Arbitration

Can Directors Be Made Parties to Arbitration Proceedings Following the Underlying Rationale of Group of Companies Doctrine? Delhi High Court Explains

Introduction

Agreement to arbitrate – through a clause in a master or a separate agreement – forms the crux of arbitration. Processes like arbitration depend entirely on parties’ written consent to arbitration agreements. Great importance is attached to party autonomy – autonomie de la volonté.[1] This age-old principle continues to be at the centre of any arbitration agreement; however, ascertaining the consent of a party, more specifically a non-signatory party, to an arbitration agreement has been up for debate.

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Pending Section 37 Appeal under Arbitration Act: Not a Legitimate Ground for Entertaining Belated Claim under IBC

The Hon’ble Supreme Court in the landmark RPS Infrastructure Ltd vs. Mukul Sharma[1] judgement, once again delved into the issue of claims being made beyond the statutorily prescribed timelines in a Corporate Insolvency Resolution Process (“CIRP”). In this case, an appeal under Section 37 of the Arbitration and Conciliation Act, 1996 (“Arbitration Act”), was pending against a Section 34 award and the Appellant submitted a claim for the same subsequent to the committee of creditors (“COC”) approving the resolution plan.

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An Analysis of Limitation for Appointment of Arbitrator Under Section 11 of the Arbitration & Conciliation Act, 1996

Introduction

In order to foster quick resolution, efficiency and flexibility are the cornerstones of arbitration. The Arbitration and Conciliation Act, 1996 (“the Act”) [1], provides for strict limitations at most stages of the arbitral process. Naturally, Section 11 with its glaring lack of prescribed limitation at the stage of appointment appears conspicuous and almost at odds with the scheme of the Act.

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Section 8 of the Arbitration & Conciliation Act, 1996, Does Not Envisage Making of a Separate Application If Due Objection is Made Before the Court to its Jurisdiction

The Hon’ble Delhi High Court in Madhu Sudan Sharma & Ors. v. Omaxe Ltd.[1]recently held that once a party has taken objection in its written statement to the jurisdiction of the Court to entertain the suit due to the presence of the arbitration clause between the parties, it would amount to sufficient compliance of Section 8 of the Arbitration & Conciliation Act, 1996 (“the Act”). The Court also held that once a party extracts an arbitration clause in its written submission to object to the jurisdiction of the Court, a separate application under Section 8 of the Act would not be necessary.

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Extension of Mandate of Arbitral Tribunal under Section 29A(4) of the Arbitration and Conciliation Act, 1996: A Primer for Practitioners

INTRODUCTION

Section 29A of the Arbitration and Conciliation Act, 1996 (“Act”), inserted vide theAmending Act of 2015 (w.e.f. 23.10.2015), was meant to introduce time limit for completion of arbitration proceedings. It prescribed a statutory period of 12 (twelve) months from the date the arbitral tribunal enters upon reference. Thereafter, vide the Amending Act of 2019 (w.e.f. 30.08.2019), the prescribed time limit was modified, and the Act required arbitration proceedings to be completed within 12 (twelve) months from the date of completion of pleadings. Further, sub-section (3) of Section 29A of the Act allows an extension of 6 (six) months by mutual consent of the parties for passing the award. Similarly, sub-section (4) of Section 29A of the Act provides that in the event the award is not passed in terms of Section 29A(1) or within the extended period of Section 29A(3), the parties can make an application to the court for extension of mandate of the arbitral tribunal.

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SC rules on applicability of doctrine of ‘group of companies’ in arbitration jurisprudence

Introduction

Consent by way of consensus-ad-idem and party autonomy are so deeply entrenched as the foundational or grundnorm principles of arbitration, that any material deviation therefrom is likely to pose challenges. One such challenge is the introduction of the doctrine of ‘group of companies’ in the jurisprudence of Indian arbitration, whereunder an arbitration agreement is extended, under certain conditions, to even non-signatory companies of the same group. In the words of Dr. Justice Dhananjaya Y. Chandrachud, Hon’ble CJI, it is “a modern theory which challenges the conventional notions of arbitration law.”

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Devas v Antrix: fraud as a ground for setting aside an arbitral award: unique outlier or a sign of things to come?

INTRODUCTION

‘Fraud vitiates all’ is a legal principle firmly embedded in the Indian jurisprudence. An iteration of this principle also finds place in the provisions of the Arbitration and Conciliation Act, 1996 (“Act”), in Section 34(2)(b)(ii), whereunder an arbitral award can be challenged for being in ‘conflict with public policy of Indian Law’, inter alia if “the making of the award was induced or affected by fraud”.

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CONUNDRUM SURROUNDING SECTION 42 OF ARBITRATION AND CONCILIATION ACT, 1996

INTRODUCTION

India’s arbitration law is thorough and organic because of its ever-evolving nature, through several amendments and decisions of the courts from time to time. However, the strict wordings of certain provisions contained in the Arbitration and Conciliation Act, 1996 (“Arbitration Act”),have caused a stir, for which courts have had to step in and use the tools of interpretation to resolve such practical dilemmas.

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Extension under Section 29A of Arbitration and Conciliation Act, 1996 not a possibility if application for extension is not made while mandate subsisted

The Hon’ble Calcutta High Court in Rohan Builders (India) Pvt. Ltd v Berger Paints India Limited 2023 SCC OnLine Cal 2645 recently deliberated on the issue of whether Courts can extend an arbitral tribunal’s mandate under Section 29A(4) of the Arbitration and Conciliation Act, 1996 (“the Act”), after the mandate of the arbitral tribunal has been terminated.

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CAN A CHALLENGE TO AN ARBITRAL AWARD BE DISMISSED FOR NON-COMPLIANCE WITH CONDITIONS FOR STAY ON ENFORCEMENT?

An arbitral award can be challenged by filing an application under Section 34 of the Arbitration and Conciliation Act, 1996 (“Act”). Ordinarily, along with the application to set aside an arbitral award, another application is filed under Section 36(2) of the Act seeking a stay on the operation of the award. Prior to the amendment to the Act in the year 2015, mere filing of an application under Section 34 of the Act would lead to an automatic stay on the enforcement of the award. However, pursuant to the Arbitration and Conciliation (Amendment) Act, 2015, Section 36(2) was amended to state that filing of an application to set aside an arbitral award shall not by itself render the award unenforceable and a specific order of stay of operation of the award shall have to be granted on a separate application being made for that purpose. Upon the filing of a separate application, seeking a stay on the operation of the arbitral award, the court may grant the stay, while imposing certain conditions, as it may deem fit. These conditions could entail either furnishing a bank guarantee or depositing cash with the court, to secure the arbitral award. The form and quantum of the security depends on the facts and circumstances of each case and is typically driven by the financial wherewithal and the conduct of the judgment debtor.

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