When Can Court Remand Arbitral Award To Tribunal Under S.34/37 Arbitration Act ? Supreme Court Explains

The Supreme Court Constitution Bench recently held that the powers of Courts to remand arbitral awards back to the Tribunal under S. 34(4) of the Arbitration and Conciliation Act 1996 cannot be seen as a straight-jacket formula. The Court observed that an award should be remitted back only if there is a possibility to correct a defect in the award, but if the entire award suffers from substantial injustice and patent illegality, remittance should be avoided. The Constitution...

Separate Notice For Counter Claims U/S 21 Of A&C Act Not Required When Arbitration Proceedings Are Pending Between Parties: Delhi HC

The Delhi High Court bench of Justice Subramonium Prasad has observed that where the disputes between the parties are already the subject matter of an earlier arbitral reference, a separate notice under Section 21, Arbitration and Conciliation Act, 1996 (“ACA”) would not be necessary for separate proceedings to adjudicate counter claims. Facts The present petition under Section 11, ACA has been filed by the Petitioner seeking appointment of an independent sole arbitrator to...

Compensation Can Be Granted When Aggrieved Party Continues Service Due To Suppression Of Fact Of Contract's Termination: Telangana HC

The Telangana High Court bench of Justices Moushumi Bhattacharya and B.R.Madhusudhan Rao has held that loss of profit incurred by a party due to the other party's suppression of material facts regarding the termination of the contract, where the former continued to render services under a mistaken belief, can be reasonably compensated by applying the Hudson formula. Brief Facts: In June, 2012, M/s. Gayathri Projects Limited (GPL)/Principal Employer issued a Tender Notification...

Courts Can Modify Arbitral Awards In Certain Circumstances Under S.34/37 Arbitration Act: Supreme Court By 4:1

Answering a reference, a Constitution Bench (by 4:1) of the Supreme Court held that Appellate Courts have limited powers to modify arbitral awards while exercising powers under either Section 34 or 37 of the Arbitration and Conciliation Act, 1996.The majority judgment by Chief Justice of India Sanjiv Khanna held that the Courts have a limited power under Section 34/37 to modify arbitral awards. This limited power can be exercised in the following circumstances :1. When the award is severable by...

Karnataka High Court Grants Ex-Parte Injunctions In Favour Of Neil Patel Digital LLC In Dispute Over Breach Of LLP Agreement

The Karnataka High Court bench of Justice Suraj Govindaraj has passed ex-parte injunctions under Section 9 of the Arbitration and Conciliation Act, 1996, in favour of Neil Patel Digital LLC (“NPD LLC”). The disputes had arisen from breach of the covenants of a Limited Liability Partnership Agreement. The LLP Agreement contained various negative covenants restricting the Respondent No. 1 in respect of, among other things, transfer of funds beyond stipulated limits, appointment of key...

Interest Of 18% Can't Be Claimed In Arbitrations Commencing Before 2015 Amendment, When Award Specifies Particular Rate: Jharkhand HC

The Jharkhand High Court bench of Chief Justice M. S. Ramachandra Rao and Justice Deepak Roshan has held that interest at the default rate of 18% under unamended Section 31(7)(b) of the Arbitration and Conciliation Act, 1996 (Arbitration Act) cannot be claimed when the arbitral proceedings commenced before the 2015 amendment and the parties have not agreed to apply the amended provision. In such cases, the unamended provision applies, and only the interest specified in the award is...

S.34 Arbitration Act | Respect Arbitral Autonomy; Judicial Interference Should Be Minimal : Supreme Court

The Supreme Court reiterated that the courts cannot go beyond the scope of Section 34 of the Arbitration & Conciliation Act, 1996 (“Arbitration Act”) while deciding an application for setting aside of an award."the role of the court under Section 34 of the 1996 Act is clearly demarcated. It is a restrictive jurisdiction and has to be invoked in a conservative manner. The reason is that arbitral autonomy must be respected and judicial interference should remain minimal otherwise it will...

Delhi High Court Dismisses BSNL's Appeal U/S 37 Of A & C Act, Upholds Arbitral Award Of Rs. 43.52 Crore

The Delhi High Court bench of Justices Vibhu Bakhru and Tejas Karia dismissed BSNL's appeal under Section 37 of the Arbitration and Conciliation Act, 1996 (Arbitration Act) holding that the Single Judge correctly upheld the Arbitrator's finding that Vihaan Networks Limited carried out the work under the Advance Purchase Order, issued on BSNL's specific instructions, which was later withdrawn. Therefore, the Respondent was rightly compensated under the principle of quantum meruit for the ...

Arbitrator Cannot Be Substituted U/S 29A(6) Of A&C Act Unless Grounds Mentioned U/S 14 & 15 Are Satisfied: Bombay High Court

The Bombay High Court bench of Justice Somasekhar Sundaresan has held that even though the term "substitution" is mentioned under Section 29-A(6) of the Arbitration and Conciliation Act, 1996 (Arbitration Act), an arbitrator cannot be substituted in an application under this section unless the grounds specified in Sections 14 and 15 of the Arbitration Act are satisfied, which outline the conditions under which an arbitrator may be substituted. Brief Facts: These Petitions have been...

Bombay HC Dismisses Appeal Against Order U/S 9 Of Arbitration Act Injuncting Owner Of Kapani Resorts From Disposing Of Interest In Properties

The Bombay High Court bench of Chief Justice Alok Aradhe And Justice M. S. Karnik has upheld the order passed by the Single Judge under Section 9 of the Arbitration and Conciliation Act, 1996 (Arbitration Act), injuncting the owner of the Kailash property and Kapani Resorts from alienating or disposing of any interest in the properties until the completion of the arbitral proceedings. Brief Facts: The present appeal under Section 37 of the Arbitration Act has been filed against an...

Composite Reference To Arbitration Can Be Made For Acceptance Of Offer At Consolidated Price Across Different Locations: Calcutta HC

The Calcutta High Court bench of Justice Shampa Sarkar has held that the very acceptance of an offer at a consolidated price for works to be executed at different locations proves that the work orders issued were treated as part of a single transaction by the parties through their conduct therefore under such circumstances a composite reference of all work orders can be made to arbitration. Brief Facts: This application has been filed under section 11(6) of the Arbitration and ...

Arbitral Award For Claims Not Included In IBC Resolution Plan Can't Be Enforced: Supreme Court

The Supreme Court recently allowed an appeal challenging the enforcement of an arbitral award passed by the Micro and Small Enterprises Facilitation Council (MSEFC) against Electrosteel Steels Ltd., holding that the award was non-executable in view of the resolution plan approved under Section 31 of the Insolvency and Bankruptcy Code (IBC), 2016.“we have no hesitation to hold that upon approval of the resolution plan by the NCLT, the claim of the respondent being outside the purview of the...