January-March,2022
- SC to HC: You can't invoke Writ Jurisdiction in Contractual Disputes with Arbitration Clauses
The Supreme Court has cautioned High Courts from invoking jurisdiction under Article 226 of Constitution in contractual matters with arbitration clause.
- SC: Court deciding S.11 Arbitration Act Application can leave plea of Non-Arbitrability of Dispute open for Tribunal
The Supreme Court took up three civil appeals filed against similar orders passed by a Single Judge of the Bombay High Court on the petitions under Section 11 of the Arbitration and Conciliation Act, 1996 for appointment of arbitrator and held that the general rule and principle, in view of the legislative mandate clear from Act 3 of 2016 and Act 33 of 2019, and the principle of severability and competence-competence, is that the Arbitral Tribunal is the preferred first authority to determine and decide all questions of non-arbitrability. The court has been conferred power of “second look” on aspects of non-arbitrability post the award in terms of sub-clauses (i), (ii) or (iv) of Section 34(2)(a) or sub-clause (i) of Section 34(2)(b) of the Arbitration Act.
- SC: HC can’t enter into merits of claim under Sec. 37 of the Arbitration and Conciliation Act
The Supreme Court allowed the appeal against the order passed by Punjab and Haryana High Court under Section 37 of the Arbitration and Conciliation Act, 1996 setting aside the judgement passed by the Additional Sessions Court. It held that as the impugned judgment and order passed by the High Court quashing and setting aside the award and the order passed by the Additional District Judge under Section 34 of the Arbitration Act are concerned, it is required to be noted that in an appeal under Section 37 of the Arbitration Act, the High Court entered into the merits of the claim, which is not permissible in exercise of powers under Section 37 of the Arbitration Act.
- ‘Multiple arbitrations can exist if the cause of action continues’ HC dismisses petition citing pending proceedings before second arbitral tribunal as it may result in delay or Confusion
The Delhi High Court recently comprising of a bench of Justice Suresh Kumar Kait while dismissing a petition seeking appointment of the respondent’s Arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996 observed that proceedings before the second arbitral tribunal are in progress, however, not yet complete and if the disputes raised in the present petition are referred to the second arbitral tribunal, it may result in delay of proceedings before the second arbitral tribunal.
- HC: Both sides have consented that the disputes are arbitrable and consented to the appointment of an arbitrator’. Sole Arbitrator appointed by court as per the Agreement between the parties.
After evaluating submissions made by both the parties the Court held that “since both sides have consented that the disputes are arbitrable and consented to the appointment of an Arbitrator by this Court, the present petition is allowed. Accordingly, sole Arbitrator is appointed to adjudicate the dispute between the parties. The learned Arbitrator shall ensure compliance of Section 12 of Arbitration and Conciliation Act, 1996 before commencing the arbitration.”
- Can an Arbitrator be appointed unilaterally by one Party if permitted in Contract? HC says NO
The Delhi High Court has reiterated that one party can't be allowed to appoint Arbitrator, unilaterally as the same would defeat the purpose of Arbitration and Conciliation Act.
- HC: We won't permit piecemeal Objections u/s 48 of Arbitration Act against Enforcement of Foreign Award
The Delhi High Court has held that objection against enforcement of an Arbitral Award under Section-48 of Arbitration Act cannot be allowed in bits.
- HC faults Arbitral Award passed by Three Ex. SC Judges in favour of BCCI
The Bombay High Court has set aside arbitral award passed by three former Supreme Court Judges with 2:1 majority in favour of BCCI in IPL Telecast Rights dispute. The Court also pointed out that Supreme Court has held that a finding in the Award based on no evidence or an Award which ignores vital evidence in arriving at its decision, would be perverse and liable to be set aside on the ground of patent illegality.
- Can the Court hearing Sec. 34 Arbitration Act Objections order fresh Arbitration Proceedings? SC says YES
The Supreme Court has provided exception to the principle that a court while deciding a petition under Section 34 of the Arbitration and Conciliation Act has no jurisdiction to remand the matter to the Arbitrator for a fresh decision and said where both the parties agreed to set aside the award, the Court has discretion to remit the matter back to Arbitrator fresh Arbitration Proceedings.
- HC: Usage of term Arbitration alone in Contract would not constitute an Arbitration Clause
The Delhi High Court has observed that mere use of the word 'Arbitration' in the Clause's heading wouldn't inference that there exists an agreement to seek dispute resolution via Arbitration.
April-June,2022
- HC: Does the Arbitration Clause survive if the Main Agreement is Terminated?
The Madras High Court has reiterated that when an arbitration agreement is in the form of a clause/covenant in a contract, the termination or effacing of the Contract does not terminate or efface the arbitration agreement. The arbitration clause contained in a partnership deed survives the termination of the deed as it is an independent contract.
- SC: There is no escape from depositing 75% of MSME Arbitral Award Amount before challenging it under Sec.34
The SC held that requirement of deposit of 75% of the amount in terms of the award as a pre-deposit as per section 19 of the MSMED Act, is mandatory. However, the court may allow the pre-deposit to be made in instalments if it is satisfied that there shall be undue hardship caused to the appellant.
- HC: Seat of Arbitration can't be decided on the basis of Rules of an Arbitration Institution
The Delhi High Court has held that Rules of an Arbitration Institution cannot decide on the Seat of Arbitration as only Courts at the place of arbitration proceedings have jurisdiction to decide it.
- SC: Courts can't look into Merits of a Time-barred Appeal unless delay is explained
A division bench of the Supreme Court has ruled that once an appeal is barred by limitation and no plausible cause is cited, there is not any obligation of the Court to consider the merits of the case.
- HC: Can a Second Application for Appointment of Arbitrator be filed without Leave? Yes.
A single judge bench of the Jharkhand HC observed that an afresh application under Section 11(6)(c) of the of the Arbitration and Conciliation Act, 1996 for appointment of an arbitrator is maintainable after an arbitral award has been set aside and quashed by the Court under Section 37 of the Act with no exclusive liberty by the Court.
- SC: A non-signatory is a member of a group of affiliated companies is no ground to claim an extension of the arbitration agreement to the non-signatory.
Supreme Court of India was dealing with the Arbitration Petition under Section 11(6) and Section l1(12)(a) of the Arbitration and Conciliation Act, 1996, for appointment of an Arbitral Tribunal in terms of the provisions of the Arbitration Act, on the ground that there has been a failure with respect to the appointment of an Arbitral Tribunal in accordance with the agreements between the parties.
- SC: Can HC invoke Section 11 to adjudicate upon dispute under Sec.14 of Arbitration Act?
Whenever there is a dispute and/or controversy that the mandate of the arbitrator is to be terminated on the grounds mentioned in section 14(1)(a), such a controversy/dispute has to be raised before the concerned “court” only and after the decision by the concerned “court” as defined under section 2(e) of the Act, 1996 and ultimately it is held that the mandate of the arbitrator is terminated, thereafter, the arbitrator is to be substituted accordingly, that too, according to the rules that were applicable to the initial appointment of the arbitrator. The dispute whether the mandate of the arbitrator has been terminated under section 14(1)(a) of the Act, cannot be decided in an application under section 11(6) of the Act, 1996.
- SC: ‘The seat’ once fixed by the arbitral tribunal should remain static and fixed, whereas the ‘venue’ of arbitration can change to a new location
Supreme Court of India stated that once the arbitrator fixes ‘the seat’ in terms of subsection (2) of Section 20 of the Act, the arbitrator cannot change ‘the seat’ of the arbitration, except when and if the parties mutually agree and state that the ‘seat of arbitration’ should be changed to another location.
- HC: Writ is not a remedy against orders passed by the Arbitral Tribunal
The Himachal Pradesh High Court has held that a writ petition would be non-maintainable against an order passed by Arbitral Tribunal. A party to arbitration proceedings has a remedy to challenge the award passed in such proceedings under Section 34 of the 1996 Act. Admitting that though there is no immediate remedy available, that Court remarked that it cannot be said that there is no remedy available. Further, the legislative intent of the Act was to keep the arbitral proceedings not only independent but free from any unnecessary delays also. Thus, a writ is not a remedy against orders passed by the Arbitral Tribunal.
- HC: No bar in reference of a Dispute to Arbitration even if there is no Arbitration Agreement
The Punjab and Haryana High Court has held that a dispute can be referred to Arbitration without agreement if the Special Act has the provision, due to the overriding effect. Noting that Section 18 of the MSMED (Micro, Small and Medium Enterprises Development) Act starts with a non obstante clause, the Court rejected the argument that proceedings are not maintainable in the absence of an arbitral clause.
Compiled By: Smita Singh student of 2nd Year, BA.LLB, National Law University of Delhi.
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