Latest Judgments on Arbitration and Conciliation Act, 1996

Latest Judgments on Arbitration and Conciliation Act, 1996

The ‘Arbitration and Conciliation Act 1996’ is an Act that regulates domestic arbitration in India. It was amended in 2015 and further amendment passed in Lok Sabha on 1 August 2019. The Government of India decided to amend the Arbitration and Conciliation Act, 1996 by introducing the Arbitration and Conciliation (Amendment) Bill, 2015 in the Parliament. In an attempt to make arbitration a preferred mode of settlement of commercial disputes and making India a hub of international commercial arbitration, the President of India on 23 October 2015 promulgated an Ordinance (Arbitration and Conciliation (Amendment) Ordinance, 2015) amending the Arbitration and Conciliation Act, 1996. The Union Cabinet chaired by the Prime Minister, had given its approval for amendments to the Arbitration and Conciliation Bill, 2015.

1) Barminco Indian Underground Mining Services LLP v. Hindustan Zinc Limited (Rajasthan High Court). Decided on 20 July, 2020

Facts: – The applicant Company Barminco Indian Underground Mining Services is a Limited Liability registered under Limited Liability Partnership Act, 2008.  On 11.03.2019, the applicant entered into a contract to provide its services for development of Rampura Agucha Mine of the respondent Hindustan Zinc Limited. According to the applicant, it had duly deployed its resources, manpower and machinery in terms of the contract with a view to perform the work awarded to it. During the course of performance of the work, applicant raised certain invoices, which were duly paid by the respondent – HZL, whereafter, the invoices for February, 2020 and March, 2020 and the claim raised under the “Force Majeure” and “Change in Law Clauses” of the contract were not paid. As per the averments made in the application, citing that the Contract in question was “financially unviable”, the respondent- HZL sought re-negotiation of the terms of the Contract and requested the applicant to reduce the scope of work by 50%. As the applicant refused to accept such offer, the respondent, vide letter dated 19.04.2020, unilaterally terminated the contract w.e.f. 01.05.2020, alleging that the applicant had failed to honour Clause 15.3 of the Contract. The applicant thereafter demanded unpaid amount (Rs.32, 17, 30,998/-) towards the work already done from the month of January, 2020 to April, 2020. It is alleged by the applicant that as a counter-blast of the applicant’s claim, the respondent Company (HZL) vide its letter dated 29.04.2020, raised a claim of Rs.49.69 crores against it. Numerous e-mails were exchanged between the applicant and the respondent, which, for the present purposes are not of much relevance.

Decision: – It is hereby held that Rajasthan High Court is not endowed with or clothed with the jurisdiction to entertain and hear the present application under Section 9 of the Act of 1996. The jurisdiction to hear the present application, as per clause 2(1) (e) of the Act of 1996 read with Section 10(3) of the Commercial Courts Act, 2015 vests in Commercial Court, Udaipur.Keeping the spirit of the provisions of Rule 10 and 10-A of Order VII of the Code of Civil Procedure in mind, the application filed by the applicant M/s Barminco Indian Underground Mining Services LLP is hereby ordered to be returned to it.

Both the parties shall appear before the Commercial Court, Udaipur on 31.07.2020. The applicant shall either file fresh application or the application, which would be returned to it, by 31.07.2020.The applicant will be required to pay requisite/deficit Court fee (if any). The concerned court shall fix the next date(s) with the consent of the parties, albeit subject to its convenience and hear the application itself or consider the prayer for interim relief afresh, as deemed expedient.

2) Dharamvir khosla v. Asian Hotel (North) Limited, CS (Common). Decided on 21 July 2020

Facts: – The six suits before this Court seek similar reliefs based on similar licences. The prayers in the six suits by the plaintiffs are that they are licencees of the defendant in respect of shops at the shopping arcade in Hyatt Hotel, Bhikaji Cama Place, New Delhi and the terms of the licences, inter alia, were akin to an irrevocable licence in perpetuity in the said shop and thus the termination of their licences by the defendant vide termination notices dated 29th May, 2020 is illegal. Consequently, the plaintiffs in the four suits i.e. CS (COMM) Nos.189, 190 191 and 192 of 2020 inter alia seek a decree of declaration in respect of their status in the shops declaring them owners, execution of the documents of ownership, in the alternative, decree of declaring the licence in favour of the plaintiffs as an irrevocable licence in perpetuity besides injunction. In CS(COMM) Nos. 184 and 185 of 2020 the plaintiffs seek the decree of declaring the plaintiffs owners of irrevocable licenses and declaring them licensees in perpetuity.

Decision: – This Court held that prima facie rights are created in favour of the plaintiffs and the interest created in the land is in the nature of an arbitrable dispute in terms of the decision of the Supreme Court in Olympus Superstructures, Booz Allen and Vidya Drolia (supra), the suits and the applications are dismissed with liberty to the parties to avail remedy of arbitration.

3) Goodwill Non-woven (P) Limited v. X coal Energy and Resources Ltd, Decided on 9 June 2020

Facts:- The Petitioner, Goodwill Non-Wovens (P) Limited is a private limited company incorporated under the provisions of the Companies Act 1956 having its registered office at 54, Todermal Road, Bengali Market, New Delhi 110001. The petitioner was incorporated in the year 2008 for the purpose of undertaking the business of buying, selling, exporting, importing, manufacturing, various commodities. The present petition is instituted, filed, verified and signed by the Director of the petitioner Company, Mr. Ashok Jain, on the basis of a Board Resolution date 15 May, 2020. The respondent, XCoal Energy & Resources LLC., is a privately-owned global coal marketing and logistics company headquartered in Latrobe, Pennsylvania.The parties entered into a Contract dated March 10, 2020 (‘Contract’, for shot) for sale and delivery of 13,500MT of Consol BEFH US High CV Thermal Coal (‘Coal’, for short) at the designated port. As per Clause 12 of the Contract, petitioner was to make requisite payment to the respondent and in turn the respondent was to make the delivery of the Coal to the petitioner upon receipt of such payment.

 Decision: – The Hon’ble Supreme Court held that the effect of the submission made by Mr. Mr. Panda is that a petition under Section 9 of the Act cannot be maintained against a foreign party having no assets in India. This submission of Mr. Mr. Panda is by relying upon the 246th report of the Law Commission and on the words ‘enforceable and recognized under the provision of Part-II’ in proviso to Section 2(2) of the Act. Insofar as the said words are concerned, the same are to mean a contracting State to the conventions, on the basis of reciprocity shall recognize and enforce the awards made in the territory of another contracting State. There is no dispute that an Arbitral award made in USA is enforceable in India under Part-II of the Act. Thus, it is clear that, passing of orders/granting interim-measures under Section 9 does not presuppose existence of asset(s) in India. The bank guarantee, which is furnished/amount deposited pursuant to an order passed by a Court in India under Section 9 (as stated at “C” above) can be invoked/withdrawn by an Indian party in the eventuality, it succeeds in a foreign seated arbitration in satisfaction of the Award, even though the foreign entity may not have any assets in Indi

4) Blue coast infrastructure Development Private Ltd V. Blue coast Hotels Ltd and ors, Decided on 10 June, 2020

Facts: – Respondent No. 1 is a Public Listed Company in hotel business and previously owned the Park Hyatt Hotel in Goa. The case of the Petitioner is that Respondent No. 1 had participated in a bidding process and secured the right from Delhi International Airport Limited to develop a commercial space at Asset Area No. 3 measuring 5.3 acres at Aerocity, New Delhi International Airport. A Special Purpose Vehicle was floated by Respondent No. 1, namely, Silver Resort Hotel India Private Limited (hereinafter referred to as „Silver Resorts‟) to develop the Aerocity Project. A Development Agreement dated 26.02.2010 and an Infrastructure Development and Service Agreement dated 26.02.2010 were executed between DIAL and Silver Resorts. Contemporaneously Silver Resorts and the Petitioner entered into a Joint Development Agreement dated 10.03.2010, amended on 15.03.2010 and further amended on 30.03.2017. Under the JDA, Silver Resorts authorized the Petitioner to collect monies O.M.P. (I) (COMM) for construction of the Aerocity Project from prospective buyers, by leasing or sub-leasing the commercial spaces in the Project.

Decision: – Petition filed by Respondent No.1 in Bombay High Court for redemption of his property is still pending and its claims are yet to be adjudicated against Respondent No.2. Therefore, at present it cannot be argued by the Petitioner that Respondent No.2 is holding the sum of Rs.85 Crores as a Custodian of Respondent No.1, so as to be entitled to the reliefs sought herein. The judgments relied by the petitioner cannot come to his aid in these facts. In view of the above, the objection rose by Respondent No.2 on its being a non-party and non-signatory to the Arbitration Agreement, becomes irrelevant and does not require any further adjudication sought by the petitioner cannot be granted by this Court and the petition is accordingly dismissed. Pending application is also dismissed.

5) Hero wind Energy v. Inox Renewable Limited, Decided on 16 March 2020

Facts: – Inox Group of Companies and of which Inox Wind Ltd. (IWL), Inox Wind Infrastructure Services Ltd. (IWISL) and Inox Renewables Ltd. (IRL)are a part, developed a wind park at district Jaisalmer in Rajasthan. The said wind park comprises of several wind farms, and each of which wind together with land comprised therein and Wind Turbine Generators (WTGs) installed thereon is owned by different person / entity. The wind park, besides having wind farms, has certain common areas comprising of common entrance, internal roads for providing access from the exterior of the wind park to each of the wind farms and also common area where common infrastructure for common services is installed. The power / electricity generated from the WTGs on each wind farm is transmitted outside the wind park, through the common infrastructure for common services, comprising of internal lines and unit substation, 33 KV line and suitable metering arrangement, 33 KV cooling substation with necessary evacuation capacity, 33 KV common feeder, transmission lines, supporting transmission towers, electrical poles etc. Thereby, each wind farm owner is saved the separate expense of transmitting the power / electricity generated on his/its wind farm to the common grid, for power/electricity to become a saleable commodity. The position is akin to a multi-storied building comprising of several apartments on each floor and / or to a housing / industrial colony comprising of several houses / industrial units.

Decision: – The appeal is thus disposed of, by directing IWISL, IWL and IRL to within seven working days of (i) Hero paying a sum of Rs.2,74,17,222/- toIWISL, and, (ii) Hero paying O&M charges at the rate of Rs.4 lacs per WTG per annum, in advance for 16 WTGs, to IWISL, restart Feeder no.14 to which 16 WTGs on the wind farm of Hero were connected and to render shared services under the O&M Agreement read with Shared Services Contract to the said 16 WTGs on the wind farm of Hero. The aforesaid payments would be without prejudice to the rights and contentions of the parties and it would be open to the parties to, in the arbitral proceedings, whether already pending or to be commenced, make their respective claims and defences with respect thereto. If it is found that any amount paid in pursuant to this order was not due to IWISL, it will be open to the parties to in the arbitration proceedings, seek adjustment or appropriate orders withrespect thereto.

6) Ashwani Minda and M/S Jay Ushin limited v. M/S U-Shin Limited and M/S Minebea Mitsumi incorporated, Decided on 7 July, 2020

Facts: – The appellants in the present appeal (who were the petitioners before the learned Single Judge) are Mr. Ashwani Minda [hereinafter referred to as “AM”] and a company of which he is the Managing Director, viz. Jay Ushin Limited. Two companies incorporated in Japan have been impleaded as respondents in the petition as well as in this appeal. Respondent No. 1, U-Shin Limited was previously known as Yuhshin Company Limited. Respondent No. 2 is a company by the name of Minebea Mitsumi Inc. The basic agreement to which the present disputes relate is a Joint Venture Agreement dated 30.05.1986 to which USL and a partnership firm by the name of M/s Jay Industries was party. The partnership firm was represented by Mr. J.P. Minda who is the father of AM. The parties to the JVA agreed to establish a joint venture company for the primary purpose stated in clause 2.1 thereof, viz. manufacture and sale of automobile locks, steering locks and key ignition switches, door latches and combination switches for all categories of automobiles. JUL is the joint venture company created pursuant to the JVA.

Decision: – For the reasons aforesaid, the present appeal is disposed of with the following directions to the effect that the petition filed by the appellants under Section 9 of the Act was not maintainable, is affirmed. The appellants are at liberty to invoke such other remedies as may be available to them in law, including under the JCAA Rules. We make it clear that we have not expressed any view regarding the contentions raised by the parties before the arbitral tribunal, on jurisdiction or on merits. The question as to whether the parties have agreed to opt out of the applicability of Section 9 of the Act is left open, and may be agitated by the parties in subsequent proceedings, if necessary. The impugned judgment will not be treated as having decided this issue finally.

7) Parsvnath Developers Limited and ors V. Rail Land Development Authority, Decided on 19 May, 2020

Facts: – Respondent invited tenders from private parties for development of a plot measuring approximately 15.27 hectares situated at Sarai Rohilla, Kishan Ganj, New Delhi (hereinafter referred to as „Project Land‟) on 18.01.2010 through IL & FS Infrastructure Development Corporation Ltd. Respondent represented that Project Land belonged to Indian Railways and the tender was issued to put the land to effective commercial utilization. Project was to be executed through a Special Purpose Vehicle (hereinafter referred to as „SPV‟) i.e. Petitioner no.2. Project included re-development of existing Railway Colony over 4.37 hectares and development of balance 10.9 hectares. Tender process was in two phases wherein those bidders who qualified the requirements under Request for Qualification document were allowed to place their financial bids. Petitioner no.1 was declared successful with its bid of Rs.1651.51 Crores on 12.11.2010 and Respondent issued a Letter of Demand dated 12.11.2010 demanding payment of Rs.33, 03, 02,000/- as Commitment Security to commence and complete the Project. Petitioner no.1 paid the said amount from the account of SPV vide letter dated 25.11.2010. Respondent thereafter issued Letter of Acceptance dated 26.11.2010 awarding the work to Petitioner no.1. Respondent was aware that SPV was to implement the Project and finally by letter dated 07.02.2011, approved the work to be executed by the SPV.

Decision: – Court here held that it is satisfied that there exists an Arbitration Agreement between the parties and therefore, the disputes raised by the Petitioners herein deserve to be referred to Arbitration. The earlier proceedings are being conducted by Mr. Justice Vikramajit Sen, Former Judge of the Supreme Court, as a Nominee Arbitrator of the Respondent. Court  accordingly appoint Mr. Justice Vikramajit Sen, Former Judge of the Supreme Court, as the Nominee Arbitrator of the Respondent. The two Arbitrators shall proceed to appoint the Presiding Arbitrator as per the Arbitral Procedure agreed between the parties.The Learned Arbitrators shall give disclosure under section- 12 of the Act before entering upon reference. All contentions raised by the parties herein are left open to be decided by the Arbitral Tribunal, if and when raised.

8) Rajesh Gupta V. Smt. Mohit Lata Sunda and ors, Decided on May 27, 2020

Facts: – Respondent No. 1 claiming herself to be legal heir of Late Shri Jiwan Lal Sunda and also claiming to have inherited 1/3rd undivided share in Property No. W-34, Greater Kailash-2, New Delhi, measuring about 964 sq. yds. approached the Petitioner through an Estate agent and expressed her desire to sell her 1/3rd undivided share in the property. It was also represented that Late Shri Sunda and his wife Shrimati Savitri Sunda had died intestate, without executing any Will. Petitioner was also informed that Respondent No. 1 had filed a partition Suit with respect to the said property against the other two legal heirs, being her brother Shri Bharat Bhushan Sunda and sister Shrimati Hemlata Trehan. As per Respondent No. 1 the two siblings had already given their consent to the property being partitioned and Respondent No. 1 being entitled to 1/3rd undivided share.

Petitioner states that on the above premise, Petitioner entered into an Agreement to Sell dated 14.05.2018 with Respondent No. 1 qua her 1/3rd undivided share in the said property. Out of the total agreed sale consideration of Rs. 7.75 crores, Petitioner, under the Agreement to Sell, paid part consideration of Rs. 31,00,000/-, by way of a cheque, bearing No. 013199, dated 11.05.2018, drawn on RBL Bank, Rajouri Garden, New Delhi. The Agreement to sell was duly witnessed by one Shri Shiv Kumar resident of Greater Kailash-2, Delhi and one Shri Dheeraj Kumar, resident of Jharkhand, who had claimed to be legal advisors of Respondent No. 1.

Decision: – After examining the fact of the case, it is clear that before the execution of the Sale Deed, between the Respondents on 11.04.2019, Respondent No. 3 was fully aware of the Agreement to sell dated 14.05.2018, between the Petitioner and Respondent No. 1 and his rights in the property. Respondent No. 3 had even responded to the Public Notice issued by the Petitioner. Respondent No. 3 has thus stepped into the shoes of Respondent No. 1 in respect of her 1/3rd undivided share in the property in question and is an „Assignee‟ of Respondent No. 1. Following the judgment in case of Aerens the Arbitration Agreement between Petitioner and Respondent No. 1 would bind Respondent No. 3. Thus, in my view, this is a fit case for appointment of an Arbitrator under Section 11 (6) of the Act. Parties have leveled allegations of fraud against each other with respect to the execution of the various Agreements. It is settled law that this issue cannot be decided by this Court and is in he domain of the Arbitral Tribunal, in view of the judgments of the Supreme Court in Ameet Lalchand Shah and others v. Rishabh Enterprises and Another (2018) 15 SCC 678 and A. Ayyasamy. Under Section 11 of the Act, it is not open to this Court to go beyond the examination of the existence of the Arbitration Agreement. All other contentions of the respective parties are left open to be decided by the Tribunal, if so raised.

9) Quick Heal Technologies Limited V. NCS Computech private limited and ors. Decided on June 5, 2020

Facts: – The Petitioner Company is engaged in the business of development and manufacture of anti-virus software under the brand name “Quick Heal”, whose products are popularly known as “Quick Heal Range of Products”. Respondent No.1 is a Private Limited Company and is carrying on the business of distribution of software products. Respondent No.2 is a Partnership Firm and the sister concern of Respondent No.1 Company. In or around 2011, the Directors of Respondent No.1 and the Partners of Respondent No.2 approached the Petitioner and represented that they were desirous of selling and distributing the “Quick Heal Range of Products” developed and manufactured by the Petitioner and requested the Petitioner to appoint them as ‘Distributors’ for the same.  Pursuant to the discussions between the said parties, on 2 nd April, 2011, the Petitioner entered into a Software Distribution Agreement (‘the said Agreement’) with the Respondents. Clause 17 of the said Agreement pertains to Dispute Resolution and is reproduced.

 Decision: – The dispute resolution clause provided that all disputes under the agreement shall be amicably discussed for resolution by the designated personnel of each party, and if such dispute/s cannot be resolved within 30 daysthe same may be referred to arbitration. This was further preceded by following expression Disputes under this Agreement shall be referred to arbitration. Based on this clause, in an application under Section 11(6) of the Arbitration & Conciliation Act, 1996 (‘Arbitration Act), the Petitioner inter alia contended that the Second shall envisages disputes of all nature, without any qualification whatsoever, as the Clause starts with the words “Disputes under this Agreement” and not “Disputes as referred in Sub Clause (a) above”.

10) DSC Ventures Pvt Limited V. Ministry of Road Transport and Highway Union of India, Decided on 29 June, 2020

Facts: – The petitioner and respondent entered into a Concession Agreement, dated 8th May, 2003, whereunder the respondent was to convert an existing 2-lane highway, (NH-6) in the Raipur-Durg stretch in the state of Chhattisgarh, into a 4-lane highway. Disputes arose. Clause 19.2(a) of the Concession Agreement provided for reference of disputes to a three member arbitral tribunal, if efforts at resolution, by amicable settlement, were to fail.  Attempts for settlement of the disputes between the petitioner and respondent, failed. On 23rd March, 2007, the petitioner appointed its nominee arbitrator and, on 18th April, 2007, the respondent did likewise. The disputes were, somehow, referred, even thereafter, to the Steering Group of the respondent, for exploring settlement, but the effort resulted in failure, as reported by the Steering Group on 3rd May, 2010. The petitioner, thereupon, appointed Mr. B.P. Bhattacharya, as its arbitrator, on 18 th May, 2010, and the respondent, likewise, appointed Mr. S.C. Sharma as its arbitrator on 22nd April, 2014. The two arbitrators appointed Mr. G. Sharan as the presiding arbitrator on 30th May, 2014. The learned arbitral tribunal, in terms of Clause 19.2 (a) of the Concession Agreement, thus, stood constituted.

Decision: – The Court held that the arbitration clause, in the Concession Agreement between the petitioner and respondent (Clause 19.2(a)) specifically required issuance of a notice, by one party to the other, for appointment of an arbitrator. This procedure would, therefore, apply, equally, to the appointment of a substitute arbitrator, on the mandate of the arbitrator, of any one of the parties, standing terminated, on any of the grounds contemplated in Section 14 of the 1996 Act. Admittedly, no such notice was ever issued, by the petitioner, to the respondent, to appoint a substitute arbitrator, consequent on the demise of Mr. S.C. Sharma. In the absence of any such notice, the petitioner is not entitled to plead confinement of the right, of the respondent, to appoint a substitute arbitrator, to any specific period of time, least of all to a period of 30 days from the date when the respondent came to know of the demise of Mr. S.C. Sharma, and of the requirement of appointing a substitute arbitrator. It cannot, therefore, be said that the right of the respondent, to appoint a substitute arbitrator, stood extinguished, on the date when the petitioner filed the present petition, before this Court, under Section 11 (6) of the 1996 Act. In fact, there having been no failure, on the part of the petitioner, to appoint a substitute arbitrator, as per the procedure outlined in Clause 19.2 (a) of the Concession Agreement, Section 11 of the 1996 Act did not apply, at all.

11) M/S Hamdard Laborateries (India) v. M/S Streling Electo Enterprises Decided on July 21, 2020

Facts: –  On 22.11.2017, the petitioner issued a tender inviting bids for carrying out electrical installation works at its new manufacturing unit in Aurangabad, Maharashtra. The respondent’s bid was accepted and a contract, being a Work Order, was executed between the parties on 01.03.2018 for a total value of INR 6,67,00,061.18/. On 03.03.2018, the petitioner paid an advance sum of INR 1, 66, 75,015/- to the respondent against an advance bank guarantee furnished by the latter, which was valid only till 31.05.2018. As per the terms of the Work Order, the respondent was supposed to complete the electrical work in 10 months and ensure supply of the electrical fittings as also their installation. In discharge of its obligations under the contract, in December 2018, the respondent purchased electrical fittings to be utilised at the project site against invoices for a sum of INR 47,06,00,000/-, however these fittings could not be installed at that stage as certain civil engineering work was left pending at the project site and assumed precedence over electrical installations. Thus, the respondent had to cease its activities at the project site, on the instructions of the petitioner. Admittedly, the petitioner requested the respondent to resume work only on 10.05.2019, in response whereto the respondent informed the petitioner of its unwillingness to work for the same rate as provided in the Work Order dated 01.03.2018. Instead, the respondent requested the petitioner to revisit the agreement and sought a cost escalation of 19% on the prices provided in the Work Order, but the petitioner was only willing to offer 5% escalation.

Decision: – After looking on all the facts the court stated that the respondent’s reliance on the decisions in AAA Landmark and ABC Laminart is also inapplicable. The petition, therefore, is entitled to succeed.Accordingly, in the light of the admitted position that the disputes between the parties are required to be adjudicated through arbitration, Hon’ble Ms. Justice Rekha Sharma, former Judge of this Court is appointed as the sole Arbitrator for adjudication of the disputes and differences which have arisen between the parties in relation to the Work Order dated 01.03.2018.Before commencing arbitration proceedings, the learned Arbitrator will ensure compliance with Section 12 of the Act. The fee of the learned Arbitrator shall be fixed as per Schedule IV appended to the Act. It is, however, made clear that this Court has not considered the rival claims of the parties on merits and it will, therefore, be open for them to file claims/counter claims and raise all pleas permissible in law, before the learned Arbitrator, which will be decided in accordance with law

12) Afcons infrastructure Limited V. Konkan Railway Corporation Ltd, Decided on 2 June, 2020

Facts: – The Respondent had floated a tender vide tender notice dated 21 st May, 2005 for construction of B.G. Single Line Tunnels on the Katra-Laole, section of Udhampur- Shrinagar- Baramulla Rail Link Project. The bid of the Petitioner was accepted. A contract bearing No. KR/PD/J&K/CONT /TUNNEL/T-38/47/2/2005 dated 12th December 2005 came to be executed between the Petitioner and a Respondent (‘the principal contract’). Clause 46.0 of the special conditions of contract incorporated an arbitration agreement between the parties. Annexure ‘P’ thereto provides for the constitution of an arbitral tribunal.

Decision: – The petition was entertained by court in this case and court stated that the Petitioner is allowed to appoint Mr. R.G. Kulkarni, Retired Secretary and Engineer in Chief, Government of Maharashtra as a nominee Arbitrator on behalf of the Petitioner. The Respondent is directed to appoint an independent nominee Arbitrator, in conformity with the provisions of section 12 read with Fifth and Seventh Schedule of the Act 1996,, as amended by the Amendment Act, 2015, within a period of four weeks from today.The nominee Arbitrators of both the parties shall appoint a Presiding Arbitrator, before entering the reference, in accordance with the provisions of the Arbitration and concilation 1996. The prospective Arbitrators, before entering the reference, shall make a statement of disclosure in accordance with the requirements of section 11(8) read with section 12(1) of the Arbitration and concilation act, 1996 and forward the same to the Prothonotary and Senior Master of this Court to be placed on the record of this Petition, with copies to both the parties.

13) Suryadev Alloys and Power Pvt Ltd V. Shri Govind Narayan Textile Private Ltd, Decided on 8 May 2020

Facts: – Facts are that the appellants are engaged in manufacture of MS bars, MS billets etc. and are availing the facility of CENVAT credit on inputs, capital goods and input services. During the course of audit, it was noticed that for the period September 2014 to September 2015, the appellant had wrongly availed credit to the tune of Rs.21, 35,493/- beyond the time limit of six months / one year in contravention of Rule 4(1) of CENVAT Credit Rules, 2004. Show cause notice dated 2.5.2017 was issued proposing to recover the wrongly availed credit and to impose penalty. After due process of law, the original authority confirmed the demand and imposed penalty. In appeal, Commissioner (Appeals) upheld the same.

Decision: – The court after undertaking a comparative analysis of Section 28(1) under the erstwhile Arbitration Act, 1940 and the Section 29A of the Arbitration Act, held that unlike the provision of Section 28(1) of the Arbitration Act, 1940 which gave wide powers to the court to enlarge the time for making an award even after the expiry of the time for making the award or even after the award has been made; the Arbitration Act has curtailed these powers and restricted the extension only within the provisions of Section 29A(3) and 29A(4). Thus, as per the court a similar power has not been incorporated under Section 29A of the Arbitration Act unlike Section 28(1) of the Arbitration Act, 1940. Hence, the Madras High Court held that it is only the court that can extend the period for making of the award after the expiry of the 1 (one) year period under Section 29A(1) or the extended period under Section 29A(3).

14) DDA V. Tara chand sumit Construction Company, Decided on 12 May 2020

Facts: – Petitioner had filed the present petition under Section 29A of Arbitration and Conciliation Act, 1996 for extension of mandate of the learned Arbitrator. The Court had issued notice to the respondent. Respondent filed its reply and objected to the maintainability of the petition before this Court on the ground of lack of pecuniary jurisdiction as the value of claims was less than ₹ 2 Crores. When the matter was listed on 31.07.2019, learned counsel for the petitioner submitted that the amount of claims and counter claims in the arbitration proceedings was below the pecuniary jurisdiction of this Court and, accordingly, sought leave to withdraw the petition, with liberty to file the same before the Court of competent jurisdiction. The petition was, accordingly, dismissed as withdrawn granting the liberty sought.

Decision: – The court observed that in case a petition under Section 29A of the Arbitration Act is filed before the Principal Civil Court for extension of mandate and the occasion for substitution arises, then the Principal Civil Court will be called upon to exercise the power of substituting the arbitrator and thus, the same would lead to a situation where a conflict would arise between the power of superior courts to appoint arbitrators under Section 11 of the Arbitration Act and those of the civil court to substitute those arbitrators under Section 29A of the Arbitration Act, since, the provisions of Section 11 of the Arbitration Act, confers power of appointment of arbitrators only on the High Court or the Supreme Court, as the case may be.

15) ONGC Petro Additions Limited v. Ferns Constructions Company INC, Decided on July 21, 2020.

Facts: – The dispute in Fernas Constructions arose out of a contract executed between the ONGC and Fernas India. Pursuant to the dispute, ONGC invoked arbitration against Fernas India and Fernas Constructions. Fernas Constructions, a company incorporated under the laws of Turkey, is the parent company of Fernas India. Fernas Constructions filed an anti-arbitration suit before the Delhi High Court claiming that it is not a proper party to the dispute. The Delhi High Court referred the matter back to arbitral tribunal for adjudication, and the same stands pending as of date.
Thereafter, ONGC filed a petition before the Delhi High Court for extension of time under section 29A, whereby the High Court, by way of its order dated September 25, 2019, allowed additional 18 months to the arbitral tribunal to complete the proceedings and render the award.

Decision: – The Delhi High Court observed that there exists a dichotomy in the decisions rendered by two Coordinate Benches of the Delhi High Court in the case of Shapoorji Pallonji and Company Private Limited v. Jindal India Thermal Power Limited, O.M.P.(MISC.) (COMM.) 512/2019, and MBL Infrastructures Limited v. Rites Limited, O.M.P.(MISC)(COMM) 56/2020, wherein in the case of Shapoorji (supra), the court held that the amended Section 29A(1) of the Arbitration Act being a procedural law would also apply to the pending arbitrations as on the date of the amendment whereas, the court in the case of MBL Infrastructure (supra), by referring to the notification August 30, 2019 held that, from the perusal of the said notification it does not have a retrospective effect. The Delhi High Court in the instant case also noted that in the case of MBL Infrastructure (supra), the attention of the court was not drawn to the earlier order in Shapoorji (supra) and thus, held that, to that extent the order in MBL Infrastructure (supra) is per incuriam.The Delhi High Court thus, held that the provisions of Section 29A(1) of the Arbitration Act shall be applicable to all pending arbitrations seated in India as on August 30, 2019 and commenced after October 23, 2015.

 

 

 

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