ARBITRATION
Defendant Cannot Invoke Arbitration Clause After Participating In Trial Without Objection: Delhi HC
The Delhi High Court on 3 June reiterated that a defendant who files a written statement and participates in the trial without seeking reference to arbitration at the appropriate stage cannot later invoke an arbitration clause to challenge the maintainability of the suit. Justice Neena Bansal Krishna upheld a recovery decree of Rs. 2.91 lakh in favour of Dollar Security & Support Services against Amber Electrotech Ltd., finding that the company had never disputed the outstanding invoice...
Minority Opinion Awarding Lesser Amounts Does Not Invalidate Majority Arbitral Award: Madras High Court
The Madras High Court has held that a majority arbitral award does not become invalid merely because a dissenting arbitrator awarded lesser amounts. The court dismissed a challenge by the Chennai Metropolitan Water Supply and Sewerage Board to an award in favour of SPML Infra Limited arising out of a Chennai sewerage pipeline project. A division bench of Justices P. Velmurugan and K. Govindarajan Thilakavadi observed: "The Tribunal consisted of three Arbitrators and the impugned Award is a...
BOCW Cess Dispute Not Arbitrable, Must Be Decided Under Statutory Mechanism: Chhattisgarh High Court
The Chhattisgarh High Court on 13 May, refused to appoint an arbitrator in a dispute between SK Samanta and Co. (P) Ltd. and South Eastern Coalfields Ltd. (SECL), holding that issues relating to statutory cess under the Building and Other Construction Workers' Welfare Cess Act, 1996 (BOCW Cess Act) are non-arbitrable. Chief Justice Ramesh Sinha held that the dispute arose from statutory levy and not a purely contractual arrangement, and therefore did not fall within the scope of arbitration...
Section 11 Arbitration Orders Not Reviewable, Article 215 Powers Limited: Allahabad High Court
On 14 May, the Allahabad High Court held that it cannot review an order passed under Section 11 of the Arbitration and Conciliation Act, 1996, while exercising its statutory jurisdiction. However, as a Court of Record, it may invoke its inherent powers under Article 215 of the Constitution to correct the record or remedy a grave error that may otherwise result in a failure of justice. A Bench of Justice Jaspreet Singh dismissed an application seeking recall of an earlier order constituting a...
Patent Illegality Ground Unavailable To Challenge Awards In International Commercial Arbitrations: Bombay HC
The Bombay High Court has reiterated that an arbitral award arising from an international commercial arbitration seated in India cannot be set aside on the ground of patent illegality. The court held that allegations that an arbitral tribunal ignored evidence or arrived at perverse findings fall within the ground of patent illegality, which is unavailable for challenging such an award. It dismissed Oil and Natural Gas Corporation Ltd.'s challenge to an award in favor of Malaysia-based...
Mere 'Criminal Overtones' Or Claimed 'Public Overtones' Do Not Make Dispute Non-Arbitrable: Bombay High Court
The Bombay High Court has held that a dispute does not become non-arbitrable merely because one side alleges fraud or claims that it has criminal or public overtones. Referring a dispute between television production company Shashisumeet Production Pvt. Ltd. and investor Kuresh R. Kushesh to arbitration, the Court said such allegations, by themselves, do not take the matter outside the jurisdiction of an arbitral tribunal. "Merely on the ground that there are “criminal overtones” or because a...
Bombay High Court Quashes Awards Against Guarantors Despite IBC Moratorium On Debt
The Bombay High Court on Tuesday held that arbitral awards resulting in enforcement of a debt that has become temporarily unenforceable due to a statutory moratorium run contrary to the fundamental policy of Indian law. The court consequently quashed two awards obtained by Abhyudaya Co-operative Bank against guarantors of insolvency resolution bound Nirmangold Alloys Pvt. Ltd. and Nirmangold Plasttech Pvt Ltd. Justice Sharmila U. Deshmukh held that the arbitral tribunal continued proceedings...
Bombay High Court Holds DIFC Penal Notice And Certificate Satisfy CPC Requirement For Foreign Decree Execution
The Bombay High Court has rejected an objection by two guarantors of a USD 5 million factoring facility to the maintainability of execution proceedings initiated by Malta-based Fimbank P.L.C. to enforce a Dubai International Financial Centre (DIFC) Court judgment in India. Justice Abhay Ahuja held that a penal notice issued by the DIFC Court and a subsequent certificate relating to satisfaction of the judgment fulfilled the requirement of a certificate regarding satisfaction or adjustment of...
Bombay High Court Upholds Award In Paharpur–Siemens Dispute, Reaffirms Limited Scope Of Section 34
On 8 June, the Bombay High Court reiterated that under Section 34 of the Arbitration and Conciliation Act, 1996, courts cannot reappreciate evidence or substitute a plausible view taken by an arbitral tribunal merely because another interpretation of the contract or evidence is possible. Justice Somasekhar Sundaresan dismissed the petition filed by Paharpur Cooling Towers Ltd. and upheld the arbitral award in favour of Siemens Ltd. in its entirety. He held: "In my opinion, this analysis is a...
Bombay HC Refers Tata Capital's ₹36.10 Crore Loan Dispute With Priyanka Communications To Arbitration
On 8 June, the Bombay High Court held that Section 8 of the Arbitration and Conciliation Act, 1996 must be construed liberally to facilitate arbitral reference and cannot be defeated by procedural technicalities such as insisting on a separate application for referral. Justice Abhay Ahuja referred Tata Capital Financial Services Ltd.'s Rs.36.10 crore loan recovery dispute with Priyanka Communications (India) Pvt. Ltd. and its guarantors to arbitration under Clause 21 of the Working Capital...
Commercial Court Cannot Hear Challenge To Railways Land Acquisition Award: Chhattisgarh High Court
On 14 May, the Chhattisgarh High Court held that disputes arising from land acquisition proceedings under the Railways Act do not fall within the definition of a “commercial dispute” under Section 2(1)(c) of the Commercial Courts Act, 2015, and therefore cannot be adjudicated by a Commercial Court. A Division Bench of Justices Parth Prateem Sahu and Sachin Singh Rajput allowed an appeal filed by Sagarmal Agrawal, set aside an order of the Commercial Court, Bilaspur, holding that it lacked...
Bombay HC Grants Relief To Adtrack, Says Housing Federation Tried To 'Wriggle Out' Of Hoarding Deal
The Bombay High Court on Monday held that a housing federation was seeking to "wriggle out of contractual obligations" after changing its mind about the location of a proposed digital advertisement hoarding and granted interim protection permitting the project to proceed pending arbitration. Justice Sandeep V. Marne held that the federation had changed its mind about the site location of the hoarding and that the contractor would suffer irreparable loss if interim protection was denied. “A...