'Arbitrator Interpreted Contract Contrary To Railway Policies' : Supreme Court Sets Aside Award Against IRCTC

The Supreme Court on Friday (November 7) set aside the multi-crore arbitral award passed against the Indian Railways Catering and Tourism Corporation Limited (“IRCTC”), holding that the arbitrator had impermissibly "rewritten the contract" between the parties. “Rewriting a contract for the parties would be a breach of the fundamental principles of justice, entitling a Court to interfere as it would shock its conscience and would fall within the exceptional category.”, the Court observed....

Mere Use Of Word 'Arbitration' Does Not Create Arbitration Agreement Unless Parties Clearly Intend So: Supreme Court

The Supreme Court upheld the Punjab and Haryana High Court's decision refusing to refer the dispute to arbitration, observing that the mere use of the term “arbitration” in a clause is not sufficient to mandate reference to arbitration unless the parties clearly intended to resolve their disputes through arbitration. “mere use of the word 'arbitration” is not sufficient to treat the clause as an arbitration agreement when the corresponding mandatory intent to refer the disputes to arbitration...

Arbitration | Objections To Arbitral Award Execution Maintainable Only If Decree Is Void Or Without Jurisdiction : Supreme Court

The Supreme Court on Monday (November 3) ruled against the stalling of the enforcement of an arbitral award at the execution stage, reiterating that the objections against the execution of an award lie in a narrow compass, such as only when a decree is inherently void or passed without jurisdiction. A bench of Justices Sanjay Kumar and K.V. Viswanathan upheld the Delhi High Court's decision dismissing Appellant-MMTC's objections under Section 47 of the Code of Civil Procedure and its...

Arbitration | When Delay In Pronouncing Arbitral Award Can Be Ground To Set It Aside : Supreme Court Explains

If delay has adversely impacted the award and made it unworkable, it can be a ground to set aside the award.

Decision On Limitation Made On Demurrer Not Final; Party Autonomy In Arbitration Cannot Override Statute: Supreme Court

A decision made on demurrer will not foreclose the final determination of merits, the Court said.

Hidden Doctrine In Gayatri Balasamy: How Supreme Court Used Implied Powers To Transform Arbitration Law

When the Supreme Court ruled on Gayatri Balasamy v. ISG Novasoft Technologies Ltd[1] it made waves, earning the title of the “modification judgment.” Most discussions centered on a key takeaway: Indian courts can now, in certain situations, modify arbitral awards rather than just nullifying them. However, if you dig a little deeper into those 61 pages, you'll uncover a more subtle yet significant shift. For the first time, the Court tapped into the Doctrine of Implied Powers to broaden the...

Right To Seek Arbitration Not Lost Just Because Arbitration Clause Became Inoperable Due To Statutory Amendment: Supreme Court

The Supreme Court held that the invalidity or inoperability of an arbitration clause, such as one naming an ineligible arbitrator under Section 12(5) of the Arbitration and Conciliation Act, 1996, does not nullify the underlying arbitration agreement between the parties. The Court clarified that in such cases, the Court is empowered to step in and appoint a neutral arbitrator under Section 11(6) of the Act to preserve the efficacy of the arbitration mechanism.The Court emphasised that the...

Arbitral Award Must Be Within Parameters Of Agreement Between Parties : Supreme Court Dismisses Chinese Company's Appeal

The Supreme Court has recently upheld the setting aside of an arbitral award of nearly ₹995 crore granted in favour of Chinese company SEPCO Electric Power Construction Corporation, holding that the arbitral tribunal had erred by re-interpreting contractual terms and departing from the agreed stipulations in violation of Section 28(3) of the Arbitration and Conciliation Act, 1996.“Numerous precedents laid down by this Court have often emphasised that an arbitrator lacks the power to deviate from...

S. 31(7)(b) Arbitration Act | Claim For Additional Post-Award Interest Barred When Award Fixes Rate Until Payment : Supreme Court

The Supreme Court on Wednesday (Sep. 24) held that if an arbitral award provides a composite interest rate covering the entire period from the cause of action to payment, the award holder cannot claim additional compound interest at the post-award stage under Section 31(7)(b) of the Arbitration and Conciliation Act, 1996 (“Act”). Section 31(7)(b) of the Act provides for post-award interest at 18% from the date of the award until payment. However, if the arbitral award specifies a composite...

Arbitration | Execution Of Award Cannot Be Stalled Merely Due To Pendency Of Section 37 Appeal : Supreme Court

The Supreme Court held that the execution of an arbitral award cannot be stalled merely on the ground that an appeal under Section 37 of the Arbitration and Conciliation Act is pending.A bench of Justices Manoj Misra and Ujjal Bhuyan heard the case where the appellant (award-holder/decree-holder) sought execution of the arbitral award. The respondents (judgment-debtors) argued that since a Section 37 appeal was pending against the dismissal of their Section 34 objections, the execution should be...

S. 37(1)(a) Arbitration Act | Clause Restricting Interest On Delayed Payments By Itself Won't Bar Pendente Lite Interest : Supreme Court

The Supreme Court on Tuesday (Sep.2) observed that an Arbitral Tribunal can grant pendente lite interest unless expressly or impliedly barred in the contract. It added that a contractual clause barring interest on delayed payments does not prevent an arbitral tribunal from awarding pendente lite interest, i.e., the interest for the period during which the arbitration is pending. “…arbitral tribunal can be denuded of its power to award pendente lite interest only if the agreement/ contract...

Arbitration | Delivery Of Award To Govt Official Not Connected With Case Doesn't Amount To Valid Service On State : Supreme Court

The Supreme Court has clarified that when the government or one of its departments is a party to arbitration, delivery of an arbitral award to an official who is not connected with or aware of the proceedings cannot be treated as valid service for commencing the limitation period to challenge the award. Citing its ruling of Union of India vs. Tecco Trichy Engineers & Contractors (2005), the Court said that the delivery of the copy of the arbitral award should be made to the “party to the...