50 Landmark Judgments on Arbitration Act [2018-2019]

The malaise of the Indian Courts articulated in Guru Nanak Foundation v. Rattan Singh and
Sons, is as true today as it was so many years ago. In that case, Justice DA Desai succinctly
stated:
“Interminable, time consuming, complex and expensive Court procedures impelled jurists to
search for an alternative Forum, less formal, more effective and speedy for resolution of
disputes, avoiding procedural claptrap and this led them to Arbitration Act, 1940.
However, the way in which the proceedings under the Act are conducted and without
exception challenged in Courts, has made Lawyers laugh and legal philosophers
weep…Informal Forum chosen by the parties for expeditious disposal of their disputes has by
the decisions of the Court been clothed with ‘legalese’ of unforeseeable complexity.”
The UNCITRAL Model Law, on which the Arbitration Act is based, also aims to, “protect the
arbitral process from unpredictable or disruptive court interference” as this is, “essential to
parties who choose arbitration (in particular foreign parties)”.
Arbitration in India is often criticized due to unruly court interference. However, recent
judicial pronouncements indicate that Indian courts are taking an increasingly pro-arbitration
stance.
Following are the 50 landmark decisions delivered by the Indian Courts on Arbitration law in
2018-2019.
SECTION 7
Whether Arbitration Agreement can be binding on Non-Signatory to the Agreement?
1. Cheran Properties Ltd. v. Kasturi and Sons Ltd. & Ors. Civil Appeal 10025/2017
While observing the principle enunciated in Chloro Controls that a non-signatory may also be
bound by an arbitration agreement in certain cases, the Court held that the group of
companies doctrine is essentially intended to facilitate the fulfillment of a mutually held
intent between the parties, where the circumstances indicate that the intent was to bind both
signatories and non signatories.
The effort is to find the true essence of the business arrangement and to unravel from a
layered structure of commercial arrangements, an intent to bind someone who is not formally
a signatory, but has assumed the obligation to be bound by the actions of a signatory.
Non-parties to an Arbitration Agreement cannot be made party to an Arbitration, Delhi High
Court [Read Judgment]
2. R.V. Solutions Pvt. Ltd. v. Ajay Kumar Dixit & Ors. 2019 SCC Online Del 6531 CS Comm
745/2017
The Delhi High Court held that a non-signatory or third party could be subjected to Arbitration
without its consent, only in exceptional cases. There needs to be either a direct relationship
to the signatory party of the Arbitration Agreement, or commonality of the subject matter, or
composite transactions in the agreement between the parties.
[Also See: Ameet Lal Chand v. Rishabh Enterprises SLP (c) 16798/2017]
Incorrect reference regarding the applicability of the Indian Arbitration Act, 1940 would not
render the entire Arbitration Agreement invalid
3. Purushottam S/o Tulsiram Badwaik v. Anil & Ors. Civil Appeal No.4664 of 2018
The Bench of Justice Arun Mishra and Justice UU Lalit of the Supreme Court observed that
even if an arbitration agreement entered into after the 1996 Act had come into force were to
make a reference to the applicable provisions of those under Indian Arbitration Act or 1940
Act, such stipulation would be of no consequence and the matter must be governed under
the provisions of 1996 Act. Further, the Court held that an incorrect reference or recital
regarding the applicability of the 1940 Act would not render the entire arbitration agreement
invalid.
4. Mother Boon Foods Pvt Ltd v. Mindscape One Marketing Pvt Ltd O.M.P. (COMM)
136/2017
The Court held that an arbitration agreement, as per the 1996 Act, has to be in writing. Since
the arbitration clause -which is a part of the contract – was in writing, the same could not
have been superseded by any oral demand or agreement.
[Also See: Shyam Sunder Agarwal v. P. Narotham Rao And Ors. Civil Appeal No. 6872 of 2018
and Varinder Pal Singh & Anr Versus BPTP Ltd ARB.P. 350/2017]
SECTION 8
Whether Arbitration Clause can oust the jurisdiction of consumer forums?
5. M/S Emaar MGF Land Limited & Anr. v. Aftab Singh, 2018 SCC Online SC 2771
The Supreme Court upheld the NCDRC’s decision whereby it ruled that an Arbitration Clause
in a Buyer’s Agreement cannot circumscribe the jurisdiction of a Consumer Fora,
notwithstanding the amendments made to Section 8 of the Arbitration Act.
Referring Parties to Arbitration has serious civil consequences
6. Kerala State Electricity Board and Anr. v. Kurien E. Kathilal- Civil Appeal Nos.3164-3165
of 2017
Referring the parties to arbitration has serious civil consequences procedurally and
substantively. When there was no arbitration agreement between the parties, without a joint
memo or a joint application of the parties, the High Court ought not to have referred the
parties to arbitration, the Supreme Court held in this case.
SECTION 9
Section 9 of the Arbitration Act cannot bypass Section 41 of the Specific Relief Act
7. Parsoli Motor Works (P) Ltd. v. BMW India P Ltd. 2018 SCC Online Del 6556
The Delhi High Court held that injunctions that cannot be granted under Section 41 of the
Specific Relief Act, cannot be granted under Section 9 of Arbitration Act, 1996 either.
Related: Cabinet approves Ordinance to establish New Delhi International Arbitration Centre
SECTION 11
Arbitral Clause to be strictly construed
8. Oriental Insurance Company Limited v. M/s Narbheram Power and Steel Pvt. Ltd. Civil
Appeal No. 2268 of 2018
The Supreme Court held that an arbitration clause is required to be strictly construed. Any
expression in the clause must unequivocally express the intent of arbitration.
[Also See: United India Insurance Co. Ltd. & Anr. v. Hyundai Engineering and Construction Co.
Ltd. & Ors 2018 SCC Online SC 1045]
Appointment of Arbitrator cannot be challenged under Section 11 (6) of the Arbitration and
Conciliation Act, 1996
9. Sp Singla Constructions Pvt. Ltd. v State of Himachal Pradesh & Anr. 2018 SCC Online SC
2673
Issuance of notice of request under Section 11 is mandatory for filing an application therein
10. Golden Chariot Recreations Pvt Ltd. v Mukesh Panika & Anr. 2018 SCC online del 10050
Whether an agreement which is not adequately stamped would disable the Court from acting
upon the Arbitration clause incorporated in the Agreement
11.Garware Wall Ropes Ltd. v. Coastal Marine Constructions & Engineering Ltd. Civil Appeal
No.3631/2019
The Court held that the High Court must impound the instrument which has not borne stamp
duty and hand it over to the Authority who will then decide issues qua payment of stamp duty
and penalty (if any) as expeditiously as possible, and preferably within a period of 45 days
from the date on which the authority receives the instrument. As soon as the stamp duty is
paid on the instrument, any of the parties can bring the instrument to the notice of the high
court which will then proceed to expeditiously hear and dispose of the Section 11 application.
“
Jurisdiction of Court
12. BHEL v. Uttar Pradesh Rajya Vidhyut Utpadan Nigam Limited Arb. P 78/2019]
Relying on AAA Landmark Pvt. Ltd. vs. AKME Projects Ltd. & Ors, the Supreme Court held that
where the parties agree not to insist upon the exclusive jurisdiction clause in an Agreement
or raise such objection, and by their conduct, waive such condition/submit themselves to
another Court’s jurisdiction, it cannot be said that the Court other than the one in which
exclusive jurisdiction has been vested, would be without jurisdiction.
Related: Arbitration Act: A Section 11 Handbook for Respondents
Fees prescribed in the Fourth Schedule of the Act is only suggestive
13. Paschimanchal Vidyut Vitran Nigam Limited v. M/S IL & FS Engineering & Construction
Company Limited O.M.P.(MISC.)(COMM.) 164/2018
The question before the Delhi High Court was whether the provisions of the Fourth Schedule
of the Act pertaining to the fee to be paid to the arbitrators would apply to domestic ad hoc
arbitrations where parties have not approached the Court for the constitution of an Arbitral
Tribunal.
It was held that the provision with regard to fees contained in Section 11(14) of the Act is only
an enabling provision. The concerned High Court has been given the leeway to frame rules, if
it chooses to do so. Since the parties did not approach the Court for the constitution of the
Arbitral Tribunal, the Court would have no role to play in fixing the fees of the Arbitral Tribunal
as no such power is vested in the Court. Further, provisions of sub-section (14) of Section 11
clearly indicate that the fee prescribed in the Fourth Schedule of the Act is only suggestive.
14. NCC Limited v Indian Oil Corporation Limited 2019 SCC online Del 6964
The Court observed that the insertion of Section 11(6A) by the Amendment Act, 2015 has
considerably narrowed down the scope of examination by the Court. It is confined only to the
existence of an Arbitration Agreement, relatable to the dispute at hand.
Court can appoint independent arbitrator only after resorting to the procedure in the
Arbitration Agreement
15. Union of India v. Parmar Construction Company Civil Appeal No (s). 3303 of 2019
SECTION 12 AND 13
Whether disclosing only the major requirement of Schedule VI of the Arbitration Act, 1996
and leaving other relevant aspects of the said Schedule would amount to improper
disclosure?
16. Goel Construction Co. Pvt. Ltd. v. ICAI O.M.P. (T) (Comm.) 120/2018
The Court held that the Arbitrator was under a misconception that he need not disclose the
other relevant aspects of the Sixth Schedule to the Act. Further, it was held that compliance
with the major requirement of the said Schedule is not enough, and the Court directed the
Arbitrator to give full disclosure in terms of the Sixth Schedule of the Act.
17. Manish Anand & Ors. v. Fiitjee Ltd., 2018 SCC Online Del 7587
The Court held that though the disclosure is not in terms of the Sixth Schedule of the Act, if it
discloses the most vital aspect of the same, the mandate of the Arbitrator cannot be
terminated.
Whether after the coming into force of the Arbitration and Conciliation (Amendment) Act,
2015 and in view of Section 12 (5) of the Act, the appointment of the arbitrator by the
Managing Director is null and void.
18. Worlds Window Infrastructure & Logistics Pvt. Ltd. v. Central Warehousing Corporation
[ARB.P. 437/2018] O.M.P. (T) (COMM.) 45/2018
The Delhi High Court held that that the amendment to the Act does not in any way take away
the power vested in one of the parties to the Arbitration Agreement to appoint an Arbitrator.
In such agreements, the burden of ensuring that the person so appointed shall not fall foul of
any of the provisions of the Fifth or the Seventh Schedule of the Act will be even higher and
open to greater scrutiny.
Related: Time for Insurance Companies to respect the remedy of Arbitration
19. TRF Ltd v. Energo Engineering Projects Ltd Civil Appeal No. 5306 of 2017
Once the arbitrator has become ineligible by operation of law, he cannot nominate another
as an arbitrator. It is inconceivable in law that a person who is statutorily ineligible can
nominate a person. Needless to say, once the infrastructure collapses, the superstructure is
bound to collapse.
SECTION 14 AND 15
20. National Highways Authority OF India v. Gammon Engineers and Contractor Pvt Ltd
O.M.P. (T) (Comm.) 39/2018
The Court held that the Arbitral Tribunal cannot accept the appointment in part and rewrite
the arbitration agreement between the parties.
SECTION 26
21. Precious Sapphires Ltd v. Amira Pure Foods Private Ltd. EX.P. 330/2015
It was held that the Arbitration and Conciliation Act, 1996, being a special statute, shall prevail
over the Delhi High Court Act, which would be a general statute dealing with the jurisdiction
and procedure of the High Court. Further, it was held that Section 26 of the Amending Act
does not exclude the application of the amended Explanation to Section 47 of the Act to
proceedings pending in the High Court on that date.
SECTION 29 A
22. Republic of India v. Agusta Westland International Ltd. 2019 SCC Online Del 6419
Section 29A of the Arbitration and Conciliation Act, 1996 is not applicable to proceedings
already initiated in terms of Section 21 of the Principal Act i.e. prior to coming into force of
the 2015 Amendment Act.
SECTION 31
Whether an Arbitral Award can be set aside on the ground that one of the members of the
Arbitral Tribunal had withdrawn from the Arbitration proceedings prior to the
pronouncement of the award?
23. CIMMCO LTD. versus Union of India O.M.P. (COMM) 297/2016
The Court held that if this question is answered in the affirmative, then any party which is
unhappy with the manner in which the Arbitral Tribunal is proceeding in a given matter can
inspire its nominee-Arbitrator on the Arbitral Tribunal to withdraw from the arbitration
proceedings at the last hour.
Further, the Court relied on Section 31(2) of the 1996 Act to hold that where the Arbitral
Tribunal comprises more than one arbitrator, the signatures of the majority of all members
of the Arbitral Tribunal would be sufficient for framing an Award, so long as reasons are given
for any omitted signature.
SECTION 33
24. M/s Chandok Machineries v. M/s S.N. Sunderson & Co. 2018 SCC Online Del 12782
In this case, the Arbitral Award was signed by the Third Arbitrator after the mandate of the
Arbitral Tribunal had terminated. However, the reasons for the delay in signing the Award
were set out in an order on an application under section 33(1)(a) filed by the respondent.
The challenge under Section 34 was raised on the ground that mandate of the Arbitral
Tribunal had terminated prior to the signing of Award by the third Arbitrator. The Court
observed that a procedural irregularity of this nature ought not to vitiate the entire decision-
making process, particularly when it is capable of being cured. Since the reasons for the delay
in the signing were stated in the Order of application under section 33, the lacuna of the
Award was cured.
To be continued.
SECTION 34
Scope of interference with Arbitral Award in India
MMTC Ltd. v. M/s Vedanta Ltd. (Civil Appeal No. 1862/2014)
As far as section 34 of the Arbitration Act, 1996 is concerned, the position is that Court does
not sit in appeal over the arbitral award and may interfere on merits on the limited grounds
provided under Section 34(2) (b) (ii) i.e. if award is against public policy of India. Further, an
arbitral award may not be interfered if the view taken by the arbitrator is a possible view
based on facts. However, position changed after 2015 Amendment whereby Explanation 1
was inserted to Section 34(2) and the scope of contravention of public policy was modified to
the extent that it now means fraud or corruption in the making of the award etc. Additionally,
in domestic arbitrations, violation of Indian Public Policy also includes patent illegality
appearing on the face of the award. [Section 34 (2A)]
Interference under Section 37 cannot travel beyond the restrictions laid down under Section
34. While interpreting the terms of a contract, conduct of parties and correspondences
exchanged would also be relevant factors and it is within the Arbitrator’s jurisdiction to
consider the same
Whether in a Section 34 Petition the Court has the Jurisdiction to remand the matter to the
Arbitrator?
Radha Chemicals v. Union of India Civil Appeal No. 10386 of 2018
The Supreme Court reaffirmed its stand taken in Kinnari Mullick and Another vs. Ghanshyam
Das Damani, (2018) 11 SCC 328, and held that the court while deciding a Section 34 petition
has no jurisdiction to remand the matter to the Arbitrator for a fresh decision. Further, it was
held that the discretion of the Court under Section 34(4) to defer the proceedings for specified
purpose is limited and can be invoked only upon request by the party prior to setting aside of
the Award.
Limit on Fresh Evidence for Adjudicating Challenge to Arbitral Award
M/s Emkay Global Financial Services ltd. v. Girdhar Sondhi Civil Appeal No. 8367 of 2018
The court held that an application for setting aside an arbitral award will not ordinarily require
anything beyond the record that was before the Arbitrator. However, if there are matters not
contained in such record, and are relevant to the determination of issues arising under
Section 34(2)(a), they may be brought to the notice of the Court by way of affidavits filed by
both parties. Cross examination of persons swearing to the affidavits should not be allowed
unless absolutely necessary, as the truth will emerge on a reading of the affidavits filed by
both the parties.

No requirement to lead evidence under Section 34 of Arbitration Act, Supreme Court

Limitation Period for setting aside an Award

Anilkumar Jinabhai Patel (D) V Pravinchandra Jinabhai Patel Civil Appeal No. 3313 of 2018
arising out of SLP (C) No.15668 of 2012
Limitation period prescribed under Section 34(3) of the Arbitration Act, 1996 would
commence only from the date of signed copy of the award delivered to the party making the
application for setting it aside. Further, the court held that Section 31(5) of the Act requires a
signed copy of the award to be delivered to each party.
Section 34 (3) of the Arbitration Act tantamount to an “express exclusion” of Section 17 of
Limitation Act
P Radha Bai v Ashok Kumar 2018 SCC Online SC 1670
The court held that the phrase “but not thereafter” in Section 34(4) of the Act nails the
legislative intent of giving “finality” to the Arbitral Award by fixing an “outer boundary period”
for challenging an award.
M/s Simplex Infrastructure Ltd. v Union of India 2019 2 SCC 455
In this case the court held that the statutory time limit to challenge an Arbitral Award has to
be strictly adhered to.
Meaning of Public Policy
M/S Lion Engineering Consultants v State of M.P. & Ors. Civil Appeal NOS. 8984-8985 OF
2017
The Hon’ble Supreme Court has held that the public policy of India refers to law in force in
India whether State law or Central law. Further, the court held that there is no bar on plea of
jurisdiction being raised by way of an objection under Section 34 of the Arbitration Act, 1996
even if no such objection was raised under Section 16.
Whether prior notice of an application under Section 34 is directory or mandatory?
The State Of Bihar & Ors. v. Bihar Rajya Bhumi Vikas Bank Samiti Civil Appeal No. 7314 of
2018
Contrasting Section 34(5) with Section 80 of the Code of Civil Procedure, the court observed
that to construe such a provision as being mandatory would defeat the advancement of
justice and therefore, prior notice to other party before filing application to set aside arbitral
award is not mandatory and is merely directory.

Not mandatory to serve notice to opposite party before filing application to set
aside Arbitral Award, SC

Whether no particular evidence is required for awarding loss of profits and the same could
be awarded by estimating the same at 10%?
GTM Builders & Promoters Pvt Ltd. v. Sneh Developers Pvt Ltd O.M.P. (COMM) 10/2016
Taking a note of the judgments of the Supreme Court relied upon by the Arbitral Tribunal, the
court held that none of the referred decisions are authorities for the proposition that claim
for loss of profits can be awarded without any rudimentary evidence or material indicating
the same. Further, it is open to the courts to estimate the quantum of loss of profits; however,
it would be necessary for a party to establish that in the normal course, the contract would
have yielded profits to the extent as claimed.
Whether a clause in an agreement excluding interest on security deposit can act as a bar on
the Arbitrator to award pendente lite interest?
M/s Ravechee and Co v Union of India Civil Appeal Nos. 5964-5965 OF 2018
The court relied on a three-judge bench decision in Union of India v Ambica Construction and
held that an Arbitrator has the power to award interest unless specifically barred from
awarding it. It was clarified that the bar must be clear and specific. It was further held that
the bar to award interest on the amounts payable under the contract would not be sufficient
to deny the payment of interest pendent-lite.
BCCI v. Kochi Cricket Pvt. Ltd., (2018) 6 SCC 287
Amended Section 36 applies even to pending Section 34 applications on the date of
commencement of the Arbitration Amendment Act, 2015.

Amended Section 36 of Arbitration Act to apply to Section 34 applications filed

before 2015 amendment

Whether an award adjudicating excepted matters would violate Section 34?

Triune Energy Services Pvt Ltd v. Indian Oil Petronas Pvt Ltd O.M.P. (Comm) 5/2016
Relying upon the judgement of the Supreme Court in J.G. Engineers Private Ltd. v. Union of
India & Another: (2011) 5 SCC 758, the court held that an award adjudicating claims, which
are excepted matters would violate Section 34 (2)(a)(iv) and 34(2)(b) of the Act. Further, the
court held that the Petitioner’s claim for work done could not have been rejected only on the
ground that the termination of the contract was legal. The court observed that
notwithstanding the legality of the termination of the contract, a contractor is entitled to the
value of the work done.
If an issue is conclusively determined prior to the final award, the same constitutes an
‘interim award’
M/S Cinevistaas Ltd. v. M/s Prasar Bharti OMP (Comm.) 31/2017
A petition under section 34 of the Arbitration Act, 1996 was filed challenging the Order passed
by the Arbitrator whereby the prayer for amendment of Statement of Claim filed by the
Petitioner was rejected. The issue before the court was whether these amendments were
inadvertent errors which were left out in the Statement of Claims or they were additional
claims. Relying on Indian Farmers Fertilizer Co-operative Ltd. vs Bhadra Products 2018 (1) Arb
LR 271 (SC) the court held that if an issue is conclusively determined prior to the final award,
the same constitutes an ‘interim award’. The court observed that the order is not to be
construed as a mere procedural order or an order rejecting a technical amendment but in fact
a rejection of substantive claims. Lastly, it was held that additional claims were not time-
barred as they were raised in the first place in the notice invoking arbitration.

Limitation on amendment of Statement of Claim in Arbitration: What Delhi HC ruled

SECTION 36
Jurisdiction of Court in Enforcement Proceedings
M/s ARSS Infrastructure Projects Ltd v. Calcutta Haldia Port Road Company Ltd. O.M.P.
(ENF.) (COMM) 55/2017
The Court held that in exercising its power under Section 36 of the Act it cannot substitute
such award or make amendments thereto. Further, in enforcement proceedings the Court
has no jurisdiction to modify the Award. The jurisdiction of the Court is limited only to ensure
that the Award is implemented.
Sundaram Finance Limited v. Abdul Samad & Anr. Civil Appeal No.1650 of 2018
The court held that enforcement of an award through its execution can be initiated anywhere
in the country where the decree can be executed and there is no requirement of obtaining a
transfer of the decree from the court which would have jurisdiction over the arbitral
proceedings.
SECTION 37
Whether an order on the application for discovery is appealable under Section 37?
Union of India v Reliance Ltd. & Ors. 2018 SCC Online Del 13018
The court held that an Order directing disclosure of documents is not appealable under
Section 37 (2) (b) of the Arbitration Act. The court held that power of an Arbitral Tribunal to
order discovery was not contained in section 17 (1) (ii) (c) of the Arbitration Act, 1996 rather
it can be understood to be sourced in Section 19(4) read with Section 27 of the 1996 Act. It
was further held that an appeal was not maintainable against a procedural order seeking
disclosure/discovery of documents passed by the Arbitral Tribunal.
SECTION 47
Whether an Application under Section 47 of the Act seeking enforcement of a foreign award
is liable to be dismissed if it is not accompanied by an Arbitration Agreement?
P.E.C. Limited v. Austbulk Shipping SDN BHD 2018 SCC Online SC 2549
The court held that the Arbitration Agreement need not be filed at the time of filing an
application seeking enforcement of Foreign Award.
SECTIONS 48 AND 49
Whether non-stamping of a Foreign Award would render it unenforceable?
Shriram EPC Limited v. Rioglass Solar SA 2018 SCC Online SC 1471
The Supreme Court held that since a foreign award, is not contained within the expression
“award” in Item 12 of Schedule I, it is not taxable under the Indian Stamp Act, 1899 and thus,
non stamping of foreign award would not render it unenforceable under section 49 of the
arbitration act

Stamp Duty is not required for Enforcement of Foreign Awards, SC [Read Judgment]

Fundamental Policy of Indian Law and limited scope of Section 48

Daiichi Sankyo Company Limited v Malvinder Mohan Singh And Ors O.M.P.(EFA)(COMM.)
6/2016
The court held that protection of the minor is a fundamental policy of Indian law. It is a
substratal principle on which Indian law is founded. Court observed on the limited scope of
interference in so far as enforcement of a foreign award is concerned and noted that under
Section 48(2)(b) of the Act, the enforcement could be refused only if the award was contrary
to the (i) fundamental policy of India (ii) interest of India and (iii) justice or morality. Further,
the Delhi High Court affirmed that an award could not be said to be against the fundamental
policy of Indian law in case there was violation of provisions of a statute but only if there was
a breach of a substantial principle on which Indian law is founded. Lastly, the court held that
the approach of the Arbitral Tribunal as regards the methodology for calculating damages
could not be faulted with, particularly given the limited scope of Section 48 of the Act.

Gopal Subramaniam, P&A win for Daiichi: Singapore HC upholds 3,500 Crore ICC Award in
Daiichi’s favour

SECTION 50
Whether an appeal not maintainable under Section 50 of the Arbitration and Conciliation
Act is nonetheless maintainable under Section 13 (1) of the Commercial Courts Act?
Kandla Export Corporation & Anr. v. M/s OCI Corporation & Anr. 2018 14 SCC 715
In this the Supreme Court held that appeals filed under Section 50 of the Arbitration
Act would have to follow the drill of Section 50 alone and not Section 13(1) of the Commercial
Courts Act. Hence, Foreign Awards cannot be challenged under Section 13(1) of the
Commercial Courts Act, 2015.

Is an Appeal, not maintainable under S. 50 of Arbitration Act, maintainable

under Commercial Courts Act? SC answers

Parameters for Grant of Anti-Arbitration injunctions

Himachal Sorang Power Private Limited & Anr. Versus NCC Infrastructure Holdings Ltd. (CS
COMM 12/2019)
1) Principles governing anti-suit injunction are not identical to those that govern an anti-
arbitration injunction.
2) Court’s are slow in granting an anti-arbitration injunction unless it comes to the conclusion
that the proceeding initiated is vexatious and/or oppressive.
3) Court which has supervisory jurisdiction or even personal jurisdiction over parties has the
power to disallow commencement of fresh proceedings on the ground of res judicata or
constructive res judicata.
4) The fact that in assessment of the court a trial would be required would be a factor which
would weigh against grant of anti-arbitration injunction.
5) Aggrieved should be encouraged to approach either the Arbitral Tribunal or court which
has the supervisory jurisdiction in the matter. An endeavour should be made to support and
aid arbitration rather than allowing parties to move away from the chosen adjudicatory
process.
6) Arbitral Tribunal could adopt a procedure to deal with “re-arbitration complaint”
(depending on rules/procedure governing the proceedings )as a preliminary issue
No anti-arbitration injunction unless proceeding is vexatious or oppressive, Delhi HC

Whether the Insolvency and Bankruptcy Code can be invoked in respect of an operational
debt where an Arbitral Award has been passed against the Operational Debtor, which is not
yet been finally adjudicated upon
K. Kishan v. M/S Vijay Nirman Company Pvt. Ltd Civil Appeal No. 21824 of 2017
The court held that the filing of a Section 34 petition against an Arbitral Award shows that a
pre-existing dispute which culminates at the first stage of the proceedings in an
Award, continues even after the Award, at least till the final adjudicatory process under
Sections 34 & 37 has taken place. However, court clarified that there may be cases where
a Section 34 petition challenging an Arbitral Award may clearly and unequivocally be barred
by limitation, in that it can be demonstrated to the Court that the period of 90 days plus
the discretionary period of 30 days has clearly expired, after which either no petition under
Section 34 has been filed or a belated petition under Section 34 has been filed. It is only in
such clear cases that the insolvency process may then be put into operation.

The Viewpoint – Insolvency proceedings barred during the pendency of S.34 petition

Transfer of Property Act is silent on Arbitrability and does not negate arbitrability
Vidya Drolia & Ors. v. Durga Trading Corporation Civil Appeal No. 2402 / 2019
In this case the court held that the reasoning given in Himangni Enterprises case is incorrect
insofar it holds that “mere fact that an exemption from Rent Act is available does not mean
that the matter becomes non-arbitrable….As soon as the exemption is withdrawn, Rent Act
will apply, and therefore it cannot be contended that Arbitration & Conciliation Act, 1996
would apply“. Court further held that there is nothing in Transfer of Property Act to show that
a dispute as to determination of lease arising under Section 111 cannot be decided by
arbitration.
Basis and Principle to decide the place of ‘Seat’ of Arbitration
Union of India v. Hardy Exploration and Production (India) Inc Civil Appeal No. 4628 of 2018
The court held that when a place is agreed upon, it gets the status of seat which means
juridical seat. Further, the terms “place” and “seat” are used interchangeably. When only the
term “place” is stated or mentioned and no other condition is postulated, it is equivalent to
“seat” and that finalises the facet of jurisdiction. But if a condition precedent is attached to
the term “place”, the said condition has to be satisfied so that the place can become
equivalent to seat. The court concluded that the word “place” cannot be used as seat. An
illustration was also given by the court that a venue can become a seat if something else is
added to it as a concomitant. But a place unlike seat, at least as is seen in the contract, can
become a seat if one of the conditions precedent is satisfied. It does not ipso facto assume
the status of seat.

What the Supreme Court held on ‘Place’ and ‘Seat’ of Arbitration [Read Judgment]
Bilateral investment treaty and Anti-Arbitration Injunction
Union of India v. Vodafone Group Plc United Kingdom & Anr CS (OS) 383/2017
1) The court concluded that an investment treaty arbitration between a private investor and
the host state, which results by following the treaty route is not itself a treaty, but is sui
generis and recognized as such all over the world.
2) Court clarified that it cannot be said as an absolute proposition of law that the moment
there is an investment treaty arbitration between a private investor and the State, National
Courts are divested of their jurisdiction.
3) Investment Arbitration disputes are fundamentally different from commercial disputes as
the cause of action (whether contractual or not) is grounded on State guarantees and
assurances (and are not commercial in nature).
4) Lastly, it was held that it is not unknown for Courts to issue anti arbitration injunction under
their inherent power, especially when neither the seat of arbitration nor the curial law has
been agreed upon.

Delhi HC dismisses Centre’s plea seeking injunction against UK arbitration by Vodafone

Foreign Lawyers and Law Firms can conduct International Commercial Arbitrations in India
Bar Council of India v. A.K. Balaji & Ors. 2018 5 SCC 379
The Supreme Court held that foreign lawyers do not have an absolute right in conducting
International Commercial Arbitrations in India, however this does not bar them in cases
where the rules of Institutional Arbitration apply or the matter is covered by the provisions
of Arbitration Act in view of Section 32 and 33 of the Advocates Act, 1961.