Hotel Marina Vs Sushil Kumar Raut
A request for arbitration of the dispute was made by the respondent to Mr. RA Aggarwal, the Managing Partner of the petitioner. The appointing authority instead of acting as an arbitrator himself appointed another as the sole arbitrator. Thereafter, he cancelled the said nomination and appointment and himself entered into reference and issued notice to the parties.
It was held that there is no provision which specifically empowers the appointing authority to recall the mandate of a duly appointed arbitrator as has been attempted in the present case. The appointed arbitrator has not withdrawn for any reason or for any event mentioned in section 14. There is no power contained in the arbitration clause permitting the appointing authority to recall the appointment. Section 15(2) only clarifies that where the mandate of an arbitrator terminates, a substitute arbitrator shall be appointed according to the rules that were applicable to the appointment of the arbitrator being replaced. Had the new arbitrator declined, this provision would have come into play.
Therefore it is held that the order of Mr. RA Aggarwal dated 29.7.2000, in which he purports to act as the sole arbitrator, is non-est and without jurisdiction and accordingly struck down.
Union of India Vs Girdhari Lal
This case discussed as to what happens to the mandate of the arbitrator when he withdraws from the office.
It was held that an appointed arbitrator, on his withdrawal from the office, ceases to be an arbitrator and his mandate terminates. The powers of the court as regards extension of time period of the arbitrator could be exercised by the court when an arbitrator is appointed by it and where the arbitrator is appointed under the contract and it is provided that he can act as an arbitrator so long as he is in service then it cannot be said that his period can be extended as the mandate itself has come to an end u/s 15 and something which got exhausted cannot be saved unless a power is vested in the court by some legislation to extend the time.
The power to extend time in the Act is not available and since the power is not available, the same cannot be extended and therefore, in this background the plea of the respondent that the arbitrator should be permitted to pronounce the award is also devoid of any merit.
GAIL (India) Ltd Vs Nagarjuna Cerachem Pvt Ltd
There was a government contract for supply of gas which had an arbitration clause. However, the petitioner filed a writ petition under Article 226 of the Constitution of India, the maintainability of which was questioned in this case.
The court held that the writ was not maintainable as there was an arbitration clause in the agreement under which all the disputes, if not settled mutually, will have to be referred for arbitration where the arbitrator would decide the dispute and grant appropriate relief. It is not permissible to invoke Article 226 because there is an existing effective remedy available in the contract itself. Availability of an alternative remedy is a good ground for the court to decline to exercise its extraordinary jurisdiction under Article 226.
Archcon & Ors Vs Sewda Construction Co & Anr
At the very outset a question was raised as to the maintainability of the writ petition on the ground that against the impugned order, appeal lies before this court u/s 37 and the same being the alternative remedy available to the petitioner, the present petition under Article 226 was not maintainable.
It was held that undoubtedly against an order u/s 9, a statutory appeal is maintainable u/s 37 but it cannot be said that the same will be a bar for invoking the power of the court under Article 226. If the order suffers from basic illegality or has been passed in contravention of the established principles of law, or if it is shown that grave injustice has been done to the party, the High Court in exercise of its power under Article 226 can interfere with such orders. This power involves a duty of the High Court to keep the inferior courts and tribunals within the bounds of their authority, ensure that they are performing their duty in a legal manner.
Therefore, seeing the facts and circumstances of the case, although an alternative remedy was available to the petitioner, the said remedy was not adequate and efficacious and therefore a petition under Article 226 was maintainable.
Mankanner Jain Social Welfare Society Vs Anilkumar J Doshi
The respondent was a member of the petitioner society who expelled the respondent from its membership. The respondent sought revocation of the expulsion and in the ensuing dispute, the petitioner appointed an arbitrator. The respondent did not argue that there is no arbitration clause but his argument was that the arbitration clause does not bind him and he has no faith in the sole arbitrator and he also filed a suit for declaration that the alleged expulsion was void.
It was held that the prime issue before the suit and the arbitrator is one and the same. The arbitrator has the power to decide his own jurisdiction, therefore the first issue raised by the respondent can be answered by the arbitrator himself. With regard to the issue of legality of the expulsion as raised by the respondent in the suit, the same is a prime issue before the arbitrator. If the arbitrator had come to the conclusion that the expulsion was illegal, the respondent would have got relief that he sought in the suit.
Rail India Technical & Economic Services Ltd Vs Vidyawati Construction Company
The power of the arbitrator to decide the question of the existence of the arbitration clause was discussed in this case and support was taken from citing another case viz. Nimet Resources Inc and Anr Vs Essar Steels Ltd ; 2000(3) RAJ 175
It was held that in a matter where there has been some transaction between the parties and the existence of the arbitration agreement is in challenge, the proper course for the parties is to thrash out such questions u/s 16 and not u/s 11 of the Act. The reason being that the power which is exercise u/s11 is in the nature of an administrative order and in such a case, unless the Chief Justice can be absolutely sure that there exists no arbitration agreement between the parties, it would be difficult to state that there should be no reference to arbitration. Further, such a view may not be conclusive in view of the nature of the powers that are exercised u/s 11(6).
It was also held that section 16 does not take away the jurisdiction of the Chief Justice, if need be, to decide the question of existence of the arbitration agreement and it does not declare that except the arbitral tribunal, none else can determine such a question. It was also observed that merely because the 1996 Act permits the arbitrator to decide this question, it does not necessarily follow that at the stage of section11, the Chief Justice cannot decide a question as to the existence of the arbitration clause.
Wellington Associates Ltd Vs Kirit Mehta
The question that was raised in this case was whether the Chief Justice had a power to adjudicate on the question of existence of the arbitration agreement.
While answering in the affirmative, the court held that in cases where there is a dispute raised at the stage of the application u/s 11 that there is no arbitration clause at all, then it would be absurd to refer the very issue to an arbitrator without first deciding whether there is an arbitration clause or not in the first place. Therefore, the jurisdiction of the Chief Justice or his designate to decide the question of the 'existence' of the arbitration clause cannot be doubted or excluded by section 16. Merely because the 1996 Act permits the arbitrator to decide this question does not necessarily mean that at the stage of section 11, the Chief Justice cannot decide a question as to the existence of the arbitration clause.
Board of Trustees for the Port of Calcutta Vs Mahalakshmi Constructions
The determination of jurisdiction of an arbitrator was discussed in this matter. It was held that the same is to be determined with reference to the arbitration clause ie. The forum choosing clause. The phrases used in that clause are to be looked at to see whether any and every dispute arising out of the commercial contract has been made the subject of a possible reference or not.
In all usual contracts containing an arbitration clause, there are not one but two contracts ie. The clause containing the arbitration clause is one contract and the other clauses delineating the terms and conditions agreed upon by and between the parties for commercial transactions forms the other contract. Although these two contracts are contained in the same document, it is very important to distinguish them as separate and distinct. Even if the commercial contract is unenforceable due to illegality or fraud, the arbitration contract does not become void and the arbitrator can pronounce upon the illegality or fraud.
Rajnigandha Co-operative Group Housing Society Ltd Vs Chand Construction Co
The issue was whether the ruling on its own jurisdiction by the arbitrator is an interim award and appealable. The court deliberated on this matter in a very lucid and elaborate manner and clarified that the decision by the arbitral tribunal u/s 16(5) holding that it has jurisdiction to entertain the claim petition is not an interim award. It was categorically held that where the arbitral tribunal decides the question of jurisdiction u/s 16(5) and rules that disputes raised in the petition are arbitrable, the petition u/s 34 is not maintainable as no appeal is provided under the Act against such order and since the order is not an interim order, it is not challengeable u/s 34 either.
It was further observed that from the scheme of the Act, it is apparent that the Legislature did not provide appeal against the order u/s 16(5) where the arbitral tribunal takes a decision rejecting the plea that the arbitral tribunal has no jurisdiction. The intention appears to be that in such a case, the arbitral tribunal shall continue with the proceedings and make an award without delay an without the arbitral process being interfered with at that stage by the Court in their supervisory role.
D-Ionic India (P) Ltd Vs State of Rajasthan
The issue raised in this case was whether a dispute raised by a party for determination of the existence of the arbitration agreement was within the scope of the arbitrator.
It was held that the question whether the arbitrator has jurisdiction to decide the disputes and differences raised by the petitioner in the petition is itself the subject matter of the decision of the arbitrator. Section 16 confers power under the arbitrator to rule on its own jurisdiction, including ruling on any objections with respect to the existence or validity of the arbitration agreement and for that purpose an arbitration clause which forms part of the contract shall be treated as an agreement independent of the other terms of the contract and a decision by the arbitrator that the contract is null and void shall not entail ipso jure the invalidity of the arbitration clause.Section 16(3) also provides that as soon as the matter is alleged to be beyond the scope or authority of the arbitrator, such a plea should be raised during the arbitral proceedings. Where the arbitrator rejects the aforesaid plea and continues with the proceedings and makes an award, the aggrieved party may make an application u/s 34 for setting aside of such an award.
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