Category: Parties and Arbitration Agreements

ISSUE:

Whether an arbitration act can oust the jurisdiction of the civil courts where parties do not follow Section 8 of the Arbitration and Conciliation Act, 1996 and is there no provision for partly referring the dispute to arbitration under Section 8 of the Act?

RULE:

In a matter that is the subject matter of an arbitration agreement, the Court is required to refer the parties to arbitration. Therefore, the suit should be in respect of a matter which the parties have agreed to refer to and which comes within the ambit of the arbitration agreement. Where, however, a suit is commenced “as to matter” which lies outside the arbitration agreement and is also between some of the parties who are not parties to the arbitration agreement, there is no question of application of Section 8 of the Arbitration and Conciliation Act, 1996.

ISSUE:

Whether the arbitration clause could be enforced?

RULE:

The New York Convention controls the proceedings in arbitration. Even the plain language of Section 2(a) of the Act makes it clear that the Act is applicable in respect of a foreign award made in pursuance of an agreement in writing for arbitration to which the Convention set forth in the Schedule applies and the terms of the Convention are available in the Schedule to the Act.

ISSUE:

Whether the validity of the arbitration agreement was governed by any law?

Whether there was any possibility that a court might find that KFG became a party to the arbitration agreement in the franchise agreements if governed by English Law?

Whether the Court of Appeal was justified in its summary judgement?

RULE:

The Validation Principle, an established technique of contractual interpretations, states that when there is a question or ambiguity in a contract, the law assumes that the law which upholds the validity and forms the base of the contract will prevail.

ISSUE:

Whether an arbitration clause between two parties be considered as a binding arbitration agreement on a person who is not a signatory to it?

RULE:

Parties to the Agreement: By interpreting the definition mentioned in Section 2(h) of the Act with Section 7 and considering the facts of the case as well held that there was no acknowledgment on the part of the third party that they are willing to or not bound by the agreement, neither by the company nor by any other board of directors of the company.

ISSUE:

Does determining the proper law of an arbitration agreement require a specific approach?

Does the choice of law for the main contract under Rome I hold relevance?

Whether it is permissible for an English Court to allow a foreign court to decide whether proceedings before the said foreign Court are in breach of an arbitration agreement?

RULE:

Article 4 of the Rome I Regulations dictates the provision for the applicable law in the absence of choice, which upholds the ‘closest connection’ principle to decide the applicable law and also simplifies the process. The provision aims to modernize the current choice of rules and laws in contractual obligations.

ISSUE:

Whether the Appellant could adjudicate on the agreement considering the principle of natural justice that nobody can be a judge of his own cause?

RULE:

The Real Likelihood Test of Bias, which originated in England to challenge administrative action on the basis of potential bias, explains that the test for disqualifying is whether the fact being examined by the Court has substantial potential for bias.

ISSUE:

Whether the American Arbitration Association (AAA) had the authority to administer an arbitration proceeding between Thomson CSF, a French company, and a group of American companies?

RULE:

A company that knowingly exploits the benefits of an arbitration agreement may be bound by the agreement even if it is not a party to it.

ISSUE:

Whether acquiescence of arbitration binds the parties to continue with arbitration?

Whether the agreement between parties arises from the arbitration clause or not?

RULE:

A Letter of Intent (LOI) can be construed as a binding contract if it is followed by conduct that is consistent with the existence of a contract.