Successor To Merger Transaction Can Invoke Arbitration Clause When All Rights And Liabilities Are Transferred: Calcutta High Court

The Calcutta High Court bench of Justice Shampa Sarkar has held that once all liabilities, rights, and obligations are transferred to an entity through a merger approved by the competent forum, the arbitration clause contained in a loan agreement executed between the parties prior to the merger can be invoked by a third party that has acquired all such rights and liabilities post-merger. Brief Facts: This application has been filed under section 11(6) of the Arbitration and ...

MSME Council Cannot Reject Arbitrable Claims Without Providing Any Reasons When Meditation U/S 18 Of MSME Act Has Failed: Calcutta HC

The Calcutta High Court bench of Justice Shampa Sarkar has held that the Micro, Small and Medium Enterprises (MSME) Facilitation Council cannot reject the arbitrable claims of the supplier without providing an opportunity to present evidence in support of the same, especially when mediation, as required under Section 18 of the Micro, Small and Medium Enterprises Development Act, 2006 (MSME Act) has failed. As per law, the Council is then mandated to either adjudicate the arbitrable matter...

Clause Empowering Contract Signatories To Resolve Disputes Does Not Constitute A Valid Arbitration Agreement Due To Lack Of Impartiality: Calcutta HC

The Calcutta High Court bench of Justice Shampa Sarkar has held that merely because a dispute resolution mechanism is provided in a clause empowering the signatories to the contract to resolve the dispute, it cannot be inferred that the parties intended to refer the dispute to arbitration. Such a clause amounts to an in-house mechanism and not a reference to an impartial arbitral tribunal, especially when impartiality is clearly lacking as the very individuals who signed the contract are...

Arbitration Clause Contained In Incomplete Memorandum Of Understanding Cannot Form Basis For Arbitration Proceedings: Calcutta HC

The Calcutta High Court bench of Justice Shampa Sarkar has held that an arbitration clause in a memorandum of understanding that was not finalized, as indicated by the correspondences between the parties, cannot serve as the basis for initiating arbitration proceedings. Brief Facts: In October 2020, the Respondent approached the petitioner and they reached an oral agreement with respect to sale and takeover of assets, plants and machinery for Rs. 21 crores. It was further agreed that...

Directions For Refund Of Consideration With Interest Must Be Considered Based On Conduct Of Parties During Arbitral Proceedings: Calcutta HC

The Calcutta High Court has held that in arbitral proceedings, the direction for refund of the deposited consideration amount with interest has to be considered in the background of the conduct of the parties and their admissions during the proceedings.A division bench of Justices Soumen Sen and Biswaroop Chowdury held:The learned arbitrator rejected the claim for specific performance of the contract as claimed by the present appellants. However, the appellants were directed to refund the sum of...

Court Can Decline To Refer Dispute To Arbitration When Time-Barred Claim Is Evident From Record: Calcutta High Court

The Calcutta High Court bench of Justice Shampa Sarkar has held that when a claim is ex facie time-barred and no trial is needed to determine whether it is barred by limitation, the referral court can refuse to refer the matter to arbitration under Section 11 of the Arbitration and Conciliation Act, 1996 (Arbitration Act). Brief Facts: This application has been filed under section 11 of the Arbitration Act seeking appointment of an arbitrator to adjudicate disputes arising from...

Composite Reference Of Disputes From Distinct Purchase Orders To Arbitration Is Valid When Parties' Conduct Indicates Single Transaction: Calcutta HC

The Calcutta High Court bench of Justice Shampa Sarkar has held that a composite reference of disputes to arbitration arising out of distinct purchase and service orders can be made when the conduct of the parties demonstrates that they were all part of a single business transaction. Brief Facts: The petitioner was engaged as an agent-cum-sub-contractor by the respondent, for procurement, setting-up, erection, commissioning and maintenance of solar power installations for projects,...

Prescribing Pre-Qualification Criteria By Authority In Tender Document Cannot Be Considered Arbitrary If Conditions Are Reasonable: Calcutta HC

The Calcutta High Court bench of Chief Justice T.S. Sivagnanam and Justice Chaitali Chatterjee Das has held that the imposition of pre-qualification conditions by the tender-inviting authority cannot be interfered with by the courts when sufficient guidelines have been provided in the tender documents on how the authority's discretion shall be exercised. Brief Facts: The writ petitioner is a partnership firm and has set up a unit in BHARUCH, Gujrat for converting High density...

Non-Signatories To Arbitration Agreement Can Be Made Party To Dispute If Reliefs Sought Against Them Align With Those Sought Against Signatories: Calcutta HC

The Calcutta High Court bench of Justices Sabyasachi Bhattacharyya and Uday Kumar has observed that if the reliefs against the non-signatories to the arbitration agreement are in harmony with the reliefs sought against the signatories, particularly when the legal relationship between the signatories and non-signatories are on the same platform vis-a-vis the cause of action of the suit and the reliefs claimed, then the non-signatories could very well be brought within the purview of the ...

Tendering Authority Is Best Judge To Decide T&C Of Tender, Judicial Interference Permissible Only When Terms Are Arbitrary: Calcutta HC

The Calcutta High Court bench of Chief Justice T.S. Sivagnanam and Justice Chaitali Chatterjee (Das) has held that tender issuing authority is the best judge to decide terms and conditions of a tender. Such terms and conditions cannot be tinkered with by the Judicial Authority unless they are found to be arbitrary or whimsical. Brief Facts: A writ petition was filed by the Appellant seeking a writ of mandamus to set aside, rescind or modify the e-tender issued on September 18, 2024...

Writ Petition Is Not Maintainable When Effective And Efficacious Remedy In Form Of Arbitration Is Available: Calcutta High Court

The Calcutta High Court Bench of Chief Justice T.S. Sivagnanam and Justice Hiranmay Bhattacharyya held that it cannot entertain a writ petition if an effective and efficacious remedy, in the form of arbitration, is available. It said that the High Court would normally exercise its jurisdiction in 3 contingencies namely (i) when the writ petition was filed for enforcement of any fundamental rights, (ii) where there has been violation of principle of natural justice, or (iii) where the order...

Loss Of Profit In Works Contracts Can Be Awarded Upon Illegal Termination, Even In Absence Of Direct Proof: Calcutta High Court

The Calcutta High Court division bench of Justice Soumen Sen and Justice Biswaroop Chowdhury has held that once a contractor establishes an illegal and unjustified termination of the contract by the employer, there is no need to prove the actual loss suffered. A reasonable expectation of profit is implicit in a works contract, and compensation must be awarded accordingly. The court distinguished between claims for 'loss of profit' (resulting from unexecuted work due to illegal or...