Arbitration Cases Weekly Round-Up: April 30 To May 06, 2023
Parina Katyal
8 May 2023 8:00 PM IST
Bombay High Court: Invalidity Of Board Resolution Is A Procedural And Curable Defect, Cannot Lead To Rejection Of Claims And Termination Of Arbitral Proceedings: Bombay High Court Case Title: Palmview Investments Overseas Limited vs Ravi Arya The High Court of Bombay has held that any defect in the board resolution authorizing a person to initiate arbitration is only a...
Bombay High Court:
Case Title: Palmview Investments Overseas Limited vs Ravi Arya
The High Court of Bombay has held that any defect in the board resolution authorizing a person to initiate arbitration is only a procedural and a curable defect, thus, it cannot be a ground for the rejection of the claims and termination of the arbitral proceedings.
The bench of Justices K.R. Shriram and Rajesh S. Patil held that requirement of a board resolution authorizing a person to take legal action on behalf of a company is a procedural requirement and any defect in such a resolution would only be a procedural irregularity and thus it cannot be allowed to defeat a substantive right of a party.
Case Title: Gurumahima Heights Co-operative Housing Society Ltd vs M/s Admirecon Infrastructure Pvt Ltd
The Bombay High Court has ruled that mere signing of the arbitral award at a place cannot be the determinative factor for ascertaining the place of arbitration. It added that if there is no agreement between the parties regarding the place of arbitration and the arbitrator has not determined the place of arbitration, the overall circumstances of the case would have to be taken into consideration to reach a conclusion regarding the same.
Calcutta High Court:
Case Title: State of West Bengal vs Rajpath Contractors and Engineers Limited
The High Court of Calcutta has invoked its powers under Article 133(1)(a) r/w Article 134A of the Constitution to allow the aggrieved party to directly appeal against its judgment to the Supreme Court on the ground that the case involves a substantial question of law of general importance.
The bench of Justice Shekhar B. Saraf was dealing with a peculiar situation wherein the application filed under Section 34 of the A&C Act was rendered barred in law for the reason that the entire 30 days grace period provided under proviso to Section 34(3) coincided with the Court holidays.
Case Title: Ugro Capital Limited vs Raj Drug Agency
The Calcutta High Court has held that mere allegations of fraud inter-se the respondents would not make a dispute non-arbitrable. The bench of Justice Shekhar B. Saraf held that merely because the respondents inter-se dispute the validity of the agreement containing arbitration clause and also their signature on it, it does not make the dispute non-arbitrable. It further held that mere possibility or existence of criminal proceedings arising out of the same facts would not put the dispute beyond the scope of arbitration.
Delhi High Court:
Case Title: Fedders Electric & Engineering vs Srishthi Constructions
The Delhi High Court has held that the Court while exercising powers under Section 9(3) of the A&C Act cannot examine the allegations of fraud or forgery when the arbitral tribunal is already in place and seized of the matter. The bench of Justice Chandra Dhari Singh held that once the arbitral tribunal has been constituted, the Court shall not entertain any application under Section 9 except in cases of exceptional circumstances in which the remedy before the tribunal would not be efficacious.
Gujarat High Court:
Case Title: Yashang Navinbhai Patel vs Dilipbhai Prabhubhai Patel
The Gujarat High Court has ruled that once the partnership at will is dissolved, the arbitration clause contained in the partnership deed cannot be invoked to refer the dispute between the partners to arbitration. The bench of Justice Biren Vaishnav was dealing with an arbitration clause which provided for reference of the dispute between the partners with regard to the “dealing of the firm” to arbitration. The court held that the term “dealing” would mean engaging in business and thus, for the dispute to fall within the ambit of the arbitration clause, the firm must be subsisting.
Madras High Court:
Case Title: Prime Store vs Sugam Vanijya Holdings
The Madras High Court has recently held that the provisions for disqualification for appointment as arbitrator under the Seventh Schedule of the Arbitration and Conciliation Act would be applicable to any person, including a retired judge. The court noted that the provisions with respect to ineligibility and disqualification are mandatory and non-derogable.
Patna High Court:
Case Title: M/s REW Contracts Pvt Ltd vs Bihar State Power Transmission Co. Ltd & Anr
The Patna High Court has ruled that an arbitration agreement executed by a Joint Venture cannot be invoked by the constituents of the said Joint Venture, since they cannot be considered as a party to the arbitration agreement.
While dealing with a petition under Section 11 of the Arbitration and Conciliation Act, 1996 (A&C Act) seeking appointment of arbitrator, the bench of Chief Justice K. Vinod Chandran held that only the Joint Venture, being a separate legal entity and a party to the arbitration agreement, could invoke arbitration and not the petitioner, who was only one of the constituents of the said Joint Venture.
Telangana High Court:
Case Title: Hyderabad Metropolitan Development Authority vs Ramky Elsamex Hyderabad Ring Road Limited
The Telangana High Court held that once the tribunal has passed an order terminating the arbitral proceedings under Section 32(2)(c) r/w Section 38 of the A&C Act for non-payment of tribunal fees, the tribunal cannot recall the order and continue the arbitral proceedings.
The bench of Justices P. Naveen Rao and Nagesh Bheempaka held that once the arbitral proceedings are terminated under Section 32(2)(c) of the Act, the tribunal becomes functus officio and it cannot continue with the arbitral proceedings merely on the grounds that the parties did not take the issue of termination seriously and continued with the arbitral proceedings.
