Unconditional Bank Guarantee Can Be Invoked Despite Contract Termination Dispute: Delhi High Court Reiterates

The Delhi High Court has reiterated that an unconditional performance bank guarantee can be invoked even if the contractor disputes the legality of the contract's termination, an issue the court said must be decided in arbitration.A single-judge bench of Justice Jasmeet Singh relied on precedents set by the apex court to hold that it cannot go into such questions while deciding a petition under Section 9 of the Arbitration and Conciliation Act. The Court clarified that it cannot go into the...

Parties Must Exhaust Contractual Dispute Resolution Before Court Appoints Arbitrator: MP High Court

The Madhya Pradesh High Court has held that a court cannot appoint an arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996 unless the party seeking such appointment has first exhausted the dispute resolution mechanism contractually agreed upon between the parties. A Bench of Justice Pavan Kumar Dwivedi dismissed three applications filed by former employees of Taskis India Private Limited, seeking appointment of an arbitrator, holding that the applicants were bound by the...

Commercial Courts Cannot Hear Non-Commercial Arbitration Disputes Without Specified Claim Value: MP High Court

The Madhya Pradesh High Court has clarified that arbitration challenges arising from non-commercial disputes with no determinable monetary value cannot be heard by Commercial Courts, even if such courts function at the level of a Civil Judge (Senior Division). The court clarified that the Commercial Courts Act, 2015 applies only when two conditions are met, the dispute must be commercial in nature and must have a specified value as defined under the law. Justice Vivek Jain said that where...

Contractual Bar On Interest Binds Arbitrator; Delhi High Court Partly Sets Aside Award In BHEL–Delkon Dispute

In a dispute involving public sector undertaking Bharat Heavy Electricals Limited, the Delhi High Court has set aside a ₹66.50 lakh interest component of an arbitral award that had directed BHEL to pay Delkon India Private Limited. The court held that an arbitral tribunal cannot award interest where the contract expressly prohibits it, even if the termination of the contract is found to be illegal. A division bench of Justice V. Kameswar Rao and Justice Vinod Kumar ruled that the contractual...

Arbitration | Mechanical Reliance On No Claim Certificate Is Non-Adjudication: Calcutta High Court

The Calcutta High Court has recently held that mechanical reliance on a 'No Claim Certificate,' without examining whether the claims raised were covered by such document, amounts to non-adjudication.A Single Bench of Justice Gaurang Kanth in an order dated January 9 explained that the mechanical reliance on such certificates, without examining the surrounding facts and evidence, amounts to non-adjudication and renders the award vulnerable to challenge. The Court observed:“Even execution of a...

Delhi High Court Sets Aside Arbitration Against Bhushan Steel Following Tata Steel Takeover

The Delhi High Court has set aside an arbitral tribunal order that allowed arbitration to continue against Tata Steel, formerly Bhushan Steel, even after its resolution plan under the Insolvency and Bankruptcy Code was approved. A single-judge bench of Justice Amit Sharma allowed Tata Steel's writ petition and quashed the tribunal's October 7, 2020 order. The court said that once a resolution plan is approved, it binds all creditors. “The Resolution Plan had attained finality and would be...

Court Intervention In Arbitrator Appointment Required Only If Institution Fails: Bombay High Court

The Bombay High Court has held that court intervention for the appointment of arbitrators is required only when an arbitral institution fails to discharge its designated functions in appointing an arbitrator. A single-judge bench of Justice Sandeep V Marne held that once parties agree to resolve disputes through an arbitral institution, the appointment procedure prescribed by that institution must be followed.“In case of an institutional arbitration, application for appointment of...

Court Cannot Use Attachment In Arbitration To Turn Unsecured Damages Claim Into Secured Debt: AP High Court

The Andhra Pradesh High Court has said that a claim for demurrage, which is essentially a charge demanded for delay in loading or unloading a ship, cannot be treated as an actual money debt until an arbitral tribunal finally decides who is at fault. Because of this, the court held that such a claim cannot be secured by attaching goods under Section 9 of the Arbitration Act while arbitration is still pending. A division bench of Justice Ravi Nath Tilhari and Justice Maheswara Rao Kuncheam, in...

Sole Arbitrator Returning Finding Based On Presumption, Modifying Agreement Vitiates Award: Allahabad High Court

The Allahabad High Court has held that finding returned by a Sole Arbitrator based on presumption and which has the effect of modifying the agreement, vitiates the arbitral award.The bench of Chief Justice Arun Bhansali and Justice Jaspreet Singh held “The Sole Arbitrator by returning a finding which is not based on any evidence and material on record and merely is based on presumption coupled with the fact that it has the effect of modifying the terms of the agreement and also amounts to...

Second Arbitral Reference Maintainable When Award Is Set Aside Without Adjudication On Merits: J&K&L High Court

The Jammu & Kashmir and Ladakh High Court has held that a second reference to arbitration is maintainable where an arbitral award has been set aside under section 34 of the Arbitration and Conciliation Act, 1996 ("Arbitration Act") without any adjudication on merits of the claims, leaving the underlying disputes unresolved. Justice Sanjay Dhar said while allowing the application seeking appointment of a fresh arbitrator after the earlier award had been set aside by the Designated...

Bar U/S 42 Of Arbitration Act Not Attracted Where Seat Is Chosen Before First Application Is Filed: Calcutta High Court

The Calcutta High Court has held that where parties have already chosen a seat of arbitration before the first application is filed, the courts exercising jurisdiction over the seat alone will have jurisdiction over all subsequent applications, including those under sections 34 and 36 of the Arbitration and Conciliation Act, 1996 ("Arbitration Act") notwithstanding that earlier application may have been filed before another High Court. Justice Sabyasachi Bhattacharyya held while...

Arbitral Tribunal Not Declared As “Court”, False Evidence Before Arbitrator Does Not Attract S.195 CrPC: J&K&L High Court

Clarifying the scope of criminal law in arbitral proceedings, the High Court of Jammu & Kashmir and Ladakh has held that the bar contained in Section 195 of the Code of Criminal Procedure does not apply to allegations of false evidence given before an Arbitral Tribunal, as an arbitrator is not a “court” within the meaning of that provision.“… the term “Court” has been defined in sub-section (3) of Section 195 of Cr. P. C to mean a civil, revenue or criminal court and it includes a Tribunal...