Kandeep Shravan | SASTRA Deemed to be University | 19th July 2020
Hindustan Construction Company Limited & Anr. Vs. Union of India & Ors.
The constitutional validity of section 87 of the Arbitration Act was challenged in the present case. It was argued in the Supreme Court. The bench comprised of Hon’ble Mr. Justice R.F. Nariman, Hon’ble Mr. Justice Surya Kant and Hon’ble Mr. Justice V. Ramasubramanium who had struck down section 87 of the Arbitration and Conciliation Act stating that it was a violation of Art.14 of the Indian Constitution and observed that the provision was manifestly arbitrary and contrary to public interest.
It was observed by the court that section 87 when applied with Arbitration and Conciliation (2015 Amendment) Act was directly against the said act and destroys the purpose of the whole act. The provision was also against the interest stated in Board of Cricket in India Vs. Kochi Cricket Pvt. Ltd which held that the act was of prospective nature. The SC reiterated the decision given in the BCCI case stating that it is seen as a guiding principle to determine the applicability of the amendment and also reviving section 26 of the said 2015 amendment was accordingly revived.
National Highways Authority of India v. Sayedabad Tea Estate
It was decided by the Supreme Court that an application filed under Section 11 of Arbitration Act shall not be maintainable as mentioned in the provision as established in section 3G(5) of the National Highways Act, 1956. Section 3G(5) of the act clearly provides for an arbitrator by the central government.
It was observed by the Court that just because section 3G(5) does not pose any statutory limitation , the Central Government’s right of appointment of Arbitrator does not get forfeited within 30 days. If the Government fails to appoint an arbitrator on request by any of the aggrieved party, the party can invoke the writ jurisdiction under Article 226 of the High Court or civil court.
Mahanagar Telephone Nigam Limited Vs. Canara Bank & Ors
Every company is a separate legal entity having separate legal rights and liabilities. Even though a company is an affiliate, the separate legal entity cannot be dissolved. The group of companies’ doctrine was first invoked by the Supreme Court in the case of Chloro Controls India (P) Ltd. v. Severn Trent Water Purification Inc. The Supreme court invoked this doctrine in the instant case to permit a non-signatory in arbitration agreements or proceedings. It was held that by the court that when parent company engages or is a signatory to the arbitration agreement and the non-signatory also participates in the negotiation of contract and is benefitted by the pertinent proceedings, on such circumstances a non-signatory is bound by the arbitration agreement. It was observed by the SC that there was supporting facts which proved the party’s intention in binding the non-signatory party to the arbitration proceedings.
M/s Icomm Tele Ltd. Vs. Punjab State Water Supply & Sewage Board
The Supreme Court in this case pointed out that arbitration being a significant alternate dispute resolution mechanism and the pre-deposit requirement as mentioned in Clause 25(viii) would disrupt the purpose of arbitration and directly opposes the obstruction free Court system. The said clause insisted on a pre-deposit of 10 percent on the claim amount even before the commencement of the arbitration proceedings.
The 10 percent pre-deposit was considered arbitrary as the clause applied to all kinds of claims and had no connection with frivolous claims. However, a 10 percent deposit was considered necessary even before determining the case whether it is frivolous or not. The Supreme Court struck down the clause accordingly.
M/s Dharmaratnakara Rai Bahadur v. M/s Bhaskar Raju & Brothers
The Supreme Court was of the view that the court cannot act upon a document which is unstamped as stated in the arbitration clause therein. However, on the payment of deficit duty or penalty as mentioned in section 35 or 40 of the Stamp Act 1899, the admission of the document as evidence shall be considered. Any lease deed or any other instrument which is of importance to the to arbitration agreement must be stamped, the document will be impounded.
M/s Morgan Securities & Credits Pvt. Ltd. v. Videocon Industries Ltd.
It was held by the court that it is of assumption that the arbitrator has taken due care in granting award after post award interest and was well aware of the claim of the parties. The court held that arbitrators view in grating interest cannot be regarded as illegal to the root of the matter. Mindful consideration of the claim of the parties along with the appropriate merits or demerits along with the balancing of equities are important factors while granting the rate of interest.
Indian Oil Corporation Limited v Toyo Engineering Corporation
It was held by the court that there exists no mandate of law that that court should order 100 percent deposit of the amount to be awarded. It was purely of court’s discretion and it differs from facts and circumstances of each case.
State of Gujara v. Amber Builders
The Court made it clear that through a conjoint of the Acts together , the tribunal’s powers as mentioned in section 17 of the Arbitration and Conciliation Act involved, few powers are applied by the Arbitral Tribunal established under the Gujarat act as there is no inconsistency between these two acts for the purpose of granting interim relief.
The court believed that the Judgment given in Gangotri Enterprises Limited v Union of India is per incuriam as it relies upon Raman Iron Foundry which has been overruled by the H.M. Kamaluddin Judgment which consisted of a three Judges Bench.
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