CDC Financial Services (Mauritius) Ltd Vs BPL Communications Ltd & Ors
The parties had entered into an investment agreement, containing an arbitration clause, out of which a dispute arose. The appellant approached the court u/s 11 whereby an arbitrator was appointed. While the proceedings were pending, the respondent filed a writ petition in the High Court, and the High Court passed certain interim orders.
It was held that the orders passed by the High Court were in violation of section 5 whereunder courts are restrained from interfering with arbitration. Whatever may be the merits of the writ application, the High Court should have had regard to section 5 before granting the reliefs that it did. Therefore the High Court order was set aside and the respondents were restrained from moving an application in the pending writ petition which would have the effect of interfering with the continuance and conclusion of the arbitration proceedings.
Asiasoft (India) Pvt Ltd Vs Globesyn Technologies Ltd
The plaintiff had filed a suit for recovery for Rs 40 lakhs advanced to the defendant in pursuance to a verbal agreement regarding a joint venture. The defendant sent a copy of the proposed joint venture, which being unacceptable by the plaintiff, was not executed by the plaintiff and the agreement did not bear any signature on behalf of the plaintiff.
It was held that the said agreement could not be relied upon to refer the dispute to arbitration as the facts of the case do not bring out any arbitration agreement between the parties.
Asiasoft (India) Pvt Ltd Vs Globesyn Technologies Ltd
The plaintiff had filed a suit for recovery for Rs 40 lakhs advanced to the defendant in pursuance to a verbal agreement regarding a joint venture. The defendant sent a copy of the proposed joint venture, which being unacceptable by the plaintiff, was not executed by the plaintiff and the agreement did not bear any signature on behalf of the plaintiff.
It was held that the said agreement could not be relied upon to refer the dispute to arbitration as the facts of the case do not bring out any arbitration agreement between the parties.
Ford Credit Kotak Mahindra Ltd vs M Swaminathan
The parties entered into a loan agreement, containing an arbitration clause, whereby the respondent availed of the loan. However, the respondent defaulted in loan payment and the petitioner terminated the contract and recalled the entire amount. The Respondent filed a suit and the petitioner, in the said suit, filed an application u/ss 8 and 5. It was contended that arbitration clause had perished when the contract was terminated.
Dismissing the contention, it was held that the arbitration clause is distinct from the other clauses in the contract. Total breach of the substantive stipulations, even when it is accepted by the other party, does not abrogate the arbitration clause and even the party in default may invoke that clause.
Union of India Vs RR Industries
The application/notice for appointment of arbitrator was given by the respondent to the petitioner on 1.6.2004. the petition for appointment of arbitrator by the designated authority was filed by the respondent on 24.2.2005. The arbitrator was appointed by the petitioner on 21.3.2005 after the expiry of 30 days of the receipt of the notice and after filing of the petition for appointment of arbitrator by the respondent. The petitioner argued that in terms of law, even though he has forfeited the right to supply the vacancy, but still the appointment of the arbitrator has to be in terms of the arbitration clause, ie. A gazetted officer.
It was held that once a party opts not to appoint the arbitrator within the stipulated period and leaves it open to the other party to move the designated authority then the party is estopped from reverting back to say that if at all an arbitrator is being appointed by the designated authority, it should be according to the party's choice and as per the arbitration clause, a gazetted officer.
It was further held that firstly there is the statutory limitation of 30 days and then precedented limitation upto the time of filing of petition u/s 11 (6) by the opposite party. The party which does not exercise its rights and crosses the first limitation and also crosses the extended 2nd limitation and sleeps over its right, totally forfeits the right to either appoint the arbitrator or to have the arbitrator of its own choice. Also, the forfeiture of the right of the erring party is not partial; it is complete forfeiture. The lauded purpose of this arbitral provision in the new Act is to expedite justice delivery system. The exercise of the power by the designated authority to appoint a retired judicial officer, therefore, cannot be attacked.
Delkon India Pvt. Ltd Vs The General Manager, Bharat Heavy Electricals Ltd
The petitioner had issued notice invoking the arbitration clause for appointment of arbitrator on 23.9.1997 but the respondent ignored that and did not appoint the arbitrator. Then the petitioner filed a petition u/s 11(6) in September 1998, after which the respondent appointed an arbitrator in May 1999. The court dismissed the petitioner's application for appointment and directed it to appear before the arbitrator appointed by the respondent. The petitioner appeared before the arbitrator and questioned his jurisdiction. The respondent contented that after the appointment of arbitrator by the respondent, the petitioner appeared before the arbitrator challenging his jurisdiction u/s 16 which is still pending therefore the writ petition impugning the court's order is not maintainable.
It was held that it is no more res integra that the vacancy can be supplied by a party pursuant to the arbitration agreement even after 30 days of receipt of notice. However, once a party approaches the court and files a petition for appointment by designated authority u/s 11 (6), the right to supply vacancy by the opposite party is extinguished. If that right stood extinguished on filing of the petition in September 1998, the appointment of the arbitrator by the respondent in May 1999 could not be made and therefore the order passed by the court dismissing the petitioner's application suffers from patent illegality.
Section 34, 2(1)(c), 16(2), (3) & 37(2) - Order or decision on jurisdiction, interim award or arbitrability of dispute not challengable u/s 34
Nirma Ltd Vs Lurgi Energie Und Entsorgung GmBH
An application had been made by a party to the dispute u/s 34 for setting aside of the decision of the arbitrator on a jurisdictional aspect. The question was whether the arbitrator's decision was to be considered an award.
It was held that such a decision was only an order or a decision of the tribunal. Further, an award would not include an interim award which is a decision of the arbitral tribunal rejecting the plea raised u/s 16(2) or (3). An award which is permitted to be challenged u/s 34 is an award distinguished from an order or a decision on jurisdiction or arbitrability of dispute.
If the plea regarding jurisdiction or exceeding the scope of authority were accepted, an appeal from such a decision is expressly provided in Section 37(2) where it is called an 'order of the arbitral tribunal'. The Legislature has consciously and clearly considered the decision on jurisdictional aspect to be not an 'award' but an 'order' or a 'decision'. The Legislature has also omitted to provide for an appeal from such a decision. On the other hand, the award as distinguished from an order or a decision on jurisdiction or arbitrability is expressly permitted to be challenged in accordance with Section 34.
Oil & Natural Gas Corporation Ltd Vs Saw Pipes Ltd
The issue that arose was whether the court has the jurisdiction u/s 34 to set aside an award passed by the arbitral tribunal which is patently illegal or in contravention of the provisions of the Act or any other substantive law governing the parties or is against the terms of the contract.
It was held that:
National Thermal Power Corporation Vs RS Avtar Singh
An arbitrator was appointed by the Supreme Court thereafter which an award was made. When the petitioner filed objections, the issue that arose was whether it was permissible for High Court to entertain objections to the award u/s 34. It was contended that only the Supreme Court has jurisdiction to entertain such an application.
It was held that the definition of 'court under the 1996 Act is totally different. Now it does not mean the civil court having jurisdiction to decide the question. Presently, section 2(e) defines the court as the principal court of civil jurisdiction and includes the High Court in exercise of its Ordinary Original Jurisdiction. Keeping in view the pecuniary jurisdiction when the application u/s 34 of the Act has been filed in this regard, indeed in face of the definition u/s 2(e), this court alone can entertain this suit.
MIC Electronics Limited Vs Union of India
There was a delay of 80 days by the respondent when making an application for setting aside the award. Thereafter the respondent filed an application u/s 5 of the Limitation Act to condone the delay in filing the petition u/s 34. the Chief Judge allowed the application and condoned the delay.
Setting aside the impugned order, it was held that Section 5 of the Limitation Act was not applicable to proceedings u/s 34. Further, no application for setting aside the award can be made after 3 months from the date on which the party making the application had received the award or, if a request has been made u/s 33, from the date on which that request has been disposed off by the tribunal. However, the court, in an appropriate case, may extend the period of 3 months for a further period of 30 days 'but not thereafter'. The provision is mandatory in its nature. The competent court has no jurisdiction to extend or condone delay in filing application beyond 30 days.
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