Nov 24,2022 | 8 min read

10 MOST IMPORTANT JUDGMENTS UNDER ARBITRATION LAW IN INDIA

Due to its effectiveness, efficiency, and speed, arbitration is becoming a more popular form of alternative conflict resolution than court-based litigation. With the goal of modernising Indian Arbitration Law and bringing it in line with the best international practices, the (Indian) Arbitration and Conciliation Act, 1996 (Arbitration Act) was modelled after the UNCITRAL framework of legislation.

 

The Supreme Court of India (SC) and other High Courts (HC) issued a number of notable rulings in 2021 that addressed the legal status and applicability of the Arbitration Act's provisions. In order to guarantee that the alternative dispute resolution procedures outlined in Indian Law adhere to international norms, the Indian Government also modified the Arbitration Act.

 

Some Of the Important Judgments are:

  1. N.N. Global Mercantile Pvt. Ltd. v. Indo Unique Flame Ltd. & Ors, SLP (Civil) Nos.13132-13133 of 2020)

 

Issue: Whether an arbitration agreement would be void, ineffective, or unenforceable if the underlying contract was not stamped in accordance with the applicable stamp legislation?

 

The SC ruled that even if the substantive contract is not admissible in evidence or that it cannot be implemented due to non-payment of stamp duty, in such cases the arbitration agreement would not be considered void, unenforceable, or non-existent. However, due to a contradiction with an earlier ruling, the SC referred the aforementioned issue to be addressed by a Constitution Bench of Five Judges.

 

  1. Government of Maharashtra v. Borse Brothers Engineers & Contractors Pvt. Ltd.,SLP (CIVIL) No.665 of 2021

 

Issue: Whether a delay of more than 120 days can be condoned in case of filing of appeal against the order?

 

The SC ruled that a delay in submitting an appeal against a court order under the Arbitration Act may be excused even after 120 days. However, only in rare circumstances may such a delay be excused.

 

  1. Inox Renewables Limited v. Jayesh Electricals Limited, SLP (C) No.29161 of 2019

 

Issue: Whether by mutual consent can the parties to arbitration change the seat of arbitration.

 

The SC ruled that changing the "venue" of arbitration by both parties' consent will also change the juridical "seat" of arbitration.

 

  1. PASL Wind Solutions Private Limited v. GE Power Conversion India Private Limited, SLP (CIVIL) NO.3936 OF 2021

 

Issue: Whether two Indian parties can agree on a foreign seat of arbitration?

 

The SC held that two Indian parties may select a foreign arbitral seat and that those who pick such a foreign seat may seek temporary relief from Indian courts.

 

  1. Rahul S Shah v. Jinendra Kumar Gandhi and Ors, SPECIAL LEAVE TO APPEAL NOS. 7965-7966/2020

 

In order to expeditiously carry out decree execution, the SC issued guidelines that all executing courts must abide by. The guidelines noted that an executing court must resolve the execution proceedings within 6 (six) months of the date of filing, and that this deadline may only be extended by providing written justification for the delay. 

 

  1. Board of Control for Cricket in India v. Deccan Chronicle Holdings Ltd, COMM ARBITRATION PETITION (L) NO. 4466 OF 2020

 

Issue: Whether the arbitral tribunal can go beyond the terms of the contract between the parties?

 

An arbitral decision that violated the provisions of the parties' contract was overturned by the Bombay High Court. Unless the parties mutually agree to allow the arbitrator to settle a dispute by applying what they deem to be "fair and reasonable," the Bombay High Court ruled that the arbitrator's jurisdiction is restricted to the agreement and that they can pass an order that may be the subject of reference.

 

  1. Interdigital Technology Corporation & Ors. v. Xiaomi Corporation& Ors., CS(COMM) 295/2020

 

The Delhi High Court issued a precedent-setting order prohibiting the implementation of a foreign court's rulings. Interdigital Technology Corporation filed a lawsuit in the Delhi High Court asking for an injunction against Xiaomi Corporation for allegedly infringing on its patents.

 

  1. Gemini Bay Transcription Pvt. Ltd. v. Integrated Sales Service Ltd., CIVIL APPEAL NOS.8343-8344 OF 2018

 

The SC ruled that a non-signatory who is functioning as the arbitration agreement's signatory's alter ego would be subject to the enforcement of a foreign award. The SC concluded that being a non-signatory to the arbitration agreement is not a reason for Indian courts to refuse enforcement of a foreign judgement, underscoring the limited grounds on which enforcement of a foreign award may be refused by courts.

 

  1. DLF Homes Developers Ltd. v. Rajapura Homes Pvt. Ltd. and Anr, ARBITRATION PETITION (CIVIL) NO. 17 OF 2020

 

The SC ruled that even though the parties have an arbitration agreement, the court may nevertheless conduct a prima facie review and deny a request to send a matter to arbitration if it does not fall under the terms of the arbitration agreement.

 

  1. Tata Capital Finance Ltd. v. Shri Chand Construction and Apartment Pvt. Ltd., AO(OS) 40/2020 and CM No. 15441/2020

 

The Delhi High Court ruled that an arbitration agreement that gives one party unequal authority to end the arbitration process on its own would be legally unenforceable. Additionally, a clause in an arbitration agreement that directs one party's claims to arbitration while leaving the other party's claims open to another remedy would be illegal under the law.

 

Reference:

  1. https://www.mondaq.com/india/arbitration-dispute-resolution/1156308/arbitration-law-in-india-key-judgments-and-updates-for-the-year-2021

  2.   https://www.barandbench.com/columns/40-important-judgments-on-arbitration-2021

  3.   https://blog.ipleaders.in/important-judgments-arbitration-passed-2021/

  4. https://www.barandbench.com/columns/50-important-arbitration-judgements-january-may-2022

 


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ABOUT THE AUTHOR


Shreya Kapil

We have extensive experience handling a broad spectrum of cases on both the original and appellate jurisdiction relating to Civil, Criminal, Arbitration, and General litigation matters, with regular appearances before various courts, such as the High Courts, subordinate courts in several states, administrative authorities and regulators, including the Central Administrative Tribunal, National Company Law Tribunal, National/State Consumer Disputes Redressal Commission, Debt Recovery Tribunals etc

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