhi High Court:

Time Spent On Application Under Section 8 Of A&C Act, Not Excludable For Computation Of Limitation For Counter Claim: Delhi High Court

Case Title: Web Overseas Limited versus Universal Industrial Plants Manufacturing Company Private Limited

The Delhi High Court has ruled that in a suit filed by a party, the time spent by the opposite party in pursuing its application under Section 8 of the Arbitration and Conciliation Act, 1996 (A&C Act), cannot be excluded for the purpose of computation of the limitation period for filing the counterclaims by the opposite party before the Arbitral Tribunal.

The bench of Justices Vibhu Bakhru and Amit Mahajan held that the benefit of Section 14 (1) of the Limitation Act, 1963 is available only to the plaintiff who has been prosecuting civil proceedings against the defendant, and not to the defendant who is resisting a claim.

Gujarat High Court:

Findings On Limitation, During Section 16 Proceedings, Can't Be Challenged Under Sec. 34 Of A&C Act: Gujarat High Court

Case Title: M/s Karan Paper Mills versus M/s Shah Paper Pack Industries

The Gujarat High Court has ruled that the findings of the Arbitrator relating to the issue of limitation, arrived at while dealing with an application filed under Section 16 of the Arbitration and Conciliation Act, 1996 (A&C Act), challenging the jurisdiction of the Arbitrator on the ground that the claims raised by the claimant were barred by limitation, do not constitute an 'interim award'.

The bench of Justices Sonia Gokani and Nisha M. Thakore held that the Arbitrator's findings on limitation, while dealing with the Section 16 application, cannot be held as giving finality to the issue of limitation so as to permit its challenge under Section 34 of the A&C Act.