Supreme Court
Arbitration | Unconditional Stay On Execution Of Award Only In Exceptional Cases: Supreme Court
The Supreme Court recently declined to grant an unconditional stay on the execution of the arbitral award, holding that the requirement to deposit the security amount was justified since the award was not shown to have been induced or tainted by fraud or corruption. Referring to its latest ruling in Lifestyle Equities C.V. and Another v. Amazon Technologies Inc., a bench of Justices JB Pardiwala and KV Viswanathan reiterated that for the grant of an unconditional stay on the execution of an...
Indian Courts Have No Jurisdiction To Appoint Arbitrator For Foreign-Seated Arbitration : Supreme Court
The Supreme Court on Friday (November 21) dismissed a plea seeking the appointment of an arbitrator in an international commercial arbitration, holding that once the principal contract is governed by foreign law and provides for a foreign-seated arbitration, Indian courts lose jurisdiction, irrespective of the Indian nationality of any party. “Indian Courts have no jurisdiction to appoint an arbitrator for a foreign-seated arbitration, irrespective of the nationality or domicile of the...
Arbitration | Dispute On Interest Rate Doesn't Fall Under Public Policy Ground To Set Aside Award Ordinarily: Supreme Court
The Supreme Court on Tuesday (November 18) upheld the charging of a 24% interest rate in an arbitral award, stating that an interest rate agreed upon in a commercial loan agreement did not violate the fundamental policy of Indian law. “It is well-settled that fundamental policy of Indian law does not refer to violation of any Statue but fundamental principles on which Indian law is founded. Any difference or controversy as to rate of interest clearly falls outside the scope of challenge on...
'Arbitrator Interpreted Contract Contrary To Railway Policies' : Supreme Court Sets Aside Award Against IRCTC
The Supreme Court on Friday (November 7) set aside the multi-crore arbitral award passed against the Indian Railways Catering and Tourism Corporation Limited (“IRCTC”), holding that the arbitrator had impermissibly "rewritten the contract" between the parties. “Rewriting a contract for the parties would be a breach of the fundamental principles of justice, entitling a Court to interfere as it would shock its conscience and would fall within the exceptional category.”, the Court observed....
Mere Use Of Word 'Arbitration' Does Not Create Arbitration Agreement Unless Parties Clearly Intend So: Supreme Court
The Supreme Court upheld the Punjab and Haryana High Court's decision refusing to refer the dispute to arbitration, observing that the mere use of the term “arbitration” in a clause is not sufficient to mandate reference to arbitration unless the parties clearly intended to resolve their disputes through arbitration. “mere use of the word 'arbitration” is not sufficient to treat the clause as an arbitration agreement when the corresponding mandatory intent to refer the disputes to arbitration...
Arbitration | Objections To Arbitral Award Execution Maintainable Only If Decree Is Void Or Without Jurisdiction : Supreme Court
The Supreme Court on Monday (November 3) ruled against the stalling of the enforcement of an arbitral award at the execution stage, reiterating that the objections against the execution of an award lie in a narrow compass, such as only when a decree is inherently void or passed without jurisdiction. A bench of Justices Sanjay Kumar and K.V. Viswanathan upheld the Delhi High Court's decision dismissing Appellant-MMTC's objections under Section 47 of the Code of Civil Procedure and its...
Hidden Doctrine In Gayatri Balasamy: How Supreme Court Used Implied Powers To Transform Arbitration Law
When the Supreme Court ruled on Gayatri Balasamy v. ISG Novasoft Technologies Ltd[1] it made waves, earning the title of the “modification judgment.” Most discussions centered on a key takeaway: Indian courts can now, in certain situations, modify arbitral awards rather than just nullifying them. However, if you dig a little deeper into those 61 pages, you'll uncover a more subtle yet significant shift. For the first time, the Court tapped into the Doctrine of Implied Powers to broaden the...
Right To Seek Arbitration Not Lost Just Because Arbitration Clause Became Inoperable Due To Statutory Amendment: Supreme Court
The Supreme Court held that the invalidity or inoperability of an arbitration clause, such as one naming an ineligible arbitrator under Section 12(5) of the Arbitration and Conciliation Act, 1996, does not nullify the underlying arbitration agreement between the parties. The Court clarified that in such cases, the Court is empowered to step in and appoint a neutral arbitrator under Section 11(6) of the Act to preserve the efficacy of the arbitration mechanism.The Court emphasised that the...
Arbitral Award Must Be Within Parameters Of Agreement Between Parties : Supreme Court Dismisses Chinese Company's Appeal
The Supreme Court has recently upheld the setting aside of an arbitral award of nearly ₹995 crore granted in favour of Chinese company SEPCO Electric Power Construction Corporation, holding that the arbitral tribunal had erred by re-interpreting contractual terms and departing from the agreed stipulations in violation of Section 28(3) of the Arbitration and Conciliation Act, 1996.“Numerous precedents laid down by this Court have often emphasised that an arbitrator lacks the power to deviate from...
S. 31(7)(b) Arbitration Act | Claim For Additional Post-Award Interest Barred When Award Fixes Rate Until Payment : Supreme Court
The Supreme Court on Wednesday (Sep. 24) held that if an arbitral award provides a composite interest rate covering the entire period from the cause of action to payment, the award holder cannot claim additional compound interest at the post-award stage under Section 31(7)(b) of the Arbitration and Conciliation Act, 1996 (“Act”). Section 31(7)(b) of the Act provides for post-award interest at 18% from the date of the award until payment. However, if the arbitral award specifies a composite...