Trace Your Case

Author: admin

Categories
Supply

Union of India & Anr v. Mohit Minerals Pvt. Ltd. [2022 (61) GSTL 257 (SC)]:

UNION OF INDIA & ANR V. MOHIT MINERALS PVT. LTD

Union of India & Anr v. Mohit Minerals Pvt. Ltd. [2022 (61) GSTL 257 (SC)]:

ISSUE:

  • Whether the Central Goods and Services Tax (CGST) Act, 2017 and the Integrated Goods and Services Tax (IGST) Act, 2017 apply to ocean freight under the reverse charge mechanism (RCM) for cost, insurance, and freight (CIF) imports?

RULE:

  • The Central Goods and Services Tax (CGST) Act, 2017 and the Integrated Goods and Services Tax (IGST) Act, 2017 do not apply to ocean freight under the reverse charge mechanism (RCM) for cost, insurance, freight (CIF) imports.

FACTS:

  • Mohit Minerals Pvt. Ltd. (the respondent) imports coal into India under CIF terms, meaning that the cost of ocean freight is included in the price of the coal.
  • The respondent is liable to pay customs duty and IGST on the value of the imported coal, including the cost of ocean freight.
  • However, the respondent is not liable to pay GST on the ocean freight under the RCM, because the shipping line is not registered for GST in India.
  • The Indian government issued notifications in 2017 imposing GST on ocean freight under the RCM for CIF imports.
  • The respondent challenged these notifications before the Gujarat High Court, which held that they were unconstitutional and ultra vires the CGST Act and the IGST Act.
  • The Indian government appealed the Gujarat High Court's decision to the Supreme Court,
    which upheld the Gujarat High Court's decision and held that the CGST Act and the IGST Act do not apply to ocean freight under the RCM for CIF imports.

HELD:

  • The reverse charge mechanism (RCM) under the Goods and Services Tax (GST) is only applicable to services that are provided in India.
  • Ocean freight is not part of the value of imported goods, but rather a separate service that is provided by the shipping line
  • Therefore, the Central Goods and Services Tax (CGST) Act, 2017 and the Integrated Goods and Services Tax (IGST) Act, 2017 do not apply to ocean freight under the RCM for cost, insurance, freight (CIF) imports.
  • The Supreme Court held that the government notifications imposing GST on ocean freight under the RCM for CIF imports were unconstitutional and ultra vires the CGST Act and the IGST Act.
  • The Supreme Court’s decision is a significant victory for importers, as it means that they are no longer liable to pay GST on ocean freight under the RCM for CIF imports.
  • This can lead to a significant reduction in the cost of imports for businesses that import goods under CIF terms.
  • The Supreme Court’s decision is only applicable to CIF imports. For imports under other terms, such as free on board (FOB), the importer may still be liable to pay GST on the ocean freight under the RCM.
Categories
Arbitrability

Avitel Post Studioz Ltd. v. HSBC PI Holdings (Mauritius) Ltd., (2021) 4 SCC 713

AVITEL POST STUDIOZ LTD. V. HSBC PI HOLDINGS (MAURITIUS) LTD

Avitel Post Studioz Ltd. v. HSBC PI Holdings (Mauritius) Ltd., (2021) 4 SCC 713

ISSUE:

  • Whether the Singapore Arbitration Tribunal has jurisdiction in the matter?
  • Whether the given matter concerning fraud can be governed under Singapore Laws?

RULE:

  • Section 9 of the Arbitration and Conciliation Act 1996 holds the interim measures by Courts for the appointment of a guardian for a minor or a person of unsound mind for the purposes of arbitral proceedings; or
  • a) for an interim measure of protection in respect of any of the following matters, namely:
  • b) the preservation, interim custody or sale of any goods which are the subject-matter of the arbitration agreement;
  • c) securing the amount in dispute in the arbitration;

FACTS:

  • HSBC PI Holdings is an investment holding company for the Asia Division of HSBC. HSBC PI Holdings pursued interim injunctive relief and related orders before the Bombay High Court in support of Singapore arbitration proceedings to compel Avitel(respondent) to deposit money or security to the extent of HSBC’s original investment of US$60 million in a failed project. HSBC had invested US$60 million in Avitel in order to acquire 7.80% of its shareholding
  • Both the parties signed a Share Subscription Agreement (SSA). The SSA stated that the agreement would be construed in accordance with the Indian laws and any arbitration proceedings to be conducted under the Singapore International Arbitration Centre (SIAC) Rules in Singapore. Further a dispute arose between the parties. HSBC had accused that the promoters of Avitel the Jain Family had induced HSBC to invest in Avitel by making a representation that Avitel was on the verge of finalising a contract with the BBC. An earlier meeting between the parties with a BBC representative, in order to provide supposed endorsement by the BBC of its contract with Avitel’s subsidiary, was discovered by HSBC to have been fraudulent. When HSBC discovered the contract to be fraudulent it approached SIAC arbitration proceedings against Avitel.
  • Arbitral proceedings were initiated, and a final award was passed in favour of HSBC inter alia holding the above allegations to be true. HSBC brought a petition before the Bombay High Court against Avitel demanding the deposit of HSBC’s original investment of US$60 million and y security for the investment that had disappeared. The matter was then heard before the Supreme Court of India.

HELD:

  • The Bombay High Court ruled in favor of HSBC and stated that the two parties had voluntarily chosen Singapore to be the seat of arbitration, and thus it was not incorrect for the arbitration proceedings to be held in Singapore under the Singaporean Law. The Court also held that the SIAC had the jurisdiction to deal with allegations of fraud.
  • The Court held that HSBC was entitled to seek interim measures against the Appellants, and ordered Avitel to pay compensation which would be decided by the SIAC.
Categories
Uncategorized

Centrotrade Minerals & Metal v. Hindustan Copper Ltd, (2006) 11 SCC 245

ISSUE:

Whether the contract's two-tier arbitration clause, which allows for a second arbitration with the International Chamber of Commerce (ICC) in London after the initial arbitration in India, is legitimate and allowed under Indian law. This issue has already been addressed and resolved in favor of the clause's legitimacy?

Whether the contract's two-tier arbitration clause, which allows for a second arbitration with the International Chamber of Commerce (ICC) in London after the initial arbitration in India, is legitimate and allowed under Indian law. This issue has already been addressed and resolved in favour of the clause's legitimacy.

RULE:

In this scenario, the relevant rule is the two-tier arbitration clause included in the parties' contract. This section provides for a two-stage arbitration process, with the first stage involving arbitration in India and the case proceeding to a second arbitration conducted by the International Chamber of Commerce (ICC) in London if either party is dissatisfied with the outcome. This regulation specifies the agreed-upon approach for resolving contract-related issues.

Subscribe to Read More.
Login Join Now
Categories
Appointment and Challenge

Amazon.Com NV Investment Holdings LLC v. Future Coupons Private Limited & Ors, 2021 SCC OnLine Del 1279.

AMAZON.COM NV INVESTMENT V. FUTURE COUPONS

Amazon.Com NV Investment Holdings LLC v. Future Coupons Private Limited & Ors, 2021 SCC OnLine Del 1279.

ISSUE:

  • What is the legal status of an Emergency Arbitrator (EA), i.e. whether the EA is an arbitrator in terms of the Act and whether the interim order of an EA is an order under Section 17(1) and is enforceable under Section 17(2) of the Act?
  • Whether the EA misapplied the Group of Companies doctrine, which arguably applies only to proceedings under Section 8 of the Act?
  • Whether the interim order of EA is null and void as it was passed without jurisdiction

RULE:

  • Emergency arbitral awards are enforceable under Section 17(2) of the Arbitration and Conciliation Act, 1996 of India (the Act) as an interim order of an arbitral tribunal made under Section 17(1) of the Act.

FACTS:

  • Amazon and Future Coupons Private Limited (FCPL) entered into a shareholder agreement in 2019, which contained an arbitration clause.
  • In 2020, Future Retail announced a merger with Reliance Retail.
  • Amazon filed an emergency arbitration case in Singapore, seeking to prevent Future Retail from going ahead with the merger.
  • The emergency arbitrator ruled in favor of Amazon and granted an interim injunction restraining Future Retail from proceeding with the merger.
  • Future Retail challenged the emergency arbitral award in the Delhi High Court.
  • The Supreme Court of India overturned the Delhi High Court’s order and allowed the emergency arbitral award to be enforced.

HELD:

  • The emergency arbitrator had jurisdiction to hear the dispute.
  • The emergency arbitral award was valid and enforceable.
  • Emergency arbitral awards are enforceable under Section 17(2) of the Arbitration and Conciliation Act, 1996 as an interim order of an arbitral tribunal made under Section 17(1) of the Act.
  • In other words, the Supreme Court held that emergency arbitral awards are enforceable in India, even if the arbitration agreement is governed by foreign law.
  • The Court also reinforced the principle of party autonomy in arbitration, as it upheld the right of parties to agree to an emergency arbitration procedure.
  • The Supreme Court’s decision in this case is a significant development in Indian arbitration law.
  • It provides businesses with more certainty and predictability in the enforcement of arbitral awards, and it makes India a more attractive destination for international arbitration.
Categories
Recourse against Arbitral Awards

Associate Builders v. DDA, (2015) 3 SCC 49

ASSOCIATE BUILDERS V. DDA

Associate Builders v. DDA, (2015) 3 SCC 49

ISSUE:

  • Whether the Delhi Development Authority (DDA) was legally obligated to compensate the contractor for the significant delay in the construction project that the arbitrators determined?
  • Whether the division bench of the High Court’s use of the principle of “rough and ready justice” was a suitable criterion for determining compensation amounts in cases of construction project delays.

RULE:

  • In circumstances involving construction contracts and delays, courts may apply the idea of “rough and ready justice” to determine the amount of compensation. Based on the facts of the case, this approach helps courts to decide a reasonable and justifiable compensation sum.

FACTS:

  • The lawsuit involves a contract for building construction between the Delhi Development Authority (DDA) and Associate Builders.
  • The building project experienced major delays, extending the completion deadline by 25 months.
  • Arbitrators evaluating the contractor’s claims blamed the delay on the DDA.
  • As compensation for the delay, the arbitrators awarded the contractor Rs. 23.39 lakhs.
  • The case was heard by a learned single judge of the High Court and dismissed.
  • The DDA filed an appeal, appealing the learned single judge’s order.
  • The division bench overturned the contested order and reduced the claims, describing it as “rough and ready justice.”

HELD:

  • The Supreme Court dismissed the appeal and overturned the arbitral award.
  • Courts should not vacate arbitral verdicts based solely on disagreements with the arbitrator’s interpretations of the agreement under Section 34 of the Arbitration and Conciliation Act.
  • To set aside an award, you must show that the tribunal’s decisions were based on no or irrelevant evidence.
  • ‘Public Policy’ Justifications:
  • The Supreme Court established what constitutes ‘public policy.’
  • Among these grounds are:
  • Failure to comply with superior court instructions.
  • Violation of judicial approach principles.
  • Violation of natural justice principles.
  • Unreasonableness in the selection of an arbitrator to the degree that no reasonable person would reach a comparable conclusion.
  • These points provide clarification.
Categories
Foreign Awards and their Enforcement

Centrotrade Minerals and Metals Inc v. Hindustan Copper Limited [Supreme Court, 2 June 2020]

CENTROTRADE MINERALS AND METALS V. HINDUSTAN COPPER

Centrotrade Minerals and Metals Inc v. Hindustan Copper Limited [Supreme Court, 2 June 2020]

ISSUE:

  • Whether the contract’s two-tier arbitration clause, which allows for a second arbitration with the International Chamber of Commerce (ICC) in London after the initial arbitration in India, is legitimate and allowed under Indian law. This issue has already been addressed and resolved in favor of the clause’s legitimacy?
  • Whether the contract’s two-tier arbitration clause, which allows for a second arbitration with the International Chamber of Commerce (ICC) in London after the initial arbitration in India, is legitimate and allowed under Indian law. This issue has already been addressed and resolved in favour of the clause’s legitimacy.

RULE:

  • In this scenario, the relevant rule is the two-tier arbitration clause included in the parties’ contract. This section provides for a two-stage arbitration process, with the first stage involving arbitration in India and the case proceeding to a second arbitration conducted by the International Chamber of Commerce (ICC) in London if either party is dissatisfied with the outcome. This regulation specifies the agreed-upon approach for resolving contract-related issues.

FACTS:

  • Centrotrade Minerals and Metals Inc. (Centrotrade), a US firm, has agreed to sell 15,500 DMT of copper concentrate to Hindustan Copper Ltd. (HCL) for delivery at Kandla Port in Gujarat, India.
  • The contract featured a two-tier arbitration clause: first-tier arbitration in India, followed by a second-tier arbitration held by the International Chamber of Commerce (ICC) in London if either party disagreed with the outcome.
  • A disagreement occurred regarding the quantity of copper concentrate given, prompting arbitration proceedings.
  • In the first-tier arbitration, the arbitrator assigned by the Indian Council of Arbitration issued a Nil Award.
  • Centrotrade requested second-tier arbitration, and the ICC arbiter in London delivered a decision in Centrotrade’s favor, awarding precise monetary amounts.
  • During the London arbitration, HCL filed a suit in a Rajasthan court challenging the arbitration clause, obtaining an interim stay that the Supreme Court ultimately overturned.
  • The implementation of the London award was initially permitted by a single judge of the Calcutta High Court, but a Division Bench overturned this decision.
  • The matter was heard by the Supreme Court, which issued two distinct judgments addressing the constitutionality of the two-tier arbitration clause and the procedural fairness of the arbitration.

HELD:

  • According to S.B. Sinha, J., the two-tier arbitration agreement was unlawful under Indian law, so the foreign judgment was not enforceable in India.
  • Tarun Chatterjee, J., decided that the two-tier arbitration process was lawful and admissible under Indian law, but procedural fairness was difficult throughout the London arbitration. HCL was not allowed to present its case before the ICC arbitrator.
  • The case was submitted to a higher court.
  • The first question, whether the two-tier arbitration agreement was lawful, was answered positively.
  • The matter is currently being evaluated for the second question, which concerns the enforcement of the London award, focusing on whether HCL was given a fair and adequate opportunity to respond.
  • The Court found no evidence to support Hindustan Copper Ltd.’s (HCL) contention that it was unable to present its case during the arbitration hearings. Under Section 48(b) of the Arbitration and Conciliation Act, the refusal ground is an impossibility, not difficulty in presenting one’s case. HCL had many opportunities to state its position but chose not to participate in the arbitration at first.
  • The Court rejected the claim that the London arbitrator should have resolved the issue of jurisdiction as a preliminary matter before examining the contract’s substantive issues. This was the first time this argument was offered, and it needed more substance.
  • The Court criticized one of the judges’ errors in the prior judgment, pointing out that the judge had misread some aspects of the arbitration proceedings and needed to correctly apply essential legal principles.
  • The Court determined that remanding the case to the ICC arbitrator for a new award was outside the enforcing court’s authority under Section 48 of the Arbitration and Conciliation Act.
  • As a result, Centrotrade’s appeal was permitted (Civil Appeal No. 2562 of 2006), and Chatterjee, J.’s judgment was reversed. The appeal filed by HCL (Civil Appeal No. 2564 of 2006) was denied.
Categories
Arbitral Awards

Dr. Writer’s Food Products v. Cosmos Co-operative Bank [Bombay HC, 20 September]

DR. WRITER'S FOOD PRODUCTS V. COSMOS CO-OPERATIVE

Dr. Writer’s Food Products v. Cosmos Co-operative Bank [Bombay HC, 20 September]

ISSUE:

  • Whether the respondent’s motion for correction of the arbitral award, filed on December 29, 2016, was maintainable under Section 33 of the Arbitration Act after the 30-day limitation period from the date of service of the arbitral judgement?
  • Whether it is possible that the respondent’s late application under Section 33, which was not maintainable, could prolong the time limit for the petitioners to file an arbitration petition under Section 34 challenging the initial arbitral judgement of June 4, 2015?

RULE:

  • In India, the Arbitration and Conciliation Act of 1996 oversees the resolution of arbitration issues. Section 34 of the Act addresses the setting aside of an arbitral award, while Section 33 addresses award revision and interpretation.

FACTS:

  • On June 4, 2015, an arbitral award was rendered, and a copy was immediately served on the petitioners.
  • The respondent submitted an application for correction of the arbitral award on December 29, 2016, well after the 30-day limitation period stipulated by Section 33(1)(a) of the Arbitration Act.
  • The petitioners challenged this application and also requested that the respondent’s application be excused for the delay.
  • The arbitrator repaired the typographical errors pointed out by the respondent and excused the delay in filing the application on February 16, 2017.
  • On March 2, 2017, the petitioners obtained a copy of this order, and on May 5, 2017, they filed an arbitration petition under Section 34, appealing the original award.

HELD:

  • The respondent’s application under Section 33 for correction of the arbitral award, filed on December 29, 2016, was not maintainable since it was filed much after the 30-day limitation period from the date of service of the arbitral judgement.
  • The respondent’s motion for correction was not maintainable in law because there was no power to excuse the delay in filing an application under Section 33(1)(a) of the Arbitration Act.
  • Because the respondent’s Section 33 motion was denied, there was no new term of limitation for contesting the original award under Section 34(3) of the Arbitration Act.
  • As, the period for making an application under Section 34 had already expired when the respondent filed its application under Section 33, the petitioners were not compelled to wait for the respondent’s untimely application under Section 33 to be disposed of.
  • The petitioners’ referenced case, Ved Prakash Mithal & Sons, was distinguished because the facts were different, and the application under Section 33 in that case was filed within the necessary limitation time.
  • Invoking Section 33(1) within the limitation period did not have any effect because the limitation period for contesting the original arbitral award had already elapsed. As a result, the arbitration petition appealing the initial award was denied.
Categories
Arbitrability

Deccan Paper Mills Co. Ltd. v. Regency Mahavir Properties, (2021) 4 SCC 786

DECCAN PAPER MILLS CO. V. REGENCY MAHAVIR PROPERTIES & ORS

Deccan Paper Mills Co. Ltd. v. Regency Mahavir Properties, (2021) 4 SCC 786

ISSUE:

  • Whether disputes involving allegations of fraud in the execution of agreement can be arbitrated?
  • Whether proceedings under Section 31 of the Specific Relief Act, 1963 would be treated as proceedings in personam or proceedings in rem?

RULE:

  • Section 31 of the Specific Relief Act 1963 states when a cancellation may be ordered;
  • a) Any person against whom a written instrument is void or voidable, and who has reasonable apprehension that such instrument, if left outstanding may cause him serious injury, may sue to have it adjudged void or voidable; and the court may, in its discretion, so adjudge it and order it to be delivered up and cancelled.
  • b) If the instrument has been registered under the Indian Registration Act, 1908 (16 of 1908), the court shall also send a copy of its decree to the officer in whose office the instrument has been so registered; and such officer shall note on the copy of the instrument contained in his books the fact of its cancellation.

FACTS:

  • Deccan Paper Mills Co. Ltd. (“Deccan”) and Ashray Premises Pvt. Ltd. (“Ashray”) entered into an agreement on July 22, 2004, to develop a portion of land owned by Deccan. The parties agreed that Deccan would not object if Ashray assigned or delegated the rights or the Power of Attorney/writings executed in furtherance of the Agreement to any other person, firm, or party at any time during the Agreement’s continuation, without violating the T&Cs of the Agreement.
  • As a result, Ashray entered into a partnership agreement with Regency Mahavir Properties (“Regency”). Ashray delegated the Agreement’s execution to Regency. The Regency Agreement had an arbitration clause, despite the Agreement not having one. A deed of confirmation then confirmed the Regency Agreement. The Deccan Directors agreed to this assignment based on assurances given by Mr. Atul Chordia, who had orchestrated the entire transaction fraudulently. Mr. Atul Chordia chose to retire on May 30 2006, shortly after Ashray assigned development work to Regency and before he fraudulently signed the Deed as an authorised partner of Regency.
  • Deccan informed Ashray that the Regency Agreement and Deed are not binding upon it and filed a suit for declaration praying,among other things, for a declaration that the Regency Agreement and Deed are illegal, null, void and not binding upon Deccan and for cancellation of the Agreement, Regency Agreement as well as the Deed. Soon after, Regency applied under Section 8 of the Arbitration and Conciliation Act, 1996 seeking arbitration of the dispute, which was granted. Deccan filed a writ petition in the High Court of Bombay, which was dismissed. The matter was then appealed before the Supreme Court.

HELD:

  • The Supreme court held that “a person” referred to in Section 31 of Specific Assistance Act 1963 does not include third parties but are limited to the written statement or any other instrument that may possibly bind a third party.
  • The Court also relied on the Avitel case and held that because a transaction has criminal overtones does not make it non-arbitrable. The Court additionally explained that when an unregistered instrument is dropped, an activity brought under Area 31(1) of the Particular Alleviation Act can’t be supposed to be in personam. At the point when an enlisted instrument is dropped, being in rem can’t be said.
  • It was likewise expressed that the factum of enrollment of what is generally a confidential record between parties presents no higher legitimate status on the report because of its enlistment. The High Court likewise checked out at various choices. It reached the determination that a judgment passed under Segment 31 of the Particular Help Act ties the gatherings to the suit, as opposed to each and every individual who has a case to the property.
Categories
Appointment and Challenge

Entertainment City Ltd. v. Aspek Media (P) Ltd., 2020 SCC OnLine Del 2648

ENTERTAINMENT CITY LTD V. ASPEK MEDIA PRIVATE LTD

Entertainment City Ltd. v. Aspek Media (P) Ltd., 2020 SCC OnLine Del 2648

ISSUE:

  • Whether the fees charged by the Arbitrator are subject to the statutory limits stipulated in the fourth schedule of the Arbitration and Conciliation Act 1996?

RULE:

  • Section 14 of the Arbitration and Conciliation Act 1996 deals with the resignation and termination of appointed arbitrators on the grounds of inability to perform duties de jure or de facto or any such reasons.

FACTS:

  • The arbitral disputes arising between the petitioner and the respondent for appointment of an arbitrator to arbitrate on the disputes. Vide order, dated 21th December, 2018, a learned retired Judge of this Court was appointed as Sole Arbitrator. The said order did not fix any fees, as payable to the learned Sole Arbitrator. The contract/agreement, dated 14th August, 2014, between the petitioner and the respondent, too, contained an arbitral clause, but does not fix any fees as payable to the Arbitrator.
  • A claim of Rs. 71,76,11, 202 with an 18% interest was filed by the Respondent, and a counter-claim of Rs. 64,34,20,140 was filed by the Petitioner. The Learned Sole Arbitrator heard the parties and issued an award, for which the Petitioners prayed for terminating the mandate of the Arbitrator, especially relating to the fees being charged by the Arbitrator under Section 14 of the Act.
  • The matter was appealed before the High Court of Delhi.

HELD:

  • The High Court of Delhi held that Section 14 deals with situations where there is an impossibility to act, where, on the part of the Learned Sole Arbitrator, the mandate is terminated. The Court referred to Section 11(4) of the Act which empowers the Court to frame rules for the purpose of determining the fees of the arbitral authorities, taking into consideration the rates mentioned in the Fourth Schedule of the Act.
  • The Court further held that the rates fixed in the fourth schedule of the Act are not necessarily binding on the Arbitrator in the present matter, and the Petitioners did not insist on a fee at the time of appointment, and thus it is not up to the Petitioners to seek a termination of the mandate of the Arbitrator at this stage.
Categories
Appointment and Challenge

DSC Ventures (P) Ltd. v. Ministry of Road Transport & Highways, 2020 SCC OnLine Del 669

DSC VENTURES PVT LTD V. MINISTRY OF ROAD TRANSPORT AND HIGHWAYS

DSC Ventures (P) Ltd. v. Ministry of Road Transport & Highways, 2020 SCC OnLine Del 669

ISSUE:

  • Whether a party can appoint an arbitrator after the expiry of 30 days from the date of demand to do so, in a case falling under Section 11(6) of the Arbitration and Conciliation Act 1996?

RULE:

  • Section 11(6) of the Arbitration and Conciliation Act 1996 reads that when a party has failed to act as required by procedure, or when the parties fail to reach an amicable solution, they may request the Supreme Court or as the case may be, the High Court to take necessary steps or direct orders, unless the agreement between the disputing parties prescribes other means for the same.

FACTS:

  • The petitioner and respondent entered into a Concession Agreement, dated 8th May, 2003, whereunder the respondent was to convert an existing 2-lane highway, (NH-6) in the state of Chhattisgarh, into a 4-lane highway. Disputes arose between the two parties, and clause 19.2 (a) of the Concession Agreement provided for reference of disputes to a three member arbitral tribunal, if efforts at resolution, by amicable settlement, were to fail.
  • Attempts, at amicable settlement of the disputes between the petitioner and respondent, failed. On 23rd March, 2007, the petitioner appointed its nominee arbitrator and, on 18th April, 2007, the respondent did likewise.
  • On 24th February, 2020, before the award was announced, unfortunately, Mr. S.C. Sharma, the learned arbitrator appointed by the respondent, expired. From this unfortunate occurrence, emanates the present dispute.
  • On the ground that, reading Section 15 (2), along with Section 11 (4) of the 1996 Act, the time of thirty days, as available with the respondent, for appointing a substitute arbitrator in place of Mr. S.C. Sharma, had expired, the petitioner has moved the present petition, under Section 11 (6) of the 1996 Act, praying that this Court should appoint a substitute arbitrator, in place of Mr. S.C. Sharma.
  • During the pendency of these proceedings, on 8th June, 2020, the respondent appointed Mr. Manoj Kumar, as its substitute arbitrator, in place of Mr. S.C. Sharma.

HELD:

  • The High Court of Delhi dismissed the petition and held that the Arbitration Clause in the present case clearly specified that issuance of a notice by the Petitioner to the Respondent was required for the appointment of an Arbitrator, and in the given case, no such notice was given by the Petitioner, thus the Petitioner could not press on the Respondents right to appoint a substitute arbitrator.
  • The Court also held that the action of the Respondent appointing a substitute arbitrator even after 30 days would not go unnoticed given the restrictions laid down due to COVID-19.