Parties Cannot Challenge Arbitration Clause After Accepting Court-Appointed Arbitrator Under Pre-2015 Regime: Supreme Court

The Supreme Court on Wednesday (February 4) reaffirmed that parties who accept a court order appointing an arbitrator under the pre-2015 arbitration regime cannot later challenge the existence or validity of the arbitration clause while assailing the arbitral award. The ruling was delivered by a bench comprising Justices J.B. Pardiwala and K.V. Viswanathan. Under the law as it stood before the 2015 amendments, the Chief Justice or the designated judge exercising powers under Section 11 was...

Madras High Court Sets Aside ₹7.77-Crore Award Against New India Assurance

The Madras High Court has recently set aside a Rs 7.77-crore arbitral award passed against New India Assurance Company Limited, holding that the arbitral tribunal failed to properly examine whether the claimant had the right to maintain the insurance claim after transferring its entire business. Allowing the insurer's challenge, Justice N. Anand Venkatesh held that the tribunal ignored a threshold issue going to the root of the dispute and returned findings that were “bereft of any materials”...

Bombay High Court Sets Aside ₹1.17-Crore Arbitral Award Enforcing Off-Book Cash Claims

The Bombay High Court has set aside an arbitral award directing a real estate partnership to pay over Rs 1.17 crore to a former partner, holding that the award sought to enforce rights allegedly arising from illegal and undocumented cash transactions.Allowing the challenge, Justice Somasekhar Sundaresan held that the arbitral tribunal had enforced rights flowing from a partnership arrangement that was shown to operate entirely outside lawful accounting. The court warned that if such...

SARFAESI Involves Enforcement, Not Adjudication; Does Not Bar Arbitration: Bombay High Court

The Bombay High Court on Monday held that initiation of proceedings under the SARFAESI Act does not bar arbitration between a lender and a borrower. The court clarified that SARFAESI proceedings are meant only for enforcement of security and do not involve adjudication of disputes. Arbitration, it held, is an adjudicatory process and can proceed in parallel. Justice Sandeep V. Marne made the observations while hearing petitions filed by Tata Capital Housing Finance Ltd seeking appointment of...

Supreme Court Sets Aside Interim Relief In Arbitration Case Involving Pure Money Claim

The Supreme Court recently set aside a Calcutta High Court order directing escrow of payments arising out of a master service agreement, holding that in the facts of the case, where the dispute involved a pure money claim and there was no risk of irrecoverability, the High Court ought not to have granted interim protection after arbitration had been invoked. A Bench of Justice Manoj Misra and Justice Manmohan held that in such circumstances, the High Court should have deferred to the arbitral...

Arbitration Can Resume Without Fresh Notice After Award Is Set Aside: Karnataka High Court

The Karnataka High Court has held that once an arbitral award is set aside, the disputes stand revived and can be referred back to arbitration without requiring the parties to issue a fresh notice under Section 21 of the Arbitration and Conciliation Act, 1996.Section 21 deals with the commencement of arbitral proceedings through notice to the opposing party. Justice Suraj Govindaraj held that this requirement is procedural and not jurisdictional and cannot be invoked to block arbitration after...

Delhi High Court Slaps ₹1 Lakh Cost On Litigant For 'Calculated Attempt' To Delay Arbitral Award Execution

The Delhi High Court has imposed Rs 1 lakh in costs on a litigant for what it called a “calculated attempt” to stall enforcement of a decade-old arbitral award. Justice Harish Vaidyanathan Shankar dismissed the objection application, holding that repeated attempts to delay execution, as in the present case, cannot be justified as an exercise of legal rights. The court underscored that the award, passed on December 31, 2014, had already attained finality. “The approach adopted by the Objector...

Arbitral Award Passed After Arbitrator's Mandate Expires Can Be Enforced If Court Extends Time Subsequtently: Supreme Court

The Supreme Court on Tuesday (February 3) held that arbitral awards delivered beyond the statutory timeline prescribed under Section 29A of the Arbitration and Conciliation Act, 1996, do not automatically become ineffective. The Court clarified that such awards remain ineffective and unenforceable at that stage but may still be given effect if a party approaches the competent court seeking an extension of the arbitral tribunal's mandate under Section 29A. “…we are of the opinion that...

Delhi High Court Rejects Reliance Industries' Objections To Centre's Appeal In $3.86 Billion Dispute

The Delhi High Court on Monday ruled that the Centre's appeal against the refusal to enforce a foreign arbitral award in a $3.86 billion dispute with Reliance Industries can proceed. The court rejected RIL's objections to the Centre's appeal against a single judge order refusing to enforce the foreign arbitral award.The dispute relates to production sharing contracts for the Tapti and Panna Mukta oil and gas fields and a claim of USD 3,856,734,582. A Division Bench of Justice Navin Chawla and...

Calcutta High Court Appoints Former Chief Justice As Arbitrator In Turner Morrison–Berger Paints Tax Dispute

The Calcutta High Court has appointed Justice T.S. Sivagnanam, former Chief Justice of the Court, as the sole arbitrator to decide a tax liability holdback dispute between Turner Morrison Limited and Berger Paints India Limited. A Single Bench of Justice Shampa Sarkar held that objections based on limitation and contractual interpretation cannot be decided at the stage of appointing an arbitrator. The Court said such issues must be left to the arbitral tribunal, which is the “master of facts”. ...

Dispute Cannot Be Referred To Arbitration When Arbitration Agreement Itself Is Alleged To Be Forged: Supreme Court

The Supreme Court on Monday observed that disputes cannot be referred to arbitration when the very existence of the arbitration agreement is in question, particularly where the document relied upon is alleged to be forged. A bench of Justice Pamidighantam Sri Narasimha and Justice Alok Aradhe said courts must first satisfy themselves that an arbitration agreement actually exists before sending parties to arbitration. The court clarified that challenges going to the root of the arbitration...

Delhi High Court Upholds Arbitral Award Directing Zreyah To Supply Switches, Refund ₹2.84 Crore To OYO

The Delhi High Court has ruled in favour of OYO Hotels and Homes Pvt. Ltd. in a dispute over the supply of electronic switches. The Court upheld an arbitral award directing Zreyah Semiconductors Private Limited to deliver 11,000 switches to OYO and refund Rs 2.84 crore with interest. It said the arbitrator's conclusions were plausible and did not call for interference. The case was heard by Justice Avneesh Jhingan. The court agreed with the arbitrator's reading of the contract. It refused to...