Q. Whether the petition under Section 14(2) of Arbitration and Conciliation Act, 1996 (the Act) seeking termination of the mandate of the arbitrator before the court is maintainable, when such a challenge was rejected by the tribunal under Section 13(2) of the Act?
There is a dichotomy under the Act between persons who become "ineligible" to be appointed as arbitrators under section 14(2) of the Act and persons about whom justifiable doubts exist as to their independence or impartiality under section 13(2) of the Act. Once he becomes ineligible, it is clear that, under Section 14(1)(a), he then becomes de jure unable to perform his functions inasmuch as, in law, he is regarded as "ineligible". In order to determine whether an arbitrator is de jure unable to perform his functions, it is not necessary to go to the Arbitral Tribunal under section 13 of the Act. Both the sections operate in two different field, the Court held that there is no illegality in moving an application under section 14(2) of the Act in spite of there being an order under section 13(2) of the Act. Further, the provisions of the Act do not anywhere expressly prescribe any bar in approaching the court under section 14 of the Act.
B.S.N. Joshi and Sons Limited vs. Rashtriya Ispat Nigam Limited and Ors. (02.09.2021 - APHC) : MANU/AP/0923/2021
Q. Whether an arbitrator can be appointed under Section 11 of the Arbitration and Conciliation Act, 1996 in case of an impugned dealership agreement?
In the instant case, the court is of the view that it can decide the existence of an agreement for arbitration by taking into consideration the surrounding circumstances including the conduct of the parties and the evidence such as exchange of correspondence between the parties. In this case, the correspondence exchanged between the parties through e-mails prima facie shows that the respondents have executed the impugned dealership agreement, terms sheet and agreement of Corporate Guarantee. Therefore, merely because the signatures found in the aforesaid documents are not similar in nature, the court cannot jump to the conclusion that the respondents have not executed the said dealership agreement. Lastly, it was held that any disputes arising between the parties regarding the dealership agreement shall be referred to Arbitration.
The Waterbase Limited vs. Rising Tide and Ors. (16.04.2021 - MADHC) : MANU/TN/3326/2021
Q. Whether the constraints applicable to a Court while exercising jurisdiction under Section 34 would also apply to an appeal under Section 37(2)(a) of the 1996 Act and whether subsequent disputes which arose after appointment of arbitrator could be said to be within the scope of such arbitration?
While addressing the first issue, the Delhi High Court held that in the absence of any contrary statutory indication, jurisdiction of the court to interfere as against an interlocutory order under Section 37(2) shall be the same as that under Section 37(1) against a final award. The former cannot be said to be more expansive than the latter and the principles and therefore, constraints as applicable to the exercise of jurisdiction under Section 34 shall apply. Thus, the Court held that in the present appeal under Section 37(2)(a), it could only examine whether the order of the arbitrator suffers from any patent illegality or perversity, or is otherwise unconscionable in law on facts.
Further, the Court observed that the arbitrator's mandate was circumscribed by the order dated 11.10.2019. As per the said order the arbitrator was appointed to adjudicate disputes between the parties as they existed on the date when the order was passed. The notices for terminating the contract were issued after passing of order dated 11.10.2019 and therefore the dispute as to the legality of such termination was not in existence on the date of passing of the order.
In light of the above observations, the view of the sole arbitrator was found to be plausible and did not merit interference.
Raghuvir Buildcon Pvt. Ltd. vs. Ircon International Limited (18.05.2021 - DELHC) : MANU/DE/0920/2021
Q. Whether the State Commission has an exclusive jurisdiction to adjudicate disputes between the licensees and generating companies under Section 86 of Electricity Act, 2003 and whether the appointment of an arbitrator by the High Court under Section 11 of the Arbitration and Conciliation Act, 1996 is maintainable or not?
In this judgment the Supreme Court held that Section 86(1)(f) of the Electricity Act, 2003 is a special provision which overrides the general provisions contained in Section 11 of the Arbitration and Conciliation Act, 1996. It is well settled that the special law overrides the general law and therefore it was ruled that Section 11 of the Arbitration and Conciliation Act, 1996 has no application to the question who can adjudicate/arbitrate disputes between licensees and generating companies, and only Section 86(1)(f) shall apply in such a situation. Further the SC also clarified that Section 86(1)(f) vests a statutory jurisdiction with the State Electricity Commission to adjudicate upon disputes between licensees and generating companies and to refer any dispute for arbitration. The "and" between "generating companies" and "to refer any dispute for arbitration" is to be read as an "or", since the State Electricity Commission cannot obviously resolve the dispute itself and also refer the same for arbitration.
Chief General Manager (IPC), M.P. Power Trading Co. Ltd. and Ors. vs. Narmada Equipments Pvt. Ltd. (23.03.2021 - SC) : MANU/SC/0212/2021
Q. What is to be done in case of a conflict between the power of superior Courts to appoint Arbitrators under Section 11 of the Act and those of the Civil Court to substitute those Arbitrators under Section 29A of the Arbitration and Conciliation Act, 1996?
Once the appointment of arbitrator or arbitral Tribunal has been made by the High Court or the Supreme Court exercising power under sub-sections (4), (5) and (6) of Section 11 then the power to substitute the arbitrator or the Arbitral Tribunal only vest with the said appointing authority i.e. High Court or Supreme Court, as the case may be.
The argument that the word 'Court' occurring in Section 2(1)(e) means the principal Civil Court and not the High Court cannot be accepted, as once the appointment was made by the High Court exercising power under Section 11, the power to substitute an arbitrator cannot vest under sub-section (6) of Section 29A with the principal Civil Court.
Indian Farmers Fertilizers Cooperative Ltd. vs. Manish Engineering Enterprises (11.03.2022 - ALLHC) : MANU/UP/0515/2022
Q. In case a reference is to be made to two arbitrators under the Arbitration Agreement, what happens if one party fails to appoint an arbitrator?
Section 9(b) of the Arbitration Act, 1940 provides that in case, a reference is to be made to two arbitrators under the Arbitration Agreement, if one party fails to appoint an arbitrator either originally or by way of substitution [on death of one of the arbitrator], for 15 clear days after the service by the other party of a notice in writing to make that appointment, the arbitrator appointed by that party may act as sole arbitrator in the reference and his award shall be binding on both parties as if he has been appointed by consent. The proviso to Section 9(b) gives chance to the defaulting party to approach the Court either to set aside the appointment of sole arbitrator or to seek time for appointment of another arbitrator.
U.P.S.E.B., Hathras vs. Hindustan Metal Works, Hathras (11.02.2022 - ALLHC) : MANU/UP/0395/2022
Q. Whether the application Under Section 11 of the Arbitration and Conciliation Act, 1996 is maintainable in view of Section 3G(5) of the National Highways Act, 1956 which provides for appointment of an Arbitrator by the Central Government.
The bench agreed with what was laid down in General Manager (Project), National Highways and Infrastructure Development Corporation Ltd. v. Prakash Chand Pradhan and Ors. and noted that Section 11 of the Act, 1996 has no application and the power is exclusively vested with the Central Government Under Section 3G(5) of the Act, 1956 for appointment of an Arbitrator.
The Court further observed that it is settled principle of law that when the special law sets out a self-contained code, the application of general law would impliedly be excluded. In the instant case, the scheme of Act, 1956 being a special law enacted for the purpose and for appointment of an arbitrator by the Central Government Under Section 3G(5) of Act, 1956 and Sub-section (6) of Section 3G itself clarifies that subject to the provisions of the Act 1956, the provisions of Act 1996 shall apply to every arbitration obviously to the extent where the Act 1956 is silent, the Arbitrator may take recourse in adjudicating the dispute invoking the provisions of Act, 1996 for the limited purpose.
National Highways Authority of India vs. Sayedabad Tea Company Ltd. and Ors. MANU/SC/1166/2019 : (27.08.2019 - SC)
Q. What is the effect of not appointing the arbitrator in accordance with the terms of the Arbitration Agreement?
Hon'ble Supreme Court in the matter of Dakshin Shelters P. Ltd. vs. Geeta S. Johari MANU/SC/0151/2012 has held that declining to appoint arbitrator in terms of agreement amounts to failure to appoint arbitrator, hence, the party's right to appoint arbitrator under the arbitration agreement stands extinguished. In the present case also, the respondent had failed to appoint arbitrator in terms of Arbitration Clause 33 after receiving the request of the applicant, therefore, their right had extinguished.
Unless appointment of arbitrator is ex facie valid and satisfies the Court exercising jurisdiction under Section 11(6) of the Arbitration Act, such appointment cannot be accepted as fait accompli and does not come in the way of exercise of jurisdiction under Section 11 of the Arbitration Act.
India Power Corporation Ltd. vs. The Eastern Railway (24.03.2022 - CALHC) : MANU/WB/0451/2022
Q. Can a person still appoint an arbitrator after filing an application under Section 11 of Arbitration and Conciliation Act, 1996?
The position of law is well settled on this issue. Once an application Under Section 11(6) of the Act has been filed for appointment of an Arbitrator before the High Court, the parties forfeit their right to appoint an Arbitrator and the High Court alone holds jurisdiction to appoint an Arbitrator in exercise of power Under Section 11(6) of the Act.
Durga Welding Works vs. Chief Engineer, Railway Electrification, Allahabad and Ors. (04.01.2022 - SC) : MANU/SC/0013/2022
