Hello! For our readers in India, we hope that you had an enjoyable Diwali and remain safe! Welcome back to our updates on arbitration law.
The scuffle between Amazon and Reliance Industries Limited to gain some greater foothold in the Indian retail e-commerce space has reached the SIAC. An emergency order has been passed to restrain the Future Group and Reliance industries from proceeding with the Rs. 24,713 crore deal. The Future Group has maintained that the order rendered by the emergency arbitrator had no legal standing under the Arbitration and Conciliation Act, 1996. The parties have approached the High Court of Delhi where the Future Group argued that the order of the emergency arbitrator was illegal.
The Government of India has been advised to challenge the award passed by the Permanent Court of Arbitration in favour of Vodafone International Holding BV in relation to the retroactive applicability of tax.
The US federal court for the Western District of Washington has upheld the award rendered by the International Court of Commerce in September 2015 in the dispute between Antrix Corporation and Devas Multimedia Pvt Ltd.
In a surprise move, an ordinance was promulgated to retrospectively amend the Arbitration & Conciliation Act, 1996. Apart from the deletion of the Eighth Schedule (introduced by the 2019 Amendment), the Ordinance allows the court to grant the unconditional stay of an award, if the agreement or award is the result of fraud. The move was met with mixed reactions.
From the Docket
In Sanjeev Prakash v. Seema Kukreja, the Delhi High Court held that the novation of a contract under Section 62 of the of Indian Contract Act, 1872 puts an end to the arbitration clause present in the earlier contract. The Delhi High Court, relying on various precedents observed that the scope of inquiry vested in the courts under Section 11 of the Arbitration and Conciliation Act, 1996, was limited to the existence of a valid arbitration clause. Since the arbitration clause present in the earlier contract perished with the novation, the court cannot appoint an arbitrator under Section 11 relying on the arbitration clause present in the earlier contract.
In CRSC Research v. Dedicated Freight Corridor Corporation, the Delhi High Court has further laid down criteria, which are required to be satisfied before interim protection can be granted under Section 9: (a) the existence of an arbitration clause; (b) the existence of a prima facie case, the balance of convenience and irreparable loss; and (c) the existence of “emergent necessity”. The Court held that a court should not usurp the powers of the arbitrator even at pre-arbitration stage.
In Big Charter v. Ezen Aviation, the Delhi High Court held that for the term “agreement to the contrary” in the proviso to Section 2(2) of the Act to be applicable, the mere conferment of exclusive jurisdiction would not suffice. The agreement should have a specific stipulation that the parties had agreed to exclude the applicability of Section 9 of the Act to the dispute between them. In the absence of such a specific stipulation, the mere recital regarding the exclusive jurisdiction, would not oust the jurisdiction of the Indian Court under Section 9 in a foreign seated arbitration. The Court further highlighted that the reason for the inclusion of the proviso to Section 2(2) was that courts in the foreign country would not be in a position to efficiently grant pre-arbitral interim relief and secure assets which may be located in India.
In Ram Sarup Lugani v. Nirmal Lugani, the Delhi High Court has held that the Delhi High Court (Original Side) Rules will prevail over the Code of Civil Procedure in case of any inconsistency between them. The Court also held that Rule 5 under Chapter 7 of the Rules, which prescribe 45 days to file the replication, is mandatory in nature. The Court further observed that Rule 16 under Chapter 1 preserving the inherent power of the Court, cannot be invoked to overcome the limitation period as prescribed by Rule 5 under Chapter 7.
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