By: Aarushi Gupta, Archi Jain, Christina D’souza, Gaurav Choudhary, Snehil Balani and Yash Bhatnagar
1. The English High Court refused an application for ‘further’ extension of time which sought to challenge an arbitral award under section 68 of the 1996 act, due to its non-conformity with the time limit stipulated under the earlier application for extension of time. (STA v OFY  EWHC 1574)
This case revolves around two applications made for the extension of time for challenging an arbitral award under the English Arbitration Act, 1996. Before the expiry (for challenging an award) of the initial 28-days stipulated under section 70(3) of the Act, the claimant applied for an extension of time on the ground of delay due to the effects of Covid-19. The court denied the second application due to the absence of an adequate explanation for it and stated that “The final ‘factor’ is whether, in the broadest sense, it would be unfair to STA for it to be denied the opportunity of having its application determined. In my judgment, it would not.”
2. The Hong Kong High Court sets aside an HKIAC arbitral award and termed it ‘manifestly invalid’ due to its inconsistency with an earlier arbitral award involving the same parties and one of the same arbitrators. (W v AW  HKCFI 1701)
Two separate arbitrations were commenced based on two separate but related arbitration agreements. W, being the successful party in the first award, applied before the Hong Kong court to set aside the second award on the basis that it is in conflict with the public policy of Hong Kong and also it has not considered the findings of the first award on the common issues. On the other side, AW’s application for enforcement of the award was set aside and the fact that AW nominated the same arbitrator in both the proceedings but made contradicting findings in both the awards was one of the important points taken into consideration by the court to decide this ‘highly unusual case’.
3. Federal Court of Australia upheld the principle of party autonomy in respect of appointment of arbitrators and also ruled regarding the court’s discretion to enforce an award. (Hub Street Equipment Pty Ltd v Energy City Qatar Holding Company  FCAFC 110)
In this case, disputes arose between the parties due to which ECQ sought for appointment of arbitrators before the courts in Qatar (seat of the arbitration). The parties’ agreement provided that each party shall appoint an arbitrator within 45 days of receiving the notice of arbitration and the third arbitrator to be mutually decided by the first two arbitrators. The Qatari court made orders for the appointment of arbitrators and the tribunal sent 6 notices to Hub about the conduct of the arbitration to which Hub never participated, following which an ex-parte award was made by the tribunal in favour of ECQ.
After the award was rendered, ECQ sought enforcement before the Australian courts. The decision was appealed by Hub and the Full Court of the Federal Court of Australia refused enforcement of the award on the ground that the appointment of arbitrators was not following the parties’ agreement.
4. The English High Court allowed a joinder application which allowed a party to join the judgment of four of its associated companies to eventually help in the enforcement of the award. (Devas Multimedia America Inc and others v Antrix Corporation Ltd  EWHC 1944 (Comm))
Devas Multimedia has been trying to enforce an award against Antrix Corporation, but in 2021 Devas was placed into liquidation which might produce challenges for the enforcement of the award. So, to preserve the award and the judge’s proper enforcement, the court allowed four shareholders in Devas Multimedia to join the judgment as it was a ‘serious issue to be tried’.
5. Various challenges regarding the tribunal’s breach of the general duty of fairness were accepted by the English High Court. (PBO v DONPRO & ors  EWHC 1951)
In this case, PBO challenged an arbitral award under section 68 of the Arbitration Act, 1996 claiming that the proceedings were affected by serious irregularity due to the tribunal’s breach of the general duty of fairness which is guaranteed under section 33 of the 1996 act. The court accepted the challenges made by PBO and chose remission because setting aside the award in its entirety would lead to unnecessary costs, and rearguing of matters afresh that have already been determined.
6. The Swiss Federal Supreme Court denied a challenge to set aside an arbitral award and observed that the right to be heard does not encompass delaying tactics. (case no. 4A_530/2020 (in French))
In a Geneva seated arbitration, governed by the LCIA Rules, the arbitral tribunal due to the emergence of COVID-19, proposed to resolve the dispute virtually via video conferencing to which both the parties consented but the respondent showed no further reply to the procedural timetable. Later, the respondents submitted a last-minute request to postpone a scheduled hearing without submitting any substantiated reasons. The arbitral tribunal denied the request and later passed an award in favour of the claimant. The award was challenged by the respondent on the ground that its right to be heard (guaranteed under Article 190(2)(d) of the Swiss Private International Law Act) was violated when the tribunal denied its request to postpone the hearings.
The apex court dismissed the challenge and observed that the request to postpone was just a tactic to elongate the whole arbitral proceedings and multiple delaying tactics were used by the respondent previously to hinder the normal course of the arbitration.
7. Paris Court of Appeal rules on the French court’s jurisdiction to decide challenges relating to a liability action against an arbitrator and explains why German courts won’t have jurisdiction to decide the present case. (Judgment (in French)
This case emerges from an earlier arbitral proceeding between Saad Buzwair Automotive Co. (SBA) and Audi Volkswagen Middle East Fze (AVME). Previous proceedings’ decision on an appeal regarding the case can be understood here. Earlier, the Paris First Instance Tribunal observed that it did not have the jurisdiction to rule upon an arbitrator’s liability claim because the “place of effective performance of the arbitrator’s intellectual services was Germany” and told the parties to take the issue before German courts. This decision was quashed by the Paris Court of Appeal which held that French courts did have the jurisdiction in the present case by applying Article 46 of the French Code of Civil Procedure as a liability claim against an arbitrator is very closely related to the conduct of the arbitration.
8. The English High Court refused challenges brought by Manchester City Football Club (MCFC) against an arbitral award under sections 67 and 68 of the English Arbitration Act. (Manchester City Football Club Ltd v Football Association Premier League Ltd & ors  EWHC 628 (Comm))
In this case, the arbitration proceedings were commenced by Football Association Premier League (FAPL) in which it sought a declaration that MCFC withheld some essential documents which it was obliged to deliver. An award was made in favour of FAPL which was challenged by MCFC before the English Commercial Court because the issue dealt with under arbitration is outside the scope of the arbitration agreement and also that the arbitrators were in breach of their duty to act independently and impartially. The court denied the challenges made by MCFC and ruled that the express terms of the arbitration agreement provided that any disputes could be submitted to arbitration.
9. The Hong Kong Court of First Instance gave effect to a pathological arbitration clause displaying the pro-arbitration approach. (Kinli Civil Engineering Limited v Geotech Engineering Limited  HKCFI 2503)
In this case, the court gave effect to a pathological arbitration clause which provided that the disputes ‘may’ be submitted to arbitration rather than using the word ‘shall’. The court held the arbitration clause to be mandatory by citing the modern approach to the construction of arbitration agreements which provides a presumption in favour of arbitrability and the ‘one-stop’ adjudication approach. Thus, giving effect to the arbitration agreement, the court stayed the litigation (commenced by Kinli) in favour of arbitration.
10. English Court of Appeal confirms that an arbitral award cannot be binding upon a third party even when the third party is a parent company of one of the parties to the arbitration. (Vale v Steinmetz  ECWA Civ 1087)
The arbitration arose out of a Joint Venture Agreement (JVA) between Vale and BSGR Resources Ltd. Vale’s subsidiary (on Vale’s order) paid USD 500 million to BSGR to purchase interests in mining licenses in Guinea. Later, the Government of Guinea revoked mining licenses which led to Vale commencing arbitration proceedings against BSGR seeking revocation of the JVA.
The tribunal upheld the revocation but denied to order recovery of the amount paid by Vale as it was paid by a subsidiary of Vale. In order to trace and recover the payment made by Vale, it commenced a claim in the English High Court against the Steinmetz Group (Parent Company of BSGR) as some part of the payment was made to it. The English Court of Appeal finally settled the dispute of relying upon an arbitral award by a different, but related party and held that, except in extremely rare circumstances (where parties can establish clear abuse of process), an arbitral award cannot be relied upon by a third party (even though related) in a different proceeding.
11. The English High Court declined to set aside an award based on failure to mediate a dispute before referring it to arbitration. (NWA & FSA v NVF & others  EWHC 2666 (Comm))
The concerned parties had agreed to the reorganization of their existing business dealings under which they had specified that any dispute shall first seek settlement by mediation and if the dispute is not settled by mediation within 30 days, then the parties shall refer to arbitration. Soon after a dispute arose, despite having not engaged with the offer to mediate, the Claimants brought a challenge under section 67 of the English Act. As a result, the judge decided that the issue was one of admissibility rather than jurisdiction. The dispute had validly been submitted to arbitration following the clause, and any allegation of violation of clause 10.2 would be determined by the arbitrator.
12. Federal Court of Australia declines to enforce a consent award that had been satisfied. (EBH21 v EB021  FCA 1406).
In the following case, award creditors sought recognition and enforcement of an arbitral award that had already been paid in time and in full. It was argued by the award debtors that bringing the dispute into the public arena of a court proceeding circumvented the confidentiality agreement. The Federal Court of Australia concurred with the award debtors. As a result, the Court determined that there was no justification for recognising or enforcing an award that had already been fulfilled it had the force of law and had already taken effect. The obligations imposed by it had already been discharged. Thus, the Court granted the award debtor’s suppression request and emphasized the importance of contract confidentiality in arbitration.
13. English Court determines that it does not have the jurisdiction to permit a counterclaim in enforcement proceedings. (Selevision Co v Bein Media Group LLC  EWHC 2802 (Comm)).
According to the English Commercial Court, it does not have jurisdiction to permit a counterclaim in the context of a request for leave to enforce a New York Convention Award under section 101(2) of the English Arbitration Act and CPR 62, which highlights the “highly streamlined” nature of the enforcement procedure. The nature of Bein Media Groups’s (BMG) proposed counterclaim was that Selevision had orchestrated and was responsible for very large piracy of BMG’s broadcasting rights in the Kingdom of Saudi Arabia and elsewhere in the MENA region. BMG justified bringing its counterclaim by reference to the wording of English Civil Procedure Rule (CPR) 62.18(3), which provides that an arbitration claim must be started by the issue of an arbitration claim form following the Part 8 procedure, which in turn refers to Part 20 regarding counterclaims and additional claims. The judge commented that more generally that if Part 20 proceedings were permissible at all in arbitration claims, it would be highly exceptional for them to be permitted, as they would generally be inappropriate.
14. UK Supreme Court unanimously dismissed an appeal relating to the enforcement of an arbitration award against a non-party. (Kabab-Ji SAL (Lebanon) v Kout Food Group (Kuwait)  UKSC 48).
A landmark ruling involving the enforcement of an arbitration award against a non-party was issued by the UK Supreme Court on 27 October 2021. Supreme Court held that the parties’ choice of English law as their governing law extended to the validity of their arbitration agreement as well. Consequently, the arbitration agreement failed as a matter of English law, since the defendant was not a party to it. Accordingly, the Supreme Court refused recognition and enforcement of the award under section 103 of the English Arbitration Act 1996 (the AA 1996).
OTHER NOTABLE DEVELOPMENTS
1. HKIAC publishes an updated report on average costs and duration of arbitral proceedings. The mean duration was reported to be 13 months and the mean costs were USD 137,332.
2. Arbitration Foundation of Southern Africa’s new International Arbitration Rules came into force on 1 June, 2021.
3. ICSID published its fifth working paper on proposals for amendment of the ICSID rules.
4. Asian International Arbitration Centre published its new rules that came into force on 1 August, 2021.
5. Ecuador introduced regulations to its arbitration and mediation Act. This step was taken after it re-joined the ICSID convention in June 2021.
6. Iraq becomes the 9th state to ratify the Mauritius Convention on Transparency in Treaty-cased Investor-State Arbitration.
7. In a report, the Law Reform Commission of Hong Kong recommended that lawyers be allowed to charge success fees for arbitrations. In its report “Outcome Related Fee Structures for Arbitration“, the LRC proposes that Hong Kong law be changed to lift long-standing prohibitions on such fees, which are widely used in other arbitral seats.
8. As Poland’s judicial system becomes increasingly clogged, the Ministry of Justice has proposed pro-arbitration provisions, which may lead to a rise in the popularity of arbitration. It introduces a potential “conversion” of litigation into arbitration, between the initiation and the conclusion of court proceedings: “In a case that is before the court, the parties are permitted to submit their dispute to arbitration at any time before it is decided by the court”.
9. Singapore announced amendments to the Legal Profession Act, 1966 allowing Conditional Fee Arrangements in certain legal proceedings. The proposed bill for the same can be accessed here.
JUDICIAL DEVELOPMENTS IN INDIA
1. The Court does not have the power to modify an arbitral award passed under section 34 of the Arbitration and Conciliation Act, 1996 (The Project Director, National Highways Authority of India v M. Hakeem & Anr)
The question of law that was raised in this case was whether the power of a court under Section 34 of the Arbitration and Conciliation Act, 1996 to ‘set aside’ an award of an arbitrator would include the power to modify such an award. The Court observed that section 34 of the 1996 act is modelled on the UNCITRAL Model Law on International Commercial Arbitration, 1985, under which powers to modify an award is not given to a court hearing a challenge to an award. The Court held that Section 34 of the Arbitration Act, 1996 cannot be held to include within it a power to modify an award.
2. Award of an emergency arbitrator passed in an India-seated arbitration is enforceable in India (Amazon.com NV Investment Holdings LLC v Future Retail Limited & Ors)
The question of law that was raised in this case was whether the award of an emergency arbitrator is recognized under the Arbitration and Conciliation Act, 1996, and whether it is enforceable under Indian law. The Supreme Court referred to the definition of ‘arbitration’ under Section 2(1)(a) of the Arbitration and Conciliation Act, 1996. As per Section 2(1)(a), ‘arbitration’ means any arbitration, whether or not administered by a permanent arbitral institution, which when read with Sections 2(6) and 2(8) of the Arbitration and Conciliation Act, 1996 would make it clear that even interim orders that are passed by emergency arbitrators under the rules of a permanent arbitral institution would be included.
3. The Constitution of an arbitral tribunal does not bar courts from adjudicating on applications seeking an interim relief (Arcelor Mittal Nippon Steel India Ltd v Essar Bulk Terminal Ltd)
The question of law that rose before the Court was whether a Commercial Court can entertain an application seeking interim relief after the arbitral tribunal has been constituted under the Arbitration and Conciliation Act, 1996. The Court held that under the Arbitration and Conciliation Act, 1996, even after the constitution of an arbitral tribunal, the Commercial Court cannot be denied the power to grant interim relief. The Court upheld the decision of the Gujarat High Court to allow the Commercial Court to proceed to complete the adjudication on the interim relief applications.
4. A foreign award can be enforced against a non-signatory to the Arbitration Agreement (Gemini Bay Transcription Pvt Ltd v Integrated Sales Service Ltd & Anr)
The question of law before the Court was whether a foreign award rendered in an international commercial arbitration under Part II of the Arbitration and Conciliation Act, 1996, can be enforced against a non-signatory to an arbitration agreement. The Court held in this regard that section 47(1)(c) of the Arbitration and Conciliation Act, 1996 in its application, is procedural in nature. Therefore, the requirement to adduce any additional and substantive evidence to prove that a non-signatory to an arbitration agreement can be bound by a foreign award is to be dispensed with.
5. Section 34 of the Act does not permit courts to be a judge of evidence examined by the arbitrator in the course of arbitration proceedings (Delhi Airport Metro Express Pvt Ltd v Delhi Metro Rail Corporation Ltd)
The question of law before the Court was whether the Division Bench was right in setting aside the award of the Tribunal by deviating from the principles for interference under Sections 34 and 37 of the Arbitration and Conciliation Act, 1996. The Court examined the contours of the court’s power to review arbitral awards and held that the principal objective of the Arbitration and Conciliation Act, 1996 was to minimize the supervisory role of courts in arbitral processes and that judicial interference with arbitral awards is limited to the grounds as specified in Section 34. Consequently, the Court held that Section 34 of the Act does not permit Courts to be a judge of evidence examined by the arbitrator in the course of arbitration proceedings. Thus, the Division Bench was wrong in setting aside the award of the Arbitral Tribunal.
6. A Court can decline reference under section 11 of the Arbitration and Conciliation Act, 1996 if the dispute does not fall within the ambit of the arbitration agreement (DLF Homes Developers Ltd v Rajapura Homes Pvt Ltd and Anr)
The question before the Court was to determine the scope of inquiry under section 11 of the Arbitration and Conciliation Act, 1996. The Court observed that post the 2015 amendment, the scope of its interference at the stage of referring matters to arbitration was substantially restricted. The jurisdiction of the Court under Section 11 was primarily to find out whether there exists a written agreement amongst the parties for the resolution of the disputes through arbitration. The Court clarified that they are not expected to act mechanically merely to deliver a purported dispute raised by an applicant at the doors of the chosen Arbitrator. The Courts are, in fact, “obliged to apply their mind to the core preliminary issues, albeit, within the framework of Section 11(6-A) of the Act.” The Supreme Court held that such a review is aimed at streamlining the process of arbitration.
7. Once an issue is raised before the Court-appointed arbitrator, a party cannot approach another tribunal for the same (M.P. Housing and Infrastructure Development Board v K.P. Dwivedi)
The Appellant approached the Supreme Court after being dissatisfied with the order passed by the M.P. High Court. The Supreme Court held that a party, who participated in the arbitral proceedings before the arbitrator appointed by the High Court, cannot bring up the same before another arbitral tribunal. The Court further observed that the respondent did not challenge the award passed by the Court-appointed arbitrator. Therefore, the same is binding between the parties.
8. An arbitrator is required to treat both the parties equally and give them a fair opportunity of hearing under Section 18 of the Indian Arbitration Act (Narinder Singh v Union of India)
The Supreme Court referred to section 18 of the Indian Arbitration Act. Section 18 mandates that both parties shall be treated with equality and each party shall be given a full opportunity to present his case. The Court further observed that there was unnecessary haste and hurry by the arbitrator. Since the respondent was “unable to present his case”, there is a valid ground and justification for setting aside the award under Section 34(2)(a)(iii) of the Indian Arbitration Act.
9. An arbitrator cannot award interest to either party when the agreement between the parties bars grant of interest. (Union of India v Manraj Enterprises)
As per clause 16(2) of the agreement between the parties, no interest would be payable upon the earnest money or the security deposit or amounts payable to the contractor under the contract. The Supreme Court held that the learned Arbitrator erred in awarding pendente lite and future interest on the amount due and payable to the contractor under the contract.
10. The 2015 Amendment Act is prospective in nature and will apply to those arbitral proceedings that are commenced on or after the 2015 Amendment Act (Ratnam Sudesh Iyer v Jackie Kakubhai Shroff)
The Court pointed out that the legislature intended to mean that the 2015 Amendment Act is prospective in nature and will apply to those arbitral proceedings that are commenced, as understood by Section 21 of the said Act, on or after the 2015 Amendment Act. The provisions of the 2015 Amendment Act would apply only concerning arbitral proceedings commenced on or after the date of commencement of the 2015 amendment. Thus it was held that the arbitrator’s findings are not per the fundamental policy of Indian law, and can thus be set aside under the pre-2015 interpretation of S. 34 of the said Act.
11. The ground of “patent illegality is available under section 37 of the Indian Arbitration Act” (State of Chhattisgarh v M/s Sal Udyog Private Limited)
The Court held that ground of “patent illegality” is available under Section 37 of the Act. It was further observed that a failure on the part of the sole arbitrator to decide by the terms of the contract governing the parties, would certainly attract the “patent illegality ground”.
1. Participation in arbitral proceedings without objecting with regards to invocation constitutes a waiver of the same (C. Mugilan v IndusInd Bank Ltd and Ors)
On the challenge of arbitral award u/s 34, the High Court of Madras rejected the challenge premised on the ground that no notice of invocation of arbitration had been served to the Petitioner. The Court observed the fact that the Petitioner had participated in arbitral proceedings without raising any objection either u/s 13 or 16 shall be taken as a waiver of any such violation as per Section 4 of the Act.
2. Clause which provides for the unilateral appointment of an arbitrator would not render the agreement to arbitrate void (M/s Jyoti Sarup Mittal v The Executive Engineer-XX-III, South Delhi Municipal Corporation)
The Delhi High Court examined whether the entire agreement between the parties to refer the dispute to arbitration will be void or non-existent in case the appointment mechanism is considered to be void. The Court observed that according to the expansive reading of the decisions in TRF Ltd. and Perkins Eastman Architects and legislative history, the wordings of the clause cannot be read in such a manner to render the clause ineffective of reference merely because the clause only permitted a unilateral appointment mechanism. The Court held the view that the fundamental agreement between the parties would not perish even if it is no longer permissible to follow the mechanism of appointment of an arbitrator.
3. Same person acting as Conciliator and Arbitrator is a ground to set aside the award (Hatsun Agro Products Ltd v Three C Visuals and Ors)
The Madras High Court considered the question of whether a Cconciliator could have acted as an Arbitrator in an arbitration under the MSME Act. The Court observed that Section 18(2) of the MSME Act provides for application of the Arbitration and Conciliation Act to the conciliation proceedings and Section 80 of the Act bars the Cconciliator to acting as Arbitrator in the same matter unless otherwise agreed. Further Section 81 of the Act bars relying on any evidence and suggestions in conciliation proceedings. The court held that conciliation proceedings conducted by the same person/Council, when the final award was passed, would be contrary to the provisions of both MSME and Arbitration Act as there would be a real danger of using evidence unearthed in conciliation proceedings in arbitration.
4. Interim measures under Section 9 of the Act apply to foreign awards unless excluded by the parties in the arbitration agreement (Medima Llc v Balasore Alloys Limited)
While examining whether Section 9 of the Act can be made applicable to a foreign award made under the Rules of the ICC in arbitration proceedings governed by British law with the seat of arbitration in London, the Calcutta High Court answered in affirmative and held that Section 9 would apply in a post-award scenario when the seat of arbitration is outside India. Further, the court advanced that an award-holder of an arbitration proceeding that took place outside India would be left hopeless if interim measures are not granted concerning the assets of the award-debtor which are located in India.
5. The Choice of venue is also a choice of the seat of the arbitration (S.P. Singla Constructions Pvt Ltd v Construction and Design Services)
In a recent decision concerning the identification of seat of arbitration, the court delved into the question that whether the seat of arbitration shall be New Delhi in the light that the arbitration has to be conducted in accordance with ICADR Rules or Lucknow, in the light of agreement that the venue of such arbitration shall be Lucknow. Referring to the law laid down by the Supreme Court in BGS SGS SOMA JV, the Delhi High Court observed that if the arbitration agreement provides that the arbitral proceedings “shall be held” at a particular venue, then the arbitration proceedings would be anchored at such venue. Thus, the chosen venue is also a choice of the seat of arbitration. The court held that the seat of arbitration was at Lucknow and the courts at Lucknow had the exclusive jurisdiction to entertain the dispute arising out of the contract.
6. An interim award cannot be equated to an interim order that can be passed by an Arbitral Tribunal under Section 17 (1)(ii)(e) of the Act (Union of India v Gee Kay Engineering Industries)
The Jammu & Kashmir ad Ladakh High Court clarified the difference between an interim order and an interim award and held that while passing an order under Section 17 (1)(ii)(e) of the Act of 1996, an Arbitral Tribunal would be justified in considering the prima facie case, the balance of convenience and similar other factors at the time of passing such an order while making an interim award under
Section 31 (6) of the Act, the Tribunal arbitral has to be satisfied that there is an admission or acknowledgement of liability on the part of the party against which the award is proposed to be made and such admission should be clear, unambiguous and definite and should not require any evidence to prove at the stage of the trial.
7. Whether the right of a party to invoke arbitration can be restricted to a lesser period than provided under the limitation act? (Sagar Constructions v Govt (NCT) of Delhi)
The High Court of Delhi held that a party cannot restrict the right of the other party to invoke arbitration to a lesser period than provided under the Arbitration Act. It held that the right of the party to invoke arbitration would be three years from the date when the cause of action arises, the parties cannot circumscribe it to a lesser period through an agreement. The court relied on the judgment of the Supreme Court in National Insurance Co. v. Sujir Ganesh Nayak to hold that an agreement that restricts the period of limitation would be void under
Section 28 of the Indian Contract Act. The court held that the right of the party to invoke arbitration would be three years from the date when the cause of action arises, the parties cannot circumscribe it to a lesser period through an agreement.
8. Whether a party invoking arbitration can bifurcate its claims, choosing to refer some claims at one stage and others at a later stage? (Airone Charters Pvt Ltd v JetSetGo Aviation Services Pvt Ltd)
The High Court of Delhi held that a party invoking arbitration cannot bifurcate its claims, choosing to refer some claims at one stage and others at a later stage. A party must specify in the notice invoking arbitration all existing disputes. However, if the arbitration agreement does not mandate that all the claims are to be made in one go, then the parties are not barred from raising them in different proceedings.
9. Whether the Pre-Aarbitral steps are mandatory in nature? (Sanjay Iron and Steel Limited v Steel Authority of India)
The High Court of Delhi held that if the arbitration agreement mandates pre-arbitral conciliation, then the parties cannot circumvent the conciliation process and directly approach the court for the appointment of an arbitrator. The parties must first make efforts to amicably resolve the dispute through conciliation, and only after the efforts fail and no scope for conciliation remains, the court can directly appoint an arbitrator.
10. Whether the panel of Arbitrators maintained by the Respondent will be hit by Section 12 of the Act? (BCC Developers & Promoters Ltd v DMRC)
Relying on the judgment in Central Organisation for Railway Electrification, the High Court of Delhi held that merely because the arbitrators on the panel are the ex-employees of one of the parties, it would not make them ineligible to be appointed as arbitrators to decide on the dispute. When the parties agreed on a procedure to appoint the arbitrators, the appointment shall be made in accordance with the agreed procedure only.
11. Whether an ex-parte ad-interim order can be passed by an arbitral tribunal without providing sufficient notice, and subsequently hearing the parties concerned? (Godrej Properties Ltd v Goldbricks Infrastructure Pvt Ltd)
The High Court concluded that it would be unknown to law and quite peculiar for an arbitral tribunal to pass an ex-parte ad-interim order without even hearing the party making the application, much less the party contesting the same. The High Court clarified that the arbitral tribunal would not be permitted on grounds of procedural fairness to pass an ex-parte order on a Section 17 application even if we’re of the firm opinion that some urgent orders were required to be passed.
12. Whether the Arbitral Tribunal could conduct a comprehensive examination of the terms of the contract while adjudicating an application for interim measures under Section 17 of the Act? (L&T Finance Limited v Dm South India Hospitality Private Limited)
The High Court of Delhi held that an arbitral tribunal while adjudicating on a Section 17 application for interim measures is not supposed to conduct a detailed examination of the terms of the contract. Doing so would amount to a pre-trial determination of the issues and would be detrimental to the concept of a dispassionate arbitral process. The tribunal acts on equity and is required to keep in mind a prima facie case, the balance of convenience, and irreparable injury while deciding an application for interim measures. It further held that the appellate court is not required to re-assess the evidence and, would not interfere with the discretion of the tribunal unless the reasoning of the tribunal is ex-facie perverse or patently illegal.
13. Whether the unilateral appointment of an arbitrator be challenged for the first time under a Section 34 petition? (Kanodia Infratech Limited v Dalmia Cement (Bharat) Limited)
The High Court of Delhi held that a party who has actively participated in the arbitral proceedings, cannot challenge the unilateral appointment of the arbitrator, for the first time under Section 34 petition. Failure of the party to object to the earliest possible opportunity under Sections 11, 12(5), 14, 15, and 16 of the Act, would deprive him to challenge the appointment under a Section 34 application.
14. Whether an arbitration clause that allows the arbitration proceeding to be abandoned at the will of one party valid in law? (Tata Capital Finance Limited v Shri Chand Construction and Apartment Pvt Ltd)
The High Court of Delhi held that an arbitration agreement that confers unequal power on one party to unilaterally abandon the arbitration proceedings, would be invalid in law, as such an agreement would lack ‘mutuality’, which is an essential feature of an arbitration agreement. The court further held that an arbitration agreement which provides for arbitration of the claims of one party and providing for a remedy of the court or any other form for the claim of the other party would also be invalid in law as the same would not only result in splitting of the claims and cause of action but also the multiplicity of proceedings and conflicting decisions on the same cause of action.
16. Whether a prior agreement of the parties would limit the power of the court to award cost? (Union of India v Om Vajrakaya Construction Company)
The High Court of Delhi held that unlike the power of the tribunal to award interest, there is no fetter on its power to award costs within the meaning of Section 31A and any agreement of the parties prohibiting the awarding of the cost would be inconsequential unless the parties agree after the disputes have arisen.
EDITORS PICK: FRESH LITERATURE
- The Science of Witness Memory: Implications for Practice and Procedure in International Arbitration Kimberley A. Wade, Ula Cartwright-Finch – Journal of International Arbitration.
- On Route to Climate Justice: The Greta Effect on International Commercial Arbitration Lucia Bizikova- Journal of International Arbitration.
- Proper characterization of the parole evidence rule and its applicability in International Arbitration, Darius Chan, Louis Lau Yi Hang – OUP Arbitration International.
- Delays Expected but Duration of Delays Unpredictable: Causes, Types, and Symptoms of Procedural Applications in Investment Arbitration, Julien Chaisse- OUP Arbitration International
- Costs, Damages and Duration in Investor-State Arbitration– Allen & Overy
Articles and Blogs
- Regime Interaction in Investment Arbitration: Crowded Streets; Are Human Rights Law and International Investment Law Good Neighbors?– Kabir A.N. Duggal and Nicholas J. Diamond – Kluwer Arbitration Blog –
- Supreme Court Rules on Intervening Claims Arising During Arbitration Proceedings, Raghav Bhatia- India Corp Law Blog-
- Unlawful Consent is Still Consent: International Law Perspectives on Komstroy vs Moldova– Sebastian Lukic- Cambridge Int. Law Blog-
- The Arbitrability of Antitrust Related Issues And The Competition Act, 2002– Ankit Panchel & Mehar Kaur- The CBCL Blog-
- The Contours of Abus De Droit Doctrine: An Exonerate Means to Participate in Investment Claim– Abhay Raj- SEAL, RMLNLU.
- An Unlikely Couple – The Use of Transfer of Funds Clauses for the Determination of Exchange Rates in Investor-State Disputes– Julia Hildebrandt – Kluwer Arbitration-