LEGAL UPDATES


March 2020 

Dr. Bina Modi v. Lalit Modi

The Court held that the Arbitration Act is governed by the principle of freedom of parties and Section 19 thereof expressly provides that the parties are free to agree on the procedure to be followed by the Arbitral Tribunal in conducting the proceedings. The Court observed that considering the status of the parties, who belong to business family and are well alive to litigations and arbitrations of all kinds, it cannot be said that they were not aware of the procedure of ICC. Thus, the ground of haste makes waste, cannot be invoked. It was further held that the amendment to section 8 does not change the bar to the jurisdiction of the court vide section 5 of the Act. Further, no window has been opened to permit a judicial authority to intervene, if finds no valid arbitration agreement existing, to injunct arbitration. It is only when a substantive action is brought before the Court and a plea of Section 8 is taken, that the Legislature has permitted the Court to go into the question of existence of a valid arbitration agreement, before referring the parties to arbitration. It was clarified that principles pertaining to anti suit injunction suits, are not attracted to anti arbitration injunction suits, for the reason of the Arbitration Act being a complete code in itself and the 1996 Act empowers the Arbitral Tribunal to rule on its own jurisdiction.



Shri Chand Construction and Apartments Pvt. Ltd. v. Tata Capital Housing Finance Ltd. 
The Court held that the use of words “all or certain disputes” in Section 7 of the Act permit classification of disputes but do not permit classification of claims. It was further held that once the time for filing written statement has been extended then the time for filing the application under section 8 of the Arbitration Act also stands extended.




February 2020 


SSIPL Lifestyle Pvt. Ltd. v. Vama Apparels (India) Private Limited & Anr. 

The court held that arbitration clause can be waived by a party under dual circumstances- one by filing a statement of defence or submitting to jurisdiction and secondly, by unduly delaying the filing of the application under Section 8 by not filing the same till the date by which the statement of defence could have been filed. In the background of the amendments in the CPC including recent amendments in the context of Commercial Courts Act, 2015 and the amendments in the Arbitration Act, the court concluded that the amendment to Section 8 is a conscious step towards prescribing a limitation period for filing the Section 8 application. Thus, the limitation period for filing of written statement as prescribed in the CPC, 1908 as well as Commercial Courts Act, 2015 would be applicable for filing of an application under Section 8.


November  2019


High Lights in the Arbitration and Conciliation (Amendment) Act 2019 (“the Amendment Act”) 

The Amendment Act imposes time limits on the filing of pleadings, issuing of arbitral awards and the granting of extensions of time.

1) A statement of claim and defence will need to be completed within a period of six months from the date the arbitrator receives notice, in writing, of their appointment.
2) Further, arbitral awards, other than in international commercial arbitration, will need to be made within a period of 12 months from the date of completion of pleadings. In international commercial arbitration matters, awards ought to be made as expeditiously as possible and endeavors ought to be made to dispose of the matter within a period of 12 months from the date of completion of pleadings.
3) Where an application for an extension of time is pending, the mandate of the arbitrator will continue until the disposal of the application




Appointment of arbitrators: Under the 1996 Act, the procedure for appointment of arbitrators in case of disagreement between parties often led to delays in the arbitral process. The 2019 Act empowers the Supreme Court and the High Courts to designate arbitral institutions (accredited by the Council) for the appointment of arbitrators. This is intended to result in speedy appointment of arbitrators. In case no accredited institutions are available in the relevant jurisdiction, the High Court will maintain a panel of arbitrators to perform the functions of the arbitral institutions.

Restrictions on setting aside an award:

Previously under the Section 34(2)(a) of the 1996 Act, an award made in India could be set aside on limited grounds (such as incapacity of parties, invalidity of arbitration agreement, lack of proper notice of arbitration, where tribunal acts outside the scope of its jurisdictions etc.) on the basis of the proof furnished by parties. The 2019 Act restricts the scope of interference by the Indian courts by stating that in an application to set aside an award, the courts can only rely on the materials furnished before the relevant arbitral tribunal.


October, 2019

Section 34 Arbitration Act- Additional Evidence Can Be Adduced Only In Exceptional Cases
M/S. CANARA NIDHI LIMITED vs M. SHASHIKALA AND OTHERS

​​"The proceedings under Section 34 of the Act are summary proceedings and is not in the nature of a regular suit."
The Supreme Court has held that proceedings under Section 34 of Arbitration and Conciliation Act will not ordinarily require anything beyond the record that was before the arbitrator and only in exceptional case, additional evidence can be permitted to be adduced.


AUGUST, 2019


Only The High Court  Which Has Jurisdiction Over 'Venue' Of Arbitration Can Entertain Petition Seeking Appointment Of Arbitrator

Brahmani River Pellets Limited vs. Kamachi Industries Limited, Supreme Court of India.
Non-use of words like "exclusive jurisdiction", "only", "exclusive", "alone" is not decisive and does not make any material difference."
When the parties agreed to have the "venue" of arbitration at a particular place, only the High Court which has jurisdiction over the said place can entertain the petition seeking appointment of Arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996, the Supreme Court has held.


12 May 2019

 Sec.34 Arbitration Act- Unilateral Addition To Contract By Arbitral Tribunal Violates Most Basic Notions Of Justice 

CIVIL APPEAL NO. 4779 OF 2019 (Arising out of Special Leave Petition (Civil) No.19033 of 2017)
Ssangyong Engineering & Construction Co. Ltd. Versus  National Highways Authority of India (NHAI)


When it comes to the 'public policy of India' argument based upon 'most basic notions of justice', it is clear that this ground can be attracted only in very exceptional circumstances when the conscience of the Court is shocked by infraction of fundamental notions or principles of justice" Holding that "a unilateral addition or alteration of a contract can never be foisted upon an unwilling party", the Supreme Court has set aside an arbitral award on the grounds of it being in conflict with "most basic notions of justice" and thereby conflicting with "public policy of India" as per Section 34(2)(b)(ii)(iii) of the Arbitration and Conciliation Act 1996. 


In addition to that, the Court held that the award was also liable to be set aside under Section 34(2)(a)(iii) on the finding that the party was rendered "unable to present his case".


August 24, 2018


No Appointment Of Arbitrator If There Is Violation Of Conditionality Clause In Arbitration Agreement:...

United India Insurance Co. Ltd. vs. Hyundai Engineering and Construction Co. Ltd....


The apex court bench comprising Chief Justice of India Dipak Misra, Justice AM Khanwilkar and Justice DY Chandrachud took note of a judgment rendered by a three-judge bench in  Oriental Insurance Company Limited vs. Narbheram Power and Steel Private Limited that held that if a clause stipulates that under certain circumstances there can be no arbitration, and they are demonstrably clear, then the controversy pertaining to the appointment of arbitrator has to be put to rest.

Allowing the appeals, the bench said: “It is clear that the arbitration clause has to be interpreted strictly.


The subject clause 7 which is in pari materia to clause 13 of the policy considered by a three-Judge Bench in Oriental Insurance Company Limited (supra), is a conditional expression of intent. Such an arbitration clause will get activated or kindled only if the dispute between the parties is limited to the quantum to be paid under the policy. .


The liability should be unequivocally admitted by the insurer. That is the precondition and sine qua non for triggering the arbitration clause.To put it differently, an arbitration clause would enliven or invigorate only if the insurer admits or accepts its liability under or in respect of the concerned policy.”...


MARCH 31, 2018

​Dispute resolution centres a hit, ease pressure on courts


Mediation is picking up as a popular mode of dispute resolution, particularly at the district level, where people are preferring to resolve disputes at the Alternate Dispute Resolution centres rather than courts.
The number of cases referred by the courts to ADR centres in districts have shown a sharp increase in the past few years in some states. Centres in Madhya Pradesh, Maharashtra, Kerala, Rajasthan and UP have 35,000 to 75,000 cases listed for mediation at the ADR centres.


Legal Services authorities are engaged in promoting the use of ADR mechanisms," the minister said of centres set up in states that deal with matters referred to them by courts.

The government is promoting ADR mechanism through mediations to bring down the pressure on the regular courts which are having huge pendency of cases. The subordinate courts in the country have more than 2.69 crore cases pending.


28, December 2017


BlackBerry Loses Payment Dispute With Nokia, to Pay $137 Million 


An arbitration court ordered smartphone pioneer BlackBerry Ltd to pay $137 million (roughly Rs. 883.5 crores) to Nokia to settle a payment dispute and the Canadian company said it would pursue a separate patent infringement case against the Finnish firm.

The International Court of Arbitration ruled earlier this week that BlackBerry had failed to make certain payments to Nokia under a patent licence contract, BlackBerry said on Friday.



December 5, 2017


Tamil Nadu Moves Court To Stop Nissan From Go For Arbitration Against Centre


 The Tamil Nadu government has moved the Madras High Court to restrain Nissan Motor Company, which runs its unit here, from proceeding with international arbitration against the Centre in a dispute which involves, among other things, refund of Value Added Tax (VAT).

Opposing arbitration under the Indo-Japanese Comprehensive Economic Partnership Agreement (CEPA), the state government said it was not the remedy.

The remedy for Nissan and its Joint Venture partner Renault lay in the Memorandum of Understanding (MoU) entered with it and not the CEPA, to which Tamil Nadu was not a party.

Even under CEPA, the firm cannot go in for arbitration as it has gone to the High Court over a related matter which is pending, the state government contended in its plea.




October, 27, 2017


​Kochi Tuskers win arbitration against BCCI

Kochi Tuskers' owners had won the arbitration in 2015 challenging BCCI's decision to encash bank guarantee citing breach of agreement.


Kochi Tuskers have won arbitration against the Board of Control for Cricket in India (BCCI) over wrongful terminational from the IPL.

The now scrapped franchise has asked to be paid Rs 850 crore in compensation. 




September 22, 2017

NCLAT to study London Arbitration court award in McDonald's-Bakshi dispute


The National Company Law Appellate Tribunal on Thursday said that it will study the award given by the London Court of International Arbitration to arrive at a decision in the ongoing dispute between the US-based fast food McDonald's and its estranged Indian partner Vikram Bakshi.

A bench headed by Justice SJ Mukhopadhaya said the Tribunal will see whether it is the case of operational mismanagement or arbitral dispute. He said that if it's operational mismanagement then the LCIA award is not binding.The bench further added that if it's the case of arbitral dispute, then the tribunal has no jurisdiction




September 05, 2017

Law ministry panel recommends revamp of arbitration framework


The Justice BN Srikrishna committee, set up by the law ministry in January to suggest reforms in India’s arbitration mechanism, has recommended key amendments in the existing arbitration laws and establishment of an arbitration promotion council of India (APCI) among other suggestions.

The recommendations submitted to law minister Ravi Shankar Prasad on Thursday include setting up a dedicated bar for arbitration and creating special arbitration benches for commercial disputes in courts.

The committee — set up on the instructions of Prime Minister Narendra Modi to turn India into an international hub of arbitration — has said the Arbitration and Conciliation Act should be limited to domestic arbitrations and suggested a time limit for completion of proceedings.



May 01, 2017


Delhi HC Makes 2015 Amendments To Arbitration Act Applicable To Proceedings Initiated Under The 1996 Act

Ratna Infrastructure Projects Pvt. Ltd. v. Meja Urja Nigam Private Limited, Arb. Pet 537/2016


In Ratna Infrastructure Projects Pvt. Ltd. v. Meja Urja Nigam Private Limited, Arb. Pet 537/2016, Justice S. Muralidhar   made observations on the applicability of the 2015 amendments over the arbitration proceedings commenced under the Arbitration and Conciliation Act, 1996 (“Act”) i.e. before 23 October 2015.


The Court interpreted the words “unless the parties otherwise agree” as used in the Section 26 of the Amendment Act in light of the standard agreement terms and held that the amendment act shall be applicable to the arbitral proceedings initiated before 23 October 2015, since the parties had agreed to statutory modification in their agreement and hence the 2015 amendments shall come within the ambit of the clause.


Court held that it is not necessary for the parties to expressly enter into a separate agreement to make the 2015 amendments applicable to the arbitration proceedings


April 29, 2017


Tata Sons-NTT Docomo case: Delhi HC clears $1.17 b arbitral award


he Delhi high court on Friday cleared the way for enforcement of the $1.17 billion arbitral award between Tata Sons and NTT Docomo. Accordingly, Tata Sons can proceed with the transfer of the amount to Docomo, and subsequently Docomo can transfer its shares in Tata Teleservices Ltd to Tata Sons. The amount of $1.17 billion has already been deposited by Tata Sons with the court. Justice S. Muralidhar rejected Reserve Bank of India’s (RBI) intervention in the enforcement of the award that had been agreed to by both parties.

February 28, 2017


A dispute resolution mechanism will be put in place to address issues in the infrastructure space, Finance Minister Arun Jaitley said today.
"After extensive stakeholder consideration we have decided that the required mechanism would be institutionalised as the part of the Arbitration and Conciliation Act, 1996," he said.
An Amendment bill would be shortly introduced in this regard, Jaitley said in his Union Budget 2017-18 speech.
"I stated in my budget speech last year that a Bill would be introduced to streamline institutional arrangement for the resolution of disputes in infrastructure-related construction contracts, PPP and public utility contracts," he added.




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