Arbitral Award With Internal Contradictions Is Perverse And Patently Illegal; Delhi High Court allows Section 34 Petition

The Delhi High Court single bench comprising Justice Sachin Datta held that an award suffering from internal contradictions is considered perverse and patently illegal under Section 34 of the Arbitration and Conciliation Act, 1996. Brief Facts: Samtel Colors Limited (“Respondent”) obtained an Inter-Corporate Deposit (ICD) facility of Rs. 1,70,00,00,000/- from Morgan Securities & Credits Pvt Ltd. (“Petitioner”). The facility was granted with the condition that the Respondent would...

Arbitral Award Lacking Adequate Reasoning Is Inherently Flawed With Patent Illegality: Delhi High Court Allows Section 34 Petition

The Delhi High Court single bench of Justice Mohan Kumar Ohri held that an arbitral award lacking adequate reasoning suffers from the inherent flaw of patent illegality. It emphasized that a reasoned order should be proper, intelligible, and adequate, and failure to adhere to these standards can lead to challenges under Section 34 of the Arbitration and Conciliation Act, 1996. Brief Facts: The matter pertained to dispute arising from security services provided by Gorkha Security...

Court Not Mere Post Office U/s 11(6) A&C Act, Has Power To Decide Arbitrability By Prima Facie Analysis: Gauhati HC

The Gauhati High Court single Judge Justice Michael Zothankhuma has rejected the notion that it is a mere post office under Section 11(6) of the Arbitration and Conciliation Act, 1996, obligated to appoint an arbitrator without considering obvious legal infirmities. The single-judge held that the court under Section 11(6) of the Arbitration Act decides the arbitrability of the dispute by prima facie analysis. Brief Facts: M/s Atw (India) Pvt. Ltd. (“Petitioner”) was awarded...

Consumer Forum Cannot Assume Jurisdiction When Special Statue Prescribes Arbitration; Calcutta High Court Set Aside West Bengal State Commission Order

The Calcutta High Court single bench of Justice Prasenjit Biswas held that consumer forum cannot assume jurisdiction when a special statue prescribes for arbitration and designates a forum for adjudication of disputes. It held that a special law takes precedence over a general law. Brief Facts: Jyotish Chandra Sarkar (“Complainant”) filed a complaint alleging that despite the completion of loan repayments before his retirement in September 2007, dues of Rs. 12,608/- were not ...

Arbitration Clause In Unstamped Letter Of Intent Is Valid, Independent And Binding Agreement; Delhi High Court Allows Section 11 Petition

The Delhi High Court single bench of Justice Dinesh Kumar Sharma rejected an argument that a letter of intent was a non-binding agreement and noted that the arbitration agreement contained in the letter of intent should be treated as an independent and binding agreement. Further, it held that the referral court at Section 11 stage should not examine or impound an unstamped instrument and should leave it for determination by the arbitral tribunal. Brief Facts: The matter pertained to...

Agency Executing Or Allotting Work Is Necessary Party To S. 11, A&C Act Petition, Beneficiary Department Isn't Necessary Party: Punjab And Haryana High Court

The High Court of Punjab and Haryana single-judge bench of Justice Suvir Sehgal adjudicated on a Section 11 petition filed by a Construction Company which was conducting work for the Department of Technical Education and Industrial Training, although the department itself wasn't a party to the petition. The single-judge bench determined that even though the work was intended for the Department, this department neither issued the allotment nor acted as the executing agency. As a result,...

Compliance Of Section 21 Of Arbitration & Conciliation Act, 1996 Is Mandatory: Allahabad High Court

The Allahabad High Court has held that the compliance of Section 21 of the Arbitration and Conciliation Act, 1996 (“Arbitration Act”) is mandatory. Thus, arbitral proceedings would only commence once the notice invoking arbitration issued by the claimant is received by the respondent.The Bench comprising Justice Manju Rani Chauhan was adjudicating a writ petition filed under Article 226 of the Constitution by borrowers, challenging the arbitration proceedings initiated against them by...

Whether Courts Can Modify Arbitral Award U/S 34 or 37 of Arbitration Act? Supreme Court Refers To Larger Bench

The Supreme Court has referred to the larger bench the question of whether the courts have the power to modify the arbitral award under Sections 34 or 37 of the Arbitration and Conciliation Act, 1996. “Whether or not the Courts in exercise of power under sections 34 or 37 of the Arbitration and Conciliation Act, 1996 are empowered to modify an arbitral award is a question which frequently arises in proceedings not only before this Court but also before the High Courts and the District Courts.”,...

Arbitration Clause Does Not Cease With Contract Termination, It Is An Independent Agreement: Delhi High Court Allows S. 11 Application

The Delhi High Court single bench of Justice Sachin Datta dismissed the notion that the arbitration clause would cease to exist with the termination of the contract. The bench emphasized that the arbitration clause, as part of the contract, should be treated as an independent agreement. Brief Facts: M/s S.K Agencies (“Petitioner”) and M/s DFM Foods (“Respondent”) initially entered into an agreement, granting the Petitioner the right to operate a distribution outlet/sale depot of the...

Writ Petition Not A Remedy For Execution Of Arbitration Award: Andhra Pradesh High Court

The Andhra Pradesh High Court division bench comprising Chief Justice Dhiraj Singh Thakur and Justice R. Raghunandan Rao held that that it lacks the authority in writ petition to enforce an award issued by an arbitrator when it is already challenged under Section 34 of the Arbitration and Conciliation Act, 1996. Brief Facts: M/s. Vijayanagaram Hatcheries Pvt. Ltd. (“Respondent”) filed a writ petition in the Andhra Pradesh High Court (“High Court”) for the enforcement of the...

Arbitration Commences When Arbitral Tribunal Is Constituted, Not When Party Gives Receipt Of Claim: Gauhati High Court

The Gauhati High Court single bench of Justice Sanjay Kumar Medhi held that the commencement under Section 21 of the Arbitration and Conciliation Act, 1996 does not arise unless an Arbitration Tribunal is constituted. It held that the arbitration does not automatically commence when the other party gives receipt of the claim. Brief Facts: The dispute arose when the Badri Rai And Company (“Respondent”) issued a notice to Oil India Limited (“Petitioner”), invoking arbitration...

Seat Of Arbitration Inferred By Contractual Clauses & Conduct Of Parties, Venue Is Considered Seat In Absence Of Other Indications: Delhi High Court

The Delhi High Court single bench of Justice Anup Jairam Bhambhani held that mere expression of "place of arbitration" does not automatically indicate the seat and the determination of the seat should be inferred from other clauses in the agreement and the conduct of the parties. The bench held that the seat was in Delhi as the contract clause specified that the venue for arbitral proceedings would be in New Delhi, and it vested exclusive jurisdiction in the courts of law in Delhi for all...