- Partial setting aside of award is permissible: NHPC Ltd. v. Jaiprakash Associates Ltd. [OMP(ENF)(Comm.) 184 of 2023]
The Delhi High Court clarified that if a portion of the award proposed to be annulled is independent and can be validly incised without affecting the other components of the award, the award can be set aside in part and consequently, would only be enforced in part. This decision brings awaited relief to parties engaged in construction contracts in particular where a variety of independent claims are arbitrated.
- Issue of whether the court can modify an award under Section 34 and 37 of the Arbitration Act referred to a larger bench of the Supreme Court – Gayatri Balaswamy v. ISG Novasoft Technologies Limited [SLP (C) Nos. 15336-15337/2021]
Noting conflicting judicial opinions on the subject, the Supreme Court recently referred to a larger bench, questions concerning the powers of a court to modify the arbitral award and whether such power, if any, extends to modification in cases where the award is not severable.
- Supreme Court lays down certain guidelines on incorporating arbitration clauses by reference in case of multiple contracts – NBCC v. Zillion Infraprojects [2024 SCC OnLine SC 323]
The Supreme Court provided guidance on how to incorporate arbitration clauses in a single versus two-contract situations. In case of a single contract, involving two or more agreements between the same parties, a general reference to a standard form of contract would be enough to incorporate the arbitration clause for both the agreements. Whereas, in a two-contract case involving two or more agreements with at least one third party, the arbitration clause must be incorporated by way of a specific reference.
- Office Memorandum by the Department of Expenditure, Ministry of Finance dated 03.06.2024, titled “Guidelines for Arbitration and Mediation in Contracts for Domestic Public Procurement” vide F. 1/2/2024-PPD
In a dramatic shift, the Ministry of Finance issued an Office Memorandum on June 3, 2024, advising ministries and public sector undertakings to resort to arbitration in relatively low value matters and instead seek to adjudicate disputes through mediation or court litigation. The Office Memorandum also recommended that wherever arbitration is opted in high value matters, recourse ought to be made to institutional arbitration. Despite calls for roll back, no further decision has been taken. International arbitration remains outside the scope of this Office Memorandum.
- Execution of a discharge voucher towards full and final settlement between the parties would not operate as a bar on arbitration – SBI General Insurance Co. Ltd. vs. Krish Spinning [2024 SCC Online SC 1754]
The Supreme Court in held that the execution of a discharge voucher towards full and final settlement between parties would not operate as a bar on arbitration. It held that the arbitration agreement contained in a contract would survive even after the underlying contract is discharged by ‘accord and satisfaction and thus, clarifies the independent nature of the arbitration agreement. The Supreme Court has emphasised the narrow scope of the court’s power at the stage of proceedings under Section 11 of the Arbitration and Conciliation Act, 1996.
- An application for extending the arbitrator’s mandate can be filed even after the expiry of the specified period under Section 29A – Rohan Builders (India) Pvt. Ltd. v. Berger Paints India Limited [2024 SCC OnLine SC 2494]
The Supreme Court has put to rest the controversy concerning extension of term of a tribunal after the expiry of its mandate. Reconciling the conflicting views taken by various High Courts, the Supreme Court has held that there is no bar under Section 29A for filing an application for extension, even when the mandate of the arbitrator has expired. However, the Court cautioned that such extensions must only be granted upon establishing sufficient cause and on terms and conditions that the court deems fit.
- A claim for copyright infringement against a particular person is arbitrable – Binaya Kumar Naik v. Sanjay Kumar Naik [Arb. P. No. 9 of 2024]
Orissa High Court has clarified that while ownership of copyright is a right in rem and is generally non-arbitrable, in cases concerning copyright infringement disputes, if this right in rem results in an enforceable right in personam and against a specific individual, it would become arbitrable. This judgement is in line with a growing trend to make IP disputes arbitrable.
- Draft Arbitration and Conciliation (Amendment) Bill, 2024
Government of India has released a draft bill to amend the Arbitration and Conciliation Act, 1996 for public consultation. The amendments are aimed at increasing efficiency and ironing out some long-standing inconveniences. Amendments proposed include recognition of emergency arbitration, a formal statutory distinction between seat and venue, omission of conciliation provisions from the Arbitration Act, formal recognition of digital signatures, conduct of arbitration proceedings through audio visual means and provisioning for partial setting of aside of awards under Section 34, among others.
- Choice of arbitrator cannot be restricted to a unilateral panel of nominated arbitrators – Central Organisation for Railway Electrification v. ECI SPIC SMO MCML (JV) [2024 SCC OnLine SC 3219]
A constitutional bench of the Supreme Court of India expanded the restrictions on unilateral appointment of arbitrators by holding that even asking a party to select an arbitrator from a curated panel of arbitrators is against the principle of equal treatment. While government undertakings/companies may still maintain a list of empanelled arbitrators, they, however, cannot mandate the opposite party to restrict its selection only to such a panel.
- The stipulated time period of 30 days for seeking modifications / clarifications to the award is flexible, but subject to parties consenting for such a time extension – North Delhi Municipal Corporation v. M/s S.A. Builders Ltd. [2024 SCC OnLine SC 3768]
Giving an interpretation to the phrase “…unless another period of time has been agreed upon by the parties.” stated under Section 33(1) of the Arbitration Act, the Supreme Court has clarified that the period of 30 days as provided in Section 33(1) is not an inflexible period. Ordinarily, the time limit for approaching the arbitral tribunal for modification of award is 30 days from the date of receipt of the arbitral award. However, this time period can be waived for another period of time, if agreed upon by the parties and the arbitrator would continue to enjoy jurisdiction even after its expiry to such limited extent.