Disputes Prior To Registration Under MSME Act Can't Be Referred To MSME Arbitration: Delhi High Court Reiterates

The Delhi High Court bench comprising Justice Subramonium Prasad held that an entity registered under Micro, Small and Medium Enterprises Development Act, 2006 after the commencement of the contract cannot be referred to arbitration by MSME Council under Section 17 and 18 of the Act for the claims arisen before its registration. The bench noted that this objection should be raised before the arbitrator under the Arbitration & Conciliation Act, 1996. Brief Facts: The Respondent No....

Party Failing To File Written Submission Within Time Frame, Forfeits Right To File Sec. 8 Petition Under A&C Act: Delhi High Court

The Delhi High Court bench comprising Justice Vibhu Bakhru and Justice Tara Vitasta Ganju held that a party forfeits its right to file an application under Section 8 of the Arbitration and Conciliation Act, 1996 once it has filed the written statement in a civil suit. Brief Facts: Surender Singh Sethi (“Respondent”) initiated a civil suit against Ranjana Bhasin (“Appellant”) in April 2022 before the Commercial Court surrounding around accounts reconciliation, debt recovery, and...

Splitting Of An Arbitral Award For Publication Is Unnatural And Unsupported By Law, Calcutta High Court Allows Extension Of Arbitrator's Mandate

The Calcutta High Court bench comprising Justice Moushumi Bhattacharya held that neither the Arbitration and Conciliation Act, 1996 nor the Insolvency and Bankruptcy Code, 2016 allows a party's request to halt the publication of an arbitral award to the extent of its reliance on another party's counter-clam. The bench noted that the notion of splitting an arbitral award for this purpose is unnatural and unsupported by law. Brief Facts: R S Fuel Pvt Ltd. (“Petitioner”) filed...

Extension of Arbitrator's Mandate Lies Exclusively With Court Which Appointed Arbitrator: Bombay High Court

The Bombay High Court bench comprising Justice Bharati Dangre held that the power to extend the mandate of an arbitral tribunal or arbitrator under Section 29-A of the Arbitration and Conciliation Act, 1996 lies exclusively with the court that appointed the arbitrator(s). The bench held that the term 'Court' in Section 29A must be interpreted in a manner consistent with the Court's power to appoint arbitrators under Section 11. Brief Facts: The Municipal Corporation of Ichalkarnji...

Delhi High Court Modifies Interim Relief Of Stay Of Award, Allows Air India To Pay 50% Amount In Form Of Bank Guarantee

The Delhi High Court bench comprising Acting Chief Justice Manmohan and Justice Tushar Rao Gedela modified its earlier order which restrained the execution of an arbitral award involving Air India as a party. Air India claimed that instead of granting an unconditional stay as requested, the High Court initially restrained the execution of the award by employing a contingency on Air India to pay the whole decretal amount. The High Court modified this order and allowed Air India to deposit...

Arbitrators Can't Unilaterally Modify Fee, Needs Parties' Consent: Bombay High Court

The Bombay High Court bench comprising Justice Manish Pitale held that any amendments, revisions, or modifications in fees of an arbitrator must only occur with the consent of the parties, as outlined in the tripartite agreement and per Schedule IV of the Arbitration and Conciliation Act, 1996. The High Court also held that the arbitrator is not bound by the strict rules of the CPC and the Evidence Act and can employ a reasonable approach while judging the proceedings, in light of the ...

Limitation Period U/s 34(3) Absolute; Condonation Of Delay Impermissible Unless Party Shows Diligence And Bona Fide Reasons: Delhi High Court

The Delhi High Court bench comprising Justice Pratibha M Singh held that the time limit for limitation under Section 34(3) of the Arbitration and Conciliation Act, 1996 is absolute in nature and it is impermissible to condone the delay in challenging an arbitral award under Section 34 unless the party demonstrates diligence and bona fide reasons beyond its control for the delay. Brief Facts: The present petition under Section 34 of the Arbitration and Conciliation Act, 1996 has been...

Separate Arbitration Agreement Necessary Between Parties For Reference To Arbitration U/s 18(3) Of MSMED Act by Council: Bombay High Court

The Bombay High Court bench comprising Justice Neela Gokhle held that the parties should have a separate arbitration agreement between them for reference to arbitration under Micro, Small & Medium Enterprises Development Act, 2006 by Micro & Small Enterprises, Facilitation Council. The bench rejected the argument that Section 18(3) of the MSMED Act 2006 provides for a deemed arbitration agreement, thereby, eliminating the necessity for a separate arbitration agreement between the...

Section 11 Petition Can Be Filed Only After Failure Of Parties To Appoint Arbitrator Within 30 Days Of Notice, Limitation Act Applies: Delhi High Court

The Delhi High Court bench, comprising Justice Prathiba M. Singh, held that a petition under Section 11 of the Arbitration and Conciliation Act, 1996 can only be filed after a notice of arbitration has been issued and there has been a failure to make the appointment of an arbitrator within 30 days. The bench held that the limitation period arises upon the failure to make the appointment of the arbitrator within 30 days from the issuance of the notice invoking arbitration. Brief Facts: ...

Individual/Minority Members Of Housing Society Can't Invoke Arbitration Clause In Development Agreement: Bombay High Court

The Bombay High Court bench comprising Justice Manish Pitale held that individual and minority members of a society cannot invoke arbitration clauses in development agreements against the developer. The bench held that when a society and its members enter into a development agreement with the developer, the society speaks for its members and the members would lose their independent rights qua the society. Brief Facts: The development agreement, signed by the DGS Township Pvt....

Need For Broad Panel To Choose From To Ensure Arbitrator's Independence As Per Clause 64 of GCC: Delhi High Court

The Delhi High Court bench comprising Justice Sachin Datta allowed an application made under Section 14 of the Arbitration and Conciliation Act, regarding the termination of an arbitrator's mandate under his former employment with the respondent, Northern Railway. The bench held that a broad-based panel should have been provided to the complainant and 4 was very less a number, coupled with the fact that each arbitrator in the panel was a former employee of Northern Railway. The bench ...

Striking Off Co's Name By ROC Post-Commencement Of Arbitration Not A Ground To Set Aside Award, Delhi H.C. Dismisses S. 34 Application

The Delhi High Court bench comprising of Justice Vibhu Bakhru and Justice Tara Vitasta Ganju dismissed a Section 34 application filed by Exotic Buildcon Pvt. Ltd. against M/s Medors Biotech Pvt. Ltd. The bench held that an arbitral award cannot be set aside merely because the respondent company's name was struck off from the Register of Companies post-commencement of arbitral proceedings. It upheld the principle that the cancellation of a company's incorporation doesn't affect the ...