Clause Captioned As “Arbitration”, Doesn’t Conclusively Imply Mandatory Nature Of Arbitration: Bombay High Court

The Bombay High Court has ruled that the use of the word ‘can’ in the relevant clause has the effect of qualifying Arbitration as a mode of settlement, and the mere fact that a particular clause is captioned as “Arbitration”, does not conclusively imply the mandatory nature of arbitration when the option is left to the parties to settle their disputes through the mode of arbitration. The bench of Justice Bharati Dangre observed that in cases involving debatable and disputable facts,...

Award Passed By Unilaterally Appointed Arbitrator Is Void; Himachal Pradesh High Court

The Himachal Pradesh High Court has held that arbitral proceedings conducted by a unilaterally appointed arbitrator are void ab initio and the consequent award is non-est. The bench of Justice Jyotsana Rewal Dua held that an arbitration award passed by a unilaterally appointed sole arbitrator is not enforceable under Section 36 of the A&C Act. The Court further held that Section 12(5) would also apply to arbitration agreement entered into before the 2015 amendment came...

Court Has Almost “Nil” Scope Of Interference Against Order Disposing Of S. 34 Petition Under Arbitration Act: Delhi High Court

The Delhi High Court has ruled that, as a necessary corollary of the provisions of Section 34 and Section 37 of the Arbitration and Conciliation Act, 1996 (A&C Act), what cannot be considered by the adjudicating Court under a Section 34 petition can certainly not be adjudicated upon by the appellate Court under Section 37. The Court added that it has almost “Nil” scope of interference while dealing with a challenge against an order disposing of a Section 34 petition, unless there is...

Reference To Wrong Agreement in Arbitration Notice, Not Invalid If Agreement Otherwise Exists: Delhi High Court

The Delhi High Court has reiterated that mere reference to a wrong provision or term of the agreement cannot invalidate the notice invoking arbitration, if otherwise such power or provision exists in the document executed between the parties. The bench of Justice Navin Chawla was dealing with a petition filed under Section 11 of the Arbitration and Conciliation Act, 1996 (A&C Act), which was resisted on the ground that the claimant had wrongly invoked the arbitration clause...

Arbitration Cases Monthly Round-Up: February 2023

High Courts Bombay High Court: Court Not Powerless To Appoint Appropriate Arbitral Tribunal, Even If Party Forfeits Its Right Under Arbitration Clause: Bombay High Court Case Title: PSP Projects Limited versus Bhiwandi Nizampur City Municipal Corp The Bombay High Court has ruled that even if a party’s right to appoint its nominee in the Arbitral Tribunal as per the arbitration clause, is forfeited because it failed to exercise its right within the statutory period after...

Merely Because The Borrower Is An MSME, It Would Not Be Governed By The Arbitral Mechanism Provided Under MSMED Act: Gujarat High Court

The Gujarat High Court has ruled that merely because the borrower is an MSME, it would not be governed by the provisions of the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act), including the arbitral mechanism envisaged under the said Act. The bench of Justice Biren Vaishnav observed that though, as per the mechanism provided under the MSMED Act, the dispute between the supplier and the buyer of goods or services may be adjudicated through arbitration in accordance...

Section 11 Petitions Seeking Relief But Not Raised In The Previous Arbitration; Gross Abuse Of Process of Court: Delhi High Court

The Delhi High Court has ruled that since the party had failed to challenge the termination of the Collaboration Agreement in the first round of arbitral proceedings, the demolition of the structure built by it under the said Collaboration Agreement would not give it a fresh cause of action. The bench of Justice Navin Chawla remarked that the cause of action for challenging the termination of the Collaboration Agreement and/or for claiming any relief under the said Collaboration...

S. 34 Petition Can’t Be Amended To Introduce New Grounds Containing New Facts, To Challenge Arbitral Award: Delhi High Court Reiterates

The Delhi High Court has reiterated that though it is permissible to introduce an amendment in a petition filed under Section 34 of the Arbitration and Conciliation Act, 1996 (A&C Act), however, new grounds of challenge containing new material/ facts cannot be introduced when the said grounds were neither raised in the original petition under Section 34 nor before the Arbitral Tribunal. While dismissing the application seeking to raise additional grounds to challenge the arbitral ...

Clause Exclusively Empowering Chief Project Manager To Appoint Arbitrator From A Panel Maintained By It, Illegal: Delhi High Court

The Delhi High Court has reiterated that when a person has itself become ineligible by operation of law to act as an arbitrator, it cannot nominate another person to act as arbitrator. The bench of Justice Yashwant Varma was dealing with an arbitration clause which exclusively empowered the Chief Project Manager to appoint the arbitrator from a panel which was itself maintained by it. The Court observed that the arbitration clause did not bestow a right on any of the parties to the ...

Order Passed Under Section 11 Of The Arbitration And Conciliation Act Cannot Be Reviewed: Calcutta High Court

The High Court of Calcutta that the A&C Act is a complete code in itself and it does not contain any provision for the review of an order passed under Section 11 of the Act. The Bench of Justice Shekhar B. Saraf held that power of review is a creature of statute and unlike the Supreme Court which has inherent power of review under Article 137 of the Constitution of India, no such power is conferred on the High Courts by the Constitution, therefore, it cannot review its order passed...

Arbitration Under Section 42 Of Special Economic Zones Act, 2005 Would Override A Contractual Arbitration Clause: Telangana High Court

The High Court of Telangana has held that arbitration under Section 42 of the Special Economic Zones Act, 2005 would override a contractual arbitration clause entered into between the parties. The bench of Chief Justice Ujjal Bhuyan held that Special Economic Zones Act, 2005 is a special legislation and Sections 42 and 51 of the Act gives it an overriding act over other acts and Section 42 of the Act provides for statutory arbitration wherein the arbitrator would be appointed by the...

Arbitration Cases Weekly Round-Up: February 19 To February 25, 2023

Bombay High Court: Multiple Arbitrations By Arbitrator Involving The Same Co-operative Bank Under S. 84 Of MSCS Act; Not A Disqualification: Bombay High Court Case Title: Kalpesh Shantikumar Mehta & Ors. versus NKGSB Co-op. Bank Ltd & Anr. The Bombay High Court has ruled that reference of more than two arbitrations to the same arbitrator under Section 84 of the Multi-State Cooperative Societies Act, 2002 (MSCS Act), involving the same Co-operative Bank, would not fall foul...