The latest arbitration judgments have been released, and they provide some interesting insights into how the courts are interpreting the law. Here are the lists of the top 10 latest judgments of the supreme court on arbitration
Sanjiv Prakash v. Seema Kukreja,
The Supreme Court of India has considered the limiting scope of Section 11 of the Arbitration and Conciliation Act, 1996, and has concluded that the issue of novation of an agreement cannot be decided by courts in the limited prima facie assessment of whether the parties have entered into an arbitration agreement. The Supreme Court cited Vidya Drolia versus Durga Trading Corporation (2020). That case held that the Court can only interfere at the pre-reference stage if it can be shown that the claims are prima facie time-barred and dead or that there is no continuing dispute. All other cases should be referred to an arbitral tribunal for a determination on the merits.
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M/S NN Global Mercantile Pvt Ltd v. M/S Indo Unique Flame Ltd & Others,
Non-stamping/inadequate stamping is treatable, according to the Supreme Court. Furthermore, due to the fact that the arbitration agreement is,
An accord was reached on its own.
The failure to pay duty on the contract was not actionable under stamping legislation. But it did not prevent the parties from using the contract’s arbitration clause.
The Supreme Court overturned its previous ruling in M/S Sms Tea Estates P.Ltd versus M/S Chandmari Tea Co. P.Ltd, (2011), and determined that the conclusions in Garware Wall Ropers Ltd. vs Coastal Marine Constructions, (2019) were wrong. However, this decision was recently confirmed by a Supreme Court coordinating panel. The case has been sent to a higher court for a decision. The Supreme Court has established guidelines for how courts and tribunals should address concerns about non-stamping or insufficient stamping.
The document will be seized by an arbitral tribunal, which will order the parties to pay the stamp duty and any fines to the satisfaction of the collector.
Rather than impounding the document under Section 8, the court will submit the dispute to arbitration. The court will order the parties to stamp the document before the panel decides on the issue.
Under Section 9, the court can grant remedies to protect the arbitration’s subject matter. But it will seize the document and force the parties to pay the stamp duty.
Under Section 11, the court will appoint a tribunal. But the parties must stamp the document before the tribunal can rule on the matter.
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Haryana Space Application Centre (HARSAC) and Anr. v. Pan India Consultants Pvt. Ltd. and Anr.,
The Hon’ble Supreme Court held that the nomination of the Principal Secretary, Government of Haryana, as the nominee arbitrator of the appellant, which was a nodal agency of the Government of Haryana, was unconstitutional under Section 12(5) of the Arbitration Act, 1996 read with the Seventh Schedule. It was pointed out that, regardless of any prior agreement to the contrary, anyone whose connection to the parties falls into any of the categories enumerated in the Seventh Schedule is ineligible to be chosen as an arbitrator under Section 12(5) of the Arbitration Act. The Supreme Court of India found that Section 12(5) of the Arbitration Act, in conjunction with the Seventh Schedule, was an obligatory and non-derogable clause.
Because he would have a controlling influence on the HARSAC, a state-run nodal agency. It was determined that the Principal Secretary of the Government would be unqualified to act as an arbitrator in this case.
During the hearing, the attorneys for both sides agreed to replace the current panel with a single arbitrator to complete the arbitral procedures. The Hon’ble Supreme Court then appointed a substitute arbitrator. He would resume the proceedings from the point at which the order was received and issue an arbitral ruling within six months.
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Government of Maharashtra v. Borse Brothers Engineers & Contractors Pvt. Ltd.,
The Commercial Courts Act, 2015, which creates a stipulated value for application, will only apply to appeals under Section 37 of the Arbitration Act. If the specified value exceeds three lakh rupees, according to the Hon’ble Supreme Court. When an appeal under Section 37 of the Arbitration Act is directed by Section 13 of the Commercial Courts Act, the limitation period is 60 days.
The requirements of Articles 116 and 117 of the Limitation Act, 1963 apply where the Commercial Courts Act does not cover an appeal under Section 37 of the Arbitration Act because the claimed value is less than three lakhs. The time of limitation for an appeal to the High Court from a subordinate court order was established at 90 (ninety) days from the date the order was passed by the subordinate court, according to Article 116 of the Limitation Act. Similarly, under Article 117 of the Limitation Act, if an appeal is filed from a High Court order to the same court or a court other than the High Court, the term of limitation is 30 (thirty) days.
In all of the aforementioned appeals, the Hon’ble Supreme Court concluded that a minor delay may be justified as an exception rather than a rule. A court may only grant a limited-term order if the party acted in good faith. And the court believes the opposing party has earned equity and justice that is now being lost. As a result of the first party’s inaction and negligence.
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Indus Biotech Pvt. Ltd. v. Kotak India Venture (Offshore) Fund,
The Hon’ble Supreme Court turned to the recent judgment in Vidya Drolia and Others v. Durga Trading Corporation to determine whether the subject matter, in this case, was arbitrable (2020). Based on the detailed analysis performed in Vidya Drolia, the Hon’ble Supreme Court held that when a process is in rem, a dispute is non-arbitrable, and the IBC procedure is to be regarded in rem only after it is approved. However, it should be noted that the application under Section 7 of the IBC was denied in this case. The moot point was whether an application submitted under Section 7 of the IBC before it was admitted might be sent to arbitration, given the request to send parties to arbitration made under Section 8 of the Arbitration Act.
Explaining the legal position
The legal position of the IBC superseding all other laws, as provided in Section 238 of the IBC, was well-established, according to the Hon’ble Supreme Court. Despite the fact that the corporate debtor filed an application under Section 8 of the Arbitration Act, the NCLT must consider the arguments stated in the application filed under Section 7 of the IBC, review the financial creditor’s materials, and determine whether a default has occurred. Regardless of whether the parties have agreed to arbitrate, if the NCLT arrives to the unavoidable conclusion that there has been a default and the obligation is due, no reference to arbitration will be made.
As a result, the Hon’ble Supreme Court clarified, while summarising the procedure, that in any proceeding pending before the NCLT under Section 7 of the IBC, any subsequent application under Section 8 of the Arbitration Act will not be maintainable if such petition is admitted upon the NCLT recording the satisfaction with regard to the default and the debt due from the corporate debtor. As a result, the Hon’ble Supreme Court found that the NCLT’s ruling was reasonable in the circumstances of the case, and Indus’ request for the establishment of the arbitral tribunal was allowed.
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Inox Renewables Ltd. v Jayesh Electricals Ltd.
The Supreme Court found that the parties had agreed to the change of venue to Ahmedabad and that no written agreement was required. When Ahmedabad was picked as the site, it also became the arbitration’s “seat,” which meant that any challenges had to be filed in Ahmedabad courts.
Oriental Structural Engineers Pvt. Ltd. v State of Kerala
The SC concluded that the Tribunal might have awarded interest as a compensatory or equitable remedy because there was no exclusion clause. In determining whether the Tribunal can assign such interest, the Supreme Court cited the G.C. Roy case (1991), in which interest was found to be fundamentally compensating. It went on to state that the same was fully included under Section 31(7)(a) of the Act. As a result, the Supreme Court upheld the tribunal’s verdict, reversing previous court rulings.
The agreement was silent on the rate of interest. But it did provide for the payment of interest on late payments, according to the Supreme Court. The Supreme Court granted simple interest at the rate of 8% on outstanding money as a fair measure.
Chintels India Ltd. v. Bhayana Builders P. Ltd
BGS SGS Soma was distinguished by the Supreme Court, which stated that the delay was tolerated in that case and that the judgment did not constitute a final decision on the subject. A rejection to accept delay, on the other hand, would constitute a definitive ruling, as the challenge would be dismissed. As a result, such orders are subject to judicial review under Section 37. (1). (c). According to the Court, Section 37(1)(c) states, “Setting aside…an arbitral award under Section 34.” This would imply dismissing a challenge not only for its merits but also for its tardiness.
The Court also upheld the long-held position that Section 5 of the Limitation Act of 1963 does not apply to Section 34 challenges. And that no delay of more than three months and thirty days can be excused.
Pravin Electricals Pvt. Ltd. v Galaxy Infra and Engineering Pvt. Ltd.
The SC determines that assessing whether the parties have entered into an arbitration agreement should be left to an arbitrator. Who will thoroughly analyze the documentary evidence given to him after witnesses have been cross-examined on it? As a result, we overturn the Delhi High Court’s decision insofar. As it concludes that the parties have entered into an Arbitration Agreement. The ultimate ruling naming former Delhi High Court Judge Justice G.S. Sistani as a Sole Arbitrator, however, was upheld by the court.
As a preliminary issue, the expert Judge will determine if the parties have engaged in an Arbitration Agreement. And will only consider the merits of the case if that agreement is discovered. It is emphasized that all issues will be resolved without regard to the court’s preliminary opinions. The appeal is granted, subject to the aforementioned conditions.
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Bharat Sanchar Nigam Ltd. and Anr. v. M/s. Nortel Networks India Pvt. Ltd
The Supreme Court concluded that Article 137 of the first schedule of the Limitation Act, 1963 governs the time limit for filing an application. That time limit is under Section 11 of the Arbitration and Conciliation Act, 1996. Article 137 is an additional provision that provides a limitation period for any application. That does not have a term of limitation specified in any of the Limitation Act’s Schedule Articles. It provides a three-year restriction period beginning on the date the right to apply is granted.
According to the judgment, which was given on March 10, 2021, the statute of limitations will begin to run from the day of failure to appoint the arbitrator. “It is now relatively well established that if the arbitrator was not assigned within 30 days after the issue of the notification seeking arbitration. The limitation for making an application under Section 11 would emerge,” the court said. To put it another way, an application under Section 11 can only be made after a notice of arbitration has been given in respect of the specific claim(s) / dispute(s) to be referred to arbitration, but no appointment has been made.
Secunderabad Cantonment Board v B. Ramachandraiah & Sons
According to the Hon’ble Supreme Court, the claim for arbitration, in this case, was presented via a letter dated November 7, 2006. In a letter dated January 13, 2007, this demand was restated. Along with the requirement that an arbitrator is appointed within 30 days. As a result, the Supreme Court declared that the statute of limitations began to run on February 12, 2007. That it would continue to run until the end of the year. Despite the fact that the restriction on merits began on February 16, 2010, 30 days. After the Appellant’s first denial of an arbitrator’s appointment, three years had passed by February 2013. The claim on merits was judged to be hopelessly time-barred. As a result, the Supreme Court ruled that the High Court had no authority to appoint an arbitrator. As a result, the appeals were allowed to proceed.
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