“Shall Endeavour” Clause In Construction/Commercial Contracts Can Create Enforceable Obligations: Bombay High Court

The Bombay High Court has observed that the “shall endeavour” clause can amount to an enforceable obligation in the context of construction contracts. While mere failure to achieve revenue projections does not constitute a breach of the “shall endeavour” clause but not making best efforts to achieve projections in the business plan amounts to a breach of the clause. Facts The present petition was filed by Petitioner i.e. Regus South Mumbai Business Centre Private Limited (“Regus”) ...

Single Partner In A Firm Cannot Invoke Arbitration Without Explicit Authority From Other Partners: Kerala High Court

The Kerala High Court has held that one partner of a partnership firm cannot, without explicit authorisation from the other partners, invoke an arbitration clause or seek appointment of an arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996.Justice S. Manu, delivered the judgment in an arbitration request.The arbitration request was filed by a partner of M/s P K Chandrasekharan Nair and Co., a partnership firm, which was operating a retail outlet of petroleum products of...

HC Cannot Issue Writ To Compel Arbitrator To Decide Dispute After Expiration Of His Mandate: Allahabad High Court

The Allahabad High Court has recently clarified that it cannot issue a writ of mandamus to compel an arbitrator to decide compensation disputes relating to land acquisition for making national highways, once his mandate has expired under the Arbitration and Conciliation Act, 1996. A Division Bench of Justice Mahesh Chandra Tripathi and Justice Kunal Ravi Singh observed that “The issuance of a mandamus directing the arbitrator to decide the case within a time-bound period, when his...

Courts Can Correct Manifest Computational Errors In Awards Without Re-Appraising Arbitrator's Reasoning: Delhi High Court

The Delhi High Court held that the courts under sections 34 and 37 of the Arbitration and Conciliation Act, 1996 (Arbitration Act) possess limited but definite authority to correct manifest computation errors without reopening the merits of the case. A Division Bench comprising Justice Anil Kshetrapal and Justice Harish Vaidyanathan Shankar partly modified the arbitral award to the extent of adjusting overpayment made by the homeowners to the contractor. The court observed that...

Arbitrator Can't Pierce Corporate Veil To Fasten Liability On Non-Signatory: Madras High Court Partially Sets Aside Award

The Madras High Court partially set aside an arbitral award holding that arbitrator cannot pierce a corporate veil or treat a non-signatory as an alter ego to fasten liability, while modifying the award to direct repayment of a loan of Rs. 2.5 crore with interest. Justice N. Anand Venkatesh held that the arbitrator exceeded its jurisdiction by treating a third party as the petitioner's sister concern and concluding breach of contract based on that inference. Sugesan Transport Pvt....

Even Though Evidence Act Is Not Applicable To Arbitration, Tribunal Must Follow Its Core Principles: Madras High Court

The Madras High Court has recently observed that although arbitral tribunals are not bound by the Evidence Act, they must still follow its foundational principles when assessing evidence to avoid judicial scrutiny. A single bench of Justice N Anand Venkatesh stated that “the fundamental principles of the Evidence Act which provides the basis for dealing with the case must be satisfied failing which the Arbitral Award will infract the fundamental policy of Indian law. It can also lead to...

Post-Award Claim For Reimbursement Of Municipal Tax Is Not Maintainable U/S 9 Arbitration Act: Calcutta High Court

The Calcutta High Court held that a partner cannot claim reimbursement of municipal tax payments through a post award petition filed under section 9 of the Arbitration and Conciliation Act, 1996 (Arbitration Act) as such issue constitutes substantive monetary dispute requiring adjudication under section 34 of the Arbitration Act. Justice Gaurang Kanth dismissed the petition filed by partners of M/s. Chander Niwas seeking directions for reimbursement from other partners of their share of...

Settlement With Concessionaire Doesn't Erase NHAI's Role In Dispute: Delhi High Court Dismisses Substitution Petition

The Delhi High Court refused to interfere with an arbitral tribunal's order rejecting the plea of National Highways Authority of India's (NHAI) to substitute itself with a special purpose vehicle (SPV) in an ongoing arbitration initiated by CFM Asset Reconstruction Pvt. Ltd. (CFM ARC). The court held that the substitution could prejudice claimants' rights and that court's intervention under Article under 227 of the Indian Constitution is permitted only in exceptional rarity. Justice...

Power To Extend Arbitrator's Mandate Lies With Civil Court Of Original Jurisdiction, Not Appointing Court: Telangana High Court

The Telangana High Court dismissed a Civil Revision Petition filed by Employees State Insurance (ESI) Corporation. ESI had challenged an order passed by the Civil Court allowing the application seeking extension of the arbitrator's mandate. Justice P. Sam Koshy held that the mandate of the arbitrator under section 29A(4) of the Arbitration and Conciliation Act, 1996 (Arbitration Act) can be extended by the court as defined under section 2(1)(e) which expressly included the city civil ...

'Sum' U/S 31(7)(b) A&C Act Excludes Pendente Lite Interest Unless Expressly Included: Delhi High Court In Award Execution Plea Against BSNL

The Delhi High Court held that if pre-award or pendente lite interest is not added to the principal amount in an arbitral award or on appeal, then post-award interest under Section 31(7)(b) cannot be charged on it.Justice Amit Bansal dismissed the decree-holder's contention that the Supreme Court's use of the phrase 'statutory interest' entitled it to post-award interest on both principal and pendente lite interest. An arbitral award dated 26.09.2000 directed BSNL to pay over INR 6.07...

Arbitrator Is The Master of Evidence; Court In Appeal Cannot Reassess Facts: Delhi High Court

The Delhi High Court has recently reiterated that an arbitrator is the master of both the quantity and quality of evidence, and therefore the court, while exercising appeal or supervisory jurisdiction, cannot reappreciate factual findings recorded in an arbitral award. The court emphasized that it does not sit as a court of appeal over the findings of the learned Arbitrator and its role under Section 34 is 'restrictive jurisdiction' and it cannot travel beyond the four corners of it. A...

Dispute Over Property Used Exclusively For Trade Constitutes Commercial Dispute Even If Situated In Residential Area: Delhi High Court

The Delhi High Court held that a dispute arising from a lease agreement under which premises were used actually used for running a retail showroom qualifies as a commercial dispute under section 2(1)(c)(vii) of the Commercial Courts Act, 2015 even if the property is situated in a residential zone under the Municipal Law. A Division Bench of Justice Anil Kshetrapal and Justice Harish Vaidyanathan Shankar set aside the Patiala Court's decision of returning the plaint on the ground that...