Tag: arbitration

ABOUT THE FIRM

LK&BG Advocates & Solicitors is an established law office founded by Mr. Lakshmi Kant Garg, Advocate, and Mr. Bharat Garg, Advocate. Born from the chamber-built practice of L.K. Garg and Associates since 1988, LK&BG is resourced, equipped, experienced, and professional law office. They aim to provide diverse legal services and effective solutions to the individual and business clientele through their objective, dynamic and refined approach by their well-researched, drafted, and prepared representation LK&BG specializes in Dispute Resolution (Litigation, Arbitration & Mediation) of diverse and complex legal issues.

INTERNSHIP DESCRIPTION

1. Eligibility: Penultimate year of law school
2. Duration: 2-3 months (could be extended)
3. Mode: Physical/In-office

APPLICATION PROCESS

Interested candidates can send their applications to chamber303lkg@gmail.com

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– Report by Mahija Sinha

The Supreme Court in the case of  M/S. Emmar India Ltd. V. Tarun Aggarwal Projects LLP & Anr.  has stated that the HC must perform a preliminary inquiry to determine if the dispute is arbitrable to justify the appointment of arbitrators in an application under Sections 11(5) and (6) of the Arbitration Act.

FACTS

The appellants challenged the Delhi High Court’s decision and ruling in the Arbitration Petition in a civil appeal. Both parties had entered into a Collaboration Agreement and a subsequent Addendum Agreement for building a residential colony in Gurugram’s Sector 62 and 65. The parties got into a dispute, and the respondents, in this case, claimed that the appellant had broken the Addendum Agreement’s responsibilities. The respondents sent a legal notice demanding actual control of five plots totalling 2160 square yards and alleging losses of Rs. 10 crores. The disagreement was arbitrable, according to the respondents in this case, and an ex-High Court judge was chosen as the arbitrator. However, the appellants, in this case, reject the arbitrator’s appointment. As a result, the respondents, in this case, submitted an application under Sections 11(5) and (6) of the Arbitration Act asking the Court to select the arbitrators in accordance with Clause 37 of the Addendum Agreement. The appellants made a number of arguments in opposition to the aforementioned arbitration petition. The High Court granted the application under sections 11(5) and (6) of the Arbitration Act and appointed the arbitrator while keeping in mind clauses 36 and 37 of the Addendum clause. This infuriated the appellants, who then brought the current appeal.

APPELLANT’S CONTENTION

The legal representatives for the appellant argued that the High Court completely overlooked the fact that, in the appellant’s opinion, the issue occurs under Clause 36 of the Agreement and not Clause 37 while granting the application under Sections 11(5) and (6) and selecting the arbitrators. They referred to the cases Vidya Drolia and Ors. v. Durga Trading Corporation and Indian Oil Corporation Limited v. NCC Limited, where the Court noted “that at the stage of Section 11 of the Arbitration Act, a preliminary” injunction must be filed, and Uttarakhand Purv Sainik Kalyan Nigam Limited v. Northern Coal Field Limited, where it was held that the appointment of an arbitrator could be refused if the arbitration agreement is not in writing. As a result, it was finally argued that the High Court must conduct a preliminary investigation to determine whether the disagreement between the parties is covered by Clause 36 of the Agreement

RESPONDENT’S CONTENTION

Referring to Vidya Drolia and Others v. Durga Trading Corporation, the legal representatives for respondents argued that it would be best to leave the decision of whether or not the dispute is arbitrable to the arbitrator in a request made under Section 16 of the Arbitration Act, as it is the arbitrator’s job to make that determination. He continued by saying that the High Court’s selection of the arbitrators was correct, given a combined reading of Clauses 36 and 37 of the Agreement and the parties’ determination to settle their dispute through arbitration in accordance with the Arbitration Act.

COURT’S DECISION

 The bench of Justice M.R. Shah and Justice Krishna Murari observed that

“Applying the law laid down by this Court in the aforesaid decisions and considering Clauses 36 and 37 of the Agreement and when a specific plea was taken that the dispute falls within Clause 36 and not under Clause 37 and therefore, the dispute is not arbitrable, the High Court was at least required to hold a primary inquiry/review, and prima facie come to a conclusion on whether the dispute is arbitrable. Without conducting this preliminary investigation and despite knowing the fact that a party does have the right to seek enforcement of an agreement before a court of law as per Clause 36, the arbitrators were only appointed after it was noted that the 1996 Arbitration and Conciliation Act does not preclude the resolution of disputes through arbitration.”

The Court stated that the High Court, however, did not recognize or consider that a dispute involving the enforcement of the Agreement as described in Clauses 3, 6, and 9 is not subject to arbitration at all. According to this interpretation, the High Court’s contested judgment and order appointing the arbitrators is invalid and should be repealed and overturned.

–Report by Rhea Mistry

In Ircon International Ltd. v. Reacon Engineers (India) Ltd., on 10th June 2019, the petitioner filed the petition under section 34 of the Arbitration and Conciliation Act, contesting an arbitral award given by a Single Arbitrator-Led Arbitral Tribunal. Concerning the agreement made on 16.06.2010, there was a disagreement between the parties which made them opt for the arbitration settlement.

Contentions by the Respondent

The respondent contended that the petition filed by the petitioner was filed after the period for filing had expired. Under the Limitation Act, the period under which a petition shall be filed is three months and the petitioner filed the petition on 13th September 2019 when the last date to file was 12th September 2019. The petitioner has not submitted any legal paperwork asking for a delayed pardon. The respondents also asserted that initially when the petition was filed, there was no attachment made to it, i.e., contested award, statement of truth, and the vakalatnama was not attached. The petition was unsigned and when it was re-filed by the petitioner, it was after the court’s window for tolerating delays.

Referring to the case Union of India v. Bharat Biotech International Ltd. and INX News Pvt. Ltd. v Pier One Construction Pvt. Ltd. to support his contentions, he stated that the petition that was filed on 24th October 2019 cannot be regarded as the same as filed on 13th September 2019.

Contentions by the Petitioner

The petitioner claimed that the contested award was received by him on 12th June 2019 and was delivered on 10th June 2019. They filed the petition one day after the expiration of filing the petition i.e., on 13th September 2019, and as per section 34(3) of the Arbitration and Conciliation Act, the petition can be filed within three months from the date of receipt of the arbitral award.

The petition that was filed on 13th September 2019 was 73 pages and the registry returned the petition on 16th September 2019 stating that it was defective and did not contain any attestation on affidavits, awards, documents, or statement of truth, there were also no bookmarks, and the pages were without page numbers. The petition was refiled on 24th October 2019, with a total of 1325 pages. The registry again said the petition is still defective and returned it on 30th October 2019 to be re-filed. It was refiled on 6th November 2019 and again returned on 13th November 2019 with defects, it was refiled on 14th November 2019 and returned yet again as defective on 15th November 2019 and refiled on 18th November 2019 to cure some defects, and finally was refiled on 19th November 2019.

The counsel of the petitioner claimed that even though there was a delay of one day, he applied to explain that he had met with an accident and could not attend to file the petition for three weeks.

Decision

There was a delay of thirty-seven days in filing the petition, so the petitioner has submitted absolutions for the delay of thirty-seven days in re-filing the petition but did not submit absolution for the delay in filing the initial petition.

The initial petition filed on 13th September 2019 was only seventy-three pages and did not contain any attachments which were mandatory such as the contested award and the statement of truth. On 24th October 2019 the petition was filed which contained 1325 pages with all the proper attachments, attested, signed, and formatted as prescribed.

The court stated in favor of the respondent’s contention that the petition which was filed on 24th October 2019 cannot be considered the same petition filed on 13th September 2019 as they are completely different. The court noted that the petition as filed on 13th September did not contain the impugned award or vakalatnama. Considering the same, the case of Union of India v. Bharat Biotech International Ltd is substantially applicable to the facts of this case and so the filings made on 13th September 2019 cannot be considered a valid submission.

The filing made on 24th October 2019 is considered the first date of filing in the present petition. This filing is made after three months period of filing and as per the Limitation Act, it is beyond the period the court can condone.
The petition stands dismissed due to the limitation and all the pending applications are also dismissed with this petition.

About GMU

Gujarat Maritime University is an endeavor by the Gujarat Maritime Board to provide a fillip to this growth by bridging the knowledge gap within the industry. The prime objective of Gujarat Maritime University is to be a global center for excellence in maritime education, research and development, professional training and it aims to enhance and increase the human capital and capacity of the maritime industry both in India and across the globe.

The aspiration is to serve the global maritime community by producing educated and well-trained professionals in the maritime domain.

About the Competition

In Academic Session 2021-22, GIMAC Committee of School of Maritime Law, Policy and Administration, Gujarat Maritime University is holding its annual flagship event, GMU-CIArb (India) International Maritime Arbitration Competition (GIMAC) from April 8, 2022, to April 10, 2022, online using a virtual platform. The event is expected to have participation from about 50 Law Schools and Universities across India & abroad.

Objective

GMU-CIArb (India) International Maritime Arbitration Competition is aimed at nurturing and creating opportunities for the development of the skills of Arbitration in Maritime Law. For your convenience, I have attached with this mail, GIMAC Invitation, GIMAC Rule, and GIMAC Proposition.

Registration

For registration please log on to and fill out the registration form on or before March 11, 2022.

Awards

The Prize money for the winners of GIMAC 2022 are as follows:

• Winning Team: Rs. 1 Lakh
• Runners up: Rs. 60,000
• Best Speaker: Rs. 20,000
• Best Researcher: Rs. 20,000
• Best Memorial: Rs. 20,000

Registration Deadline

March 11, 2022

More details about GIMAC is available here.

Important links

• Moot Problem
• GIMAC Arbitration Rules
• GIMAC Organising Rules

Disclaimer: All information posted by us on LexPeeps is true to our knowledge. But still, it is suggested that you check and confirm things on your level.

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About Amity Law School

The School has been established under Amity University Rajasthan to achieve world-class legal education in the state and the country. In its constant pursuit to excellence, it is always endeavouring to create a legacy of leadership, professional acumen, and excellence. The Amity Law School (ALS), Amity University, Rajasthan has been established in the year 2008.

About the Competition

The goal is to offer a forum for like-minded people interested in alternative dispute resolution to compete in an intellectual and thought-provoking mediation and arbitration simulation. 

Venue: Online

Date: 11th-13th March 2022

Eligibility

Law students enrolled in 3 years LLB program and 5 years integrated program from any college/institution/university recognized by BCI across the country.

Team Composition

Participating Team shall consist of 3 members (2  members shall act as a client-counsel pair and 1 member as Mediator/Arbitrator

No team will be allowed to substitute any of its members after a team has submitted its Registration form, except with the permission of the organizers.

Registration Procedure

The registration shall be done by filling up the registration form

Registration Link: https://forms.gle/kZ3MbKc5fteN6Qqa8

• The registration shall be considered complete only when the ‘Registration Fee’ has been paid successfully and the registration form is duly filled with all the credentials.
• The registration fee for the competition is 3500.00 INR.

Payment Details

• Bank Details for NEFT/IMPS
• Name of Institution: Amity University Rajasthan
• Bank Name: Axis Bank Ltd.
• Address: No O/15, Green House, C Scheme, Ashok Marg, Jaipur, Rajasthan, 302001
• IFSC: UTIB0000010
• ACCOUNT NUMBER: 010010100496797
• TYPE OF ACCOUNT: SAVINGS

SUBMIT THE PROOF OF PAYMENT THROUGH EMAIL: arbmedamityjaipur@gmail.com

Awards

Participation certificates will be given to all the participants. Following awards will be distributed during the valedictory ceremony:

• Winners, Client-Counsel
• Best Mediator-Arbitrator
• Runners Up, Client- Counsel Pair
• Runners Up, Mediator-Arbitrator
• Best Client-Counsel Team from Preliminary Rounds
• Best Mediator-Arbitrator from Preliminary Rounds
• Best Memorial
• Best Arbitral Award (Preliminary Rounds).

Contact details

Student Conveners

• Harshvi Chaumal: 9829522551
• Deepesh Katariya: 9119210883

Disclaimer: All information posted by us on LexPeeps is true to our knowledge. But still it is suggested that you check and confirm things on your level.

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Introduction

Industrialization has resulted in a dramatic increase in global trade and business. To keep up with financial growth and avoid lengthy lawsuits, the parties have chosen arbitral proceedings as their preferred method of dispute resolution¹.
Arbitration is not at all a modern process, especially in India. It can be traced back to the Vedic ages². Even though it had been in practice for ages, it is still in its evolving stage. Arbitration is a type of “alternative dispute resolution” (ADR). Some other forms of ADR include mediation, Lok adalats, negotiation, etc. There are a number of pending cases that need resolution. Hence, ADR techniques have been proven to be very useful to reduce the pressure on the conventional court system. The recommendation made by the “Malimath committee” was related to mandating the usage of ADR techniques. In the article, there is mention of certain problems with these techniques (especially arbitration).

History of arbitration in India

If we want to trace back the origins of arbitration procedures in India, we would find the reference to the panchayat system ³. It showed a lot of improvement mainly in the nineteenth century. The “Indian Arbitration Act, 1899” had been very very important legislation that has changed the dynamics of the arbitration process. This Act was relevant only in Calcutta, Madras, and Bombay. This Act was quite lengthy and confusing. The same was held in the case of Dinkarrai Lakshmiprasad vs. Yeshwantrai Hariprasad ⁴ . To end the complexities of the Act, a new Act needed to be enacted. Therefore, in the year 1940, “The Arbitration Act, 1940” came into action. It applied to the whole country and not only to specific presidency towns. Later arbitration was codified under Section 89 and Schedule II of the “Code of Civil
The procedure, 1908”.

Arbitration had also been mentioned in ancient times. “Brihadaranyaka Upanishad” is one of the ancient scriptures that supposedly talks about arbitration. In the 1700s and 1800s, separate regulations were present that were applicable in Calcutta, Bombay, and Madras. In the case of Gajendra Singh v. Durga Kunwar _⁵, it was considered that arbitration is more of a “compromise between two parties”.
In the year 1996, following the UNCITRAL model, the “Arbitration and Conciliation Act” came into action.

Advantages and disadvantages of arbitration

Arbitration has proven to be more effective as compared to litigation (going to the court). It is more flexible than litigation techniques. Also, arbitration is comparatively less time-consuming and more cost-effective when compared to litigation. Many believe that justice provided through arbitration is of better quality.

Along with the pros mentioned above, there are some cons too. When compared to other ADR techniques (for instance, mediation), arbitration is a more expensive and time-consuming method. In the case of an arbitration proceeding, the arbitrator has to study the evidence and hear both sides before making a decision. This whole procedure takes quite some time. Unlike mediation, in the case of an arbitral proceeding, there is a scene where a party
wins and the other loses. Due to such a win or loss situation, the relation between the two parties often gets stressed.

Present status of arbitration in India

Judiciary in India has been trying a lot to simplify the processes of arbitration (especially in cases of “International Commercial Arbitration”) ⁶. There are some significant differences that the 1996 Act had when compared to the previous legislation. One of the most significant changes in the judicial involvement to the arbitral product. If an arbitration agreement is present, the judicial system has to direct the parties to opt for arbitration. The powers that an
arbitrator can exercise have been improved too. A specific mention of “domestic arbitration”⁷ had also been mentioned in the Act. In 2015, an act was enacted in order to make amendments to the existing 1996 Act. This 2015 Act was declared to be applicable to arbitral as well as court proceedings⁸.
Recently, an “Arbitration and Conciliation (Amendment) Act” was enacted in March 2021. One of the main purposes of this Act was to promote India as a center of international arbitration. To ensure the above purpose, Schedule VIII of the 1996 Act was scrapped off. This schedule banned certain categories of people from being selected as arbitrators in India.

Conclusion

From this article, it can be concluded how arbitration had become a preferred method of dispute resolution. We can see how arbitration in India is in an evolving stage. Lots of amendments are still required to make. This process had already evolved a lot if the scenario is compared to the pre-British era and in the past in general. It has also been mentioned by the experts that more professionalism is expected on the part of the arbitrators. This would
improve the scenario of this dispute resolution process in India. In order to improve the situation of arbitration procedures in India, the mechanism should be made more time effective and cost-efficient. People should be made more aware of the ADR techniques.

References:

1. “India: Evolution of Arbitration in India”, [October 21, 2016], https://www.mondaq.com/india/arbitration-dispute-resolution/537190/evolution-of-arbitration-in-india.
2. Ashutosh Singh, “Evolution of arbitration in India and the lack of professionalism”, [October 9, 2021], https://blog.ipleaders.in/evolution-arbitration-india-lack-of-professionalism/#Arbitration_in_pre-British_era.
3. “Evolution Of the Arbitration Law in India”, https://www.legalserviceindia.com/legal/article-4145-evolution-of-the-arbitration-law-in-india.html.
4. Dinkarrai Lakshmiprasad v. Yeshwantrai Hariprasad, [1930 AIR BOM 98].
5. Gajendra Singh v. Durga Kunwar, [1925 ILR 47A II 637].
6. Aditi Goyal, “Arbitration Law in India: Everything You Want to Know”, https://viamediationcentre.org/readnews/NTUy/Arbitration-law-in-India-Everything-you-want-to-know.
7. Section 2(7), Arbitration and Conciliation Act 1996.
8. Abhinav Kumar, “Making India a global hub for arbitration”, [March 24, 2021], https://www.thehindubusinessline.com/opinion/making-india-a-global-hub-for-arbitration/article34152992.ece.

This article is written by Aaratrika Bal student at National Law University Odisha.

A 3 judge bench of the Supreme Court has held that the expression “existence of arbitration agreement” which is included in Section 11 of the Arbitration Act shall also include the aspect of validity of arbitration agreement.

The Supreme Court also explained that at the stages that are included in Section 8 and 11 of the Arbitration Act the courts should undertake a prima facie examination to determine the validity of the arbitration agreement.

SECTION 8 AND SECTION 11 OF THE ARBITRATION AND CONCILIATION ACT

Section 8 of the Arbitration and Conciliation Act actually obligates any judicial authority to refer the dispute to arbitration where there was a valid arbitration agreement. A clear reading of Section 8 of the Act would give you an idea about what it says. It clears the fact that when it is compared to the UNCITRAL Model Law it differs from the Article 8 of the model law The Article 8 actually enables a court to decline to refer parties to arbitration in case the arbitration agreement is found to be void or null or in capable of being performed. In this aspect Section 8 has made a departure which indicates that it has a wider ambit and reach. Section 8 uses the expansive expression judicial authority instead of the term court.

Section 11 of the Arbitration and Conciliation Act deals with the appointment of arbitrators.

While answering a reference made to it by a division bench on the issue of whether landlord tenant disputes under the transfer of property act are arbitrable  the Apex court held that such disputes could become the subject matter of the arbitration if they are not covered by rent control laws.

The court also went on to discuss the issues relating to the stages when the question of arbitrability can be decided and the scope of examination under section 11 and section 8 of the act.

OBSERVATIONS MADE IN THE JUDGMENT-

The judgement also observed that during the reference stage the courts do not perform ministerial functions and they exercise and perform judicial functions whenever they take decisions on objections in terms of Section 8 and 11 of the Arbitration Act.

While discussing prima facie examination under Section 8 the Court was of the opinion that Section 8(1) after the 2016 amendment has enjoined the court to undertake prima facie examination when it comes to the validity of an agreement.

The Judgement went on to clarify that prima facie case in the context of Section 8 of the Arbitration Act should not be confused for the merits of the case that have been put up by the parties which has to be established before the arbitral tribunal. Its restriction lies in the subject matter of the being prima facie arbitrable when it falls under a valid arbitration agreement. Here prima facie case would mean that the  assertions on these aspects are bonafide.

The code explained how prima facie examination is not full review but is actually a primary first review in order to manifestly weed out invalid arbitration agreement sand non arbitrable disputes. The review at the reference stage in terms of prima facie is done in order to cut the dead wood  and trim the branches in terms of straight forward cases where the dismissal is quite evident and where the law and facts dealing with the litigation must stop at the first stage.

Everything depends upon the certainty of the court that there is no valid arbitration agreement that exists or the subject matter of the disputes are not arbitrable and only then an application under Section 8 could be rejected.

The judgement also had in opinion about Section 11 subsection 6A that had been inserted with the coming in off the 2016 amendment and prescribe that the court at the stage of appointing an arbitrator should confine itself to examine whether there was the existence of an arbitration agreement. However this subsection was later removed in the 2019 amendment. The court however made it noted that the existence of an arbitration agreement would mean an arbitration agreement that is able to satisfy the statutory requirements of the Arbitration Act as well as the contract act and also to meet ends and be enforceable in law.

The apex court thus made it clear that section 8 and 11 are indeed complementary provisions and the court also made it clear that it can read the mandate of a valid arbitration agreement in Section 8 into the mandate of section 11 which would include the existence of an arbitration agreement.