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The Court noted that, “To attract curial intervention, it must be established that the breach of the rules of natural justice must, at the very least, have actually altered the final outcome of the arbitral proceedings in some meaningful way”.
Supreme Court has applied the standard of a ‘grave miscarriage of justice’ in the exceptional circumstances of this case where the process of arbitration has been perverted by the arbitral tribunal to provide an undeserved windfall to DAMEPL.
Supreme Court upheld the High Court’s decision and emphasised the need for early enforcement of the foreign award by the competent forum.
Calcutta High Court applied the amended Section 31(7)(b) for determining the interest rate after considering the silence of the Award on the interest issue and the subsequent execution proceedings filed after the 2016 amendment.
If the part of an Award proposed to be annulled is independent, stands unattached to the other part and can be validly incised, the partial setting aside would be valid and justified. The same also applies to execution proceedings.
“Petitioner shows a scant regard for the limited scope of intervention with an award in an international commercial arbitration, or for the process of the Court. Pleas have been advanced which are contrary to the record, and many attempts have been made to mislead the Court.”
“The expression ‘party’ as defined in Section 2(1)(h) of the Arbitration and Conciliation Act, 1996, clearly indicates a person who is a ‘party’ to an Arbitration Agreement and in no way includes the agent of the party to such Agreement.”
The Calcutta High Court opined that the onus is on the award-holder to provide irrefutable evidence of delivery, and any doubt in this regard favors the award-debtor.
The Court termed this case to be highly unusual one that draws attention to matters of wider importance and touches the reputation of arbitration as a dispute resolution process.
by Hiresh Choudhary* and Surbhi Sharma**
“The credibility of the evidence is the evidence of the credibility of claim for loss of profit”.
Calcutta High Court held Arbitrator’s refusal to decide question of interest under the MSMED Act constitutes a “decision” and therefore, can be challenged under Section 34 of the Arbitration and Conciliation Act, 1996.
While cautioning the parties to the Arbitration proceedings, Calcutta High Court stated that parties should be vigilant in applying for extensions within the prescribed periods and dismissed the petitions seeking an extension of the arbitrator’s mandate.
Bombay High Court viewed that by considering delays prior to the new contract, there was a ‘patent perversity apparent on the face of the award’.
A party cannot simply raise an objection on the ground of patent illegality if the Award is against them. Patent illegality requires a distinct transgression of law, the clear lack of which makes the petition a pointless effort of objection towards an Award passed by a competent Arbitral Tribunal.
Section 34 of the Arbitration Act is a clear and unequivocal embodiment of the Legislature‘s intent to balance the competing facets of arbitration, I.e., on one hand, while courts are enjoined to follow the minimalist intervention route, it would clearly be a travesty of justice if they were to fail to intervene where circumstances warrant, and demand corrective measures being adopted.
“Dissenting opinion of arbitrators might provide useful clues during procedural issues, which forms a critical part when the hearings are challenged”.
The Supreme Court explained that the older Act enabled the Court to modify an award, a power which was consciously omitted by Parliament while enacting the 1996 Act, hinting towards exclusion of power to modify an award.
The Calcutta High Court held that failure to comply with procedural requirements under Section 19 of the MSMED Act renders application for stay of Arbitral Award as not maintainable.