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Arbitration

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Arbitration proceedings -Court can appoint any arbitrator other than the prescribed arbitrator as per the terms of agreement – disputes between contractors and Railways – as per the terms of agreement a railway Officer was to be appointed as arbitrator – decades lapsed no award was passed – High court appointed former Chief Justice of the Sikkim High Court – challenged as invalid and beyond conditions of arbitration agreement – Apex court held thatA period of nearly two decades has elapsed since the contractor had raised his claims for alleged wrongful termination of the two contracts. The situation is distressing and to say the least disturbing. The power of the Court under the Act has to be exercised to effectuate the remedy provided thereunder and to facilitate the mechanism contemplated therein. In a situation where the procedure and process under the Act has been rendered futile, the power of the Court to depart from the agreed terms of appointment of arbitrators must be acknowledged in the light of the several decisions noticed by us. We are, therefore, of the view that no infirmity muchless any illegality or failure of justice can be said to be occasioned by the order passed by the High Court so as to warrant any interference. We, therefore, unhesitatingly dismiss this appeal filed by the appellant-railways. = CIVIL APPEAL NO.6275 OF 2014 (Arising out of SLP (C) No. 20427 OF 2013) NORTH EASTERN RAILWAY & ORS. … APPELLANT (S) VERSUS TRIPPLE ENGINEERING WORKS … RESPONDENT (S) = 2014- Aug. Part – http://judis.nic.in/supremecourt/filename=41824

    Arbitration proceedings -Court can appoint any arbitrator other than the prescribed arbitrator as per the terms of agreement –   disputes between contractors and Railways – as per the terms of agreement a railway Officer was to be appointed as arbitrator – decades lapsed no award was passed – High court appointed  former Chief Justice of the … Continue reading

Arbitration and conciliation Act – Request for appointment of Arbitrator under sec.11 was rejected by High court – Apex court held that as both parties mutually agreed for arbitration by retired Hon’ble Judge of the Kerala High Court, without going into the question of merit, we set aside the impugned order dated 19th July, 2010 and refer the matter to Hon’ble Mr. Justice K. John Mathew (retired). The parties will negotiate and settle the terms and conditions of arbitration. It is expected that the arbitration proceeding will be concluded at an early date. The appeals stand disposed of with aforesaid observations. = M/s Kaikara Construction Company … Appellant VERSUS State of Kerala and Ors. … Respondents = 2014 – July. Part -http://judis.nic.in/supremecourt/filename=41711

Arbitration and conciliation Act – Request for appointment of Arbitrator under sec.11 was rejected by High court – Apex court held that  as both parties mutually agreed  for arbitration by retired Hon’ble Judge  of  the  Kerala  High  Court,  without going into the question of merit, we set  aside  the  impugned  order  dated 19th July, 2010 and refer the matter … Continue reading

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

Whether there is an arbitration clause in contract agreement – No – aggrieved party remedy is only civil court = = M/s. P. Dasaratharama Reddy Complex … Appellant versus Government of Karnataka and another … Respondents – http://judis.nic.in/supremecourt/imgst.aspx?filename=40902

Whether there is an arbitration clause in contract agreement – No –     aggrieved party remedy is only civil court =       Leave granted in SLP (C) Nos. 16117 of 2004, 17147 of 2004,  24655  of   2004, 26073 of 2004, 5951 of 2006, 12552 of 2006,  12553 of 2006,  8597  of   … 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

Production of Documents for inspection can be filed under sec. 27 of Arbitration and conciliation Act = scope of Section 27, and the circumstances in which the Arbitral Tribunal or a party before the Arbitral Tribunal can apply to the court for assistance in taking evidence.= a notice to the advocate on record of the appellant on 17.3.2007, calling upon them to give inspection and to produce the following documents before the learned Arbitrator:- (a) All sales tax returns filed by the appellant with the sales tax authorities for the assessment years 1995-1996 to 2001-2002. (b) All sales tax assessment orders passed with regard to the appellant for the above-mentioned period, and all appellate orders, if any passed in any appellate proceedings arising out of the same. (c) The objection, if any, filed by the appellants against the Notice in Form 40, and proposed order at pages 123 & 124 of Volume VI of the documents filed in the arbitration, the order, if any, passed thereon, and the appellate proceedings, if any, therein. (d) The letter dated 26th May 2000 mentioned in the letter at page 32 of Volume III of the documents filed in the arbitration.- The advocate of the appellant vide his reply dated 21.3.2008, protested and objected to the production of these documents, since according to the appellant the same were being sought at a late stage when the proceeding had reached the stage of cross-examination of the witnesses of the respondent No.1. – Inasmuch as the appellant declined to give inspection / and produce the document as sought for, the respondent No. 1 made an application on 26.3.2007 before the learned Arbitrator, and in paragraph No. 5 thereof, sought a direction to produce the documents mentioned at Sl. Nos.(a) to (c) in the notice dated 17.3.2007. The learned Arbitrator by her order dated 27.3.2007 allowed the application only to the extent of the assessment orders relating to the period 1995-1996 to 2001-2002 and the appellate orders mentioned in paragraph 5(b). The prayer for producing the sales tax returns mentioned in paragraph 5(a) was not entertained. Similarly, the prayer to produce the documents as sought in paragraph 5(c) was not entertained. = It is a settled principle of law that the words used in a statute are to be read as they are used, to the extent possible, to ascertain the meaning thereof. Both these provisions contained a bar only against the Government officers from producing the documents mentioned therein. There is no bar therein against a party to produce any such document. In Tulsiram Sanganaria and Another v. Srimati Anni Rai and Ors. reported in 1971 (1) SCC 284, a bench of three Judges of this Court interpreted an identical provision in Section 54(1) of the Income Tax Act, 1922, and held that the said provision created a bar on the production of the documents mentioned therein by the officials and other servants of the Income Tax Department, and made it obligatory on them to treat as confidential the records and documents mentioned therein, but the assessee or his representative-in-interest could produce assessment orders as evidence, and such evidence was admissible. Thus, if a claim is to be decided on the basis of an order of assessment, the claimant as well cannot be denied the right to seek a direction to the party concerned to produce the assessment order. It is this very prayer which has been allowed by the earlier order dated 27.3.2007 passed by the then Arbitrator, and also by the subsequent order dated 16.9.2011 passed by the Arbitral Tribunal, and in our view rightly so. There is no substance in the second objection as well. 25. There is one more aspect which we must note, i.e., when the first respondent made an application for production of the assessment orders, the defence taken by the appellant in their affidavit dated 16.9.2011 was that those documents were confidential documents, and could not be directed to be produced. It was not stated at that time that the said documents were not available. It is ten months thereafter, that when the second affidavit was filed in the High Court, that the respondent for the first time contended that the said documents were not available. This was clearly an after thought, and this attitude of the Respondent in a way justified the earlier order permitting an application under Section 27 passed by the Arbitral Tribunal. The Assistant Commissioner of Sales Tax of the concerned area was also joined as respondent so that he could be directed to produce the required documents. However, he reported that those documents were old records, and were destroyed. The learned Single Judge did not pass any order against the respondent No.2 to produce the documents, as sought. However, the learned Single Judge rightly allowed the petition as against the appellant in terms of prayer clause ‘A’, directing the appellant to produce the documents which were sought by the respondent no. 1. 26. In the circumstances, there is no merit in the appeal. The appeal is, therefore, dismissed.

published in http://judis.nic.in/supremecourt/imgst.aspx?filename=40827         REPORTABLE   IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 8426 OF 2013 (@ out of SPECIAL LEAVE PETITION (CIVIL) NO. 28418/2012 ) Delta Distilleries Limited … Petitioner   Versus   United Spirits Limited & Anr. … Respondents   J U D G E M … 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

JURISDICTION = whether, in view of clause 18 of the consignment agency agreement (for short, ‘agreement’) dated 13.10.2002, the Calcutta High Court has exclusive jurisdiction in respect of the application made by the appellant under Section 11 of the Arbitration and Conciliation Act, 1996 (for short, ‘1996 Act’). = Conclusion: 28. For the reasons mentioned above, I agree with my learned Brother that in the jurisdiction clause of an agreement, the absence of words like “alone”, “only”, “exclusive” or “exclusive jurisdiction” is neither decisive nor does it make any material difference in deciding the jurisdiction of a court. The very existence of a jurisdiction clause in an agreement makes the intention of the parties to an agreement quite clear and it is not advisable to read such a clause in the agreement like a statute. In the present case, only the Courts in Kolkata had jurisdiction to entertain the disputes between the parties.

Published in http://judis.nic.in/supremecourt/imgs1.aspx?filename=40511 Page 1 REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 5086 OF 2013 (Arising out of SLP(C) No. 5595 of 2012) M/s. Swastik Gases P. Ltd. … Appellant Vs. Indian Oil Corp. Ltd. … Respondent JUDGMENT R.M. LODHA, J. Leave granted. 2. The short question that arises for consideration … Continue reading

DECLARATION SUIT AND INJUNCTION – ARBITRATION ACT SEC. 8 = Or.39, Rule 1 & 2 C.P.C. PRIMA FAICE IS MAINTAINABLE = It is not in dispute that the plaintiffs are in possession and enjoyment of the property. As a matter of fact, the defendants wanted them to vacate the premises. Till the question raised in the suit is decided, they are entitled to be in possession, subject however to payment of rents.As a result, the applications filed under Order 39 Rules 1 and 2 C.P.C. in the respective suits are allowed and the respective defendants are restrained from interfering with the possession of the plaintiffs or evicting them from the suit schedule premises, subject, however, to the condition that the rent shall be paid with enhancement at 10% over and above what is provided for under the lease deeds from January 2013 onwards. The difference of rent, if any in, this behalf, shall be paid within four (4) weeks from today. The payment of extra amount shall be subject to the outcome of the suits. ;WHEN REFERRING ARBITRATION AROSE & WHEN SUIT IS MAINTAINABLE = Law is also fairly well settled to the effect that if the agreement governing relationship of the parties contains a clause providing for arbitration, a suit for seeking redressal in relation to any dispute covered by the agreement cannot be maintained and it stands barred by Section 8 of the Act. However, a keen observation of the clause extracted above reveals that it is only when the dispute or question of difference arises out of, or in respect of, those presents or as to the construction, meaning or the subject matter of the lease presents or as to any act done or omitted to be done under the lease or the rights, duties and liabilities of the respective parties, referable to the agreement, that the matter shall be referred to arbitration. – no application was filed by the defendants under Order 7 Rule 11 C.P.C. for rejection of the plaint. They did not make any counter claim in the suit nor did they file any suit for reference of the matter to arbitration. Therefore, the order passed by the trial Court, referring the matter to arbitration cannot be sustained in law. The termination of the suit does not accord with the procedure prescribed under C.P.C. A decree could not have been passed outside the prayer in the suits.; ORDERS WHICH ARE dependant’ in nature and the challenge thereto cannot be rejected, on the ground that the suit itself stood terminated. That was a case, in which the delay in filing of appeal was condoned and the effected party challenged the order passed by the Court condoning the delay. Even while the proceedings, in which the order condoning delay was challenged, were pending, the appeal that came to be numbered was disposed of. An objection was raised to the effect that once the appeal has been disposed of, it is not at all open to the parties to challenge the order, through which the delay was condoned. This contention was negatived and the Hon’ble Supreme Court treated such appeals as ‘dependant’ upon the order, condoning the delay being sustained, whenever challenged. The same situation obtains in this case. REPORTED/PUBLISHED IN http://judis.nic.in/judis_andhra/filename=9751

THE HON’BLE SRI JUSTICE L. NARASIMHA REDDY AND THE HON’BLE SRI JUSTICE K.G.SHANKAR C.M.A.Nos.126 of 2012 and Batch 03.04.2013 M/s. Ashok International rep., by its Managing Director. State of A.P. and others. Counsel for the Appellant: Sri V.L.N.G.K.Murthy Counsel for respondents: G.P. for Arbitration <GIST: >HEAD NOTE: ? Cases referred: 1. AIR 1988 SUPREME COURT … Continue reading

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