Non-Signatory Group Companies Cannot Be Automatically Impleaded In Arbitration: Bombay High Court

The Bombay High Court has recently held that every group company connected to a commercial transaction cannot automatically be dragged into arbitration just because it belongs to the same corporate group as a signatory party or played some role in the underlying transaction. Explaining the scope of the “group of companies” doctrine, Justice Somasekhar Sundaresan held, “What becomes clear is that whether a non-signatory is a veritable party to the arbitration agreement is the subject matter...

Bombay High Court Finds Prolonged Detention In Cheque Bounce Case “Shockingly Disproportionate”

The Bombay High Court on 5 May held that prolonged incarceration of a cheque bounce convict solely for non-payment of compensation is ex-facie unreasonable, excessively harsh and "shockingly disproportionate". A Bench of Justice N.J. Jamadar modified the default sentence imposed on Cyrus Noshirwan Kartak, the Director of Mintaur Engineering Private Limited in 17 cheque dishonour cases to the period already undergone and directed his release. He observed:“Default sentence is...

Arbitral Tribunal's Refusal To Implead Proposed Parties Is Appealable: Bombay High Court

The Bombay High Court has held that where an arbitral tribunal finds it lacks jurisdiction over persons sought to be added to arbitration proceedings, such a decision can be challenged, though it declined to interfere with such a refusal in a dispute between two partners in a property development firm. Justice Somashekar Sundaresan held that such intervention may be necessary because, “if the arbitration proceedings are conducted entirely without the involvement of someone who is later...

Treating Returns Of Allotment Penalty Provision To Exclude Adjudicating Officer's Discretion Unconstitutional: Bombay HC

The Bombay High Court has held that penalties for defective filings relating to the issuance of securities cannot be imposed through a mechanical computation exercise without examining the nature, gravity, and impact of the default. It also called arbitrary the multiplication of penalties based solely on the number of directors on a company's board, while modifying a ₹64 lakh penalty imposed on a Nidhi company and its directors. Justice Somasekhar Sundaresan, hearing a petition by N.S.J.L...

Bombay High Court Flags 'Industrial Scale' Bank Recovery Proceedings Through Self-Chosen ODR Platforms

The Bombay High Court recently cautioned that banks conducting recovery proceedings “at an industrial scale” through self-chosen Online Dispute Resolution (ODR) platforms risk concentrating multiple disputes before the same arbitrator. The court held that banks cannot sidestep the requirement of independent arbitral appointments by offering borrowers a purported choice from a list of ODR platforms curated by the bank itself. “In any case, for a bank to conduct recovery proceedings at an...

Bombay High Court Holds Arbitral Tribunal Cannot Rewrite EPC Contract Or Shift Contractual Risk

The Bombay High Court has partly set aside an arbitral award in favour of KEC International Ltd. in its dispute with Central Railway, holding that the Arbitral Tribunal went beyond the contract by treating increased earthwork quantities as a change in scope and granting additional payment. Justice Sharmila U. Deshmukh observed that a lump sum EPC contract places the risk of quantity variations and site conditions on the contractor. This risk cannot later be shifted to Central Railway through...

Bombay High Court Refers Talent Management Firm's Dispute With YouTuber Prajakta Koli To Arbitration

The Bombay High Court recently referred disputes between Singapore-based talent management firm OneDigital Entertainment Pte Ltd. and YouTuber-actor Prajakta Koli to arbitration. A single bench of Justice Sandeep V. Marne appointed former Bombay High Court judge Justice Sadhana Jadhav as the sole arbitrator to adjudicate disputes arising out of a Performance of Artists Management Agreement dated September 10, 2015. OneDigital had approached the High Court seeking interim relief before the...

Bombay High Court Grants Interim Injunction Against Unauthorised Online Sale Of CARALL Car Perfume Products

The Bombay High Court has granted an interim injunction against several online retailers and importer Gautam Sanjay Mane, who were accused of selling "CARALL" car perfume products on e-commerce platforms without authorisation from trademark owner Harukado Co. Ltd. Justice Sharmila U. Deshmukh's May 7 order extended protection that had earlier been granted on April 29 to the remaining parties, none of whom appeared before the court or filed a response despite being served. Harukado Co. Ltd. had...

Bombay High Court Pulls Up Petitioner Over Plea To Stay Sir Ratan Tata Trust Board Meeting, Petition Withdrawn

The Bombay High Court on Wednesday disposed of as withdrawn a petition seeking a stay on the May 16 board meeting of the Sir Ratan Tata Trust (SRTT) after expressing serious displeasure over the manner in which the proceedings were instituted.A vacation bench of Justices Advait Sethna and Sandesh Patil expressed shock after noting that petitioner Suresh Patilkhede had sought a stay on the SRTT board meeting based on representations pending before the Charity Commissioner even though those...

Bombay High Court Allows Builder To Pursue Fresh Arbitration Despite Appeal Against Earlier Award

The Bombay High Court has allowed Vardhaman Builders to pursue fresh arbitration for damages over the termination of a redevelopment agreement, despite a pending appeal against an earlier arbitral award in the same dispute. Justice Sandeep V. Marne noted that the Supreme Court had refused to interfere with an earlier Bombay High Court order that allowed Vardhaman Builders to pursue fresh arbitration limited to damages. He held, “The Apex Court has permitted continuation of parallel...

Bombay High Court Rejects TVS, Kalelkar Pleas To Dismiss Laser Marking Patent Suits; Imposes ₹1 Lakh Costs

The Bombay High Court has refused to throw out patent infringement suits over laser marking and engraving technology filed by inventor Bharat Bhogilal Patel against TVS Electronics Limited and Kalelkar Surgicals Private Limited, holding that the dispute must go to trial. The court also imposed ₹1 lakh costs on both. “Several triable issues will arise, and thus, the question of a summary dismissal of the Suits at this stage does not arise,” Justice Arif S. Doctor said. Patel's suits relate to...

Nine Years Of Silence In Arbitration Equals Abandonment Under Section 32(2)(c): Bombay High Court

The Bombay High Court on 8 May held that prolonged inactivity in arbitral proceedings, coupled with absence of any steps for nearly nine years, amounted to implied abandonment, resulting in termination of proceedings under Section 32(2)(c) of the Arbitration and Conciliation Act, 1996. Justice Sandeep V. Marne dismissed the plea seeking appointment of a substitute arbitrator, holding that the arbitral proceedings stood terminated and could not be revived. He observed: “It is incomprehensible...