Issues About Party's Capacity To Invoke Arbitration And Maintainability Issues Fall Within Tribunal's Domain : Supreme Court

The Supreme Court on Wednesday (December 17) reiterated that the questions related to whether an individual is a veritable party to an arbitration agreement, eligible to invoke the arbitration clause, shall be referred for the Arbitral Tribunal's consideration. A Bench comprising Justice P.S. Narasimha and Justice Atul S. Chandurkar declined to interfere with the Telangana High Court's decision referring the dispute to arbitration and rejected the appellant's objection that Respondent No. 1 was...

S. 29A Arbitration Act | Arbitrator's Mandate Terminates On Expiry Of Time; Substituted Arbitrator Must Resume After Extension : Supreme Court

The Supreme Court on Wednesday (December 10) held that once the statutory 18-month period for delivering an arbitral award expires, the arbitrator's mandate automatically comes to an end as per Section 29A(4) of the Arbitration and Conciliation Act, 1996, when no application for extension is made. Therefore, when an extension of time is granted by the Court after the mandate of the arbitrator is terminated, then the substitution of the arbitrator is mandatory under Section 29A(6) of the...

Supreme Court Flags Failure Of New Arbitration Bill In Providing Statutory Appeal Against Arbitral Tribunals' Termination Orders

The Supreme Court criticised the new Arbitration and Conciliation Bill for failing to address the ambiguity regarding the relief against an arbitral tribunal terminating the proceedings, noting that the new Bill made no effort to remedy this gap in the law."It is indeed very sad to note that even after these many years, procedural issues such as the one involved in the case at hand, have continued to plague the arbitration regime of India. The Department of Legal Affairs has now, once again...

Non-Signatory Which Isn't A Veritable Party Cannot Invoke Arbitration Clause : Supreme Court

The Supreme Court on Tuesday (December 9) held that a non-signatory to an arbitration agreement cannot invoke the arbitration clause against a party with whom it shares no legal relationship and where there is no indication of any intention to bind the non-signatory to the main contract. A bench of Justice J.B. Pardiwala and Justice K.V. Viswanathan heard the matter, where the Respondent, admittedly a non-signatory to the primary contract between HPCL and AGC Networks Ltd., sought to invoke the...

If Arbitral Tribunal Terminates Proceedings For Not Paying Fees, Remedy Is To Seek Recall & Then Invoke S.14(2) : Supreme Court

The Supreme Court has held that an arbitral tribunal is legally empowered to terminate proceedings under Section 38(2) of the Arbitration and Conciliation Act, 1996 when a party fails to pay its share of the arbitrator's fees.Once such a termination occurs, the remedy available to the party is to seek the recall of the order before the Tribunal itself. If the recall application is dismissed, then the party has to approach the Court under Section 14(2).A bench of Justice JB Pardiwala and Justice...

Supreme Court Refers 'Bharat Drilling' Judgment' To Larger Bench For Clarity Whether Prohibited Claims Bind Arbitral Tribunals

The Supreme Court on Friday referred its 2009 judgment in Bharat Drilling and Foundation Treatment Private Limited versus State of Jharkhand (2009) 16 SCC 705. to a larger bench, observing that the ruling has been repeatedly and incorrectly relied upon to dilute prohibitory clauses in government contracts. A bench of Justice P S Narasimha and Justice A S Chandurkar said the earlier decision is not an authority for the proposition that excepted or prohibited claim clauses bind only the...

Arbitration | Agreed Interest Rate Can't Be Later Challenged As Exorbitant; Arbitrator Cannot Overrride Contractual Rate : Supreme Court

The Supreme Court on Wednesday dismissed appeals filed by BPL Limited against an arbitral award, upholding the enforcement of a 36% annual interest rate on outstanding dues owed to Morgan Securities and Credits Private Limited. The Court ruled that corporate entities cannot claim contractual terms are "unconscionable" after voluntarily agreeing to them ..“Once the parties by mutual consent agreed to a particular rate of interest to be charged and the same is included in the terms of the contract...

PSU Objects To International Arbitration Being Moved From Delhi To London; Supreme Court Questions Change Of Venue For Convenience

The Supreme Court on Wednesday heard a dispute between NMDC Steel Ltd, a Public Sector Undertaking of the Government of India and Italian company Danieli & C. Officine, regarding the shifting of the place of hearing of the international arbitration between them from Delhi to London.The bench comprising Chief Justice of India Surya Kant, Justice Ujjal Bhuyan and Justice NK Singh was hearing a Special Leave Petition filed by NDMC Steel Ltd against the order of the Telangana High Court which...

Arbitration | No Review Or Appeal Lies Against Order Appointing Arbitrator : Supreme Court

The Supreme Court observed that a review or appeal from an order of appointment of an arbitrator is impermissible.“Once an arbitrator is appointed, the arbitral process must proceed unhindered. There is no statutory provision for review or appeal from an order under Section 11, which reflects a conscious legislative choice.”, the Court held, while setting aside the Patna High Court's order allowing the review petition and recalling its earlier appointment of an arbitrator, despite the party...

Arbitration | Unconditional Stay On Execution Of Award Only In Exceptional Cases: Supreme Court

The Supreme Court recently declined to grant an unconditional stay on the execution of the arbitral award, holding that the requirement to deposit the security amount was justified since the award was not shown to have been induced or tainted by fraud or corruption. Referring to its latest ruling in Lifestyle Equities C.V. and Another v. Amazon Technologies Inc., a bench of Justices JB Pardiwala and KV Viswanathan reiterated that for the grant of an unconditional stay on the execution of an...

Indian Courts Have No Jurisdiction To Appoint Arbitrator For Foreign-Seated Arbitration : Supreme Court

The Supreme Court on Friday (November 21) dismissed a plea seeking the appointment of an arbitrator in an international commercial arbitration, holding that once the principal contract is governed by foreign law and provides for a foreign-seated arbitration, Indian courts lose jurisdiction, irrespective of the Indian nationality of any party. “Indian Courts have no jurisdiction to appoint an arbitrator for a foreign-seated arbitration, irrespective of the nationality or domicile of the...

Arbitration | Dispute On Interest Rate Doesn't Fall Under Public Policy Ground To Set Aside Award Ordinarily: Supreme Court

The Supreme Court on Tuesday (November 18) upheld the charging of a 24% interest rate in an arbitral award, stating that an interest rate agreed upon in a commercial loan agreement did not violate the fundamental policy of Indian law. “It is well-settled that fundamental policy of Indian law does not refer to violation of any Statue but fundamental principles on which Indian law is founded. Any difference or controversy as to rate of interest clearly falls outside the scope of challenge on...