May 15 to May 21, 2022

Novation of the partnership deed, the arbitration clause contained in the deed can be invoked: Supreme Court of Bombay

Case Title: Praful A. Mehta v. Nainesh M. Gandhi

The Bombay High Court ruled that the allegation of forgery should be dealt with at the trial stage before the arbitrator.

The Single Chamber of Justice AK Menon rejected the argument that an arbitration clause cannot be invoked due to the novation of the agreement containing the arbitration clause. The Court added that even if there had been a novation of the partnership deed containing an arbitration clause, an arbitrator could be appointed to adjudicate disputes against the partner in respect of the associated company.

Calcutta High Court

MSME Council’s conclusion on its jurisdiction not an interim decision: Calcutta High Court

Case Title: Port Board of Syama Prasad Mookerjee, Kolkata v Marinecraft Engineers Private Limited

Case citation: 2022 LiveLaw (Cal.) 194

The Calcutta High Court has ruled that the decision of the MSME Council on its jurisdiction is an order under Section 16 of the A&C Act and cannot be characterized as an interim decision which can be directly challenged under the Section 34 of the A&C Act pending arbitration. on the other issues.

The Single Bench of Judge Ravi Krishan Kapur has ruled that the order of the MSME Council which relates to its jurisdiction shall pass the exercise of Section 16(5) and Section 16(6) of the A&C Act and the aggrieved party must wait until the award of the final award.

No instructions may be given to sell property to a third party in Section 9 Petition of the A&C Act: High Court of Calcutta

Case title: Aditya Birla Finance Ltd v Mcleod Russel India Ltd. and Ors.

Case citation: 2022 LiveLaw (Cal.) 189

The Calcutta High Court has ruled that no instruction can be given to sell property to a third party in the A&C Act Section 9 petition.

The Single Bench of Judge Moushumi Bhattacharya held that an instruction to sell the property in question to a foreigner who was not a party to the arbitration proceedings would cause the property to be removed from the arbitration belt and the purpose of a claim under Article 9 itself would be defeated.

Delhi High Court:

Claims Rejected by Resolution Practitioner in Insolvency Proceedings, to be Decided by Adjudicator: Delhi High Court

Case Title: Bharat Petroresources Limited v JSW Ispat Special Products Limited

Citation: 2022 LiveLaw (Del) 469

The Delhi High Court ruled that the claims rejected by Resolution Professional in the insolvency proceedings on the grounds that they arose after the Insolvency Commencement Date (ICD) should be decided by the arbitrator.

The Single Bench of Judge Vibhu Bakhru held that the extinguishment of claims that arose after the Insolvency Commencement Date (ICD) is a contentious issue to be decided by the arbitrator when the parties have entered into an arbitration agreement .

Costs of adjournment on damages, no obligation to pay where damages themselves are not payable: Delhi High Court

Case Title: Haryana Vidyut Prasaran Nigam Ltd. (HVPNL) against Cobra Instalaciones Y Services SA and Shyam Indus Power Solution Pvt. ltd. JV

Citation: 2022 LiveLaw (Del) 454

The Delhi High Court ruled that there would be no question of recovering adjournment costs from the agreed damages where the agreed damages are not themselves due.

The Vibhu Bakhru Single Court of Justice held that the adjournment costs cannot be treated as separate costs payable, whether or not damages are payable. The Court held that these would only be payable when the damages are found to be due.

NHAI challenges arbitral tribunal’s fixing of costs, Delhi High Court says tribunal can fix its costs

Case Title: National Highway Authority of India v MEP Chennai Bypass Toll Road Pvt. ltd. & Anr.

Citation: 2022 LiveLaw (Del) 453

The Delhi High Court has ruled that the Arbitral Tribunal is authorized to fix its fees, if its appointment is made by means of an ad hoc agreement between the parties.

The single bench of Judge Sanjeev Narula held that where the arbitral tribunal has accepted his appointment outside the mandate of the International Center for Alternative Dispute Resolution (ICADR), it is entitled to determine its fees and is not bound by ICADR rules. The Court upheld the order of the Arbitral Tribunal setting the arbitration fees separately for claims and counterclaims.

Mere expectation of insolvency petition is no impediment to appointment of arbitrator: Delhi High Court

Case Title: Millennium Education Foundation v Educomp Infrastructure and School Management Limited

Citation: 2022 LiveLaw (Deleted) 449

The Delhi High Court has ruled that the mere expectation of an insolvency petition under Section 9 of the IBC is not a bar to the appointment of an arbitrator.

Judge Sanjeev Sachdeva’s single bench ruled that the mere fact that an insolvency petition is pending cannot constitute an embargo on the Court’s power to adjudicate on arbitration claims. The Court added that it is only when the insolvency claim is granted and the moratorium is declared that proceedings under the Arbitration Act cannot be continued.

High Court of Madhya Pradesh:

A party cannot directly request the appointment of the arbitrator if the agreement provides for a pre-arbitration reference to a competent authority: High Court of Madhya Pradesh

Business Title: Dharmadas Tirthdas Construction Pvt. ltd. against the Government of India and Ors.

The High Court of Madhya Pradesh ruled that the court cannot appoint the arbitrator when the claimant has failed to fulfill the suspensive condition of submitting the dispute to the Superintendent Engineer.

The Vivek Rusia Single Chamber of Justice has deemed the pre-arbitration steps mandatory, failure to comply with which will result in the rejection of the request for the appointment of the arbitrator.

Madras High Court:

Arbitral award rendered mechanically, awarding lower value for land acquired under NHL: Madras High Court returns case to arbitrator

Title of Case: Union of India v. J. Auuamar and Ors.

Citation: 2022 LiveLaw (Mad) 221

The Madras High Court has ruled that an arbitration award made by the District Collector giving lower value to landowners in respect of land acquired under the National Roads Act 1956 without following the mandate of the Section 3G(7) of the National Highways Act, is rendered mechanically.

The bench, consisting of Justices R. Subramanian and N. Sathish Kumar, remitted the case to the arbitrator to re-determine the value of the land acquired under the National Roads Act in accordance with Article 3G (7) of the National Roads Act..

Orissa High Court:

Invocation of the arbitration clause in the bidding document is only possible if the purchase order is placed: Orissa High Court

Case Title: Emcure Pharmaceuticals Ltd v Managing Director, Odisha State Medical Corporation and Others

The Orissa High Court has held that until a purchase order is issued by the bidder pursuant to the acceptance of an offer to supply, no “contract” is made between the parties and, by therefore, the arbitration clause contained in the solicitation document is not drawn.

Single Bench Chief Justice Dr. S. Muralidhar reiterated that the arbitration clause contained in the solicitation document was not an arbitration agreement in praesenti, but a provision that was to come into force in the future, if a purchase order was placed.

High Court of Rajasthan:

Proceedings under A&C Act and SARFAESI Act can be invoked concurrently: Rajasthan High Court Reiterates Legal Position

Case Title: Om Prakash Kumawa v Hero Housing Finance Ltd.

The Rajasthan High Court has ruled that proceedings under the A&C Act and the SARFAESI Act can be invoked simultaneously.

The single bench of Judge Mahendra Kumar Goyal held that the existence of an arbitration clause and the filing of a request under Article 9 of the A&C Act do not prevent the commencement of proceedings under the SARFAESI Act.

Delay tolerance | S.5 Limitation Act Not applicable to proceedings U/S 34 Arbitration & Conciliation Act: Rajasthan High Court

Case title: State of Rajasthan and Anr. against M/s. Godhara construction company

Citation: 2022 LiveLaw (Raj) 162

The High Court of Rajasthan observed that the provision of Section 5 of the Indian Limitation Act does not apply to proceedings under Section 34 of the Arbitration and Conciliation Act 1996.

The Single Bench of Judge Anoop Kumar Dhand observed that the proviso in Section 34(3) of the 1996 Act empowers the court, if satisfied that the plaintiff has been prevented, for sufficient cause, to submit its request within the said three-month period, to further extend the period and to file the request for annulment of the arbitral award by 30 days but not beyond.

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