Q. Whether NCLAT has any authority to prevent the High Court from considering an appeal under Section 9 of the Arbitration and Conciliation Act, 1996 or any other claim brought under the Arbitration Act?
In the instant case, the Court held that the NCLAT has no jurisdiction over the High Court and indeed not even over arbitral tribunals and no provision of the Arbitration Act is made subject to the provisions of Companies Act. The Court further observed that NCLAT has no jurisdiction over the Bombay High Court even on its original side (as it was a chartered High Court) and concluded that the High Court does not fall within the NCLAT's jurisdiction or superintendence. The HC while dismissing the petition ordered that the NCLAT order cannot and does not come in the way of the High Court making an appropriate order under Section 9 of the Arbitration Act.
Bay Capital Advisors Pvt. Ltd. vs. IL and FS Financial Services Ltd. and Ors. (09.04.2021 - BOMHC) : MANU/MH/1047/2021
Savita Jain Sole Proprietor of M S Navkar Sales v M/s Krishna Packaging
Q. Whether the High Court can set aside the trial court's order u/s 9 of the Arbitration and Conciliation Act, 1996on the ground of perversity, when the appellant's case is a case of admitted liability?
In the instant case, the High Court of Delhi held that Section 9 of the Arbitration and Conciliation Act, 1996 should be exercised in exceptional cases when there is adequate material on record leading to a definite conclusion that the respondent is likely to render the entire arbitration proceedings infructuous or where there is an admitted liability. The court is of the opinion that Section 9 grants wide powers to the Courts in granting an appropriate interim order based on the relevant facts of the case at all stages of the arbitration proceedings namely before, during or after the arbitration proceedings. Considering the facts of the present case and keeping in mind the provisions of law applicable, the Court held that the trial court in the present case had acted contrary to the settled principles of law as well as facts, it set aside the trial court's order on the ground of perversity as the appellant's case is a case of admitted liability.
Q. Whether the said dispute is required to be examined by the Arbitral Tribunal or by this Court under Section 11 of the Arbitration and Conciliation Act, 1996 at a pre-referral stage?
In the instant case, the Court held that a Court at the pre-referral stage is not required to give a conclusive finding as to the existence of an arbitration agreement between the parties. It was held that in one sense, the Court would be required to take a negative view if it finds that ex facie there is no Arbitration Agreement between the parties, and accordingly, the Court would reject the application under Section 11 of the Act. However, in all other cases where an arguable case is made out by the applicant, the parties are required to be referred to arbitration. Lastly it was held that unless the Court comes to the conclusion that the dispute raised by the claimant with regard to the validity of the settlement is bereft of any merit; is not bona fide; or is a frivolous one, the Court must relegate the parties to resolve the disputes in arbitration.
SPML Infra Ltd. vs. NTPC Limited (08.04.2021 - DELHC) : MANU/DE/0664/2021
Q. Whether Section 9 of the Arbitration and Conciliation Act, 1996 empowers the Court to grant to an applicant, a relief, not in the nature of interim measure of protection, but in the nature of final relief, even if a case for urgent need thereof is made out?
In the instant case, the Court held that direction in the nature of directing Appellant to deposit amounts under termination payment clause of contract was not in the nature of interim relief but as an enforcement of contractual clause and was in the nature of final relief and could only be granted by Arbitral Tribunal and not court. The Court held that in exercise of power under Section 9(1)(ii)(e), no relief of final nature can be granted, no monetary claim allowed, howsoever urgent the same may be and howsoever just and convenient it may be to grant the same and even if it were to be the contention of the applicant in a Section 9 application, that the opposite partyh as admitted the entitlement of the applicant to the final relief. The Court further held that merely because Section 9 Court had made release of money subject to furnishing a bank guarantee and subject to the award, would not change the nature of the relief granted.
National Highways Authority of India vs. Bhubaneswar Expressway Private Limited (11.05.2021 - DELHC) : MANU/DE/0861/2021
Q. Whether the order of court referred in Section 43(4) of the Arbitration and Conciliation Act, 1996 in case of setting aside an arbitral award or confirming such setting aside of the award can be referred to as the final order?
In the instant case, the High Court of Bombay was called upon to decide 'order of the court' referred to in Section 43(4) of the Act, for purposes of exclusion of period for purposes of exclusion of period for purposes of limitation, refers to the first order of the original or the appellate court, as the case may be, setting aside the arbitral award, or whether it refers to the final order in a challenge petition setting aside an arbitral award or confirming such setting aside of the award, as the case may be. The Court held it to be the latter and held that the principle of merger would most certainly operate for computing the exclusion period under Section 43(4) of the Act for reckoning the limitation period for a suit or arbitration proceeding in case of a dispute referred to arbitration where an award is set aside by the court. Court, thus held, "order of the court" referred to in Section 43(4) of the Act is the final order of the court-whether the first order setting aside the award, which is not subjected to further challenge or the order in appeal, if the original order setting aside the arbitral award is carried in appeal and affirmed.
Siddhivinayak Realties Pvt. Ltd. vs. V. Hotels Limited and Ors. (30.04.2021 - BOMHC) : MANU/MH/1163/2021
Q. When can a High Court entertain a writ petition, notwithstanding the availability of an alternative remedy?
In UP Power Transmission Corporation Ltd. vs. CG Power and Industrial Solutions, it is well settled by the Supreme Court that availability of an alternative remedy does not prohibit the High Court from entertaining a writ petition in an appropriate case. The High Court has the liberty to entertain a writ petition, notwithstanding the availability of an alternative remedy, particularly in cases where (i) where the writ petition seeks enforcement of a fundamental right; (ii) where principles of natural justice are not fulfilled or (iii) where the impugned orders or proceedings are wholly without jurisdiction or (iv) the vires of an Act is under challenge. Further the Supreme Court upholds the decision of the Allahabad High Court that a purely supply contract, is legally exempt from levy under the Building and Other Construction Workers (Regulation of Employment and Condition of Service) Act, 1996. Lastly, the SC has also clarified that existence of an arbitration clause does not debar the court from entertaining a writ petition and that relief under Article 226 of the Constitution of India may be granted in a case arising out of contract.
Uttar Pradesh Power Transmission Corporation Ltd. and Ors. vs. CG Power and Industrial Solutions Limited and Ors. (12.05.2021 - SC) : MANU/SC/0349/2021
There is only a very small window for interference with orders passed by the Arbitral Tribunal while exercising jurisdiction under Article 227. The said window becomes even narrower where the orders passed by the Arbitral Tribunal are procedural in nature. Therefore, this window cannot be used for impugning case management orders passed by the Arbitral Tribunal, which are in the nature of procedural orders. Such orders are completely in the domain and discretion of the Arbitral Tribunal, and include orders relating to the scheduling of the arbitration proceedings or the order in which applications filed by the parties are to be considered or the timelines in relation to the arbitration proceedings. This Court, in exercise of jurisdiction under Article 227, cannot dictate to a duly constituted Arbitral Tribunal, the manner and the procedure of carrying out the arbitration proceedings.
Future Retail Ltd. vs. Amazon.com NV Investment Holdings LLC and Ors. (04.01.2022 - DELHC) : MANU/DE/0008/2022
Q. Whether the Court has the power to secure the claim of the applicant in arbitration under the provisions of the Arbitration Act, 1940 or not?
In the said judgement, the Hon'ble court found that that the claim of the Applicant is the subject matter of the dispute and as per Section 9 & Section 17 of the Arbitration Act, 1940, the court has ample power to protect and preserve the same. Further, the court is of the view that the said petition cannot be dismissed solely on the ground of the opponent's indebtedness. Accordingly, the Court agrees with the findings of the Learned Single Judge that the Applicant has every chance to succeed in the arbitral proceedings and therefore the claim of the applicant must be secured for them to realize the arbitral award. Thus, the Court dismissed the appeals and further extended the time to deposit the amount by four weeks from the date of order.
Essar House Private Limited v Arcellor Mittal Nippon Steel India Limited : MANU/MH/0279/2021
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 Arbitration and Conciliation Act, 1996 and whether subsequent disputes which arose after appointment of arbitrator warrants any interference?
In the instant case, the Delhi High Court held that in the absence of any authority which would contradistinguish the statutory principles, 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. 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. Therefore, the Court does not re-consider the application decided by the learned Arbitrator. Further it was held that as per the 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 and therefore the dispute as to the legality of such termination was not in existence on the date of passing of the order. From the aforesaid view, the court does not find any reason to interfere with the findings of the learned Arbitrator.
Raghuvir Buildcon Pvt. Ltd. vs. Ircon International Limited (18.05.2021 - DELHC) : MANU/DE/0920/2021
Q. Whether the interpretation made by the Arbitral Tribunal warrants interference by the Hon'ble Court of law under Section 34 of the Arbitration and Conciliation Act, 1996?
In the instant case, the Delhi High Court upheld the view taken by the arbitrator that the introduction of Goods and Service Tax, will be considered as change in law. The Court further reiterated that if a view taken by an arbitrator is a plausible view, the court is not required to examine the merits of the aforesaid view and thus warrants no interference under Section 34 of the Arbitration and Conciliation Act, 1996.
National Highways Authority of India vs. C.P. Rama Rao (23.03.2021 - DELHC) : MANU/DE/0568/2021
Q. Whether a court may refuse to make the reference under Section 11 of Arbitration and Conciliation Act, 1996 where the claims are ex facie time-barred?
Referring to the ruling of the three-judge bench in Vidya Drolia v. Durga Trading Corporation, the Supreme Court concluded that a court may interfere 'only' when it is 'manifest' that the claims are ex facie time-barred and dead, or there is no subsisting dispute. Courts should refuse to refer a dispute to arbitration under Section 11 only in very limited category of cases - where there is not even a indication of doubt that the claim is ex facie time-barred, or that the dispute is non-arbitrable.
Bharat Sanchar Nigam Ltd. and Ors. vs. Nortel Networks India Pvt. Ltd. (10.03.2021 - SC) : MANU/SC/0171/2021
Q. Whether the learned Arbitrator can pass an ex-parte ad-interim order on application under Section 17 of Arbitration and Conciliation Act, 1996?
The court observed that the provisions of Section 18, 19 and 24 of Arbitration and Conciliation Act, 1996 would be required to be read in conjunction, as there is a common thread passing through these provisions in relation to the conduct of the arbitral proceedings, which is to the effect that the parties need to be fairly treated at all stages of the arbitral proceedings, and an adequate/sufficient opportunity is made available to them to present their case on any proceedings before the arbitral tribunal, which would also include before any order ad-interim, interim or final is to be passed by the arbitral tribunal. Such provisions certainly make it incumbent upon the arbitral tribunal to give sufficient notice of any hearing to the parties before it. If this is what is plainly reflected from the said provisions of the Act, it would be unknown to law and quite peculiar for an arbitral tribunal to pass an ex-parte ad-interim order, on the mere filing of a Section 17 application.
Godrej Properties Ltd. vs. Goldbricks Infrastructure Pvt. Ltd. (13.10.2021 - BOMHC) : MANU/MH/3222/2021
Q. Whether in an appeal/application filed Under Section 34 of the Arbitration & Conciliation Act, 1996 read with Section 19 of the Micro, Small and Medium Enterprises Act, 2006, the appellate court would have any discretion to deviate from deposit of 75% of the awarded amount as a pre-deposit?
On a plain/fair reading of Section 19 of the MSME Act, 2006, at the time/before entertaining the application for setting aside the award made Under Section 34 of the Arbitration & Conciliation Act, the applicant/Appellant has to deposit 75% of the amount in terms of the award as a pre-deposit. Considering the language used in Section 19 of the MSME Act, 2006 and the object and purpose of providing deposit of 75% of the awarded amount as a pre-deposit while preferring the application/appeal for setting aside the award, it has to be held that the requirement of deposit of 75% of the awarded amount as a pre-deposit is mandatory.
However, at the same time, considering the hardship which may be projected before the appellate court and if the appellate court is satisfied that there shall be undue hardship caused to the Appellant/applicant to deposit 75% of the awarded amount as a pre-deposit at a time, the court may allow the pre-deposit to be made in installments.
Gujarat State Disaster Management Authority vs. Aska Equipments Limited (08.10.2021 - SC) : MANU/SC/0842/2021
Q. Whether Court under Section 37 of the Arbitration & Conciliation Act, 1996 can enter into merits of claim raised?
As per settled position of law laid down by Supreme Court in a catena of decisions, an award can be set aside only if the award is against the public policy of India. The award can be set aside if it is found to be contrary to, (a) fundamental policy of Indian Law; or (b) the interest of India; or (c) justice or morality; or (d) if it is patently illegal. None of the aforesaid exceptions shall be applicable to the facts of the case on hand. The High Court has entered into the merits of the claim and has decided the appeal Under Section 37 of the Arbitration Act as if the High Court was deciding the appeal against the judgment and decree passed by the learned trial Court. Thus, the High Court has exercised the jurisdiction not vested in it Under Section 37 of the Arbitration Act. The impugned judgment and order passed by the High Court is hence not sustainable.
Haryana Tourism Limited vs. Kandhari Beverages Limited (11.01.2022 - SC) : MANU/SC/0033/2022
Q. Can a Court interefere with a plauibsle arbitral award merely because another view could have been taken?
It is settled law that where two views are possible, the Court cannot interfere in the plausible view taken by the arbitrator supported by reasoning. Arbitral awards should not be interefered with in a casual manner unless it is something that no fair-minded or reasonable person could do. In the instant case, the interpretation of the relevant clauses of the Implementation Agreement, as arrived at by the learned Sole Arbitrator, are both, possible and plausible. Merely because another view could have been taken, can hardly be a ground for the learned Single Judge to have interfered with the arbitral award. In the given facts and circumstances of the case, the Appellate Court has rightly held that the learned Single Judge exceeded his jurisdiction in interfering with the award by questioning the interpretation given to the relevant clauses of the Implementation Agreement, as the reasons given are backed by logic.
UHL Power Company Ltd. vs. State of Himachal Pradesh (07.01.2022 - SC) : MANU/SC/0019/2022
Q. Whether the power to remit the matter to Arbitral Tribunal for resumption of proceedings u/s 34 of Arbitration and Conciliation Act, 1996 is discretionary or obligatory.
A reading of Section 34(4) of the Act itself makes it clear that it is the discretion vested with the Court for remitting the matter to Arbitral Tribunal to give an opportunity to resume the proceedings or not. The use of words "where it is appropriate" indicates that it is the discretion to be exercised by the Court. When application is filed Under Section 34(4) of the Act, the same is to be considered keeping in mind the grounds raised in the application Under Section 34(1) of the Act by the party, who has questioned the award of the Arbitral Tribunal and the grounds raised in the application filed Under Section 34(4) of the Act and the reply thereto. Merely because an application is filed Under Section 34(4) of the Act by a party, it is not always obligatory on the part of the Court to remit the matter to Arbitral Tribunal. The discretionary power conferred Under Section 34(4) of the Act, is to be exercised where there is inadequate reasoning or to fill up the gaps in the reasoning, in support of the findings which are already recorded in the award. Under guise of additional reasons and filling up the gaps in the reasoning, no award can be remitted to the Arbitrator, where there are no findings on the contentious issues in the award.
A harmonious reading of Section 31, 34(1), 34(2A) and 34(4) of the Arbitration and Conciliation Act, 1996, make it clear that in appropriate cases, on the request made by a party, Court can give an opportunity to the arbitrator to resume the arbitral proceedings for giving reasons or to fill up the gaps in the reasoning in support of a finding, which is already rendered in the award. But at the same time, when it prima facie appears that there is a patent illegality in the award itself, by not recording a finding on a contentious issue, in such cases, Court may not accede to the request of a party for giving an opportunity to the Arbitral Tribunal to resume the arbitral proceedings.
I-Pay Clearing Services Private Limited vs. ICICI Bank Limited (03.01.2022 - SC) : MANU/SC/0005/2022
Q. Whether filing of an application under Section 20 of the Arbitration Act in a competent court, which results in reference of the disputes and appointment of an arbitrator, would imply that the said court alone has the jurisdiction in respect of the arbitration proceedings.
The controversy in the present case relates to the applicability of sub-section (4) of Section 31 of the Arbitration Act. The said sub-section contains a non obstante provision and expressly provides that notwithstanding anything contained in the Arbitration Act, where any application has been made under the Act before a competent court, the said court alone would have the jurisdiction in respect of the arbitration proceedings and all subsequent applications arising out of the reference. In the present case, the petitioner had filed an application under Section 20 of the Arbitration Act seeking reference of the disputes which was allowed.
Mahavir Prasad Gupta vs. Union of India and Ors. (23.02.2022 - DELHC) : MANU/DE/0656/2022
Q. If the agreement provides for a specific venue of arbitration, can any other Court exercise jurisdiction under Section 11(6)?
Where the contract specifies the jurisdiction of the court at a particular place, only such court will have the jurisdiction to deal with the matter and parties intended to exclude all other courts. In the present case, the parties have agreed that the "venue" of arbitration shall be at Bhubaneswar. Considering the agreement of the parties having Bhubaneswar as the venue of arbitration, the intention of the parties is to exclude all other courts. As held in Swastik Gases P. Ltd. v. Indian Oil Corporation Ltd. MANU/SC/0654/2013, non-use of words like "exclusive jurisdiction", "only", "exclusive", "alone" is not decisive and does not make any material difference.
Brahmani River Pellets Limited vs. Kamachi Industries Limited MANU/SC/0968/2019 : (25.07.2019 - SC)
Q. Does Section 34 of Arbitration and Conciliation Act, 1996 empower the Court to modify or alter an arbitral award?
Relying on a catena of judgments passed by the Supreme Court, the Bench held that the court cannot correct errors of the arbitrators. The court at best can set aside the award under Section 34 of the Act, 1996, but it does not empower the court to modify an award. To recognise such power to modify, revive or vary the award under Section 34 of the Act would be to ignore the previous law contained in 1940 Act and also to ignore that 1996 Act was enacted on UNCITRAL Model Law on International Commercial Arbitration, 1985 which makes it clear that given the limited judicial interference on extremely limited grounds not dealing with the merits of an award. The position of law stands crystallized today. The findings of facts as well as of law, of the Arbitrator/Arbitral Tribunal are ordinarily not amenable to interference either under Section 34 or Section 37 of the Act.
Angel Broking Pvt. Ltd. vs. Urmil Modi (29.04.2022 - DELHC) : MANU/DE/1568/2022
Q. What is the scope of remedy available under Articles 226/227 of the Constitution when it comes to arbitral awards?
There is only a very small window for interference with orders passed by the Arbitral Tribunal while exercising jurisdiction under Article 227. The said window becomes even narrower where the orders passed by the Arbitral Tribunal are procedural in nature. Therefore, this window cannot be used for impugning case management orders passed by the Arbitral Tribunal, which are in the nature of procedural orders. Such orders are completely in the domain and discretion of the Arbitral Tribunal, and include orders relating to the scheduling of the arbitration proceedings or the order in which applications filed by the parties are to be considered or the timelines in relation to the arbitration proceedings. This Court, in exercise of jurisdiction under Article 227, cannot dictate to a duly constituted Arbitral Tribunal, the manner and the procedure of carrying out the arbitration proceedings.
Future Retail Ltd. vs. Amazon.com NV Investment Holdings LLC and Ors. (04.01.2022 - DELHC) : MANU/DE/0008/2022
