In Interconnected Agreements, Use Of Word 'May' Does Not Defeat Clear Intention To Arbitrate In Main Agreement: Telangana High Court

The Telangana High Court bench of Justice K. Lakshman has held that in case of interconnected agreements, where the mother agreement clearly and unequivocally refers the disputes to arbitration, mere use of 'may' in the arbitration clause of one of the ancillary agreements will not defeat the intention to arbitrate. Brief Facts: This application has been filed under section 11(6) of the Arbitration Act seeking an appointment of an Arbitrator. The Applicant, a developer, entered...

Whether A Particular Contract Is A Works Contract Under MSME Can't Be Decided Under Writ Jurisdiction: Telangana High Court

The Telangana High Court bench of Justice K. Lakshman has held that the question of whether a particular contract is a works contract or not is for the MSME Council to decide, and the dispute cannot be decided under writ jurisdiction. Brief Facts: This writ petition challenges the order dated 21.12.2024 in Case No. 1292/MSEFC/2021 passed by Respondent No. 2, seeking a declaration that the order is non-arbitrable and illegal. The petitioner prays for a direction to Respondent No. 2 to...

Mere Passage Of Time Does Not Bar Arbitration If Arbitration Clause Remains Valid & Enforceable: Telangana High Court

The Telangana High Court bench of Justice K Lakshman has held that mere passage of time does not bar arbitration if the arbitration clause remains valid. The Limitation for the purpose of filing the application under section 11(6) of the Arbitration Act commences from the date when request for initiating arbitration is rejected. Brief Facts: This application has been filed under Section - 11 (5) & (6) of the Arbitration and Conciliation Act, 1996 ('Arbitration Act'), to appoint a...

When Earlier Appointment Of Arbitrator Is Defective, Court May Appoint New Arbitrator U/S 11 Of Arbitration Act: Telangana High Court

The Telangana High Court bench of Justice K. Lakshman has held that a substitute arbitrator must generally be appointed in the same mode and manner as the original arbitrator. When the appointment of an earlier arbitrator was done under a defective arbitration clause or an unlawful procedure was followed, in such cases a proper recourse is to seek appointment of a new arbitrator under section 11 of the Arbitration and Conciliation Act, 1996. Brief Facts: The present two applications...

Open Terrace/Portico Excluded While Computing Built-Up Area To Determine Eligibility For Deduction U/S 80-IB Of IT Act: Telangana High Court

The Telangana High Court stated that open terrace/portico excluded while computing build-up area for determining eligibility for deduction under section 80-IB of Income Tax Act. The Bench consists of Justices P. Sam Koshy and Narsing Rao Nandikonda was addressing the issue of whether the terrace / balcony that is in the form of open to sky or portico / porch area without walls could be added while computing the built-up area for the purpose of determining the eligibility for deduction...

Limitation Act Applies To Proceedings Under Interest On Delayed Payments To Small Scale & Ancillary Industrial Undertakings Act: Telangana High Court

The Telangana High Court bench of Justice P. Sam Koshy and Justice N. Tukaramji have held that the provisions of the Limitation Act, 1963 are applicable to proceedings initiated under the Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993. The Court clarified that the overriding effect under Section 10 of the 1993 Act applies only to the express provisions of that Act and does not exclude the applicability of the Limitation Act in the absence of any...

Unfair To Presume That Plea Of Limitation Can't Be Adjudicated By Arbitrator, Court U/S 11 Must Not Conduct Roving Inquiry: Telangana High Court

The Telangana High Court bench of Justice K. Lakshman has held that in a scenario where the referral court can discern the frivolity of the dispute from the bare minimum pleadings, it would be incorrect to presume that the arbitral tribunal, equipped to undertake a detailed examination of the pleadings and evidence, would be unable to reach the same conclusion. Therefore, it is better that the plea of limitation should be left to be decided by the Arbitrator. Brief Facts: The 1st...

Court Can Appoint New Arbitrator U/S 11(6) Of Arbitration Act If Designated Arbitral Institution No Longer Exists: Telangana HC

The Telangana High Court bench of Justice K Lakshman has held that even if the designated arbitral institution named in the arbitration agreement no longer exists, the Court can still appoint a new arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996 (Arbitration Act) provided the intention to arbitrate is clearly evident from the arbitration clause. Brief Facts: Danieli India Limited (Applicant) is a company incorporated under the Companies Act, 1956...

S.47 Of CPC Cannot Be Used As An Alternative To S.37 Of A&C Act For Unsettling Arbitration Award: Telangana HC

The Telangana High Court has clarified that section 47 of the CPC, which permits objections to be raised in an execution petition before the Trial Court; cannot be used as an alternative to challenge an arbitration award, which is being executed before a Trial Court.The Division Bench of Justice Moushumi Bhattacharya and Justice B.R. Madhusudhan Rao, while passing the order made it clear that the Arbitration and Conciliation Act, 1996 is a Code in itself and lays down a mechanism to challenge an...

Compensation Can Be Granted When Aggrieved Party Continues Service Due To Suppression Of Fact Of Contract's Termination: Telangana HC

The Telangana High Court bench of Justices Moushumi Bhattacharya and B.R.Madhusudhan Rao has held that loss of profit incurred by a party due to the other party's suppression of material facts regarding the termination of the contract, where the former continued to render services under a mistaken belief, can be reasonably compensated by applying the Hudson formula. Brief Facts: In June, 2012, M/s. Gayathri Projects Limited (GPL)/Principal Employer issued a Tender Notification...

Mandate Of Arbitration U/S 29A Of Arbitration Act Can Be Extended By High Court Only When Arbitrator Is Appointed By It: Telangana High Court

The Telangana High Court bench of Justice Moushumi Bhattacharya and Justice B.R.Madhusudhan Rao has held that when an arbitrator is appointed by the High Court under Section 11(6) of the Arbitration and Conciliation Act, 1996 (Arbitration Act) in a domestic arbitration, the mandate of the arbitrator can be extended by the High Court only under Section 29A of the Arbitration Act and not by any other courts inferior to the High Court. Brief Facts: The present civil revision petition has...

Arbitrator Cannot Be Appointed Unless Arbitration Clause Is Invoked With Proper Notice U/S 21 Of A&C Act: Telangana High Court

The Telangana High Court bench of Acting Chief Justice Sujoy Paul has held that unless a proper notice under Section 21 of the Arbitration and Conciliation Act, 1996 (Arbitration Act), suggesting the name of the proposed arbitrator, is sent to the other party, the court cannot exercise its jurisdiction under Section 11(6) of the Arbitration Act. Merely demanding outstanding payment without proposing the name of an arbitrator cannot be construed as a valid invocation of the arbitration...