Government Entity Can't Be Given Differential Treatment While Staying Operation Of Arbitral Award : Supreme Court

Case Title: International Seaport Dredging Pvt Ltd Versus Kamarajar Port Limited,

Case Number- Civil Appeal No 12097 of 2024

Recently, the Supreme Court disapproved of a High Court's decision to exempt a government entity from depositing other amounts in addition to the arbitral award amount as a condition precedent for seeking a stay on the enforcement of the award just because the government entity was not a flight risk.

The bench comprising Chief Justice DY Chandrachud,Justices JB Pardiwala and Manoj Misra observed that the law qua arbitration proceedings cannot be differently applied merely because of the status of the respondent-entity as a statutory undertaking.

Arbitral Tribunal May Impose Costs On Party Abusing Referral Court's Limited Jurisdiction To Compel Another's Participation In Arbitration : Supreme Court

Case Title: ASLAM ISMAIL KHAN DESHMUKH VERSUS ASAP FLUIDS PVT. LTD. & ANR., ARBITRATION PETITION NO. 20 OF 2019

Citation :2024 LiveLaw (SC) 868

The Supreme Court held that in the interest of justice, the Arbitral Tribunal may impose costs on the Party who abused the process of law constraining another party to participate in the Arbitral Proceedings by taking advantage of minimal judicial interference at the referral stage.

“In order to balance such a limited scope of judicial interference with the interests of the parties who might be constrained to participate in the arbitration proceedings, the arbitral tribunal may direct that the costs of the arbitration shall be borne by the party which the Tribunal ultimately finds to have abused the process of law and caused unnecessary harassment to the other party to the arbitration.”, the court said.

Unilateral Arbitrator Appointment Clauses In Public-Private Contracts Invalid; Can't Compel Selection Of Arbitrators From PSU's Panels : Supreme Court

Case details : CENTRAL ORGANISATION FOR RAILWAY ELECTRIFICATION vs. M/S ECI SPIC SMO MCML (JV) A JOINT VENTURE COMPANY C.A. No. 009486 - 009487 / 2019

Citation : 2024 LiveLaw (SC) 874

The Supreme Court on Friday (November 8) ruled against clauses allowing Public Sector Undertakings to unilaterally appoint arbitrators to decide disputes with private contractors.

The Constitution Bench held that while PSUs can maintain a panel of potential arbitrators, they cannot compel the other party to select its arbitrator from the panel.

The Constitution Bench comprising Chief Justice of India DY Chandrachud, Justice Hrishikesh Roy, Justice PS Narasimha, Justice JB Pardiwala, and Justice Manoj Misra was considering the validity of an arbitration clause which prescribes that the appointment of the arbitrator will happen from a panel of arbitrators curated by one of the parties, which is mostly a public sector undertaking (PSU) in majority of the cases.

Determining 'Seat' In International Arbitration : Supreme Court Takes Shift From 'Closest Connection Test', Says Express Designation Of Place Matters

Case Title: M/S ARIF AZIM CO. LTD. VERSUS M/S MICROMAX INFORMATICS FZE, ARBITRATION PETITION NO. 31 OF 2023

Citation : 2024 LiveLaw (SC) 871

In a key ruling on International Commercial Arbitration, the Supreme Court held that when an arbitration agreement grants non-exclusive jurisdiction to a foreign court, that court is considered the "seat of arbitration." The Court reaffirmed the BALCO principle that Indian courts lack supervisory jurisdiction under Part I of the Arbitration & Conciliation Act, 1996, for arbitrations seated abroad.

Taking a shift from the 'Close Connection Test' to determine the seat of the arbitration, the Court observed that “the more appropriate criterion for determining the seat of arbitration in view of the subsequent decisions of this Court is that where in an arbitration agreement there is an express designation of a place of arbitration anchoring the arbitral proceedings to such place, and there being no other significant contrary indicia to show otherwise, such place would be the 'seat' of arbitration even if it is designated in the nomenclature of 'venue' in the arbitration agreement.”

Unconditional Withdrawal Of Arbitrator Appointment Application Bars Second Application On Same Cause Of Action: Supreme Court

Case Title: M/S HPCL BIO-FUELS LTD. VERSUS M/S SHAHAJI BHANUDAS BHAD, CIVIL APPEAL NO. 12233 OF 2024

Citation : 2024 LiveLaw (SC) 879

The Supreme Court observed that when a party seeking appointment of an arbitrator unconditionally withdraws its application, then the subsequent application for an appointment of an arbitrator on the same cause of action would be barred.

The bench comprising Chief Justice DY Chandrachud and Justice JB Pardiwala ruled that Order 23 Rule 1 of Civil Procedure Code, 1908 (“CPC”) would be made applicable to applications seeking appointment of an arbitrator under Section 11(6) of the Arbitration & Conciliation Act, 1996 (“Arbitration Act”) to restrain the party from filing second arbitrator appointment application when it had abandoned (unconditionally withdrawn the application without leave to file fresh application) the arbitration in its first application.

High Courts

Calcutta High Court

Composite Reference May Be Made When Two Contracts Are So Intertwined That Separate Arbitral Proceedings Would Prejudice Parties: Calcutta HC

Case Title: SMT SONIA DHIR AND ANR. VS PRESTAR INFRASTRUCTURE PROJECTS LIMITED

Citation : AP/179/2024

The Calcutta High Court Bench of Justice Sabyasachi Bhattacharya affirmed that when two or more contracts are so intertwined with each other so as to prejudice the parties should separate arbitrations be held, a composite reference of both the contracts can be made to the Arbitrator.

Delhi High Court

Challenge To Award U/S 34 Of Arbitration Act Without Award Itself Being Filed Would Not Be A Valid Filing: Delhi High Court

Case Title: VASISHTA MANTENA NH04 JV & ORS. V. BLACKLEAD INFRATECH PVT LTD.

Case Number: O.M.P. (COMM) 419/2023

The Delhi High Court Bench of Justice Subramonium Prasad, held that a petition under Section 34 of the Arbitration & Conciliation Act is for challenging the Award. It cannot be said that a challenge to the Award without the award itself being filed would be a valid filing. Without the Award, the challenge would become meaningless because unless the Award is perused by the Court, it cannot test or adjudicate on the correctness of the Award.

Gujarat High Court

Award In Which Serious Allegations Of Fraud Are Not Decided Must Be Set Aside On Grounds Of Patent Illegality: Gujarat High Court

Case Title: SHAILESH ANILKUMAR AMIN & ANR. Versus GUJARAT METRO RAIL CORPORATION (GMRC) LTD.

Citation : 2024 LiveLaw (Guj) 166

The Gujarat High Court Bench of Chief Justice SUNITA AGARWAL and Justice PRANAV TRIVEDI affirmed that if serious allegations of fraud are raised that the arbitration agreement was entered into by fraud and collusion and such allegations are not decided by the Arbitrator while passing an award, such an award is liable to set aside on the ground of patent illegality under section 34 of the Arbitration Act

Requirement Of Serving Notice On Other Party For Appointment Of Arbitrator Is Dispensed With In Statutory Arbitration: Gujarat High Court

Case Title: M/S KONNECTING INDIA & ORS. Versus THE KALUPUR COMMERCIAL CO OP. BANK LTD. & ANR.

Citation : 2024 LiveLaw (Guj) 167

The Gujarat High Court Bench of Chief Justice Sunita Agarwal and Justice Pranav Trivedi held that the arbitration proceedings under consideration is not a commercial arbitration, but a statutory arbitration. The Arbitrator is appointed pursuant to the provisions of Section 84(5) of the Multi State Co-operative Societies Act. The appointment of the Arbitrator is made by the State Government on behalf of the Central Government. The argument canvassed by the learned counsel for the appellants about the applicability of provisions of Section 21 of the Arbitration Act in a statutory arbitration, is absolutely meritless.

Himachal Pradesh High Court

S. 29A Of Arbitration Act Not Applicable To Arbitration Proceedings Which Commenced Before 2015 Amendment: Himachal Pradesh HC

Case Title: National Highway Authority Of India vs Rishi Singh & Ors

Citation: 2024 LiveLaw (HP) 70

The Himachal Pradesh High Court bench of Justice Jyotsna Rewal Dua affirmed that provisions of Section 29A of the Act will not be applicable to the arbitration proceedings that had started before the Arbitration & Conciliation (Amendment) Act, 2015 came into force.

Objection To Tribunal's Jurisdiction U/S 16 Of Arbitration Act Must Be Raised Before Or At Time Of Statement Of Defence: Himachal Pradesh HC

Case Title: State of H.P. and another v. M/s Gurcharan Industries

Citation: 2024 LiveLaw (HP) 71

The Himachal Pradesh High Court bench of Justice Jyotsna Rewal Dua affirmed that a party is bound by virtue of Section 16(2) of the Arbitration Act to raise any objection it may have to the jurisdiction of the Tribunal before or at the time of submission of its statement of defence, and at any time thereafter it is expressly prohibited.

Madras High Court

Arbitrator Nominated U/S 18(3) MSMED Act Erred In Deciding Merits After Finding Respondent Was Not MSME: Madras HC Upholds Setting Aside Of Award

Case Title: M/S. Sivadarshini Papers Limited vs. M/S. Sunwin Papers

Citation: 2024 LiveLaw (Mad) 420

The Madras High Coury bench of Justices R. Suresh Kumar and C. Saravanan has held that an Arbitrator ought not to decide the case on merits after coming to a conclusion that the respondent was not a Micro, Small, and Medium Enterprise (MSME) and therefore not entitled to invoke the machinery under the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006. The court upheld the setting aside of the award passed by the Arbitrator.

Award Must Not Be Set Aside On Ground Of Mere Erroneous Application Of Law Unless Patent Illegality Is Established U/S 34: Madras HC

Case Title: N.Jayamurugan Vs. M/s.Saravana Global Holdings Ltd.

Citation: 2024 LiveLaw (Mad) 423

The Madras High Court bench of Justices M.Sundar And K.Govindarajan Thilakavadi affirmed that the scope of interference under Section 34 of the Arbitration Act is limited and within the contours of the ground specified under Section 34 of the Act. To put it otherwise, the award is not required to be set aside on the ground of mere erroneous application of law or by reappreciation of the evidence until and unless it suffers from patent illegality.

Construction Of Contract's Terms Is Task Of Arbitrator, Cannot Be Interfered With U/S 34 Unless Construction Is Unreasonable: Madras HC

Case Title: M/s.Bhadra International (India) Pvt. Ltd Vs. Airports Authority of India and Ors.

Citation: 2024 LiveLaw (Mad) 424

The Madras High Court bench of Justices M.Sundar And K.Govindarajan Thilakavadi affirmed that the construction of the terms of a contract is primarily for an Arbitrator to decide unless the Arbitrator construes the contract in such a way that it could be said to be something that no fair-minded or reasonable person could do then only interference under section 34 of the Arbitration Act is justified.

Telangana High Court

Parties To Lis Should Not Be Appointed As Receiver Without Consent Of Other Parties: Telangana High Court

Case Title: Mrs. Bibi Hajjar Dashti vs Mr. Syed Ali Asghar Bolooki

Case Number: COMMERCIAL COURT APPEAL No.14 OF 2024

The Telangana High Court Bench of Chief Justice Alok Aradhe And Justice J.Sreenivas Rao held that impartiality is an essential attribute of a Receiver. Therefore, normally one of the parties to a lis should not be appointed as Receiver without consent of the other parties unless a very special case is made out.

Court U/S 11 Of Arbitration Act Only Checks For Existence Of Agreement, Jurisdictional Questions To Be Decided By Arbitrator: Telangana HC

Case Title: M/s K.D. SOLAR SYSTEMS v. M/s. Mytrah Energy India Pvt. Ltd.

Case Number: ARBITRATION APPLICATION No.176 of 2024

The Telangana High Court Bench of Chief Justice Alok Aradhe affirmed that Sub-section (1) of Section 16 provides that the Arbitral Tribunal may rule on its own jurisdiction, “including any objections” with respect to the existence or validity of the arbitration agreement. Section 16 is an inclusive provision, which would comprehend all preliminary issues touching upon the jurisdiction of the Arbitral Tribunal. The issue of limitation is a jurisdictional issue, which would be required to be decided by the arbitrator under Section 16, and not the High Court at the pre-reference stage under Section 11 of the Act.

Telangana High Court Reiterates Limited Scope For Interference With Arbitral Awards U/S 34 Of Arbitration & Conciliation Act, 1996

Case Title: The Andhra Pradesh State Trading Corporation Ltd. v. M/S. Hima Bindu Chemicals Pvt. Ltd.
Case Number: Civil Miscellaneous Appeal No. 1079 of 2006

The Telangana High Court bench comprising Chief Justice Alok Aradhe and Justice J. Sreenivas Rao has held that an interim order passed by an arbitral tribunal under section 17 of the Arbitration and Conciliation Act, 1996, restraining the encashment of a bank guarantee does not warrant interference under section 34 of the Act. The court also held that section 34 does not permit the court to act as an appellate body or correct errors of law or fact.