NOTABLE JUDGEMENTS SEPTEMBER 2024
ARBITRATION LAW
- Case Title: Cox and Kings Ltd. v. SAP India Pvt. Ltd.
Citation: 2024 SCC OnLine SC 2452
Court: Supreme Court of India
Decided on: 09.09.2024
Brief facts:
The petitioner entered into a License Agreement with respondent no. 1 on 14.12.2010 for SAP ERP software. In 2015, respondent no. 1 recommended the SAP Hybris Software for the petitioner's e commerce operations, claiming it would be 90% compatible, with the remaining 10% customization to be completed within 10 months. Several ancillary agreements were signed, but issues arose in the timely completion of the project. After unsuccessful attempts to resolve the matter, the project was rescinded on 15.11.2016. Respondent No. 2 later acknowledged shortcomings on both sides. On 29.10.2017, respondent no.1 initiated arbitration for wrongful termination and non-payment of Rs. 17 crores. An arbitral tribunal was constituted by the Bombay High Court on 30.11.2018. The petitioner filed a counterclaim of Rs. 45.99 crore and applied for a composite arbitration of all agreements. However, the proceedings were paused due to the commencement of the CIRP by the NCLT on 22.10.2019. After CIRP initiation, the petitioner issued a fresh arbitration notice on 07.11.2019, including respondent no. 2, but the respondents failed to appoint an arbitrator, leading to the present petition.
Issue: Whether the petitioner's application for the appointment of an arbitrator deserves to be allowed.
Judgment: The Supreme Court has reiterated that referral courts should not delve into complex factual disputes at the referral stage if a valid arbitration agreement exists. The Court emphasized the doctrine of competence-competence under Section 16 of the Arbitration & Conciliation Act, 1996 (Act). It stated that when deciding on a petition for the appointment of an arbitrator under Section 11(6) of the Act, referral courts should limit their inquiry to determining the existence of a valid arbitration agreement. [Click Here]
- Case Title: Movie Time Cinemas Ltd. v. M/s Chetak Cinema Case
Citation: 2024 SCC OnLine Raj 2781
Court: Rajasthan High Court
Decided on: 11.09.2024
Brief facts:
In the present case, the petitioner and respondent executed a registered lease deed wherein the respondent leased two floors of a building to the petitioner, who duly took possession of the leased premises. Subsequently, the respondent alleged that third-party rights existed over the leased property and sought to remove the petitioner's signage from the premises, resulting in the petitioner invoking the arbitration clause contained within the lease deed. The petitioner then applied Section 9 of the Arbitration and Conciliation Act, 1996, before the Commercial Court, seeking interim relief. The Commercial Court directed the respondent to maintain the status quo regarding the leased property. Following the respondent's failure to comply with the court's order, the petitioner filed an application under Section 11 of the Arbitration and Conciliation Act, 1996, for the appointment of an arbitrator.
Issue: Whether there was an arbitration agreement existing between the parties?
Judgment: The Rajasthan High Court has held that once the existence of a valid arbitration agreement is established, parties can invoke arbitration even if the arbitrator is not specifically named in the agreement. [Click Here]
- Case Title: Meenakshi Agrawal v. M/S Roto tech
-
Citation: 2024 Live Law (Del) 998
Court: Delhi High Court
Decided on: 03.09.2024
Brief facts:
The Petitioner and Respondent entered into a Lease Deed that included an arbitration clause designating Atul Kumar as the arbitrator for any disputes. After disputes arose, the Petitioner issued a notice under Section 21 of the Arbitration and Conciliation Act, 1996, requesting arbitration by Atul Kumar. The Respondent did not respond, and instead of approaching the court under Section 11(5) for the arbitrator's appointment, the Petitioner allowed Atul Kumar to issue a notice directly to the Respondent. When the Respondent failed to appear, arbitration proceeded ex-parte. As Atul Kumar's mandate was nearing expiration, the Petitioner sought an extension but later withdrew the application, filing a petition in the High Court to terminate his mandate and appoint a substitute arbitrator.
Issue: Whether the Petitioner properly initiated arbitration by failing to approach the court under Section 11(5) of the Arbitration and Conciliation Act, 1996, after the Respondent did not respond to the Section 21 notice, thereby allowing the arbitrator to unilaterally issue a notice and proceed ex-parte?
Judgment:
The Delhi High Court ruled that if a party seeking arbitration receives no response to a Section 21 notice or faces refusal to arbitrate, the appropriate remedy is to approach the Court under Section 11(5) or Section 11(6) of the Arbitration and Conciliation Act, 1996. The Court further held that a party cannot unilaterally confer jurisdiction on an arbitrator, even if named in the agreement, and the arbitrator cannot independently summon the opposing party to the proceedings. [Click Here]
- Case Title: Rohan Builders (India) Private Limited v. Berger Paints India Limited
Citation: 2024 SCC OnLine SC 2494
Court: Supreme Court of India
Decided on: 12.09.2024
Brief facts:
In the case of Rohan Builders (India) Pvt. Ltd. (Appellant) vs. Berger Paints India Ltd. (Respondent), the Arbitral Tribunal failed to issue an award within the statutory period of 12 months, and the extended period of 6 months also lapsed without a decision. An application for an extension of time under Section 29A(4) of the Arbitration Act was subsequently filed with the High Court of Calcutta, which dismissed it, ruling that such applications cannot be entertained after the time period has expired.
The Appellant then appealed this decision to the Hon'ble Supreme Court, questioning whether a request for an extension of time can be made after the Arbitral Tribunal's mandate has expired.
Issues: Whether an application for an extension of time under Section 29A of the Arbitration and Conciliation Act, 19961 be filed after the expiry of the period for making the arbitral award?
Judgment:
It was held that an application for extending the time period for issuing an arbitral award under Section 29A(4) read with Section 29A(5) is maintainable even after the expiration of the initial twelve-month period or any extended six-month period. In considering such extension applications, the court will be guided by the principle of sufficient cause, as well as the observations made in para 15 of the judgment. [Click Here].
Click here to view the full report here.
Originally published 07 October 2024
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
