Arbitration & Conciliation Act

Court Deposit Not Payment: Delhi HC’s Key Ruling on Arbitration and Insolvency Intersection

Summary: The Delhi High Court, in McNally Bharat Engineering Company Limited v. Metso India Pvt. Ltd., has held that an amount deposited in court as a condition for stay of an arbitral award, pending a challenge under Section 34 of the Arbitration & Conciliation Act, does not amount to payment to the award-holder and remains an asset of the award-debtor. Therefore, upon the award-debtor going into CIRP under the Insolvency and Bankruptcy Code during the pendency of such challenge, if a claim is not submitted to the Resolution Professional and does not form part of an approved resolution plan, it stands extinguished. Consequently, the pending Section 34 petition challenging the underlying arbitral award is rendered infructuous, and the deposited amount is to be refunded to the award-debtor turned corporate debtor.

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The “all or nothing” problem: Partial Enforcement of Foreign Arbitral Awards

Summary: When a foreign arbitral award hits a snag, should the entire award sink or can the enforceable part still sail through? Indian law is clear on severability for domestic awards, but foreign awards remain in a grey zone. While global practice leans toward partial enforcement to protect legitimate claims, India risks being an outlier. It’s time for a pragmatic shift that aligns with international norms and safeguards commercial certainty.

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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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