Judicial authorities have recognised the unusual difficulties that the COVID-19 pandemic has presented parties to disputes. A Supreme Court bench of Chief Justice S.A. Bobde and Justices L.N. Rao and Surya Kant took suo motu cognizance of the situation arising from the COVID-19 pandemic and, exercising its plenary powers under Articles 141 and 142 of the Constitution, ordered the extension of the period of limitation, from March 15, 2020, until the Court passed any further orders on the matter. For the same reason, the Allahabad High Court extended the 12-month period stipulated under Section 29A of the Arbitration and Conciliation Act, 1996 for an arbitral tribunal to pass the final award in matters other than international arbitration. The high courts of Delhi, Bombay, Kerala, and Telangana have also granted an extension of interim orders that were expiring in civil matters during the lockdown.
Institutes of arbitration have also recognised the gravity of the crisis. A joint statement endorsed by thirteen institutes including the International Court of Arbitration, the Singapore International Arbitration Centre, the LCIA, and the Hong Kong International Arbitration Centre, asked arbitral tribunals and parties to “mitigate the effects of any impediments to the largest extent possible while ensuring the fairness and efficiency of arbitral proceedings”.
The energy sector is anticipating a spike in disputes arising from project commissioning differences, payment delays, bankruptcies, forecasting accuracy challenges and curtailment of power purchased through long-term PPAs. Some authors have recommended the energetic adoption of institutional arbitration to ease the burden on the judiciary. The crisis could also lead to increased adoption of online dispute resolution, experts say.
The National Highways Authority of India is also working on fast-tracking arbitration cases, which will help inject liquidity into the market, Union minister Nitin Gadkari said.
You may also be interested in reading our comments on how the COVID-19 crisis has impacted contracts, roads, construction contracts, finance, real estate, labour and employment, and letters of credit.
From the Docket
Rejecting a petition under Section 11 of the Arbitration and Conciliation Act, the Supreme Court refused to go into the correctness of an earlier decision in BGS SGS SOMA JV v. NHPC Ltd. In Mankastu Impex v. Airisual Limited, the Court held that that the phrase “place of arbitration shall be Hong Kong” read along with “….any dispute, controversy, difference arising out of or relating to the MoU “shall be referred to and finally resolved by arbitration administered in Hong Kong…..” made it clear that the parties intended to treat Hong Kong as the seat rather than a venue.
The Delhi High Court, in Madhu Devi Fatehpuria v. Jugal Kishore, relied on the place of registration of a partnership firm to conclude that it had territorial jurisdiction to entertain a petition under Section 11 of the Arbitration and Conciliation Act. The arbitration agreement in this case mentioned neither venue nor the seat.
In Arvind Kumar Jain v. Union, the Delhi High Court held that a party to the dispute cannot compel the other party to waive Section 12(5) of the Act and termed such insistence as being contrary to the judgement in Perkins Eastman. This case arose out of a “railways contract” but it appears that the case of Central Organisation for Rural Electrification (2019) (discussed here) where the Supreme Court had already dealt with the appointment of a retired railway officer as an arbitrator in a railways contract and distinguished Perkins Eastman, was not cited before the High Court.
The Delhi High Court, in MBL Infrastructures v. RITES, held that the 2019 amendments to Section 29A of the Act shall not have retrospective effect. This decision is contrary to the observation of a co-ordinate bench in Shapoorji Pallonji.
In Union v. Bharat Biotech, the Delhi High Court has held that filing a copy of the impugned award while challenging the award would be a sine qua non under Section 34 of the Arbitration and Conciliation Act.
In the last edition of this newsletter, we did not link to Deepika Kinhal’s article on online dispute resolution where we should have. We deeply regret this error.
Thank you for reading. We will be back in your inbox soon with more updates from the world of arbitration. We hope that you, your family, and your colleagues remain healthy and fulfilled during the current crisis.