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arbitration clause

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Arbitration and conciliation Act – Despite of criminal proceedings and Despite of allegations of fraud and void etc., the arbitration proceedings can be initiated to resolve the disputes as per agreement – Disputes arose between Switzer land company and common wealth games2010 organisation about payment of tail end payments – so many correspondences were made by the petitioner/ company – Respondent failed to pay the amount as CBI cases were registered against Kalmadi and others – due corruption etc., and agreement treated as void – Apex court held that efforts were made to amicably put a “closure to the agreement”. I, therefore, do not find any merit in the submission of the respondent that the petition is not maintainable for non-compliance with Clause 38.3 of the Dispute Resolution Clause. and further held that As a pure question of law, I am unable to accept the very broad proposition that whenever a contract is said to be void-ab-initio, the Courts exercising jurisdiction under Section 8 and Section 11 of the Arbitration Act, 1996 are rendered powerless to refer the disputes to arbitration.= Swiss Timing Limited …Petitioner Versus Organising Committee, Commonwealth Games 2010, Delhi. ….Respondent = 2014(May.Part) http://judis.nic.in/supremecourt/filename=41548

   Arbitration and conciliation Act – Despite of criminal proceedings and Despite of allegations of fraud and void etc., the arbitration proceedings can be initiated to resolve the disputes as per agreement – Disputes arose  between Switzer land company and  common wealth games 2010 organisation  about payment of tail end payments – so many correspondences were made by the petitioner/ company – Respondent failed … Continue reading

Arbitration and conciliation Act – Disputes between the parties – whether to send it for expert opinion or to arbitrator – High Court instead of deciding issue whether there is any arbitration clause or not-open the issue on merits of disputes – billing – date of billing – billing disputes etc., and appointed arbitrator – Apex court set aside the orders of high court to that extent of opening of issues on merits as it should be decided by the Arbitrator but not by the court = Arasmeta Captive Power Company Private Limited and another … Appellants Versus Lafarge India Private Limited …Respondent = published in / cited in / Reported in judis.nic.in/supremecourt/filename=41075

Arbitration and conciliation Act – Disputes between the parties whether to send it for expert opinion or to arbitrator – High Court instead of deciding issue whether there is any arbitration clause or not-open the issue on merits of disputes – billing – date of billing – billing disputes etc., and appointed arbitrator – Apex court set aside the … Continue reading

Arbitration Act – No Arbitration clause = Vishnu (dead) by L.Rs. …Appellant versus State of Maharashtra and others …Respondents published in judis.nic.in/supremecourt/filename=40853

Arbitration Act – No Arbitration  clause =     Whether Clause 30  of  B-1  Agreements  entered  into  between  the         Government of Maharashtra and the appellant is in  the  nature  of  an         arbitration clause is the question which arises for  consideration  in         this appeal … Continue reading

Novation of Contract = IMS Learning Resources Private Limited, the respondent herein, filed CS (OS) No.2316 of 2011 in the High Court of Delhi at New Delhi for a permanent injunction restraining infringement of a registered trademark, infringement of copyright, passing off of damages, rendition of accounts of profits and also for other consequential reliefs against the appellant herein. Appellant preferred IA No.18 of 2012 under Section 8, read with Section 5 -of the Arbitration and Conciliation Act, 1996 for rejecting the plaint and referring the dispute to arbitration and also for other consequential reliefs. The High Court rejected the application vide its order dated 16.04.2012 holding that that earlier agreements dated 01.04.2007 and 01.04.2010, which contained arbitration clause stood superseded by a new contract dated 01.02.2011 arrived at between the parties by mutual consent. = Exit paper would clearly indicate that it is a mutually agreed document containing comprehensive terms and conditions which -admittedly does not contain an arbitration clause. = We may indicate that so far as the present case is concerned, parties have entered into a fresh contract contained in the Exit paper which does not even indicate any disputes arising under the original contract or about the settlement thereof, it is nothing but a pure and simple novation of the original contract by mutual consent. Above being the factual and legal position, we find no error in the view taken by the High Court. The appeal, therefore, lacks merit and stands dismissed, with no order as to costs.

published in http://judis.nic.in/supremecourt/imgst.aspx?filename=40682 REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 6997 OF 2013 (Arising out of SLP(C) No.33459 of 2012) M/s Young Achievers ….. Appellant Versus IMS Learning Resources Pvt. Ltd. ….Respondent   J U D G M E N T K.S. Radhakrishnan, J. Leave granted. 2. IMS Learning Resources … Continue reading

Arbitration and Conciliation Act, 1996: s. 45 – Reference to arbitration under – Scope of – International commercial arbitration – Multi-party agreements – Joint venture agreements with different parties – Some of the agreements contained arbitration clause while the others did not – Dispute between parties leading to filing of suit – High Court referred the entire suit (including the non-signatory parties to the arbitration agreement) for arbitration u/s. 45 – Joinder of non-signatory parties to arbitration – Permissibility – Held: Joinder of non-signatory parties to arbitration is permissible – They can be referred to arbitration, provided they satisfy the pre-requisites u/ss. 44 and 45 r/w Schedule I of the Act – The cases of group companies or where various agreements constitute a composite transaction with intrinsically interlinked cause of action, can be referred to arbitration, even if the disputes exist between signatory or even non-signatory parties – However, the discretion of the court has to be exercised in exceptional, limiting, befitting and cases of necessity and very cautiously – Expression `any person claiming through or under him’ used in s. 45, takes within its ambit persons who are in legal relationships via multiple and multi-party agreements, though they may not all be signatories to the arbitration clause – In the present case, the corporate structure of the companies demonstrates a definite legal relationship between the parties to the lis or persons claiming under them – Their contractual relationship spells out the terms, obligations and roles of the respective parties which they were expected to perform for attaining the object of successful completion of the joint venture agreement – All the other agreements were intrinsically inter-connected with the mother agreement – All the agreements were part of a composite transaction to facilitate implementation of principal agreement – Hence, all the parties to the lis were covered under expression “any person claiming through or under” the principal (mother) agreement – Arbitration clause in the principal agreement was comprehensive enough to include all disputes arising “under and in connection with” principal agreement – Conduct of parties and even subsequent events show that the parties had executed, intended and actually implemented composite transaction contained in principal/mother agreement – Hence, direction to refer the disputes to arbitration -Convention on Recognition and Enforcement of Foreign Arbitral Awards (New York Convention) – Article II (3) – ICC Rules – UNCITRAL Model Rules. s. 45 – Issues under – Determination of – Issue of jurisdiction should be decided at the beginning of the proceedings itself and they should have finality – Determination of fundamental issues as contemplated u/s. 45 at the very first instance is not only appropriate but is also the legislative intent – Jurisdiction. Code of Civil Procedure, 1908 – s. 9 – Jurisdiction of civil courts – Jurisdiction of the court and the right to a party emerging from s. 9 is not an absolute right, but contains inbuilt restrictions – Civil courts have jurisdiction to try all suits except those which is either expressly or impliedly barred – The provisions of s. 45 of the 1996 Act would prevail over the provisions of CPC – Arbitration and Conciliation Act, 1996 – s. 45. Doctrines/Principles: `Group of Companies’ Doctrine; Principle of `incorporation by reference’; Principle of `composite performance’; Principle of `agreements within an agreement’ and Principle of `Kompetenz kompetenz’ – Discussed. Precedent – Observations – Precedential value – Held: The observations to be construed and read to support the ratio decidendi – They would not constitute valid precedent as it would be hit by the doctrine of stare decisis – Doctrine – Constitution of India, 1950 – Art. 141. Words and Phrases: Expression `connection’ – Meaning of. The questions which inter alia arose for consideration in the present appeals were: (1) What is the ambit and scope of Section 45 of the Arbitration and Conciliation Act, 1996; (2) Whether in a case where multiple agreements were signed between different parties some containing an arbitration clause and others not and where the parties were not identically common in proceedings before the Court (in a suit) and the arbitration agreement, a reference of disputes as a whole or in part could be made to the arbitral tribunal, more particularly, where the parties to an action were claiming under or through a party to the arbitration agreement; and (3) Whether the principles enunciated in the case of *Sukanya Holdings Pvt. Ltd. v. Jayesh H. Pandya was the correct exposition of law.= Dismissing the appeals, the Court HELD: 1.1 Section 45 is a provision falling under Chapter I of Part II of the Arbitration and Conciliation Act, 1996 which is a self-contained Code. The expression `person claiming through or under’ would mean and take within its ambit multiple and multi-party agreements, though in exceptional case. Even non-signatory parties to some of the agreements can pray and be referred to arbitration provided they satisfy the pre-requisites under Sections 44 and 45 r/w Schedule I. Reference of non-signatory parties is neither unknown to arbitration jurisprudence nor is it impermissible. [Para 167] 1.2 An arbitration agreement, under Section 45 of the 1996 Act, should be evidenced in writing and in terms of Article II of Schedule 1, an agreement in writing shall include an arbitral clause in a contract or an arbitration agreement signed by the parties or contained in an exchange of letters or telegrams. Thus, the requirement that an arbitration agreement be in writing is an expression incapable of strict construction and requires to be construed liberally, as the words of this Article provide. Even in a given circumstance, it may be possible and permissible to construe the arbitration agreement with the aid and principle of `incorporation by reference’. Though the New York Convention is silent on this matter, in common practice, the main contractual document may refer to standard terms and conditions or other standard forms and documents which may contain an arbitration clause and, therefore, these terms would become part of the contract between the parties by reference. The solution to such issue should be case-specific. The relevant considerations to determine incorporation would be the status of parties, usages within the specific industry, etc. Cases where the main documents explicitly refer to arbitration clause included in standard terms and conditions would be more easily found in compliance with the formal requirements set out in the Article II of the New York Convention than those cases in which the main contract simply refers to the application of standard forms without any express reference to the arbitration clause. [Para 72] M.V. “Baltic Confidence” and Anr. v. State Trading Corporation of India Ltd. and Anr. (2001) 7 SCC 473: 2001 (1) Suppl. SCR 699; Olympus Superstructure Pvt. Ltd. v. Meena Vijay Khetan and Ors. (1999) 5 SCC 651: 1999 (3) SCR 490 – relied on 1.3 Under the Indian Law, greater obligation is cast upon the Courts to determine whether the agreement is valid, operative and capable of being performed at the threshold itself. Such challenge has to be a serious challenge to the substantive contract or to the agreement, as in the absence of such challenge, it has to be found that the agreement was valid, operative and capable of being performed; the dispute would be referred to arbitration. [Para 78] State of Orissa v. Klockner and Company and Ors. AIR 1996 SC 2140: 1996 (1) Suppl. SCR 368 – relied on. Abu Dhabi Gas Liquefaction Co. Ltd. v. Eastern Bechtel Corp.(1982) 2 Lloyd’s Rep. 425, CA – referred to. Law and Practice of International Commercial Arbitration by Alan Redfern and Martin Hunder (Fourth Edition) 1.4 The legislative intent and essence of the 1996 Act was to bring domestic as well as international commercial arbitration in consonance with the UNCITRAL Model Rules, the New York Convention and the Geneva Convention. The New York Convention was physically before the Legislature and available for its consideration when it enacted the 1996 Act. Article II of the Convention provides that each contracting State shall recognize an agreement and submit to arbitration all or any differences which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not concerning a subject matter capable of settlement by arbitration. Once the agreement is there and the Court is seized of an action in relation to such subject matter, then on the request of one of the parties, it would refer the parties to arbitration unless the agreement is null and void, inoperative or incapable of performance. Still, the legislature opted to word Section 45 somewhat dissimilarly. Section 8 of the 1996 Act also uses the expression `parties’ simpliciter without any extension. In significant contra-distinction, Section 45 uses the expression `one of the parties or any person claiming through or under him’ and `refer the parties to arbitration’, whereas the rest of the language of Section 45 is similar to that of Article II(3) of the New York Contention. The Court cannot ignore this aspect and has to give due weightage to the legislative intent. It is a settled rule of interpretation that every word used by the Legislature in a provision should be given its due meaning. The Legislature intended to give a liberal meaning to this expression. [Paras 88 and 89] 1.5 The language and expressions used in Section 45, `any person claiming through or under him’ including in legal proceedings may seek reference of all parties to arbitration. Once the words used by the Legislature are of wider connotation or the very language of Section is structured with liberal protection then such provision should normally be construed liberally. [Para 90] 1.6 In view of the legislative object and the intent of the framers of the statute, i.e., the necessity to encourage arbitration, the Court is required to exercise its jurisdiction in a pending action, to hold the parties to the arbitration clause and not to permit them to avoid their bargain of arbitration by bringing civil action involving multifarious cause of action, parties and prayers. [Para 91] 1.7 The scope of concept of `legal relationship’ as incorporated in Article II(1) of the New York Convention vis-

REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 7134 OF 2012 (Arising out of SLP (C) No.8950 of 2010)   Chloro Controls (I) P. Ltd. … Appellant Versus Severn Trent Water Purification Inc. & Ors. … Respondents WITH CIVIL APPEAL NOS. 7135-7136 OF 2012 (Arising out of SLP (C) No.26514-26515 … Continue reading

whether on the death of a named arbitrator, the arbitration agreement survives or not. Sections 14 and 15 provide the grounds for termination of the mandate of the arbitrator on the ground of incapability of the arbitrator to act or if he withdraws from his office or when the parties agree to the termination of the mandate of the arbitrator. Section 15(2) states that a substitute arbitrator shall be appointed as per the rules that were applicable to the appointment of the arbitrator being replaced. Section 15(2), therefore, has to be given – a liberal interpretation so as to apply to all possible circumstances under which the mandate may be terminated. We have carefully gone through the arbitration clause in the Agreement dated 16.12.1989 and, in our view, the words “at any time” which appear in Clause 21, is of considerable importance. “At any time” expresses a time when an event takes place expressing a particular state or condition that is when the dispute or difference arises. The arbitration clause 21 has no nexus with the life time of the named arbitrator. The expression “at any time” used in the arbitration clause has nexus only to the time frame within which the question or dispute or difference arises between the parties be resolved. Those disputes and differences could be resolved during the life time of the named arbitrators or beyond their life time. The incident of the death of the named arbitrators has no nexus or linkage with the expression “at any time” used in clause 21 of the Agreement. The time factor mentioned therein is the time within which the question or dispute or difference between the parties is resolved as per the Agreement. Arbitration clause would have life – so long as any question or dispute or difference between the parties exists unless the language of the clause clearly expresses an intention to the contrary. The question may also arise in a given case that the named arbitrators may refuse to arbitrate disputes, in such a situation also, it is possible for the parties to appoint a substitute arbitrator unless the clause provides to the contrary. Objection can be raised by the parties only if there is a clear prohibition or debarment in resolving the question or dispute or difference between the parties in case of death of the named arbitrator or their non-availability, by a substitute arbitrator. 22. We are of the view clause 21 does not prohibit or debar the parties in appointing a substitute arbitrator in place of the named arbitrators and, in the absence of any prohibition or debarment, parties can persuade the court for appointment of an arbitrator under clause 21 of the agreement. 23. The High Court in our view was justified in entertaining such an application and appointing a former Judge of this Court as a – sole arbitrator under the Arbitration and Conciliation Act, 1996 to adjudicate the dispute and difference between the parties. 24. In view of the above mentioned reasons, we find no reason to grant leave to appeal and issue notice on the petition for special leave to appeal and the petition is dismissed.

REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION SPECIAL LEAVE PETITION (C) NO. 17689 OF 2012 ACC Limited … Petitioner (Formerly known as the Associated Cement Co. Ltd). Versus Global Cements Ltd. …Respondent J U D G M E N T K.S. Radhakrishnan, J. 1. The question that falls for consideration in this … Continue reading

when bank guarantee can be invoked ?=payment under a Bank Guarantee can normally be stopped only on two grounds and on no other, viz., on grounds of fraud and special equity, and the ground of fraud having been rejected upto this Court, the only other ground available to the Petitioner to stop the invocation of the Bank Guarantees was on account of special equities and in the instant case the Petitioner had failed to indicate any such special equity which entitled the Petitioner to an order of restraint against the Respondent No.1 from invoking the Bank Guarantees in question.

REPORTABLE     IN THE SUPREME COURT OF INDIA   CIVIL APPELLATE JURISDICTION   SPECIAL LEAVE PETITION (C) NO.24746 OF 2010     YOGRAJ INFRAS. LTD. … PETITIONER   Vs.   SSANG YONG ENG. & CONSTRN. … RESPONDENTS CO. LTD. & ANR.     J U D G M E N T     ALTAMAS … Continue reading

Arbitration and conciliation act= The arbitrator was, therefore, not right in law in coming to the conclusion that the agreement between the appellant and the respondent No.2 was void and not enforceable as the consideration or object of the agreement was hit by the letter dated 31.08.1990 of the Government of India, Ministry of Defence. This letter may be an instruction to the officers of the Defence Department to reject a tender where the rate quoted by the tenderor is more than 20% below the reasonable rates but the letter was not an Act of the legislature declaring that any supply made at a rate below 20% of the reasonable rates was unlawful. The finding of the arbitrator on Issue No.4 is thus patently illegal and opposed to public policy. In Oil and Natural Gas Corporation Ltd. vs. Saw Pipes Ltd. (2003) 5 SCC 705 at page 727], this Court after examining the grounds on which an award of the arbitrator can be set aside under Section 34 of the Act has said: “31……However, the award which is, on the face of it, patently in violation of statutory provisions cannot be said to be in public interest. Such award/judgment/decision is likely to adversely affect the administration of justice. Hence, in our view in addition to narrower meaning given to the term “public policy” in Renusagar case it is required to be held that the award could be set aside if it is patently illegal.” 12. We accordingly set aside the Award of the arbitrator and the judgments of the City Civil Court, Hyderabad and the

1 Reportable IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 2755 OF 2007 Union of India … Appellant Versus Col. L.S.N. Murthy & Anr. … Respondents J U D G M E N T A. K. PATNAIK, J. This is an appeal by way of special leave under Article 136 of … Continue reading

what is the arbitration agreement ? = the pre-requisites of a valid and binding arbitration agreement leading to an appropriate reference under the Act. Section 2(1)(b) defines `arbitration agreement’ to be an agreement referred to in Section 7. Section 7 of the Act states that an `arbitration agreement’ is an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not. The arbitration agreement may be in the form of an arbitration clause in a contract or in the form of a separate agreement and shall be an agreement in writing. An arbitration agreement is in writing if it is contained in any of the clauses i.e. clauses (a) to (c) of Sub-section (4) of Section 7 of the Act. Once these ingredients are satisfied, there would be a binding arbitration agreement between the parties and the aggrieved party would be in a capacity to invoke the jurisdiction of this Court under Section 11(6) of the Act.

IN THE SUPREME COURT OF INDIA CIVIL ORIGINAL JURISDICTION ARBITRATION PETITION (CIVIL) NO. 5 OF 2010 Powertech World Wide Limited … Petitioner Versus Delvin International General Trading LLC … Respondent O R D E R Swatanter Kumar, J. 1. M/s. Powertech World Wide Limited, the petitioner, is a limited company registered under the Companies Act, … Continue reading

Arbitration and Conciliation Act, 1996: s. 9-Application for interim measures by court-Unregistered partnership firm in liquor trade-Application by one of the partners for appointment of receiver to take charge of business of the firm-Trial court dismissing the application on the ground that name of the applicant does not figure in the register of firms as partner of the firm-High Court allowed the application holding that s.69(3) of the Partnership Act is not attracted to an application u/s 9 of the Act-High Court further directed that the partners who were running the business would run the business as receivers till 31.12..2003 and from 1.1.2004 to 31.3.2004 the applicant and two other partners of his group would run the business as receivers s.9-Unregistered partnership firm-Application by one of the partners for directions to appoint receiver-Maintainability of- s. 9- “party “-Invoking s. 9-An application u/s. 9 is not a suit- ‘Parity’ is defined in s. 2(1 )(h) to mean a party to an arbitration agreement-So right conferred by s.9 is on a party to an arbitration agreement-Right conferred by s. 9 cannot be said to be one arising out of a contract-Filing of an application u/s 9 by a party by virtue of its being a party to.an arbitration agreement is for securing a relief which the court has power to grant before, during, or after arbitral proceedings by virtue of s.9 of the Act-The relief sought for in an application u/s 9 is neither in a suit nor a right arising from a contract-Party invoking s.9 may not have actually commenced arbitral proceedings but must be able to satisfy the court that the arbitral proceedings are actually contemplated or manifestly intended. =2004 AIR 1433, 2004(1 )SCR404 , 2004(3 )SCC155 , 2004(1 )SCALE297 , 2004(2 )JT352 =Held, order passed by court should fall within the meaning of expression ‘an interim measure of protection’ as distinguished from an alt time of permanent protection-It is a serious matter to appoint a receiver on a running business-This is not a case of oppression of minority by majority-A better course would have been to allow the conduct of the business continuing in the hands of the persons who were doing so but at the same time issuing such directions and/or devising such arrangement as would protect and take care of the interest of those who are not actually running the business-Purpose of enacting s. 9 is to provide ‘interim measures of protection’-Though order of High Court appointing a receiver on the partnership business is maintained, the rest of the order is set aside- Directions given inter alia, for running the business by the group of partners who were running it prior to interim order of High Court under their control but as receivers, and for appointment of an official as observer- Interim order-Partnership Act, I932-s.69(3). Held, Court u/s 9 is only formulating interim measures so as to protect the right under adjudication before the arbitral tribunal from being frustrated-Prima facie, the bar enacted by s. 69 of Partnership Act does not affect the maintainability of an application under s.9 of the Act-s. 69 of Partnership Act has no bearing on the right of a party to an arbitration clause to file an application under s.9 of the Act. M/s. Sundaram Finance Ltd. v. Ms. NEPC India Ltd, AIR 1999 SC 565, relied on. Kamal Pushpa Enterprises v. DR Construction Company, AIR (2000) SC 2676; Jagdish Chandra v. Kajaria Traders (Ind.) Ltd., AIR (1964) SC 1882 and Delhi Development Authority v. Kochhar Construction Work and Anr., [1998] 8 SCC 559, referred to. M/s. Shreeram Finance Corporation Ltd. v. Yasin Khan and Ors., [1989] 3 SCC 476, cited. Words and phrases: Word ‘before’ in s. 9 of Arbitration and Conciliation Act, 1996-Connotation of. CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 132 and 131 of 2004. From the Judgment and Order dated 18.12.2003 of the Madhya Pradesh High Court in M.A. No.2484 of 2003. Harish N. Salve, Dr. A.M. Singhvi, Kapil Sibaii, P. Chidambaram, R.F. Nariman, Vivek Tankha, Rohit Arya, C. Mukhopadhyaii, Manu Nair, Ms. Shalini, Rakesh K. Khanna, Aseem Mehrotra, Kanahaya Singh, Rajeev Singh, Rajesh Prasad Singh, Akshay Arora, P.K. Bansal, Pankaj Kr. Singh, K.L. Janjani and Ms. Abha R. Sharma for the appearing parties.

CASE NO.: Appeal (civil) 131-132 of 2004 PETITIONER: FIRM ASHOK TRADERS AND ANR. ETC. RESPONDENT: GURUMUKH DAS SALUJA AND ORS. ETC. DATE OF JUDGMENT: 09/01/2004 BENCH: R.C. LAHOTI & ASHOK BHAN JUDGMENT: JUDGMENT 2004(1)SCR 404 The following Order of the Court was delivered : Leave granted in both the SLPs. The dispute is among 12 … Continue reading

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