Existence Of Contingent Contract U/S 31 Of Contract Act Is A Dispute To Be Referred To Arbitration: Telangana High Court

Recently, the Telangana High Court observed that existence of a "Contingent Contract" cannot be decided in the limited jurisdiction of Courts under Section 11 of Arbitration Act. Justice K. Lakshman, placing reliance on Supreme Court decision in Vidya Drolia v. Durga Trading Corporation (2021) observed that the scope of interference by the Courts under Section 11 of Arbitration Act is extremely limited: "The court should refer a matter if the validity of the arbitration...

Clause "Every Effort" To Arbitrate; Must Be Referred To Arbitration: Calcutta High Court

The Calcutta High Court has ruled that it is the intention of the parties that has to be deciphered while determining whether or not the parties must be referred to arbitration. The Single Bench of Justice Shekhar B. Saraf held that where the arbitration clause between the parties provided that "every effort" should be made by them to settle the dispute by arbitration, the term "every effort" expanded the scope and ambit of the arbitration clause, and clearly conveyed the intention to ...

If The Imposition Of LD Was Contingent On Extension Of Time, Recovery Of LD Is Not Time Barred: Delhi High Court

The High Court of Delhi has held that the arbitrator cannot reject the claim of a party for refund of Liquidated Damages (LD) as barred by time if it was inextricably linked to the issue of Extension of Time (EOT) on which the decision of the competent authority was pending. The Bench of Justice Vibhu Bakhru held that the period of limitation for the purpose of refund of LD would only begin from the date of the decision on the issue of EOT if the imposition of LD was contingent upon...

Notice Of Proceeding Under Section 11 Of The A&C Act Is A Mandatory Requirement: Madhya Pradesh High Court

The Madhya Pradesh High Court has held that it is mandatory for a High Court to issue notice of application under Section 11 of the A&C Act and non-compliance of which would vitiate the entire proceeding for appointment of arbitrator. The bench of Justice Anand Pathak was hearing a review petition against an order by which the application under Section 11(6) was allowed and an arbitrator was appointed. The Court further held that proceedings under Section 11 are judicial in...

Application Under Section 11 Of The A&C Act Is Maintainable Despite The Pendency Of Reference Before The MSME Council: Jharkhand High Court

The High Court of Jharkhand has held that merely because a reference on the same issue is pending before the MSME Council under Section 18 of the MSMED Act, the same is not a bar to the application under Section 11 of the A&C Act for the appointment of the arbitrator. The Bench of Justice Sujit Narayan Prasad has held that the High Court while exercising powers under Section 11 of the Act is only required to see if there is an arbitration clause between the parties and an objection...

Arbitration Cases Weekly Round-Up: 24 July To 30 July, 2022

Bombay High Court: Pendency Of Arbitration Is Not A Bar To The Maintainability Of An Admiralty Suit For Arrest Of The Ship: Bombay High Court Case Title: Vision Projects Technologies Pvt. Ltd. versus OSV Crest Mercury 1 Citation: 2022 LiveLaw (Bom) 270 The High Court of Bombay has held that the pendency of an arbitration proceeding between the parties on the same cause of action is not a bar to the institution of an admiralty suit. The Bench of Justice N.J. Jamadar held that...

Pendency Of Arbitration Is Not A Bar To The Maintainability Of An Admiralty Suit For Arrest Of The Ship: Bombay High Court

The High Court of Bombay has held that the pendency of an arbitration proceeding between the parties on the same cause of action is not a bar to the institution of an admiralty suit. The Bench of Justice N.J. Jamadar held that merely because the vessel owner has instituted an arbitration against the charterer, the same would not preclude the charterer from filing an admiralty suit for recovery of its dues and arrest of the vessel in an action in rem. Facts The parties entered...

Mentioning Referral Of The Matter To Arbitral Institution Is Sufficient; Party Not Required To Name Arbitrator: Karnataka High Court

The Karnataka High Court has ruled that a notice issued by a party, stating that the matter would be referred to the Council of Architecture, is sufficient for the purpose of invocation of the Arbitration Clause, since the Council of Architecture is an arbitral institution within the meaning of Section 11 of the Arbitration and Conciliation Act, 1996. The Single Bench of Justice Suraj Govindaraj held that it is sufficient if there is a mention made to refer the matter to the institution ...

Order Of Facilitation Council, After Termination Of Conciliation Under MSMED Act, Not Executable: Delhi High Court

The Delhi High Court has ruled that an order passed by the Facilitation Council under Section 18 of the Micro, Small & Medium Enterprises Development Act, 2006 (MSMED Act) after the termination of conciliation proceedings, without taking the dispute up for arbitration or referring it to an institution or centre for arbitration, is a nullity and does not constitute an arbitral award. Therefore, the Court ruled that it cannot be enforced under Section 36 of the Arbitration and...

The Arbitrator Cannot Alter The Express Terms Of The Agreement Between The Parties By Applying The Business Efficacy Test: Delhi High Court

The High Court of Delhi has held that the arbitrator cannot alter the express terms of the agreement by applying the business efficacy test when there is no ambiguity as to the intention of the parties. The Bench of Justice Vibhu Bakhru held that Penta Test as propounded by the Supreme Court in Nabha Power Ltd v. Punjab State Power Corp. Ltd. is only for the purpose of determining the intention when the terms of the agreement are not express or silent on an aspect, and would have no...

Section 29A Of The A&C Act Applies Prospectively Does Not Apply To Arbitration That Commenced Before The 2015 Amendment: Bombay High Court

The High Court of Bombay has held that Section 29A of the A&C Act that provides a timeline of 12 months for passing an arbitral award would not apply to arbitration that commenced before the 2015 Amendment to the Act. The Bench of Justice G.S. Kulkarni held that provisions of Section 29A of the A&C Act, which was incorporated into the principal act via the 2015 Amendment Act, would not apply to an arbitration proceeding commenced on 3rd Feb 2015 as in terms of Section 26 of the...

Just Because Interlocutory Order Of Arbitral Tribunal Is Not Challengeable Under Section 34 Of A&C Act, Remedy Is Not Writ Under Article 226 And 227: Delhi High Court

The Delhi High Court has ruled that merely because an interlocutory order passed by the Arbitral Tribunal is not amenable to challenge under Section 34 of the Arbitration and Conciliation Act, 1996 (A&C Act), the remedy under Article 226 and Article 227 of the Constitution of India would not be available against the said order. The Single Bench of Justice C. Hari Shankar held that a party can approach the Court against an interim order passed in the arbitral proceedings only if the...