arbitration agreement

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Introduction

The Supreme Court of India (“SC”) in its landmark decision in Arif Azim Co. Ltd. v. Micromax Informatics FZE[1] (“Arif Azim”)[2] has once again reiterated the distinction between ‘seat’ and ‘venue’ in an arbitration agreement and its jurisdictional implication. The judgment addresses the contentious issue of whether a location designated in an arbitration agreement serves merely as ‘venue’ (a place where proceedings may occur) or as juridical ‘seat’ (which grants a court jurisdictional oversight). This distinction has immense implications, especially for cross-border commercial agreements, where different interpretations can lead to divergent legal outcomes.Continue Reading Decoding Supreme Court’s Landmark Decision on ‘Seat’ vs. ‘Venue’ in Arbitration

Revisiting Unilateral Arbitrator Appointments: The Supreme Court’s New Stance on Fairness and Equality

Introduction

Party autonomy is undoubtedly a cornerstone of arbitration proceedings, allowing parties substantial freedom to shape the contours of their dispute resolution process. This freedom extends to choosing arbitrators and defining procedural rules, reflecting a central appeal of arbitration over litigation. However, this autonomy has limits, particularly where it intersects with the mandatory provisions of the Arbitration and Conciliation Act, 1996 (“Arbitration Act / Act”), designed to uphold fairness, impartiality and transparency.Continue Reading Revisiting Unilateral Arbitrator Appointments: The Supreme Court’s New Stance on Fairness and Equality

Novation of Contract and Section 11 Of the Arbitration and Conciliation Act, 1996

The doctrine of severability dictates that the arbitration clause (arbitration agreement) is deemed to be separate or independent from the overarching contract. Therefore, even when a contract’s legality is challenged, the arbitration agreement remains unaffected. However, the novation of a contract, by way of a supplemental/amended agreement, raises an interesting question regarding the validity of the arbitration clause in the original agreement entered into between the parties, which resultantly stands amended or superseded.  The issue about the extent to which the courts can intervene to determine this also requires judicial consideration.Continue Reading Novation of Contract and Section 11 Of the Arbitration and Conciliation Act, 1996

Law Governing Arbitration Agreement: Which Way are Indian Courts Headed?

The process and outcome of arbitration is largely governed by the following laws: (a) law governing the contract referring to the substantive law that parties choose to govern the main contract and any disputes arising thereunder; (b) law governing the arbitration agreement referring to the law that parties choose to govern arbitration agreement (it governs issues like validity, arbitrability, etc.); (c) law governing conduct of arbitral proceedings and forum for related court proceedings (i.e. law of the seat) and (d) Institutional rules (if chosen), governing the form and procedure of arbitration.Continue Reading Law Governing Arbitration Agreement: Which Way are Indian Courts Headed?

Arbitrability of Disputes: Indian Jurisprudence

[Continued from Part I]

The Vidya Drolia Case: Redefining Arbitrability

In 2019, aiming to solve the conundrum and marking a significant milestone in Indian arbitration, the Supreme Court’s ruling in Vidya Drolia and Ors v. Durga Trading Corporation,[1] (“Vidya Drolia”) laid down the contours of arbitrability. While analysing thearbitrability of Landlord-Tenant disputes governed by the Transfer of Property Act, 1882 (“TPA”), the Supreme Court elucidated that the mere existence of a special statute dealing with certain disputes does not ipso facto render them non-arbitrable, thereby widening the scope of arbitrability and increasing the access to arbitration in complex legal contexts. Continue Reading Arbitrability of Disputes: Indian Jurisprudence (Part 2)

Final Word on Enforceability of Unstamped Arbitration Agreements

“It [law of arbitration] is to be expeditious where the law is slow, cheap where the law is costly, simple where the law is technical, a peacemaker instead of a stirrer-up of strife.”[1]

Are arbitration clauses in unstamped or inadequately stamped agreements enforceable? This is a question that has been under legal scrutiny and has seen conflicting views from various constitutional benches of the Supreme Court for over half a decade.Continue Reading Final Word on Enforceability of Unstamped Arbitration Agreements

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

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.”Continue Reading SC rules on applicability of doctrine of ‘group of companies’ in arbitration jurisprudence

EXISTENCE AND VALIDITY OF AN ARBITRATION CLAUSE: A DEEP DIVE INTO THE CHANGING PERSPECTIVE ON THE COURT’S INTERVENTION AT THE PRE-ARBITRAL STAGE: PART-II

Duro revalidated in Mayavati Trading

The Supreme Court in a three-Judge Bench decision of Mayavati Trading (P) Ltd. v. Pradyuat Deb Burman[i] (“Mayavati Trading”), considered the impending omission of Section 11(6A) of the Act vide the Amendment Act of 2019. It was conclusively stated that Section 11(6A) is confined to the examination of the existence of an arbitration agreement and is to be understood in the narrow sense as has been laid down in Duro. The Supreme Court also expressly overruled Antique Exports, recognising that its reasoning relied on the pre-amended position, i.e., before Amendment Act of 2015 introduced Section 11(6A).Continue Reading Existence and Validity of an Arbitration Clause: A Deep Dive into the Changing Perspective on the Court’s Intervention at the Pre-Arbitral Stage: Part 2

Arbitration Law

Recently, the Delhi High Court refused to hold a third-party funder liable for furnishing security in enforcement of a foreign award, ruling that the funder — not being either a party to the arbitration agreement, the arbitration, or the eventual award — could not be “mulcted with liability, which they have neither undertaken nor are aware of”. Continue Reading Third party Funding – A funder remains a ‘Third Party” and not a ‘Party’ to the arbitration or award