Section 8 - Arbitration, Bar on civil court jurisdiction

2006 7 SCC 275

Participation in interim application does not mean waiver of arbitrability.

Statement on substance of dispute and "written statement".

Arbitration: Questions which arbitrator must decide, can decide and which court must decide

National Insurance Co. Ltd vs M/S. Boghara Polyfab Pvt. Ltd, 

http://www.indiankanoon.org/doc/1482268/

Limitation and Arbitration

Krishna Mittal v. MCD, MANU/DE/1502/2010.

Rameswara Home & Apartments Pvt Ltd v. Manojlal, 2008(3)CHN349.

Shiv Construction Company v. State of Rajasthan, RLW 2005 (4) Raj 2656, 2005 (4) WLC 234 (arbitrator to decide questions of limitation)

Legal heirs can invoke arbitration clause

Ravi Prakash Goel v. Chandra Prakash Goel, (2008) 13 SCC 667

Partnership ceases upon death of partners

CIT v. Seth Govindram Sugar Mills, AIR 1966 SC 24
CIT v. Sherally Meherally & Sons, [1998] 230 ITR 120(Bom)
Mohammad Laiquddin, 2010 (2) SCC 407 
Jagannath Mineral v. State of Orissa (on Manupatra)

Arbitration: Arbitrator powers to award interest

http://www.indiankanoon.org/doc/1939558/

Arbitrator has power to award pre-reference, pendente lite and post award interest.

Guarantor liability is co extensive

2009 9 SCC 478

Termination of Contract at will : no reason for termination

Classic Motors Ltd v. Maruti Udyog Limited, 1995 II AD (Delhi) 997; 57 (1995) DLT 677

termination without reason is improper

Umbrella Clause - Arbitration Clause Incorporation by reference

The Supreme Court accepted the proposition that even where a contract between two parties does not contain a provision for arbitration, an arbitration clause contained in an independent document will be incorporated into the contract between the parties by reference to an independent document in the contract if the reference is such to make thearbitration clause in the independent document a part of the contract. However, based on the facts of the case, it was held that there was no incorporation of the arbitration clause  r because: (i) the parties never intended to incorporate the same into the subcontract; and (ii) the entire arbitration agreement contained in the main contract was tailor-made to meet the requirements of the contract between X and Y, where Z did not have any role. 

MR Engineers and Contractors Pvt Ltd v Som Datt Builders Ltd, (2009) 7 SCC 696

Foreign Law and Part I

Citation Infowares Ltd. v. Equinox Corporation, 2009 (5) UJ 2066 (SC). The Chief Justice of India ruled that unless it is specifically excluded in an agreement between the parties or by implication, the provisions of Part I of the Indian Arbitration Act apply to international commercial arbitrations, even though the contract is governed by foreign law. Part I of the Indian Arbitration Act provides for, among others things, the appointment of arbitrators.

Contract and writ: arbitration

Principle:  Writ remedy may not be invoked when the case involves an essentially contractual disputes with the State, or involves questions of fact.  

State of U.P. v. Bridge & Roof (India) Limited, AIR 1996 SC 3515 "that the writ petition filed by the respondent for the issuance of a writ of Mandamus restraining the Government from deducting or withholding a particular sum, which according to the respondent is payable to it under the contract, was wholly misconceived and was not maintainable in law".  Followed by Vindhya Telelinks Limited v. MTNL, 95 (2002) DLT 865.

 The Bridge & Roof Case has been distinguished by the High Court at Guwahati in J. Deep  Chemicals and Fertilizers v. State of Tripura, 2007 (2) GLT 173.  The Guwahati High Court, while agreeing with the principle laid down in the Bridge & Roof Case, held that "the rightful claim or writ petitioner for payment of the remaining amount was not to be withheld by the State authorities. For that purpose the writ petition could have been entertained and there has been no necessity to refer the matter to the arbitrator as no such dispute for interpretation of contract or its terms or controversial facts was involved which could have been referred to the arbitrator".

Arbitration clause, further consent necessary.

Wellington Associates Ltd. v. Kirit Mehta, (2000) 4 SCC 272, the Supreme Court dealing with interpretation of an arbitration clause has held that an 'arbitration agreement' "… postulate an agreement which necessarily or rather mandatorily requires the appointment of an arbitrator/arbitrators. [It] does not cover a case where the parties agree that they "may " go to a suit or that they 'may' also go to arbitration".  

P. Gopal Das v. Kota Straw Board, AIR 1971 Raj 258, it was held by the Rajasthan High Court that the use of the word 'may' indicated that a fresh consent of both parties for arbitration was necessary, and may not constitute a binding arbitration clause. 

Jindal Exports Limited v. Fuerst Day Lawson Ltd, MANU/DE/3204/2009 decided on December 11, 2009, the Delhi High Court has held that "mere use of the word 'arbitration' or 'arbitrator' in a clause will not make it an arbitration agreement, if it requires or contemplates a further or fresh consent of the parties for reference to arbitration. For example, use of words such as "parties can, if they so desire, refer their disputes to arbitration" or "in the event of any dispute, the parties may also agree to refer the same to arbitration" or "if any disputes arise between the parties, they should consider settlement by arbitration" in a clause relating to settlement of disputes, indicate that the clause is not intended to be an arbitration agreement. Similarly, a clause which states that "if the parties so decide, the disputes shall be referred to arbitration" or "any disputes between parties, if they so agree, shall be referred to arbitration" is not an arbitration agreement. Any agreement or clause in an agreement requiring or contemplating a further consent or consensus before a reference to arbitration is not an arbitration agreement, but an agreement to enter into an arbitration agreement in future." However, please note that each arbitration clause is unique and therefore, it is not necessary that the use of the word 'may' would necessarily be construed as a non-binding arbitration clause.  

Fraudulent Preference

In Official Liquidator of Piramal Financial Ltd. v. Reserve Bank of India, [2004] 51 SCL 691 (Guj), the Gujarat High Court has held that “the use of word ‘preference’ implies an act of free will and that would by itself make it necessary to consider whether pressure was or had not been used. A payment made under the impression that unless a particular creditor was paid, the Company would go into liquidation is not done out of free will and volition. If the object was to save the company, it may not amount to fraudulent preference”. Further in Monark Enterprises v. Kishan Tulpule, [1992] 74 Comp Cas 89 (Bombay), the Bombay High Court has held that “if the transaction was entered into as a result of lawful pressure  of a bonafide creditor to recover his dues, the transaction of transfer could not be treated as a fraudulent preference.”  

 transaction by a company to “save its own skin” for its own benefit in the circumstances then prevailing, may     not be construed as fraudulent preference.

Seat will not give jurisdiction

Amrit Lal Madan v. KD Ahuja, delhi high court decided on Feb 8, 2010.
See also

2010 1 BCR 175.