Q. Can the Court be prevented from disposing an application under Section 11 of the Arbitration and Conciliation Act, 1996 on the ground that the document containing the Arbitration Agreement was not duly stamped?
Arbitration is seen as a speedy remedy but if applicants and respondents who may have counter-claims, have to await the fate of adjudication of documents for stamping and conclusion of the statutory challenge, the purpose of arbitration may be defeated. Once parties are ad-idem on the fact that they have signed the writing containing an arbitration clause, the parties having acknowledged that an arbitration clause was embodied in the substantive contract, cannot prevent the court from disposing an application under Section 11 and the High Court need not await the decision of the claimant in the case at hand as to whether or not to pay stamp-duty, as adjudicated. If this is not to be so, a large number of arbitration proceedings will be held up right at the inception, which is not desirable.
Pigments and Allieds vs. Carboline (India) Pvt. Ltd. and Ors. (28.02.2022 - BOMHC) : MANU/MH/1048/2022
Q. Does an allegation of fraud in relation to an arbitration agreement or in relation to a parent agreement containing the arbitration clause, nullify the agreement?
Discussing the judgment of A. Ayyasamy v. A. Paramasivam and Ors. MANU/SC/1179/2016, the Court observed that there is a distinction between ‘serious allegations’ and ‘simple allegations’. The tests laid down in Ayyasamy judgment are: (1) does this plea permeate the entire contract and above all, the agreement of arbitration, rendering it void, or (2) whether the allegations of fraud touch upon the internal affairs of the parties inter se having no implication in the public domain.
The case at hand falls on the side of "simple allegations" as there is no allegation of fraud which would vitiate the partnership deed as a whole or, in particular, the arbitration Clause concerned in the said deed. Secondly, all the allegations made which have been relied upon by the learned Counsel appearing on behalf of the Respondent, pertain to the affairs of the partnership and siphoning of funds therefrom and not to any matter in the public domain.
Rashid Raza vs. Sadaf Akhtar MANU/SC/1249/2019 : (04.09.2019 - SC)
Q. Is an arbitration agreement invalid if it is not signed by the parties?
In terms of Section 7(4)(b)(c) of Arbitration And Conciliation Act, 1996, a written document which may not be signed by the parties can also be arbitration agreement. The Hon'ble Supreme Court has held that an arbitration agreement even though in writing need not be signed by the parties if the record of agreement is provided by exchange of letters, telex, telegrams or other means of telecommunication. If it can be shown that parties are at ad idem, then mere fact of one party not signing the agreement cannot absolve him from the liability under the agreement. It has been categorically held that signature is not a formal requirement under Section 7(4)(b) or Section 7(4)(c) or Section 7(5) of the Act.
SPML Infra Limited vs. East India Udyog Limited (18.01.2022 - CALHC) : MANU/WB/0036/2022
Q. What happens to the Arbitration agreement if the parent agreement expires?
The Arbitration Agreement would survive termination of the Agreement. Notwithstanding that the term of the Agreement had expired by efflux of time, the disputes between the parties arising out of or in connection with the Agreement, would fall within the scope of the Arbitration Agreement. However, that does not mean that the scope of the Arbitration Agreement would also include disputes that had not arisen under the Agreement or in connection thereto. The scope of the Arbitration Clause is determined on the terms of the Arbitration Agreement, which in this case was confined to the disputes arising out of or in connection with the Agreement.
Shine Travels and Cargo Pvt. Ltd. vs. Mitisui Prime Advanced Composite India Ltd. (18.02.2022 - DELHC) : MANU/DE/0548/2022
Q. Whether the existence of Arbitration Agreement between parties ousts the jurisdiction of Consumer Forum?
An arbitration agreement governed by the Arbitration and Conciliation Act, 1996 will not oust the jurisdiction of the consumer forum to entertain a complaint of deficiency of goods or services. The Court relied on Section 3 of the Consumer Protection Act, 1986 which provides that the provisions of the Act are in addition to and not in derogation of the provisions of any other enactment. It would be open to a consumer to opt for the remedy of arbitration, but there is no compulsion in law to do so and it would be open to a consumer to seek recourse to the remedies which are provided under the Act of 1986.
Vodafone Idea Cellular Ltd. vs. Ajay Kumar Agarwal (16.02.2022 - SC) : MANU/SC/0242/2022
