NOTABLE JUDGEMENTS JUNE AND JULY 2024 ARBITRATION
CAN MANDATE OF ARBITRAL TRIBUNAL BE EXTENDED U/S 29A OF THE ARBITRATION ACT, EVEN AFTER EXPIRY OF SUCH MANDATE?
SS Steel Fabricators and Contractors v. Narsing Décor
2024 SCC OnLineDel 4416
Delhi High Court
Decided on: 19 June, 2024
Facts:
On May 10, 2023, the claimant, SS Steel Fabricators & Contractors, had their claim terminated. Then, in an ex parte proceeding against the claimant, the respondent (counterclaimant) filed a counterclaim. On March 15, 2023, the counterclaimant finished their pleadings and vigorously pursued the case. The counterclaimant paid all costs alone— which would have been shared—because of the ex parte proceedings. Final arguments were held, witnesses were questioned, and the award was supposed to be announced the following day. The counterclaimant requested an extension of the arbitral tribunal's mandate in an application filed under Section 151 of the CPC and Section 29A of the Arbitration Act.
Decision:
The court held that in M/S Power Mech Projects Ltd Vs M/S Doosan Power Systems India Pvt. Ltd., under Section 29A(4) of the Arbitration Act, the court has the authority to extend the mandate of the Arbitral Tribunal either before or after the expiry of the specified period. The expression "prior to or after expiry of the period so specified" empowers the court to extend the mandate, even after expiry of the mandate of the tribunal. Therefore, the High Court decided to extend the mandate of the Arbitral tribunal until June 30, 2024.
PROCESS FOR REDRESSAL OF GRIEVANCES FOR REFUND OF AMOUNT ALREADY INITIATED THROUGH ARBITRATION'; RELIEF UNDER SECTION 9 OF THE ARBITRATION AND CONCILIATION ACT, 1996, REFUSED
Vijay Maheshwari v. Splendor Buildwell (P) Ltd (Delhi HC)
2024 SCC OnLine Del 4373
Delhi High Court
Decided on: 10 June, 2024
Facts:
In 2010, the DTCP authorised Respondent 2, who possesses 6.755 acres of land in Gurgaon, to construct an IT/Cyber Park. A real estate company named Respondent 1 developed a portion of this land under the project name Splendour Spectrum One and registered the project with the Haryana Real Estate Regulatory Authority. The petitioner paid Rs. 77,85,000/-to the respondents in three separate agreements for office spaces in Tower South. Additionally, respondent 1 refused to sign and return an unsigned Memorandum of Understanding that promised guaranteed returns and unit leasing to the petitioner. The petitioner's son followed up with JLL after six months of no progress, but there were delays and inconsistencies. He was paid in part. Eventually, for Rs. 2.75 crores, the petitioner offered to give up the units. Because the value of the units increased, the petitioner felt that Respondent 1's final settlement of Rs. 47,85,000/-was insufficient. 25 January 2024 saw the petitioner issue a notice of arbitration. In an application filed under Section 151 of the CPC, respondents attempted to overturn an interim ex parte injunction order that favoured the petitioner.
Decision:
The Court explained that Section 9 of the Arbitration Act applies principles similar to those under Order 39 Rule 1 and 2 of the CPC and only permits a prima facie examination of issues, not a final determination, citing KSL & Industries Ltd. v. National Textiles Corpn. Ltd. as support. The MoU was never completed or signed, according to the Court, so there was no legally enforceable agreement for the promised returns. Additionally, it noted that on April 8, 2021, the petitioner had received a partial payment, which was taken to be a portion of the promised return. The petitioner failed to prove a priori ownership of the units or to thwart the interests of third parties, according to the court. As a result, the Court dismissed the petition, finding that the petitioner's claims were financial in nature and did not prove irreversible harm, thus tipping the scales against her. Since the petitioner had already started the arbitration process to resolve her issues, Section 9 of the Act did not grant her relief.
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Originally published 06 August 2024
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