Newsletter-Arbitration Case

Landmark judgment on determination of Seat of Arbitration – Arif Azim Co. Ltd. Vs. Micromax Informatics FZE – Supreme Court

This judgment covers:
(i) Notional Doctrine of Concurrent Jurisdiction and Applicability of Part I of the Arbitration & Conciliation Act, 1996.
(ii) Criterion or Test for Determination of Seat of Arbitration: Conflict of ‘Venue’ versus ‘Seat’ of Arbitration.
(iii) Closest Connection Test – Place of Arbitration to be ascertained by the Law governing the Arbitration Agreement and not the Place of Arbitration.
(iv) The Shashoua Principle – ‘Venue’ to be construed as ‘Seat’.
(v) Non-exclusive jurisdiction clause in arbitration agreement.
(vi) Doctrine of Forum non Conveniens.

Landmark judgment on determination of Seat of Arbitration – Arif Azim Co. Ltd. Vs. Micromax Informatics FZE – Supreme Court Read Post »

The limited jurisdiction of the referral Courts under Section 11 of Arbitration and Conciliation Act, 1996 must not be misused by parties in order to force other parties to the arbitration agreement to participate in a time-consuming and costly arbitration process – GOQII Technologies Pvt. Ltd. Vs. Sokrati Technologies Pvt. Ltd. – Supreme Court

Hon’ble Supreme Court held that the limited jurisdiction of the referral Courts under Section 11 must not be misused by parties in order to force other parties to the arbitration agreement to participate in a time-consuming and costly arbitration process. This is possible in instances, including but not limited to, where the claimant canvasses the adjudication of non-existent and mala fide claims through arbitration. With a view to balance the limited scope of judicial interference of the referral Courts with the interests of the parties who might be constrained to participate in the arbitration proceedings, the Arbitral Tribunal may direct that the costs of the arbitration shall be borne by the party which the Tribunal ultimately finds to have abused the process of law and caused unnecessary harassment to the other party to the arbitration.

The limited jurisdiction of the referral Courts under Section 11 of Arbitration and Conciliation Act, 1996 must not be misused by parties in order to force other parties to the arbitration agreement to participate in a time-consuming and costly arbitration process – GOQII Technologies Pvt. Ltd. Vs. Sokrati Technologies Pvt. Ltd. – Supreme Court Read Post »

Whether the period spent in pursuing proceedings under the IBC is liable to be excluded while computing the limitation period for filing the application under Section 11(6) of Arbitration and Conciliation Act, 1996? | Whether the principles contained in Order 23 Rule 1 of the CPC will apply to an application under Section 11(6)? | Whether the benefit of Section 5 and 14 of the Limitation Act is available in respect of an application for appointment of arbitrator under Section 11(6) of the Arbitration Act? – HPCL Bio-Fuels Ltd. Vs. Shahaji Bhanudas Bhad – Supreme Court

In this landmark judgment, following issues are covered:
(i) Scope and applicability of Order 23 Rule 1 of the CPC to proceedings other than suits.
(ii) Whether the principles contained in Order 23 Rule 1 of the CPC will apply to an application under Section 11(6) of the Act, 1996.
(iii) Important aspect while applying the principles of Order 23 Rule 1 to applications under Section 11(6) of the Act, 1996.
(iv) Withdrawing Section 11 application to file application under Section 9 of IBC, it would no longer be open to it to file a fresh application for appointment of arbitrator without having obtained the liberty of the court to file a fresh application at the time of the withdrawal.
(v) Whether the period spent in pursuing proceedings under the IBC is liable to be excluded while computing the limitation period for filing the application under Section 11(6)?
(vi) Ingredients need to be fulfilled for the applicability of Section 14(1) of the Limitation Act.
(vii) Conditions required to be fulfilled for seeking the benefit of exclusion under Section 14(2) of the Limitation Act.
(viii) Key difference between sub-sections (1) and (2) of Section 14 of the Limitation Act.
(ix) Interpretation of the expression “other cause of a like nature” used in Section 14 of the Limitation Act.
(x) A Section 11 petition is in the nature of an ‘application’ and cannot be considered to be a ‘suit’ for the purposes of the Limitation Act.
(xi) Application under Section 11(6) of the Arbitration Act is not for the same relief as an application under Section 9 of the IBC.
(xii) Insolvency proceedings are fundamentally different from arbitration proceedings etc.
(xiii) Whether the benefit of condonation of delay under Section 5 of the Limitation Act is available in respect of an application for appointment of arbitrator under Section 11(6) of the Act, 1996?
(xiv) Whether it is permissible for the courts to condone delay under Section 5 of the Limitation Act in the absence of any application seeking such condonation?

Whether the period spent in pursuing proceedings under the IBC is liable to be excluded while computing the limitation period for filing the application under Section 11(6) of Arbitration and Conciliation Act, 1996? | Whether the principles contained in Order 23 Rule 1 of the CPC will apply to an application under Section 11(6)? | Whether the benefit of Section 5 and 14 of the Limitation Act is available in respect of an application for appointment of arbitrator under Section 11(6) of the Arbitration Act? – HPCL Bio-Fuels Ltd. Vs. Shahaji Bhanudas Bhad – Supreme Court Read Post »

The Court must only conduct a limited enquiry for the purpose of examining whether Section 11(6) of Arbitration & Conciliation Act, 1996 application filed within the limitation period of three years or not, it would not be proper to enquiry whether the claims are time barred | Arbitral Tribunal may impose arbitration costs on petitioner if claims are time-barred – Aslam Ismail Khan Deshmukh Vs. Asap Fluids Pvt. Ltd. and Anr. – Supreme Court

Hon’ble Supreme Court held that while determining the issue of limitation in the exercise of powers under Section 11(6), the referral court must only conduct a limited enquiry for the purpose of examining whether the Section 11(6) application has been filed within the limitation period of three years or not. At this stage, it would not be proper for the referral court to indulge in an intricate evidentiary enquiry into the question of whether the claims raised by the petitioner are time barred. Such a determination must be left to the decision of the arbitrator.

The Court also held that the arbitral tribunal may direct that the costs of the arbitration shall be borne by the party which the Tribunal ultimately finds to have abused the process of law and caused unnecessary harassment to the other party to the arbitration.

The Court must only conduct a limited enquiry for the purpose of examining whether Section 11(6) of Arbitration & Conciliation Act, 1996 application filed within the limitation period of three years or not, it would not be proper to enquiry whether the claims are time barred | Arbitral Tribunal may impose arbitration costs on petitioner if claims are time-barred – Aslam Ismail Khan Deshmukh Vs. Asap Fluids Pvt. Ltd. and Anr. – Supreme Court Read Post »

Does the rejection of an application to set aside an award filed under Section 34 of the Arbitration and Conciliation Act, 1996, due to lack of jurisdiction, fall within the ambit of Section 37(1)(c)? | Can a petition under Section 11 for the constitution of an arbitral tribunal be recognised as an application made to a Court? – CP Rama Rao Sole Proprietor Vs. National Highways Authority of India – Delhi High Court

Hon’ble Delhi High Court held that the District Judge has taken the position that by virtue of the Section 11 petition having been preferred before this Court and the said circumstance being relevant for the purposes of Section 42, the petition for setting aside could have only been instituted before the High Court. That order clearly cannot be described to be a refusal to set aside an award on grounds which are specified and spoken of in Section 34(2) of the Act.

The Hon’ble Court further held that the District Judge has clearly taken an erroneous view in holding that a petition under Section 11 is one made to a court and which would consequently attract Section 42 of the Act.

Does the rejection of an application to set aside an award filed under Section 34 of the Arbitration and Conciliation Act, 1996, due to lack of jurisdiction, fall within the ambit of Section 37(1)(c)? | Can a petition under Section 11 for the constitution of an arbitral tribunal be recognised as an application made to a Court? – CP Rama Rao Sole Proprietor Vs. National Highways Authority of India – Delhi High Court Read Post »

The word “examine” occurring in Section 11 (6A) of the Arbitration Act intends that the Referral Court has to make a scrutiny for the existence of the arbitration agreement and the said expression does not employ the contested inquiry – Haresh Nagjibhai Ramani and Ors. Vs. Uday Dineshchandra Bhatt and Ors. – Gujarat High Court

Hon’ble Gujarat High Court held that the issues non-arbitrability of the dispute or whether the fraud alleged permeates the whole arbitration agreement making it impossible for the arbitral tribunal to adjudicate the dispute are outside the limited scope of inquiry at the pre-referral stage under Section 11 (6) of the Arbitration and Conciliation Act, 1996.

The word “examine” occurring in Section 11 (6A) of the Arbitration Act intends that the Referral Court has to make a scrutiny for the existence of the arbitration agreement and the said expression does not employ the contested inquiry – Haresh Nagjibhai Ramani and Ors. Vs. Uday Dineshchandra Bhatt and Ors. – Gujarat High Court Read Post »

Can Arbitrator change the venue of arbitration without the consent of all the parties? – Dhule Municipal Commissioner Vs. Borse Borthers Engineers and Contractors Pvt. Ltd. – Bombay High Court

In this important judgment, Hon’ble Bombay High Court referring various judgment held that even assuming that the venue is stipulated in the agreement, and the neutrality of venue comes in sharp focus on account of dominant position of one of the party at a particular venue i.e. if the arbitrator concludes that conducting the arbitration proceedings at the specified venue is detrimental to the arbitration process, he may shift the venue to an alternate conveniently located place. This exercise should be permitted as the arbitrator discharges quasi-judicial functions.

Can Arbitrator change the venue of arbitration without the consent of all the parties? – Dhule Municipal Commissioner Vs. Borse Borthers Engineers and Contractors Pvt. Ltd. – Bombay High Court Read Post »

Can a party who applied for a reference under Section 8 of Arbitration and Conciliation Act, 1996, withdraw the application? | Does opposite party have legal right to oppose the withdrawal of the application? – Sultan Chand and Sons Pvt. Ltd. Vs. Kartik Sharma – Delhi High Court

Hon’ble Delhi High Court held that:

(i) The right to seek a reference to Arbitral Tribunal under Section 8 of the Arbitration and Conciliation Act, 1996 is a right available solely to the defendant.
(ii) The Apex Court has not stated that the defendant has no option to withdraw an application filed under Section 8 of the Act.
(iii) Since the Defendant herein has now withdrawn his application and does not wish to seek a reference to arbitration, the Plaintiff has no legal right to oppose the withdrawal and/or insists that the matter be referred to arbitration.

Can a party who applied for a reference under Section 8 of Arbitration and Conciliation Act, 1996, withdraw the application? | Does opposite party have legal right to oppose the withdrawal of the application? – Sultan Chand and Sons Pvt. Ltd. Vs. Kartik Sharma – Delhi High Court Read Post »

The observations made in an order deciding an application under Section 11 of the Arbitration and Conciliation Act, 1996, cannot be construed as a final determination on the issue of limitation – Home and Soul Pvt. Ltd. Erstwhile Known as Vertical Limits Infratech Pvt. Ltd. Vs. T.V. Today Network Ltd. Erstwhile Known as Mail Today Newspapers Pvt. Ltd. – Delhi High Court

Hon’ble Delhi High Court held that the order under Section 11 is passed at a preliminary stage, where the disputes sought to be referred to arbitration are broadly outlined. It is only during the arbitration proceedings, when the statement of claims and counterclaims are presented, that the foundation facts fully emerge for consideration.

The observations made in an order deciding an application under Section 11 of the Arbitration and Conciliation Act, 1996, cannot be construed as a final determination on the issue of limitation – Home and Soul Pvt. Ltd. Erstwhile Known as Vertical Limits Infratech Pvt. Ltd. Vs. T.V. Today Network Ltd. Erstwhile Known as Mail Today Newspapers Pvt. Ltd. – Delhi High Court Read Post »

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