Arbitration

Post the 2015 Amendment, the powers of the Arbitral Tribunal under Section 17 of the Arbitration and Conciliation Act, 1996 (“Act”), are at par with and akin to the powers of the Court under Section 9 of the Act. Whilst the non-filing of the Statement of Claim did not serve as an impediment to the Courts granting interim reliefs under Section 9, the question on whether an Arbitral Tribunal is empowered to grant interim reliefs under Section 17 in the absence of a Statement of Claim remained unclear.


Continue Reading Statement of Claim not sine qua non to Filing an Application under Section 17

Arbitration Agreement

Background

Kompetenz-kompetenz, allowing the arbitral tribunal to rule on its own jurisdiction, is one of the fundamental principles of arbitration. In Indian arbitration law, this is captured in Section 16 of the Arbitration and Conciliation Act, 1996 (“Act”). This is further emphasised in Indian Farmer Fertilizer Cooperative Limited v. Bhadara Products (2018) 2 SCC 534 (“IFFCO Judgment”), wherein the Supreme Court has held that ‘jurisdiction’ mentioned in Section 16 has reference to three things: (1) existence of a valid arbitration agreement, (2) whether arbitral tribunal is properly constituted and (3) whether matters submitted to arbitration are in accordance with the arbitration agreement. Clearly, the existence of a valid arbitration agreement falls within the scope of jurisdictional matters to be determined by the arbitral tribunal.


Continue Reading Scope of Scrutiny of An Arbitration Agreement in a Section 9 Petition Filed before Commencement of Arbitral Proceedings

TIME IS THE ESSENCE OF THIS CONTRACT - IS IT REALLY

INTRODUCTION

Negotiated, as also standard format contracts, are rife with clauses proclaiming time is of the essence. Parties are usually rest assured after spelling this out, hoping (nay assured) that such words employed would by themselves be adequate to enforce rights through a Court or an arbitral process. Sadly, mere words are usually never enough.

The Supreme Court, in the recent judgement of Welspun Specialty Solution Limited vs. Oil and Natural Gas Corporation Ltd.[i], has reiterated the principles basis which Courts are required to construe whether time is of the essence of a contract. The Court held that a collective reading of the entire contract and its surrounding circumstances is imperative to come to such a conclusion. Merely having an explicit clause in the contract may not be sufficient to make time the essence of it. The Court also held that the availability of extension procedures to fulfil obligations under a contract, along with consequent imposition of liquidated damages, are good indicators to hold that time is not of the essence.
Continue Reading Time is the Essence of this Contract: Is it Really?

Arbitral Tribunal

INTRODUCTION

Recently, in the case of Godrej Properties Ltd. v. Goldbricks Infrastructure Pvt. Ltd.[i], the Hon’ble Bombay High Court has held that an arbitral tribunal cannot pass ex-parte orders on the mere filing of an Application under Section 17 of the Arbitration and Conciliation Act, 1996 (the Act) without giving the parties an opportunity to be heard. The Court has further distinguished the powers of an arbitral tribunal to pass interim orders under the Act from those enjoyed by a Civil Court under the Code of Civil Procedure, 1908 (CPC).


Continue Reading Parties to be Given an Advance Notice of Hearing – The Bombay High Court Sets Aside an Ex-Parte Order Passed by the Arbitral Tribunal

SC expands the scope of judicial inquiry under Section 11 of the Arbitration and Conciliation Act, 1996

Introduction

A two judge bench of the Supreme Court has recently passed a landmark judgment, expanding the scope of judicial inquiry under Section 11 of the Arbitration and Conciliation Act, 1996, (“Act”), in DLF Home Developers Limited v. Rajapura Homes Private Limited & Anr[1] and DLF Home Developers Limited v. Begur OMR Homes Private Limited & Anr[2].


Continue Reading SC expands the scope of judicial inquiry under Section 11 of the Arbitration and Conciliation Act, 1996

Interim Application Already Considered by Court

Introduction

Recently, the Supreme Court in Arcelor Mittal Nippon Steel India Ltd. v. Essar Bulk Terminal Ltd.,[1] (“Arcelor-Essar Judgment”) held that the bar on the Court from entertaining interim applications under Section 9(3) of the Arbitration and Conciliation Act, 1996 (“Act”) was applicable only if the application  had not been taken up for consideration at the time of the constitution of the Arbitral Tribunal. However, if the Court had heard the application even in part, and had applied its mind to it, it could decide to proceed with the adjudication of the same.


Continue Reading Interim Application Already Considered by Court? Section 9(3) of the Arbitration Act to Not Apply

Scope of judicial interference

Introduction

There are only a few sections in the Arbitration and Conciliation Act, 2016 (“Act”), in which Court’s reference or assistance is invited post commencement of arbitration and constitution of the arbitral tribunal.


Continue Reading Scope of judicial interference – Order passed by an Arbitral Tribunal under Section 27 of the Arbitration and Conciliation Act, 1996

Supreme court draws lakshman rekha on powers of a court under section 34: no power to modify an award

  1. The Supreme Court handed down a significant judgment[1] on the scope of power of a Court hearing a challenge to an arbitral award under Section 34 of the Arbitration and Conciliation Act, 1996 (“Arbitration Act”). The Supreme Court reiterated that there is no power under Section 34 to modify or vary an arbitral award.


Continue Reading Supreme court draws lakshman rekha on powers of a court under section 34: No power to modify an award

Indian Courts continue with the pro-enforcement approach

INTRODUCTION

1. On June 18, 2021, the Delhi High Court, in proceedings seeking enforcement of arbitral awards against foreign states, has reiterated the principle of restrictive immunity and upheld the basic tenets of International Commercial Arbitration – flexibility, stability, efficiency, and its legally binding nature. The Court held that prior consent of the Central Government under Section 86 of the Code of Civil Procedure, 1908 (“Code”), is not required for enforcement of arbitral awards against a foreign state. Importantly, it also held that foreign state cannot claim sovereign immunity for the purpose of stalling enforcement of an arbitral award rendered against it, and which arises out of a commercial transaction.


Continue Reading Indian Courts continue with the pro-enforcement approach: Delhi HC reiterates principle of restrictive immunity in enforcement of arbitral awards against foreign states

How Much is Too Much - Supreme Court on Scope of Examination of Arbitration Agreement at Pre-Arbitral Stage

When faced with a suit or proceeding in any court or tribunal when there is an arbitration clause in the agreement, Section 8 of the Arbitration and Conciliation Act, 1996 (“Act”), empowers a judicial authority to refer parties to arbitration, thereby honouring the parties’ (pre-dispute) bargain. The Law Commission of India, in its 246th report, recommended amendments to Sections 8 and 11(6A)[1] of the Arbitration Act, with the intent to restrict the scope of judicial intervention at the pre-arbitral stage only to prima facie determine whether an arbitration agreement exists, thereby making it imperative for such judicial authority to refer the parties to arbitration, leaving the final determination of the existence and validity of an arbitration agreement to the arbitral tribunal under Section 16.
Continue Reading How Much is Too Much? Supreme Court on Scope of Examination of Arbitration Agreement at Pre-Arbitral Stage