Dispute Resolution

Recent Cases on Arbitration Law in India

The researcher has dealt with recent cases on arbitration law in this blog. In addition, the majority of the judgment of the cases came in 2021. For clarity, the researcher has divided each case into four parts:

  • Name of the parties
  • Facts
  • Issue
  • Judgment

Thus, the cases are as follows:

Case: Shapoorji Pallonji and Co. Pvt. Ltd. v. Rattan India Power Ltd. & Anr.[1]

Petitioner: Shapoorji Pallonji and Co. Pvt. Ltd.

Respondent: India Bulls Power Ltd., Elena

Facts: The first respondent, India Bulls Power. Ltd., invited bids to execute civil, structural works and a boiler turbine package (BTG Works). The second respondent Elena is a wholly-owned subsidiary of the first respondent. The petitioner and Elena signed the Letter of Award, but the letterhead carried the name of India Bulls. They also entered into a contract for BTG Works. Later a dispute arose among the parties regarding the execution of works. The petitioner issued a notice invoking arbitration. India Bulls declined to arbitrate the matter.

Issue: Does the respondent have to arbitrate the matter?  

Held: The Delhi High Court referred to various cases. Then it reiterated the importance of arbitration law. Based on the factual matrix of the case, the Delhi High Court held that Indian bulls had participated in the formation of BTG Works. It was them who invited bids for BTG Works. The group of companies doctrine was applicable. The Delhi High Court allowed the petition.

Case: M/s Silpi Industries v. Kerala State Road Transport Corporation[2]

Petitioner: Silpi Industries

Respondent: Kerala State Road Transport Corporation

Facts: The respondent invited tenders for the supply of thread rubber. The appellants had given the purchase orders. A dispute arose regarding the payment. All the attempts to reconcile failed. They decided to arbitrate. The arbitral award was in favor of the appellants. The respondents challenged the award under section 34 of the Arbitration and Conciliation Act, 1996. Dismissal of their application made them file an appeal under section 37 of the Act.

Issue: Does the Limitation Act, 1963, apply to arbitration proceedings?

Held: Section 43 of the Act[3] states that Limitation Act applies to arbitration proceedings. In addition, if the parties cannot resolve their disputes, they may submit them to arbitration.[4] The arbitration proceedings would begin with a written agreement.[5] Thus, parties should follow the arbitration law properly.

Case: NTPC Ltd. v. M/s Deconar Services Pvt. Ltd.[6]

Appellant: NTPC Ltd

Respondent: M/s Deconar Services Pvt. Ltd.

Facts: The appellant gave both the contracts to the respondent subject to a 16% discount on the first one. However, the appellant delayed in handing over the land to the respondent. As a consequence, there was a delay in construction. Therefore, disputes arose among the parties. The parties agreed to arbitrate. Arbitration law was to be followed in the dispute. Then the arbitral award was announced in favor of the respondent. After that, the appellants filed an appeal against the award.[7] But the High Court dismissed the appeal. Again, the respondents challenged the decision of the court.

Issue: Whether the respondent’s appeal is allowed in court?

Held: Firstly, the Supreme Court referred to the decision in Kwality Manufacturing Corporation v. Central Warehousing Corporation[8]. Then the Supreme Court highlighted the limitation of courts intervention in arbitration cases. To clarify, the court stated they could not sit in appeals against the decision of the arbitrator. In other words, the court could only look into the matter regarding the arbitrator’s misconduct and nothing else.

Secondly, the Supreme Court referred to Arosan Enterprises Ltd. v. Union of India[9]. The court reiterated their position. They would not interfere with the arbitral award, even if a different view were possible. In other words, the Supreme Court held that the appellant had breached the contract. Also, the Supreme Court decided not to interfere with the arbitrator’s decision.

[1] Shapoorji Pallonji and Co. Pvt. Ltd. v. Rattan India Power Ltd. & Anr., 2021 SCC OnLine Del 2875.

[2] M/s Silpi Industries v. Kerala State Road Transport Corporation, 2021 SCC OnLine SC 439.

[3] The Arbitration and Conciliation Act, 1996, §43.

[4] Micro, Small, and Medium Enterprises Development Act, §18(3).

[5] The Arbitration and Conciliation Act, 1996, §7.

[6] NTPC Ltd. v. M/s Deconar Services Pvt. Ltd., Civil Appeal No. 6484 of 2014.

[7] The Arbitration Act, 1940, §30.

[8] Kwality Manufacturing Corporation v. Central Warehousing Corporation, 2009 5 SCC 142.

[9] Arosan Enterprises Ltd. v. Union of India, 1999 9 SCC 449.

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