Arbitration and Conciliation Act, 1996 (26 of 1996), Section 34, 37 – Arbitration award – Interference in – When it comes to scope of an appeal under Section 37 of the 1996 Act, jurisdiction of the appellate court in examining an order passed under Section 34, either setting aside or refusing to set aside an arbitral award, is all the more circumscribed -- A great deal of restraint is required to be shown while examining the validity of an arbitral award when such an award has been upheld, wholly or substantially, under Section 34 of the 1996 Act – Frequent interference with arbitral awards would defeat the very purpose of the 1996 Act -- High Court was not at all justified in setting aside the arbitral award exercising extremely limited jurisdiction u/s 37 of the 1996 Act by merely using expressions like ‘opposed to the public policy of India’, ‘patent illegality’ and ‘shocking the conscience of the court’ – Judgment and order passed by High Court set aside and the arbitral award restored.

(Para 39-43)

A. Micro, Small and Medium Enterprises Development Act, 2006 (27 of 2006), Section 18 – Arbitration and Conciliation Act, 1996 (26 of 1996), Section 34, 80 – Order/ Award of Micro and Smal enterprises Facilitation (MSEFC) – Challenge to – Alternative remedy of arbitration – Writ jurisdiction :

Following questions referred to a larger Bench of five Judges, namely:

(i) Whether the ratio in M/s India Glycols Limited (2023 SCC OnLine SC 1852) that a writ petition could never be entertained against any order/award of the MSEFC, completely bars or prohibits maintainability of the writ petition before the High Court?

(ii) If the bar/prohibition is not absolute, when and under what circumstances will the principle/restriction of adequate alternative remedy not apply?

(iii) Whether the members of MSEFC who undertake conciliation proceedings, upon failure, can themselves act as arbitrators of the arbitral tribunal in terms of Section 18 of the MSMED Act read with Section 80 of the A&C Act?

The first and second question will subsume the question of when and in what situation a writ petition can be entertained against an order/award passed by MSEFC acting as an arbitral tribunal or conciliator.

(Para 2, 19)

B. Constitution of India, Article 226 – Writ jurisdiction – Alternative remedy -- Existence of the statutory remedy does not affect the jurisdiction of the High Court to issue a writ -- The writ jurisdiction being discretionary by policy, the writ courts generally insist that the parties adhere to alternative statutory remedies, as this reinforces the rule of law -- However, in exceptional cases, writ jurisdiction can still be exercised as a power to access the court for justice and relief.

(Para 15)

Arbitration and Conciliation Act, 1996 (26 of 1996), Section 34 – Limitation Act, 1963 (36 of 1963), Section 4-24 -- General Clauses Act, 1897 (10 of 1897), Section 10 -- Objection to arbitration award – Limitation – Extended period – Exclusion of holiday – Permissibility of :

(i) There is no wholesale exclusion of Sections 4 to 24 of the Limitation Act when calculating the limitation period under Section 34(3) of the ACA.

(ii) Section 4 of the Limitation Act applies to Section 34(3) of the ACA only to the extent when the 3-month period expires on a court holiday. It does not aid the applicant when the 30-day condonable period expires on a court holiday.

(iii) In view of the applicability of Section 4 of the Limitation Act to Section 34 proceedings, Section 10 of the GCA does not apply and will not benefit the applicant when the 30-day condonable period expires on a court holiday.

(Para 1.1)

Micro, Small and Medium Enterprises Development Act, 2006 (27 of 2006), Section 8, 18 – Arbitration u/s 18 of MSME Act, 2006 -- MSME Registration – Requirement of -- Section 18 is not restrictive and is a remedy for the resolution of disputes, and as such, it is kept open-ended to enable ‘any party’ to refer the dispute to seek redressal -- Submission rejected that ‘any party to a dispute’ is confined to a ‘supplier’ who has filed a memorandum under Section 8 of the Act – However, for clarity and legal certainty, matter referred to a bench of three Judges for an authoritative pronouncement.

(Para 1.2)

A. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 7, 11 – Appointment of Arbitrator – Arbitration agreement -- An arbitration agreement is sine qua non for arbitration proceedings.

(Para 20)

B. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 7, 11, 34 – Code of Civil Procedure, 1908 (V of 1908), Section 47 -- Ex-parte arbitration award – Setting aside of -- Objections filed by the appellants under Section 34 of the A&C Act were dismissed by the trial court on the ground that they were barred by limitation and had been filed beyond the condonable period -- Authenticity of the agreement cannot be established as it is not available on the record of the Municipal Board -- State Government has denied the existence of any such agreement – No evidence to show the existence of the arbitration agreement, except a piece of paper, which is not even a certified copy or an authenticated copy of the official records -- Arbitration, which is quasi-judicial, requires a standard of behaviour of arbitrators, which is impartial and independent, no less stringent than that demanded of judges – Both the Awards shall be treated as null and void and non-enforceable in law – Section 47 of the Code of Civil Procedure, 1908, permits a party at the stage of execution to object to the decree, both on the grounds of fraud, as well as lack of subject matter jurisdiction – Appeals allowed, ex-parte awards set aside.

(Para 20-25)

Arbitration and Conciliation Act, 1996 (26 of 1996), Section 31(7) --  Limitation Act, 1963 (36 of 1963), Section 14 – Arbitration award – Interest upon delayed period -- Delay attributed to claimant -- Time spent in wrong Forum – Ends of justice would be met if the appellant-insurance company is directed to pay interest as directed by the Arbitral Tribunal @ 12% per annum with effect from 06^th March, 2010 as it was on this date that the Arbitral Tribunal held the claims to be within time after excluding the time spent by the respondent-claimant in pursuing its remedy before the N.C.D.R.C. u/s 14 of the Limitation Act.

(Para 1-4)

Arbitration and Conciliation Act, 1996 (26 of 1996), Section 11, 16, 34, 37 -- Jurisdiction of Arbitrator – Objection to -- After submitting to the jurisdiction of the sole Arbitrator, the respondent could not have belatedly objected to the jurisdiction of the sole Arbitrator.

(Para 14, 15)

Arbitration Act, 1940 (10 of 1940), Section 14(2), 17 -- Limitation Act, 1963 (36 of 1963), Article 119(b) – Arbitration award -- Limitation for filing objections – Starting date -- The trigger for the limitation to start running is the date of service of notice of the filing of the award –  Word ‘notice’ is that the parties merely reach a state of awareness about the award and plan their next steps accordingly, and not the imposition of another procedural step -- Date of receiving a copy of the award is not the requirement of Section 14(2), but merely awareness that it is available to the parties -- This holding signifies that the parties have to take steps to scrutinise the award themselves -- Any contrary interpretation will give a licence to the award-debtor to delay the arbitration by insisting on procedural nuances despite of being aware that an award exists and that its contents are accessible to it.

(Para 14-18)

A. Compensation to contractor -- Once, the employer was held to be responsible for not providing hinderance free site to the contractor for execution of work, the award of loss or profit @ 13% of the amount of balance work cannot be said to be unreasonable.

(Para 17)

B. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 34, 37 – Arbitration award – Interference in – Scope of -- Record reveals that the parties have been afforded fullest opportunity to represent their respective cases by the Arbitrator -- The impugned award contains detailed reasons based on analyses of the material on record -- Scope of interference with arbitral award in proceedings u/s 34 of the Act is limited -- Patent illegality should emerge on the face of the award itself -- It is impermissible for the court to sit in appeal or review over the findings recorded by the arbitral tribunal.

(Para 11-18)

A. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 2(1)(e), 11(6), 20, 31, 42 – Appointment of Arbitrator – Jurisdiction – Cause of action -- Definition of ‘Court’ -- High Court does not fall within definition of Court as defined under Section 2 (1) (e) of 1996 Act -- High Court gets jurisdiction u/s 11(6) where principal Civil Court of original jurisdiction has jurisdiction to decide the questions forming the subject matter of arbitration, had the same been the subject matter of suit -- Cause of action has arisen within jurisdiction of principal Civil Court at Karnal (Haryana) --  Contention of respondent that as per arbitration agreement, Mumbai Court has exclusive jurisdiction – Held, Court at Karnal (Haryana) as well as Mumbai has jurisdiction in term of Section 2(1)(e) read with Section 20 of 1996 Act -- As Civil Court at Karnal (Haryana) has jurisdiction to entertain dispute in question, Punjab and Haryana High Court has jurisdiction to entertain application under Section 11 (6) of 1996 Act.

(Para 11-22)

B. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 11(6), 20, 31, 42 -- Appointment of Arbitrator – Place of Arbitration -- High Court at Chandigarh makes appointment of an Arbitrator -- Both the parties are having their offices at Delhi -- Arbitrator, after his appointment by High Court, may fix place of arbitration at New Delhi because said place may be convenient to both the parties -- In this situation, despite appointment of arbitrator by Punjab and Haryana High Court, the place of arbitration would be ‘New Delhi’.

(Para 13)

A. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 11(6) – Arbitration – Deposit of amount as pre-condition – Legality of -- A clause which seeks deposit of a part of the claimed amount to avail of the remedy of arbitration is one which would be illegal and unlawful as it is barring a legal remedy from being invoked without deposit of money -- No remedy can be subjected to payment of money, unless authorised by law -- Such a clause in a contract lacks legitimacy and would not be enforceable.

(Para 76)

B. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 11(6) --  Constitution of India, Article 19, 21 -- Employment agreement -- Lock-in period of three years -- Covenants in employment contracts -- Lawful and reasonable covenants which are operative during the term of employment are valid and enforceable -- Such covenants are not in violation of the fundamental rights as provided in the Constitution of India -- Reasonable lock-in periods in employment contracts that apply during the term of employment are valid in law and do not violate Fundamental Rights as enshrined in the Constitution of India -- Disputes relating to lock-in periods that apply during the subsistence of employment contracts, are arbitrable in terms of the Act, 1996.

(Para 78)

Arbitration and Conciliation Act, 1996 (26 of 1996), Section 34 -- Limitation Act, 1963 (36 of 1963), Section 5 -- Arbitration award – Challenge to – Applicability of Section 5 of Limitation Act -- Section 5 of the Limitation Act has no application to challenging an arbitral award u/s 34 of the Act – It can be made within three months and the period can only be extended for a further period of thirty days -- The use of the words “but not thereafter” in the proviso to Section 34 makes it clear that extension cannot be beyond thirty days.

(Para 4)

Arbitration and Conciliation Act, 1996 (26 of 1996), Section 29A -- National Highways Act, 1956 (48 of 1956), Section 3G – Lapse of time for arbitration award – Extension of time -- Section 3G of the National Highways Act is pending adjudication before the learned Arbitrator -- Period of 12 months in terms of Section 29A(1) of the Arbitration Act, 1996 stands elapsed -- Period specified u/s 29A(3) of the Act is also over, hence, the ld. Arbitrator has closed the proceedings in view of termination of his mandate – Time extended for six months for passing the award by taking recourse of Section 29A(4).

(Para 2-4)

A. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 12(5) – Appointment of Arbitrator – Waiver to object ineligibility -- A party can waive its right to object to the ineligibility of an Arbitrator but the same is subject to two conditions -- First, that the waiver is required to be by and done by an express agreement in writing; and second, that such agreement is entered into after the disputes have arisen -- Unless both the aforesaid conditions are satisfied, there can be no waiver of the ineligibility of an arbitrator.

(Para 7)

B. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 12(5) – Appointment of Arbitrator – Waiver to object ineligibility -- Failure, if any, on the part of the respondent to object to the unilateral appointment of the sole arbitrator, cannot be construed as waiver of his right under Section 12(5) of the A&C Act.

(Para 9)

C. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 12(5) – Award by Arbitrator -- Ineligibility of Arbitrator – Effect of --  Award rendered by an arbitrator who is ineligible to be appointed as such cannot be enforced -- A person who is ineligible to act an Arbitrator, lacks the inherent jurisdiction to render an Arbitral Award -- It is trite law that a decision, by any authority, which lacks inherent jurisdiction to make such a decision, cannot be considered as valid -- Impugned award cannot be enforced.

(Para 10-14)

Arbitration and Conciliation Act, 1996 (26 of 1996), Section 34 -- Limitation Act, 1963 (36 of 1963), Section 5 – Objections against award of Arbitration -- Condonation of delay – Whether provisions of Section 5 of the Limitation Act, 1963 are applicable to objections filed under the Act of 1996 – Held, application u/s 5 of the Limitation Act, is ousted by proviso to Sub-section 3 of Section 34 of the Act, 1996.

(Para 1, 5, 6)

Arbitration and Conciliation Act, 1996 (26 of 1996), Section 34 -- Interpretation of contract – Scope of objection u/s 34 of Arbitration Act -- As far as the construction of the terms of a contract is concerned, it is for the Arbitral Tribunal to adjudicate upon -- If, after considering the material on record, the Arbitral Tribunal takes a particular view on the interpretation of the contract, the Court u/s 34 does not sit in appeal over the findings of the arbitrator.

(Para 13)

Arbitration and Conciliation Act, 1996 (26 of 1996), Section 8 -- Agreement with arbitration clause – Subsequent final Settlement and MOU – Status of -- Where there is a subsequent Settlement Agreement, a valid contract can be extinguished -- Text of the Settlement Agreement is clear to the effect that this is a final settlement and MoU, with respect to the disputes and claims -- Arbitration clause in the original agreement would not be enforceable as this is a full and final settlement with respect to the contract and will be treated as a foreclosed document.

(Para 33)

A. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 9, 17, 36 – Code of Civil Procedure, 1908 (V of 1908), Order 39 Rule 2A -- Implementation of injunction order – Constitution of Arbitration Tribunal -- Petitioners seek an implementation of an order already passed by the Court when the Arbitral Tribunal had not yet been constituted – Commercial Court never lost jurisdiction to implement its own order by virtue of the powers conferred on it under Section 9(1)(ii)(e) -- Measures under Order XXXIX Rule 2A of the CPC for contempt of its orders, penal measures can be taken even after constitution of the Arbitral Tribunal.

(Para 25-29)

B. Code of Civil Procedure, 1908 (V of 1908), Order 39 Rule 2A – Violation of order of Court – Order XXXIX Rule 2A is not the only remedy for violation of an injunction order -- Implementation of an injunction order, if necessary even by reversal of the acts taken in violation of the same, can be sought from the same court which granted the injunction in the first place.

(Para 30)

A. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 34 – Arbitration award – Objections -- While dealing with a petition u/s 34 of the 1996 Act, the Court concerned does not sit in appeal over the arbitral award and may interfere on merits on the limited grounds provided in Section 34 (2)(b)(ii) of the 1996 Act, i.e. if the award is against the public policy of the India -- Interference in an arbitral award would not entail a review of the merits of the dispute and would be limited to situations, where the findings of the Arbitrator are arbitrary or perverse or when the conscience of the Court is shocked, or when the illegality is not trivial but goes to the root of the matter -- An arbitral award, however, may not be interfered with, if the view taken by the arbitrator is a possible view based on facts.

(Para 7)

B. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 34 – Arbitration award – No written response to claim -- Appellants did not submit any written response to the claim submitted by the respondent-HAFED and only made oral submissions – Arbitrator awarded the claim of recovery of Rs.26.01 lakh and accepted the claim in toto -- Arbitrator did not commit any illegality in doing so, especially, once the claim was not opposed in any manner and further, the respondent was able to prove its case through evidence of its District Manager.

(Para 9)

A. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 8(2) – Arbitration clause in agreement -- Notarised copy of original agreement – Certified copy -- Petitioner/defendant filed the certified copy of the original agreement duly attested by the Notary Public which in terms of the law cannot be said to be a not duly certified copy of the original agreement as required under the provision of the Act -- Mandatory requirement under the Act had been complied with.

(Para 12, 24)

B. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 8 -- Arbitration clause in agreement – Suit for declaration, injunction and consequential reliefs – Temporary injunction – Civil court has no jurisdiction to entertain the suit filed by the plaintiff -- Refusal by Court to refer dispute on ground that the said clause applies only to dispute connected with agreement is not proper -- On fulfilment of the conditions of Section 8, no option is left to the court and the court has to refer the parties to arbitration -- When it prima facie satisfies that the arbitration clause is valid and has the effect of mutual consent of the parties to the contract the court is bound to refer the parties to arbitration on satisfying all other ingredients mandated u/s 8 of the Arbitration and Conciliation Act.

(Para 13-22)

C. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 8 – Arbitration clause – Refer to arbitration -- Following conditions must be satisfied:

(a) that there exists an arbitration agreement;

(b) that action has been brought to the court by one party to the arbitration agreement against the other party;

(c) that the subject-matter of the suit is same as the subject-matter of the arbitration agreement;

(d) that the other party before he submits his first statement of the substance of the dispute, moves the court for referring the parties to arbitration; and

(e) that along with the application the other party tenders the original arbitration agreement or duly certified copy thereof.

(Para 17)

Arbitration and Conciliation Act, 1996 (26 of 1996), Section 34, 37 – Arbitration appeal – Stay -- Substantive appeal pending against an order made on a petition u/s 34 of the Arbitration Act -- It will be appropriate if the interim stay continued till the disposal of the appeal -- If the appeal is not heard within a period of one year, it will be open for the respondent to make a fresh application in the pending appeal for withdrawal of the amount on appropriate terms and conditions.

(Para 3-5)

A. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 46, 48, 49 -- Enforcement of foreign arbitration award – Bias -- Courts must endeavor to adopt international best practices instead of domestic standards, while determining bias -- It is only in exceptional circumstances that enforcement should be refused on the ground of bias -- Refusal of enforcement of foreign award should only be in a rare case where non-adherence to International Standards is clearly demonstrable.

(Para 26, 42)

B. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 46, 48, 49 -- Arbitral appointments – Challenge to -- Bonafide challenges to arbitral appointments have to be made in a timely fashion and should not be used strategically to delay the enforcement process.

(Para 29)

C. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 46, 48, 49 -- Enforcement of foreign arbitration award – Bias -- Award-debtors failed to substantiate their allegation of bias, conflict of interest or the failure by the Presiding Arbitrator to render disclosure to the parties, as an objection to the enforcement of the award – Also failed to meet the high threshold for refusal of enforcement of a foreign award under Section 48 of the Indian Arbitration Act -- Accordingly, the decision given by the High Court for enforcement/ execution of the foreign award stands approved – Appeal dismissed.

 (Para 43)

Arbitration and Conciliation Act, 1996 (26 of 1996), Section 11 – Limitation Act, 1963 (36 of 1963), Article 55 – Appointment of Arbitrator -- Time barred claim -- Petitioner waited for more than 12 years for the respondent to construct building -- It would be an unnatural construction of Section 11 of the 1996 Act or so-called time-barred claims where a party with a bona fide and a genuine claim is left in the lurch on the defence of the claim being barred by limitation in spite of the parties being in constant communication with each other for settlement of the claims -- Article 55 to the Schedule of The Limitation Act contemplates continuing breach of a contract -- Respondent withholding the money without due compliance of the MoU and failing to return the money to the petitioner for several years on one pretext or the other cannot argue the point of limitation particularly after having nominated its Arbitrator.

(Para 10)

Arbitration and Conciliation Act, 1996 (26 of 1996), Section 11, 16 – Appointment of Arbitrator – Scope of -- In exercise of powers u/s 11(4)(6) of the Act of 1996 the Court has only to prima-facie examine the case of the parties to arrive at a prima-facie satisfaction that the parties before the High Court (i) have approached the correct Court for getting an arbitrator appointed, (ii) the arbitration clause subsist between the parties and the disputes are covered by the said clause -- Impact of Section 62 of the Contract Act, tripartite agreement and whether the disputes relate to construction stage and or the effect of Section 12 of the NHAI Act, 1988 can be considered by the Tribunal appropriately in terms of Section 16 of the Act of 1996 -- Once the satisfaction is formed, the Court is required to relegate to the parties to Tribunal.

(Para 16, 17)

Arbitration and Conciliation Act, 1996 (26 of 1996), Section 11 – Appointment of Arbitrator – Respondent proceeded against ex parte -- Agreement specifically provided for resolution of dispute by way of arbitration -- A dispute having arisen, the petitioner invoked notice and served a notice but to no avail -- Keeping in view the specific provision for resolution of disputes by arbitration in the agreement and the respondent not having chosen to contest the petition, the petition allowed – Sole Arbitrator appointed.

(Para 2-5)

A. Code of Civil Procedure, 1908 (V of 1908), Order 5 Rule 15 – Service of summons -- Respondent is stated to have been served physically through a member of his family -- Respondent stands duly served -- None has appeared on behalf of the respondent, the respondent is proceeded against ex parte.

(Para 5, 6)

B. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 11(6) -- Appointment of arbitrator -- Landlord-tenant dispute – Lease deed would show that the parties had specifically agreed for resolution of the disputes through arbitration -- Notice to the respondent had specifically been called upon for initiation of arbitration proceedings, but to no avail – Such disputes can be adjudicated by way of arbitration – District and Sessions Judge (Retd.) appointed as the sole Arbitrator.

(Para 6-10)

Arbitration and Conciliation Act, 1996 (26 of 1996), Section 34 – Arbitration award – Modification in award – Permissibility of --  Dispute amongst the contracting parties is to be referred to an Arbitrator but the question as regards payment of penal interest @ 21% per annum is to be taken by Managing Director, MARKFED whose decision shall be final – Arbitrator exceeded the jurisdiction by the decision regarding imposition of interest @ 21% per annum, which the Arbitrator could not have touched – Learned District Judge while adjudicating upon a petition u/s 34 of the Arbitration and Conciliation Act 1996 does not have any power to modify the award of the Arbitrator -- Award set aside.

(Para 8)

A. Multi State Co-operative Societies Act, 2002 (39 of 2002), Section 85(1)(a) -- Recovery of any sum -- Reference to Arbitrator -- Appellant was not only a member but also a shareholder of the respondent no.1 bank -- Appellant had purchased shares of the respondent no. 1 -- That being so, for the purposes of recovery of money with interest payable by the appellant to the respondent no. 1, the limitation period for referral of dispute to arbitration would be governed by Section 85(1)(a) of the Act and not by the provisions of the Limitation Act -- Since the appellant is alive and has not ceased to be a member of the respondent no. 1 bank, limitation period for referral of dispute did not even commence and therefore, the referral to arbitration was not bad in law.

(Para 13)

B. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 34 -- Objection u/s 34 of Arbitration Act, 1996 -- Scope of objections under Section 34 of the Act is quite limited and is not similar to the scope of appellate jurisdiction.

(Para 14)

A. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 11(6) – Limitation Act, 1963 (36 of 1963), Article 137 -- Appointment of Arbitrator -- Limitation -- Cause of action -- If an infringement of a right happens at a particular time, the whole cause of action will be said to have arisen then and there -- In such a case, it is not open to a party to sit tight and not to file an application for settlement of dispute of his right, which had been infringed, within the time provided by the Limitation Act, and, allow his right to be extinguished by lapse of time, and thereafter, to wait for another cause of action and then file an application u/s 11 of the Act 1996 -- In such a case, such an application would mean an application for revival of a right, which had long been extinguished under the Act 1963 and is, therefore, dead for all purposes -- Such proceedings would not be maintainable and would obviously be met by the plea of limitation under Article 137 of the Act 1963.

(Para 58)

B. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 11(6) – Limitation Act, 1963 (36 of 1963), Article 137 -- Appointment of Arbitrator – Limitation -- Cause of action – Extension of limitation -- Disputes arose between the parties in relation to the wrongful encashment of bank guarantee vide letter dated 16.02.2016 and for wrongful imposition of liquidated damages -- Respondent on 26.09.2016, deducted the amount towards recovery of the liquidated damages -- Requisite amount was credited into the Government account -- This was the end of the matter -- To say that even thereafter, the petitioner kept negotiating with the respondent in anticipation of some amicable settlement would not save the period of limitation -- When the bank guarantee came to be encashed in the year 2016 and the requisite amount stood transferred to the Government account that was the end of the matter -- This “Breaking Point” should be treated as the date at which the cause of action arose for the purpose of limitation.

(Para 59-62)

C. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 11(6) – Limitation Act, 1963 (36 of 1963), Article 137 -- Appointment of Arbitrator – Limitation -- Cause of action – Negotiation will not postpone cause of action -- Negotiations may continue even for a period of ten years or twenty years after the cause of action had arisen -- Mere negotiations will not postpone the “cause of action” for the purpose of limitation -- The Legislature has prescribed a limit of three years for the enforcement of a claim and this statutory time period cannot be defeated on the ground that the parties were negotiating.

(Para 63)

Arbitration and Conciliation Act, 1996 (26 of 1996), Section 34, 36(2) – Arbitration award – Objection – Stay of award -- Petitioners were granted stay subject to deposit of 100% awarded amount in the form of an FDR in the name of the court -- Contention that no condition should have been imposed as the objections u/s 34 of the Act are pending lacks merit -- Pendency of objections in itself shall not operate as stay – No exceptional case made out for interference – Revision dismissed.

(Para 1, 8, 9)

Arbitration and Conciliation Act, 1996 (26 of 1996), Section 11(6)(6A) – Jurisdiction of referral Court – Existence and validity of Arbitration agreement – Post-Arbitration and Conciliation Amendment Act, 2015, the jurisdiction of the court under Section 11(6) of the Act is limited to examining whether an arbitration agreement exists between the parties,  “nothing more, nothing less” -- Thus, as per the Section 11(6A) of the Act, it is the duty cast upon the referral court to consider the dispute/issue with respect to the existence of an arbitration agreement -- Matter remitted back to the High Court/ referral court to decide the respective arbitration petitions afresh and to decide the issue conclusively and finally with respect to the existence and validity of the arbitration agreement.

(Para 5.2-8)

Arbitration and Conciliation Act, 1996 (26 of 1996), Section 34, 36 -- Objection to arbitration award – Stay of execution of arbitration award -- Pendency of objections under Section 34 of the Act does not result in automatic stay.

(Para 8)

Arbitration and Conciliation Act, 1996 (26 of 1996), Section 31(5), 34 -- Arbitration award – Limitation to file objections --  Ex-parte award on 13.6.2008, objections filed on 2.6.2009 – Objections dismissed as time barred – Limitation to file objections starts from the date of receipt of the award -- Impugned order passed without recording a finding that signed copy of the award was delivered to the appellant – Order set aside, matter remitted back to decide objections afresh.

(Para 2-7)

Arbitration and Conciliation Act, 1996 (26 of 1996), Section 31(5), 34, 37 – Ex parte award -- Objections were dismissed as time barred – Section 31(5) of the Act provides that the Arbitrator is obliged to supply the signed copy of the arbitral award to each of the parties -- Nothing on record to prove that the signed copy of the arbitral award was supplied to the appellant – Appeal allowed, impugned order set aside, the matter remitted back for deciding the objections on merits.

(Para 2-7)

Arbitration and Conciliation Act, 1996 (26 of 1996), Section 8 – Arbitration clause – Tripartite agreement – Subsequent purchaser – Except the principal agreement, none of the other agreements contained any arbitration clause -- Later transactions involved other parties too like the tripartite agreement -- Other deeds of conveyance involve the appellant and the other defendants – In the frame of the suit and various other reliefs claimed, involving subsequent purchasers too and the allegations of fraud, the dispute cannot be said to be arbitrable at all – Reference to arbitration u/s 8 cannot be granted.

(Para 17, 18)

Arbitration and Conciliation Act, 1996 (26 of 1996), Section 8 -- Specific Relief Act, 1963 (47 of 1963), Section 31 -- Arbitration clause in agreement – Cancellation of agreement -- Reference to arbitration -- It is impossible to hold that an action instituted u/s 31 of the Specific Relief for cancellation of an instrument is an action in rem – Ld. Trial Judge was justified in passing an order u/s 8 of the Arbitration Act by directing that the dispute be referred to the arbitration. Deccan Paper Mills’ case (2021) 4 SCC 786 = (2020) Law Today Live Doc. Id. 15259 relied.

(Para 8)

A. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 34 -- Objection to arbitration award – Modification of award – Remand of matter – Permissibility of -- Under Section 34 of 1996 Act the award cannot be modified and the matter can be remanded only with consent of both the parties.

(Para 10)

B. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 34 -- Objection to arbitration award – Setting aside of award – Alternative remedy -- Contention that the parties have no remedy after setting aside of award to raise grievances against the compensation determined is misconceived -- Setting aside of award on the ground of jurisdiction shall not debar the parties from availing the remedies in accordance with law.

(Para 10)

A. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 11(6) – Appointment of Arbitrator -- Eye of the Needle – Pre-referral jurisdiction of the courts u/s 11(6) of the Act is very narrow and inheres two inquiries:

-- The primary inquiry is about the existence and the validity of an arbitration agreement, which also includes an inquiry as to the parties to the agreement and the applicant’s privity to the said agreement. These are matters which require a thorough examination by the referral court.

-- The secondary inquiry that may arise at the reference stage itself is with respect to the non-arbitrability of the dispute.

(Para 25)

B. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 11(6) – Appointment of Arbitrator -- Settlement between the parties during the pendency of the Writ Petition -- In compliance with the Settlement Agreement, NTPC released the Bank Guarantees, which were the subject matter of the pending Writ Petition -- SPML withdrew the Writ Petition – One month later, SPML filed the Arbitration Petition u/s 11(6) of the Act alleging coercion and economic duress in the execution of the Settlement Agreement -- SPML’s allegations lack bona fide -- These are the kinds of cases where the High Court should exercise the restricted and limited review to check and protect parties from being forced to arbitrate – Held, High Court has committed an error in allowing the application u/s 11(6) of the Act – Decision of the High Court set aside.

(Para 1, 38-41)

Arbitration and Conciliation Act, 1996 (26 of 1996), Section 34 -- Limitation Act, 1963 (36 of 1963), Section 5 -- Arbitration award – Objection after 120 days – Condonation of delay -- Application u/s 34 of the Act beyond the period of 120 days i.e. 90 days of limitation and 30 days period -- Section 5 of the Limitation Act is not applicable -- Delay beyond 30 days after expiry of limitation period cannot be condoned.

(Para 6)

Arbitration and Conciliation Act, 1996 (26 of 1996), Section 34 -- Objection against arbitration award – Remand of matter – Permissibility of -- Court after setting aside the award could not have remanded the matter -- Appeal allowed, impugned order to the extent of remanding the matter back to the Managing Director for appointment of the arbitrator is set aside.

(Para 5, 6)

Arbitration and Conciliation Act, 1996 (26 of 1996), Section 33(3), 34 -- Correction in award – Limitation to file objection -- Starting point for the limitation in case of suo-moto correction of the award, would be the date on which the correction was made and the corrected award is received by the party.

(Para 2)

Arbitration and Conciliation Act, 1996 (26 of 1996), Section 31, 34, 36 -- Arbitration award – Stay of -- It is a well-established that the arbitral award cannot be stayed in routine -- A due regard has to be given to the provisions for grant of stay of money decree under the Code of Civil Procedure -- Unconditional stay can only be granted in case, the award is suffered with fraud or corruption.

(Para 10)

Arbitration and Conciliation Act, 1996 (26 of 1996), Section 8 -- Theft of electricity -- Arbitration clause – Trial court referred the matter to Arbitrator – Challenge to -- District Consumer Forum dismissed the complaint for the reason of the same being not maintainable -- It cannot be said that the defendants have waived their right to seek arbitration and subjected themselves to the jurisdiction of the Court -- Agreement does not exclude the matters with regard to theft of electricity from its preview -- Therefore, such type of dispute can definitely be adjudicated upon by the Arbitrator -- No fault can be found with the Court in making reference of dispute to arbitration -- Revision petition dismissed.

(Para 7)

Code of Civil Procedure, 1908 (V of 1908), Section 9 -- Arbitration and Conciliation Act, 1996 (26 of 1996), Section 8 – Suit for recovery – Arbitration clause – Application for referring the matter to Arbitrator dismissed by Trial Court – Revision against the order -- Liability not disputed by the petitioners – Arbitration Clause related to dispute arising out of or in connection with the work order/ contract/ purchase order –Operation of the agreement ceases once the respondent has completed the work project – It is plain and simply a case of non-payment of dues – Arbitration clause not applicable to the case – Even the condition for amicable settlement was not adhered to by the petitioner – No error in the impugned order, revision petition dismissed.

(Para 7-9)

Arbitration and Conciliation Act, 1996 (26 of 1996), Section 34 -- Code of Civil Procedure, 1908 (V of 1908), Section 24 – Transfer of objection petition against arbitral award -- Execution Application at Patiala -- Objections u/s 34 at Sangrur – As per law laid down by the Hon’ble Supreme Court, seat of arbitration alone would have exclusive jurisdiction over subsequent proceedings -- Transfer petition allowed and Section 34 Objections transferred from the Court of ADJ, Sangrur to the Court of ld. ADJ, Patiala. BGS SGS Soma JV’s case Law Finder Doc Id # 1640616 relied.

(Para 1-5)

Arbitration and Conciliation Act, 1996 (26 of 1996), Section 11 – Appointment of Arbitrator – Time barred claim -- Petitioner not supposed to wait till 22.04.2015 in respect of alleged cause of action which accrued in favour of the petitioner either on 12.10.2001 or 07.01.2003 -- Notice of invocation of arbitration clause was done for the first time on 22.04.2015 -- Claim of the petitioner ex facie time barred --  Petition dismissed. BSNL's case (2021) 5 SCC 738 and Securderabad Cantonment Board's case 2021 (5) SCC 705 relied.

(Para 8-11)

A. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 8, 11 –Code of Civil Procedure, 1908 (V of 1908), Section 9 – Civil suit -- Application for referring the matter to Arbitrator -- The provisions of Sections 8 and 11 of the Act are complementary to each other and there is no bar to invoke jurisdiction of the High Court u/s 11 (6) of the Act during pendency of the application u/s 8 of the Act.

(Para 3)

B. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 11(6) -- Court Fees Act, 1870 (7 of 1870), Section 16, 69-A -- Code of Civil Procedure, 1908 (V of 1908), Section 89 – Civil suit -- Settlement to refer the matter to Arbitrator-- Refund of court fees -- Refund of Court fee cannot be denied merely because the matter has not been settled before the Lok Adalat – Liberty granted to approach the trial Court for refund of the court fee in question and for availing the benefit under the Court Fee Act.

(Para 4-8)

A. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 11(6) -- Appointment of Arbitrator -- Application rejected by High Court as there were already arbitral proceedings pending between the parties -- Considering the fact that Agreement entered into between the appellants and the respondent contains an arbitration clause, High Court ought to have allowed the application u/s 11 of 1996 Act and ought to have left the issue on arbitrability of the dispute to the arbitrator.

(Para 5, 5.2, 5.3)

B. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 11(6) – Appointment of Arbitrator – Effect of NCLT proceedings -- Pendency of proceedings before the NCLT, at the instance of the respondent as minority shareholder for oppression and mismanagement, cannot  be the basis for dismissing an application u/s 11(6) of 1996 Act for appointment of an arbitrator – It should be left to the arbitrator to consider the entire aspect.

(Para 5.4)

Commercial Courts Act, 2015 (4 of 2016), Section 3, 10, 15, 21 – Arbitration and Conciliation Act, 1996 (26 of 1996), Section 2(1)(e), 9, 14, 34 – Arbitration matters in Commercial court -- Whether in exercise of powers u/s 3 of the Commercial Courts Act, 2015, the State Government can confer jurisdiction to hear applications u/s 9, 14 and 34 of the Arbitration and Conciliation Act, 1996, upon Commercial Courts which are subordinate to the rank of the Principal Civil Judge in the District, contrary to the provisions of Section 2(1)(e) of the Arbitration Act? – Held, the Act, 2015 is the Act later in time and therefore when the Act, 2015 has been enacted, more particularly Sections 3 & 10, there was already a provision contained in Section 2(1)(e) of the Act, 1996 -- As per settled position of law, it is to be presumed that while enacting the subsequent law, the legislature is conscious of the provisions of the Act prior in time and therefore the later Act shall prevail -- There cannot be two fora with respect to different commercial disputes.

(Para 10,11)

A. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 31(7) -- Arbitration award -- Interest on pre-reference period -- Though final measurement was done on 30st August 1977, for a period of twelve years, i.e., till 25th July 1989, the respondent did not take any step to raise his claim -- It is only on that date, i.e., 25th July 1989, the respondent issued a notice to the appellants regarding his claim -- As such, the very conduct of the respondent for remaining silent for such a long period would disentitle him for the interest during the said period.

(Para 12)

B. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 31(7) -- Arbitration award -- Interest on period pendente lite -- Though a decree was passed on 14^th February 1990 and the respondent was directed to file the original agreement, he took no step till 4th February 2000 – Had he filed the original agreement immediately after the decree was passed on 14th February 1990, the arbitration proceedings would have commenced and concluded immediately thereafter -- As such, the learned Arbitrator was not justified in awarding interest for the period from 14th February 1990 to 4^th February 2000 -- A party cannot be permitted to derive benefits from its own lapses -- Application for appointment of an arbitrator u/s 11 of the 1996 Act before the High Court was allowed on 15th October 2001 -- Respondent would not be entitled for interest for the period from 14th February 1990 to 15th October 2001.

(Para 13, 14)

C. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 31(7) -- Arbitration award – Interest thereupon -- Arbitrator, without assigning any reasons awarded the interest @ 18% per annum for the period during which the proceedings were pending and also at the same rate after the award was made till the actual payment – Interest reduced for pre-reference period, pendente lite and post-award period to @ 9% per annum.

(Para 11, 21)