Hello! Welcome back to our updates from the world of arbitration.
The International Centre for Settlement of Investment Disputes has recently published revisions of its rules and regulations for resolving disputes between foreign investors and their host states. The revised rules have come into effect from July 1, 2022. Besides introducing numerous changes to make arbitration process more transparent and time-effective, the revised rules include new provisions for amicable settlement. Further, the revised rules also require disclosure of third-party funding throughout the proceedings with a view to avoid any conflict of interest arising as a result thereof.
At a conference in London, the Chief Justice of India (CJI), NV Ramana highlighted the importance of arbitration as a better resolution mechanism in commercial disputes. The CJI while addressing the conference on the topic Arbitrating Indo-UK Commercial Disputes said that “Arbitration is the best-suited dispute resolution mechanism for the commercial world. It is an effective alternative to traditional litigation and is regulated primarily by the terms previously agreed upon by the parties themselves. The process is consensual, confidential and the result is binding.”
From the docket
The Supreme Court upheld a judgment of the Calcutta High Court whereby the High Court had refused to appoint an arbitrator in respect of disputes which had already been part of an earlier arbitration between the same parties and were decided by the arbitrator. The Supreme Court observed that that there cannot be two arbitration proceedings with respect to the same contract/transaction, in the case of M/S Tantia Constructions Limited v. Union Of India.
In NHAI v. Transstroy (India), the Supreme Court has set aside the decision of the arbitral tribunal and High Court by which the NHAI was not allowed to file its counter-claim on the ground that it was against the intent of parties to submit their dispute to conciliation first. The Supreme Court held that it was against the very object of Section 23(2A) to disallow a party to file its counter-claim and a narrow interpretation of such clause would lead to adjudication of disputes before multiple forums.
A party cannot approach the court in writ jurisdiction to challenge an interlocutory order passed by the arbitral tribunal, which is not amenable to challenge under Section 37 of the Act, ruled the High Court of Delhi.
In Food Corporation of India v. Adani Agri Logistics, the High Court of Delhi held that the amended provision of Section 28(3) does not give the arbitrator the power to render an award contrary to the express terms of the agreement between the parties.
In National Research Development Corporation v. Mak Controls and Systems, the High Court of Delhi upheld the existence of the arbitration clause despite the expiry of the principal agreement in which such arbitration agreement was contained.
In BHEL v. Bhatia Engineering Company, the Delhi High Court held that awarding interest is mandatory under the provisions of section 15 and 16 of the Micro, Small and Medium Enterprises Development Act, 2006. The court also held that once the arbitral tribunal came to the conclusion that the said act was applicable, it had to give reasons for denying the benefits of the act to the MSME-party.
A Division-bench of the High Court of Delhi has held that an application seeking reference to arbitration under Section 8 of the Act has to be filed within the time available or granted for filing the first statement on the substance of the dispute, including a written statement. The court further over-ruled an earlier decision of the High Court in Hughes Communications India v. Union (2018 SCC OnLine Del 10879).
In Vision Projects Technologies v. OSV Crest Mercury 1 (IMO 9724398), the High Court of Bombay has held that an act in rem such as an admiralty suit for recover of dues and arrest of the vessel would not be barred merely due to pendency of an arbitration proceeding between the parties on the same cause of action.
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Mani Gupta & Sonali Jain