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...

Arbitration | Execution Of Award Cannot Be Stalled Merely Due To Pendency Of Section 37 Appeal : Supreme Court

The Supreme Court held that the execution of an arbitral award cannot be stalled merely on the ground that an appeal under Section 37 of the Arbitration and Conciliation Act is pending.A bench of Justices Manoj Misra and Ujjal Bhuyan heard the case where the appellant (award-holder/decree-holder) sought execution of the arbitral award. The respondents (judgment-debtors) argued that since a Section 37 appeal was pending against the dismissal of their Section 34 objections, the execution should be...

S. 37(1)(a) Arbitration Act | Clause Restricting Interest On Delayed Payments By Itself Won't Bar Pendente Lite Interest : Supreme Court

The Supreme Court on Tuesday (Sep.2) observed that an Arbitral Tribunal can grant pendente lite interest unless expressly or impliedly barred in the contract. It added that a contractual clause barring interest on delayed payments does not prevent an arbitral tribunal from awarding pendente lite interest, i.e., the interest for the period during which the arbitration is pending. “…arbitral tribunal can be denuded of its power to award pendente lite interest only if the agreement/ contract...

Arbitration | Delivery Of Award To Govt Official Not Connected With Case Doesn't Amount To Valid Service On State : Supreme Court

The Supreme Court has clarified that when the government or one of its departments is a party to arbitration, delivery of an arbitral award to an official who is not connected with or aware of the proceedings cannot be treated as valid service for commencing the limitation period to challenge the award. Citing its ruling of Union of India vs. Tecco Trichy Engineers & Contractors (2005), the Court said that the delivery of the copy of the arbitral award should be made to the “party to the...

Mere Non-Signing Won't Invalidate Arbitration Agreement If Parties Otherwise Consented To Arbitration : Supreme Court

The Supreme Court observed that merely because an arbitration agreement was not signed, there is no bar to refer the dispute to arbitration, if the parties have otherwise consented to arbitration.The bench comprising Justices Sanjay Kumar and Satish Chandra Sharma set aside the Delhi High Court's decision which declined reference to arbitration merely because Respondent No.1 didn't sign the arbitration agreement. Since the Respondent No.1 consented to the contractual terms via email, the...

Non-Signatories Have No Right To Attend Arbitration Proceedings, Their Presence Breaches Confidentiality : Supreme Court

The Supreme Court on Wednesday (Aug. 13) observed that a party non-signatory to an arbitration agreement cannot participate in the arbitration proceedings, as the signatories to an arbitration agreement are only entitled to remain present in the arbitration proceedings. The bench comprising Justices PS Narasimha and AS Chandurkar set aside the Delhi High Court's decision, which allowed the non-signatories to an arbitration agreement to attend the arbitration proceedings in the presence of their...

Place Of Exclusive Jurisdiction Deemed As 'Seat' Of Arbitration : Supreme Court

The Supreme Court observed that in the absence of a seat or venue of arbitration in the arbitration agreement, the place where the exclusive jurisdiction has been vested as per the agreement would be regarded as the 'seat' of the arbitration.The bench of Justices P.S. Narasimha and A.S. Chandurkar set aside the Punjab & Haryana High Court's order allowing an application for the appointment of an arbitrator in a dispute where the arbitration agreement conferred exclusive jurisdiction for...

Mere Pendency Of Criminal Cases Alleging Simple Fraud No Bar To Arbitration : Supreme Court

The Supreme Court has allowed the arbitration proceedings to continue in multi-crore Bihar Public Distribution System (“PDS”) Scam, stating that mere pendency of the criminal proceedings in offences involving simple fraud like cheating, criminal breach of trust doesn't bar a dispute from being referred to an arbitration. “The mere fact that criminal proceedings can or have been instituted in respect of the same incident(s) would not per se lead to the conclusion that the dispute which is...

Disputes Arising Out Of 'Work Contract' With MP Govt Instrumentality Shall Be Referred To MP Arbitration Tribunal : Supreme Court

The Supreme Court today (July 30) reiterated that the disputes related to 'work contract' must be adjudicated exclusively by the Madhya Pradesh Arbitration Tribunal under the Madhya Pradesh Madhyastham Adhikaran Adhiniyam, 1983 (“1983 Act”). Holding thus, the bench comprising Justices JB Pardiwala and R Mahadevan refused to interfere with the Madhya Pradesh High Court's ruling, which set aside the arbitration proceedings initiated by the Appellant, for settlement of the dispute arising out of...

Clause Saying Arbitration "May Be Sought" Doesn't Constitute A Binding Arbitration Agreement : Supreme Court

The Supreme Court recently held that a clause in an agreement that arbitration "may be sought" to resolve disputes between the parties will not constitute a binding arbitration agreement.Approving the refusal of the High Court to refer the parties to arbitartion, the Supreme Court observed that the phraseology of the clause did not indicate that the parties were bound to go for arbitration."...clause 13 does not bind parties to use arbitration for settlement of the disputes. Use of the words...

S. 11 SARFAESI Act | DRT Can't Decide Disputes Between Banks Over Secured Assets; Must Be Referred To Arbitration : Supreme Court

In a significant ruling under the SARFAESI Act, 2002 (“Act”), the Supreme Court today (May 23) held that inter-creditor disputes (between secured creditors) must be resolved through arbitration under Section 11 of the Act read with the Arbitration & Conciliation Act, 1996 (“Arbitration Act”). Unlike the Arbitration and Conciliation Act, which requires a written agreement for reference, Section 11 of the Act creates a statutory mandate for arbitration, eliminating the need for any such...

All Trademark Disputes Aren't Outside Arbitration; In Personam Issues Relating To License Agreement Arbitrable : Supreme Court

The Supreme Court recently held that a mere allegation of fraud or misconduct does not divest an arbitral tribunal of its jurisdiction to adjudicate in personam disputes stemming from contractual relationships governed by an arbitration agreement.“The law is well settled that allegations of fraud or criminal wrongdoing or of statutory violation would not detract from the jurisdiction of the arbitral tribunal to resolve a dispute arising out of a civil or contractual relationship on the basis of...