NOTES ON SOME OF THE RELEVANT

PROVISIONS OF THE ARBITRATION

AND CONCILIATION ACT, 1996 & SOME
IMPORTANT CASE LAWS
(DOMESTIC ARBITRATION)
BY
JUSTICE RAMESH D. DHANUKA
JUDGE, BOMBAY HIGH COURT

18TH MARCH, 2023

 An arbitral award may be set aside on an application by a party defined under section
2(h) of the Arbitration and Conciliation Act, 1996 which provides that 'party' means a
party to an arbitration agreement.

 By 2019 Amendment, Sub-Section (ca) is inserted in Section 2(1)(c) which provides that
the “arbitral institution” means an arbitral institution designated by the Supreme
Court or a High Court under the Arbitration Act.

 Application for setting aside an arbitral award can be filed only in the court defined under
section 2(1)(e) of the Act which provides as under :-
'(e) “Court” means—
(i) in the case of an arbitration other than international commercial
arbitration, the principal Civil Court of original jurisdiction in a district, and
includes the High Court in exercise of its ordinary original civil jurisdiction,
having jurisdiction to decide the questions forming the subject-matter of the
arbitration if the same had been the subject-matter of a suit, but does not
include any Civil Court of a grade inferior to such principal Civil Court, or any
Court of Small Causes;
(ii) in the case of international commercial arbitration, the High Court in
exercise of its ordinary original civil jurisdiction, having jurisdiction to decide
the questions forming the subject-matter of the arbitration if the same had
been the subject-matter of a suit, and in other cases, a High Court having
jurisdiction to hear appeals from decrees of courts subordinate to that High
Court.'

 Supreme Court in the case of BGS, SGS Soma JV Vs. NHPC Ltd., (2020) 4 SCC 234
considered the arbitration clause which provided that the arbitration proceedings shall be held
at New Delhi/Faridabad and held that it indicates that the so-called venue is really the seat of
arbitration proceedings. Proceedings were finally held at New Delhi. The awards were signed in
New Delhi. Both the parties thus have chosen the New Delhi as seat of arbitration which would
have exclusive jurisdiction over the arbitration proceedings. Merely because the part of cause
of action had arisen at Faridabad would not be relevant. Where seat has been chosen that
would amount to an exclusive jurisdiction clause.
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 Supreme Court in the case of Hindustan Construction Company Ltd. vs. NHPC Ltd. & Ors.,
(2020) 4 SCC 310 has held that parties had chosen New Delhi as seat of arbitration. Even if
application was first made to Faridabad Court, that application was made without jurisdiction.
Supreme Court transferred the petition filed under Section 34 before the Faridabad Court to
the High Court at Delhi, New Delhi.

 Supreme Court in case of Brahmani River Pellets Limited v/s. Kamachi Industries Limited,
2019 SCCOnline SC 929 has held that where the contract satisfies the jurisdiction of the Court
at a particular place then only such Courts will have the jurisdiction to deal with the matter and
an inference be drawn that parties intended to exclude the other Courts. In that matter, it is held
that since the parties had agreed that the venue of arbitration shall be at Bhubaneswar, the
intention of parties was to exclude all other Courts. The Madras high Court did not have
jurisdiction under Section 11(6) of the Arbitration Act to entertain an application for
appointment of an arbitrator.

 Supreme Court in the case of Indus Mobile Distribution Private Limited vs. Datawind
Innovations Private Limited and Ors. (2017) 7 SCC 678 has held that if the juridical seat
of arbitration is chosen by parties in terms of the arbitration agreement, such designated seat
of arbitration is akin to an exclusive jurisdiction clause as the Court has supervisory powers
over the arbitration. It is held that the Mumbai Courts alone thus have jurisdiction to the
exclusion of all other courts in the country as the juridical seat of arbitration was at Mumbai.

 Bombay High Court in Aniket SA Investments LLC, Mauritius vs. Janapriya Engineers
Syndicate Pvt. Ltd., Hyderabad & Ors. 2021 SCC OnLine Bom 919 has held that a choice of
seat of arbitration has the effect of conferring exclusive jurisdiction on the courts of that seat.
Court further held that Section 2(1)(e) of the Arbitration and Conciliation Act, 1996 does not
allow for two courts as having concurrent jurisdiction, namely the court where the cause of
action arises, and the court of the seat of arbitration. In the present case, the parties had
contractually agreed to a clause providing exclusive jurisdiction to the courts at Hyderabad.
However, this clause was made expressly subject to the arbitration clause that had provided for
the seat of arbitration as Mumbai. Applying the principle of plain language interpretation of
contracts, the court held that the exclusive jurisdiction clause was subject to the arbitration
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 clause. Therefore, the courts at Mumbai and not Hyderabad, were held to have exclusive
jurisdiction over all disputes falling within the scope of the arbitration agreement.

 Bombay High Court in Prakash Askram Jain vs. State of Maharashtra 2021 SCC OnLine
Bom 1254 has held that Court of Civil Judge, Senior Division cannot be considered to be a
Court under Section 2(1)(e) so as to entertain and decide proceedings under Section 34 of the
1996 Act.

 Bombay High Court in the case of United India Insurance Company Limited Vs. Eastern
Bulk Company Limited, 2019 SCCOnline Bom 1404 has held that the concept of seat of
arbitration with the venue of arbitration cannot be mixed up. Learned arbitrator fixing the
venue only for the purpose of conducting some of the arbitral proceedings could not be
considered as seat of arbitration for the purpose of conferring jurisdiction on the Courts. There
cannot be two or more seats of arbitration whereas the venue of arbitration may be more than
one and may be fixed by the parties as well as the learned arbitrator considering the
convenience of the learned arbitrator and the parties. The venue decided by the learned
arbitrator to suit his convenience or convenience of the parties for the purpose of hearing of the
arbitration proceedings cannot confer the supervisory jurisdiction of such Court within whose
territorial jurisdiction such arbitral tribunal were held at the venue decided under Section 20(3)
of the Arbitration Act.

WHEN DISPUTE ARISES

 Supreme Court in the case of Mcdermott International Inc. Vs. Burn Standard Co. Ltd. & Ors.
-(2006) 11 SCC 181 has held that once a claim was made prior to invocation of the arbitration
agreement, it became a dispute within the meaning of the provisions of the 1996 Act. It is
further held that while claiming damages, the amount therefore was not required to be
quantified. Quantification of a claim is merely a matter of proof.

 Bombay High Court in the case of the Board of Trustees, Port of Mumbai vs. Afcons
Infrastructure Limited - 2016 SCCOnline Bom 10037 has held that since the claimant had
demanded various claims from time to time which were not considered by the opponent or
were not specifically rejected and a silence was maintained in respect thereto, the
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 dispute/difference had arisen between the parties which were referred to the arbitration pursuant
to the arbitration agreement arrived at between the parties.

 Bombay High Court in the case of Patel Engineering Co. Limited vs. B.T. Patil & Sons
Belgaum (Construction) Private Limited & Ors. - 2016 SCC OnLine Bom 17 has held that
cause of action had arisen in view of notice of additional claims after the arbitral tribunal is
constituted and if the arbitration agreement provides for following the procedure for
appointment of an arbitral tribunal, such additional claims cannot be made directly before the
arbitral tribunal in the statement of claim without following the requisite procedure for referring
the dispute to the arbitration prescribed under the arbitration agreement. However, the parties
can by consent refer such additional claims before the same arbitral tribunal by way of
successive reference.

Section 4 of the Arbitration Act provides that a party who knows

that any provision of Part-I from which parties may derogate or any
requirement under the arbitration agreement has not been complied
but still proceeds with the arbitration without stating his objection to
such non-compliance without undue delay or if a time limit is
provided for stating that objection, within that period of time, shall
be deemed to have waived his right to so object.

 Supreme Court in the case of Quippo Construction Equipment Limited Vs. Janardan
Nirman Pvt. Limited, AIR 2020 SC 2038 has after considering the fact that the arbitration was
a domestic and an institutional arbitration empowering CIAA to nominate the Arbitrator and
the fact that one of the agreements provided that the venue was to be at Kolkata has held that
the respondent having not raised any objection as to the venue of arbitration before the
arbitral tribunal waived, its right to raise that objection in view of Section 4 of the Arbitration
Act and cannot raise such objection in the proceedings under Section 34.

 Supreme Court in the case of Narayan Prasad Lohia Vs. Nikunj Lohia, (2002) 3 SCC 572
has held that objection to appointment of two arbitrators by the parties contrary to Section
10 of the Arbitration Act was derrogable and would amount to waiver of right to object

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 under Section 4 of the Arbitration Act and cannot be allowed to be raised in the petition
filed under Section 34.

 Bombay High Court in the case of Rajesh Pravinchandra Rajygor Vs. Nitin Harjivandas
Rajygor, (2015) SCC OnLine Bom 4180 has held that filing of statement of claim under
Section 23 of the Arbitration Act is mandatory and the said requirement is not derrogable.
Objection not raised by the respondent about the claimant not filing of statement of claim by
filing an application under Section 16 of the Arbitration Act would not amount to waiver.
Such objection can be raised for the first time in the application under Section 34. The
arbitrator cannot collect evidence in absence of one party. Such award shows perversity
and can be set aside under Section 34.

Section 5 of the Arbitration Act provides that notwithstanding

contained in any other law for the time being in force, in matters
governed by Part-I, no judicial authority shall intervene except
where so provided in Part-I. Part-I provides for judicial intervention
by the Court in the proceedings under Sections 8, 9, 11, 14, 15, 27,
29-A, 34, 36 and 37.

 Supreme Court in the case of Municipal Corporation of Greater Mumbai & Anr. Vs.
Pratibha Industries Limited & Ors., (2019) 3 SCC 203 has held that High Court has
inherent powers under Article 215 of the Constitution of India to recall its own order being a
superior Court of record. Section 5 of the Arbitration Act is inapplicable in absence of
arbitration agreement itself.

Section 7 provides as to what the arbitration agreement means. The

arbitration agreement shall be in writing. The arbitration agreement
is in writing if it is contained in the documents signed by the parties,
exchange of letters, telex, telegrams, or other means of
telecommunication including communication through electronic
means which provide a record of the agreement or an exchange of
statement of claim and defence wherein the existence of the
agreement is alleged by one party and not denied by the other. If
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 there is a reference in a contract to a document containing an
arbitration clause constitutes an arbitration agreement if the
contract is in writing and reference is such as to make that
arbitration clause part of the contract. Unless there is arbitration
agreement between the parties, dispute cannot be referred to
arbitration. An arbitration agreement however can be arrived at
even in the pending court proceedings. If the parties have arrived at
the arbitration agreement under Part-I, all rights and obligations of
the parties would be governed by the provisions of the Part-I of the
Arbitration & Conciliation Act, 1996.

 Supreme Court in the case of Reckitt Benckiser (India) Private Limited Vs. Reynders Label
Printing India Private Limited & Anr., (2019) 7 SCC 62 has held that the party who is not a
signatory to the arbitration agreement cannot be subjected to the arbitral proceedings. The
burden is on the applicant to establish that such third party had an intention to consent to the
arbitration agreement and be party thereto.

 Supreme Court in the case of Caravel Shipping Services Private Limited Vs.Premier Sea
Foods Exim Private Limited, (2019) 11 SCC 461 considered an arbitration clause recorded
in bill of lading. Under Section 7(4) of the Arbitration Act, an arbitration agreement would
be found in the circumstances mentioned in the three sub-clauses that make up Section 7(4).
This would not mean that in all cases an arbitration agreement needs to be signed. The only
pre-requisite is that it shall be in writing, as has been pointed out in Section 7(3).

 Supreme Court in the case of South Delhi Municipal Corporation Vs.SMS AAMW Tollways
Private Limited, (2019) 11 SCC 776 has held that agreement/clause providing for a decision
of a competent officer of a party and providing for an appeal against decision of competent
officer is clearly an appeal in the nature of a departmental appeal commonly provided in
several department rules including service rules and cannot be construed as an arbitration
agreement. Purpose of such clause is to vest the competent officer with supervisory control
over the execution of work and administrative control over it to prevent disputes. No
arbitrator can be appointed under such clause.
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 Supreme Court in case of Vidya Drolia and Others v/s. Durga Trading Corporation, 2019
SCCOnline SC 358 has held that there is nothing in the Transfer of Property Act to show that a
dispute as to determination of a lease arising under Section 111 of Transfer of Property Act
cannot be decided by arbitration. It is held that public policy requires that parties cannot be
permitted to contract out of the legislative mandate which requires certain kind of disputes to be
settled by special Courts constituted by the Act. The disputes arising under the Indian Trusts Act
cannot be referred to arbitration.

 Supreme Court in case of Mahanagar Telephone Nigam Ltd. v/s. Canara Bank and Others,
2019 SCCOnline SC 995 has held that an arbitration agreement is a commercial document inter
partes, and must be interpreted so as to give effect to the intention of the parties, rather than to
invalidate it on technicalities. The intention of the parties must be inferred from the terms of the
contract, conduct of the parties and correspondence exchanged to ascertain the existence of a
binding contract between the parties. It would be the duty of the Court to make the arbitration
agreement workable within the permissible limits of the law. The parent or the subsidiary
company, entering into an agreement, unless acting in accord with the principles of agency or
representation, will be the only entity in a group, to be bound by that agreement. A non-
signatory can be bound by an arbitration agreement on the basis of the “Group of Companies”
doctrine, where the conduct of the parties evidences a clear intention of the parties to bound
both the signatory as well as the non-signatory parties.

 Supreme Court in the case of Kerala State Electricity Board and Anr. Vs. Kurien E. Kalathil
& Anr., (2018) 4 SCC 793 has held that reference of a dispute to arbitration under Section 89
of the Code of Civil Procedure, 1908 can be done only with written consent of the parties
either by way of a joint memo or joint application and not by oral consent given by the counsel
without written memo of instructions.

 Supreme Court in the case of United India Insurance Co. Ltd. & Anr. Vs. Hyundai
Engineering and Construction Co. Ltd. & Ors. - AIR 2018 SC 3932 has held that Arbitration
clause has to be interpreted strictly. Supreme Court considered the arbitration clause while
considering the application for appointment of arbitrator and held that the claim was not
arbitrable and refused to appoint an arbitrator.
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 Supreme Court in the case of M/s. Inox Wind Ltd. V/s. M/s. Thermocables Ltd. – 2018
SCCOnline SC 3 has adverted to the judgment of the Supreme Court in the case of M.R.
Engineers and Contractors (P) Ltd. – (2009) 7 SCC 696 and has held that a general
reference to a consensual standard form is sufficient for incorporation of an arbitration clause. It
is held that the Court in agreement with the judgment in M.R. Engineer’s case with a
modification that a general reference to a standard form of contract of one party along with
those of trade associations and professional bodies will be sufficient to incorporate the
arbitration clause. It is held that if the document sought to be incorporated is a bespoke contract
between the same parties, the courts have accepted this as a “single contract” case where
general words of incorporation will suffice, even though the other contract is not on standard
terms and constitutes an entirely separate agreement. Supreme Court considered the rationale
for this approach that the parties have already contracted on the terms said to be incorporated
and are therefore even more likely to be familiar with the term relied on than a party resisting
incorporation of a standard term.

 Supreme Court in the case of Hema Khattar Vs. Shiv Khera – (2017) 7 SCC 716 held that
the arbitration clause contained in agreement would remain operative even if agreement
stands terminated by mutual consent of the parties.

 Supreme Court in the case of Duro Felguera, S.A. Vs. Gangavaram Port Limited -- (2017)
9 SCC 729 has adverted to the judgment in the case of M.R. Engineers and Contractors
(P) Ltd. – (2009) 7 SCC 696 and has held that when reference is made to the priority of
documents to have clarity in execution of the work, such general reference to the Tender
Document will not be sufficient to hold that the arbitration clause 20.6 contained in the Tender
Documents is incorporated in the contract.

 Supreme Court in the case of Master Tours and Travels Vs. Chairman, Amarnath Shrine
Board and Ors. (2016) 16 SCC 661 observed that arbitration agreement providing for final
adjudication of all disputes by officer of one party having jurisdiction over subject-matter of
the contract/disputes, cannot amount to an arbitration clause.

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 Supreme Court in the case of the Umesh Goel Vs. Himachal Pradesh Cooperative Group
Housing Society Ltd. - AIR 2016 SC 3116 has held that since the arbitral proceedings do not
come under the expression “other proceeding” as specified in Section 69(3) of the Partnership
Act, 1932, ban imposed under the said Section 69 can have no application to the arbitral
proceedings as well as the arbitration award.

 Supreme Court in the case of Union of India & Anr. Vs.Premco-DKSPL (JV) & Ors.-(2016)14
SCC 651 has held that the period prescribed in the arbitration agreement for making an
application for appointment of an arbitrator would be binding between the parties and has to be
followed for making an application for appointment of an arbitrator. Application for
appointment of arbitrator before expiry of time prescribed in the arbitration agreement. It is
held that the appointment of arbitrator made by the High Court is illegal and is set aside by the
Supreme Court. Agreed procedure and time limit for appointment of arbitrator has to be
considered.

 Supreme Court in the case of Vimal Kishor Shah & Ors. Vs. Jayesh Dinesh Shah & Ors. -
(2016) 8 SCC 788 has held that disputes relating to trust, trustees and beneficiaries arising out
of trust deed and Trust Act, 1882 are not capable of being decided by the arbitrator despite
existence of arbitration agreement to that effect between the parties. Such disputes have to be
decided by the Civil Court as specified under Trust Act, 1882.

 In case of Booz Allen Hamilton vs. SBI Home Finance (2011) 5 SCC 532, it is held by
Supreme Court that if the subject matter of dispute is not capable of settlement by arbitration
under the law for the time being in force, such award is liable to be set aside. Supreme Court
has enumerated some of such non arbitrable disputes and has held that such action would be an
action in rem and not in personam and are thus not arbitrable even if parties agreed to refer such
dispute by consent.
(1) Disputes relating to criminal offence
(2) Matrimonial disputes
(3) Guardianship matters
(4) Insolvency and winding up matters
(5) Testamentary matters
(6) Eviction or tenancy matters
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 (7) Suit for enforcement of mortgage by sale of property.
(8) Intellectual Property Dispute.

 Supreme Court in the case of Chiranjilal Shrilal Goenka (deceased) through LRs. Vs. Jasjit
Singh & Ors.- (1993) 2 SCC 507 has held that consent of the parties cannot confer jurisdiction
nor an estoppel against statute. Jurisdiction could be conferred by statute and the Court cannot
confer jurisdiction or authority on the tribunal. It is held that a decree passed by a court without
jurisdiction on the subject matter or on the grounds on which the decree is made which goes to
the root to its jurisdiction or lacks inherent jurisdiction is a corum non judice. Such decree
passed by such a court is a nullity and is non est.

 Supreme Court in the case of Sangamner Bhag Sahakari Karkhana Limited vs. M/s.Krupp
Industries Limited - AIR 2002 SC 2221 has held that the arbitration agreement recorded
between the parties was of widest amplitude wherein the expression such as 'arising out of' or
'in respect of' or 'in connection with' or 'in relation to' or 'in consequence of' or 'concerning' or
'relating to' the contract which are interpreted and it is held that it was the substance of the claim
made before the arbitration which has to be seen. It is held that the Court would not construe
the nature of claim by adopting too technical an approach or by indulging into hair-splitting,
otherwise the whole purpose behind holding the arbitration proceedings as an alternate to civil
Court's forum would stand defeated.

 Bombay High Court in Ingram Micro India Pvt. Ltd. vs. Mohit Raghuram Hegde 2022 SCC
OnLine Bom 1777 has held that arbitration agreement can exist in the form of terms and
conditions (T&C) mentioned on the website.

 Bombay High Court in Priya Malay Sheth vs. VLCC Health Care Ltd. 2022 SCC OnLine Bom
1137 has held that a clause in arbitration agreement which confers unilateral authority upon a
party to appoint an arbitrator is bad in law.

 Bombay High Court in Skoda Auto Volkswagen India Private Limited vs. Commercial Auto
Products Private Limited 2022 SCC OnLine Bom 6401 has held that a clause providing that
arbitration shall be in accordance with Arbitration Act or any statutory modifications or re-

10
 enactment there of indicates that parties had agreed to applicability of Act as was to be amended
from time to time.

 Bombay High Court in the case of Dhargalkar Technoesis (I) Pvt. Ltd. Vs. Mumbai
Metropolitan Regional Development Authority 2020 SCC OnLine Bom 3436 held that
existence of clear and unquivocal arbitration agreement is pre-requisite for appointment of an
arbitrator. There must be demonstrated consensus ad idem, to refer disputes to arbitration.

 Bombay High Court in the case of Altus Uber Vs.Siem Offshore Rederi AS, 2019 SCCOnline
Bom 1327 has held that Court’s power to arrest of ships under admiralty jurisdiction of High
Court is not circumvented by arbitration agreement, if any, subject to satisfaction of
parameters of maritime claim which confers admiralty jurisdiction on High Court. The
Admiralty Act only deals with what constitutes a maritime claim and arrest of ships to secure
maritime claims. The said Admiralty Act does not provide for what is required to be done after
a ship is arrested to secure a maritime claim and the owner enters appearance and submits to
jurisdiction. The Act is silent on the procedure to be followed in the event the disputes are to be
referred to arbitration. The Court rejected the submission that once there is an arbitration
agreement and arbitration has been invoked, the Court has no jurisdiction to arrest a ship in
exercise of the Admiralty jurisdiction.

 Bombay High Court in the case of MEP RGSL Toll Bridge Pvt. Ltd. Vs. Maharashtra State
Road Development Corporation Ltd. & Ors., 2020 SCC OnLine Bom 2315 held that the
parties cannot be forced to arbitrate by issuance of a writ of this Court as would not only be
contrary to the entire concept of the arbitration agreement under Section 7 of the Arbitration Act
but would also be in the teeth of the Indian Contract Act. Section 89 of the Code of Civil
Procedure does not empower the Court to force a party to the proceedings to compulsory take
recourse to alternative dispute redressal mechanism in the proceedings before it in absence of
there being any arbitration agreement agreed between the parties.

 The mandate of the Arbitrator expired by efflux of time. The Petitioner belatedly filed an
application under Section 29-A (for extension), but the same was dismissed. Thereafter, the
Petitioner filed a fresh application under Section 11 for appointment of arbitrator, for the same
dispute. The Bombay High Court in Fedbank Financial Services vs. Narendra H. Shelar &
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 Ors. 2020 SCC OnLine Bom 5252 accordingly held that an arbitration clause cannot be
constantly revived and brought back to life again and again.

 Bombay High Court in the case of The Indian Performing Right Society Ltd. vs.
Entertainment Network (India) Ltd.- (2016) SCCOnline Bom 589 has held that declaration
granted by the arbitral tribunal in respect of the copyright of the parties which was an action in
rem and was not arbitrable. It is held that since the arbitral tribunal inherently lacked the
jurisdiction to adjudicate upon such claim made by the claimant, it would not amount to a
waiver under Section 4 of the Arbitration Act. It is held that a party even by consent cannot
confer jurisdiction on the arbitral tribunal in case of action in rem which jurisdiction the
arbitral tribunal did not have.

Under section 8(1), a judicial authority, before which an action is

brought in a matter which is the subject of an arbitration agreement
shall, if a party to the arbitration agreement or any person claiming
through or under him, so applies not later than the date of
submitting his first statement on the substance of the dispute, then,
notwithstanding any judgment, decree or order of the Supreme
Court or any Court, refer the parties to arbitration unless it finds
that prima facie no valid arbitration agreement exists. Rights and
remedy of the parties in that event would be then governed by
the provisions of the Arbitration and Conciliation Act, 1996. An
order passed by the Judicial Authority under Section 8 refusing to
refer the parties to the arbitration is now made appealable under
Section 37(1)(a) w.e.f. 23rd October 2015.

The judicial authority or the Court, however, may appoint an

arbitrator by consent of the parties while referring the parties to
arbitration under Section 8 of the Arbitration and Conciliation Act,
1996. After disposal of the suit under Section 8 by referring the
parties to the arbitration, all rights and remedies of the parties
would be thereafter governed by the provisions of the Arbitration
and Conciliation Act, 1996 and in accordance with the arbitration
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 agreement arrived at between the parties. A party aggrieved by the
arbitral award can challenge such an arbitral award not before the
judicial authority who had passed an order under Section 8 but can
file proceedings under Section 34 before the Court as defined under
Section 2(1)(e) of the Arbitration and Conciliation Act, 1996.

 A proviso is added to Section 8 which provides that where the original arbitration
agreement or a certified copy thereof is not available with the party applying for
reference to arbitration under sub-section (1), and the said agreement or certified copy
is retained by the other party to that agreement, then, the party so applying shall file
such application along with a copy of the arbitration agreement and a petition praying
the Court to call upon the other party to produce the original arbitration agreement or
its duly certified copy before that Court.

 Section 8(1) is substituted by the amendment of 2015. Under the amended Section
8(1), a judicial authority is bound to refer the parties to arbitration if the subject
matter of dispute is subject of arbitration agreement notwithstanding any judgment,
decree or order of the Supreme Court or any Court. In view of substitution of Section
8(1) by another provision, a judicial authority has to confine its scope to the
existence of valid arbitration agreement. If the judicial authority refuses to refer the
parties to the arbitration under Section 8, such order is appealable order under Section
37(1)(a) inserted by an amendment to Section 37 with effect from 23 rd October 2015.
If the parties are referred to arbitration under Section 8 of the Act by the judicial
authority, such an order is not appealable under Section 37 of the Act.

 The judicial authority or the Court, however, may appoint an arbitrator by consent of
the parties while referring the parties to arbitration under Section 8 of the Arbitration
and Conciliation Act, 1996. After disposal of the suit under Section 8 by referring the
parties to the arbitration, all rights and remedies of the parties would be thereafter
governed by the provisions of the Arbitration and Conciliation Act, 1996 and in
accordance with the arbitration agreement arrived at between the parties. A party
aggrieved by the arbitral award can challenge such an arbitral award not before the
judicial authority who had passed an order under Section 8 but can file proceedings
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 under Section 34 before the Court as defined under Section 2(1)(e) of the Arbitration
and Conciliation Act, 1996.

 If the defendant does not make an application under Section 8 before the judicial
authority before the date of submitting his first statement on the substance of the
dispute, such suit has to be proceeded with.

 Supreme Court in Tata Consultancy Services Limited vs. SK Wheels Private Limited
Resolution Professional, Vishal Ghisulal Jain (2022) 2 SCC 583 has held that existence of a
clause for referring the disputes between the parties to arbitration does not oust the jurisdiction
of NCLT to exercise its residuary powers under Section 60(5)(c) to adjudicate disputes relating
to the insolvency of the corporate debtor. IBC is a complete code and overrides all other laws.

 Supreme Court in Vodafone Idea Cellular Ltd. vs. Ajay Kumar Agarwal (2022) 6 SCC 496 has
held that the existence of statutory arbitration under the Indian Telegraph Act will not oust the
jurisdiction of a consumer forum. The Court held that there is no compulsion for the consumer
to necessarily file a complaint with the consumer forum. However, it would be open for him to
file a complaint with the consumer forum notwithstanding the availability of the arbitration
under the Indian Telegraph Act.

 Supreme Court in the case of Emaar MFG Land Limited & Anr. Vs. Aftab Singh - 2018
SCC OnLine SC 2771 after considering the provisions of Consumer Protection Act, 1986 and
after considering the amended Section 8 of the Arbitration Act has held that in the event a
person entitled to seek an additional special remedy provided under the statutes does not opt for
the additional/special remedy and he is a party to an arbitration agreement, there is no inhibition
in disputes being proceeded in arbitration. It is only the case where specific/special remedies are
provided for and which are opted by an aggrieved person that judicial authority can refuse to
relegate the parties to the arbitration. Supreme Court did not interfere with the decision of the
National Consumer Disputes Redressal Commission rejecting the application filed by the
respondent under Section 8 of the Arbitration Act for referring the parties to the arbitration
holding that the dispute which can be resolved under the provisions of the Consumer
Protection Act, 1986 cannot be referred to arbitration under Section 8 of the Act in terms of the
arbitration agreement. National Consumer Disputes Redressal Commission had held that

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 Certain disputes which are to be adjudicated and governed by the statutory enactments,
established for specific public purpose and to sub-serve a particular public policy are not
arbitrable. It is held that the Law Commission 246th Report, the Statement and Objects of Bill
and the notes on clauses do not indicate that amendments were made for overriding
special/additional remedies provided under different statutes. In the said judgment, after
considering Section 11(6-A) inserted by 2015 Amendment Act, it is held that the intention of
the legislature is crystal clear that the court should and need only look into one aspect i.e. the
existence of an arbitration agreement.

 The Supreme Court in case of Ananthesh Bhakta & Ors. vs. Nayana S. Bhakta--(2017) 5 SCC
185 has construed section 8(2) providing that the Judicial authorities shall not entertain the
application or referring the disputes to arbitration unless the said application is accompanied by
the original arbitration agreement or duly certified copy thereof and held that section 8(2) has to
be interpreted to mean that the court shall not consider any application filed by the party under
section 8(1) unless it is accompanied by the original arbitration agreement or duly certified
copy thereof. The filing of the application without such original or certified copy, but bringing
original arbitration agreement on record at the time when the court is considering the
application shall not entail rejection of the application under section 8(2).The Supreme Court
refused to accept the contention that the said application filed under section 8(1) was not
maintainable since the same was not accompanied by the original arbitration agreement or
certified copy thereof.

 Supreme Court in the case of Greaves Cotton Limited Vs. United Machinery and Appliances -
(2017) 2 SCC 268 has held that merely moving an application seeking further time to file the
written statement would not amount to making first statement on the substance of the dispute.
It is held that filing of an application without reply to the allegations of the plaint does not
constitute first statement on the substance of the dispute. It is held that it does not appear from
the language of sub-section (1) of Section 8 of the 1996 Act that the Legislature intended to
include such a step like moving simple application for seeking extension of time to file written
statement as first statement on the substance of the dispute. Supreme Court in the said
judgment has held that by moving an application for extension of time to file written statement
will not amount to waiver of right to object to the jurisdiction of judicial authority under
Section 4 of the Arbitration and Conciliation Act, 1996.
15
 Supreme Court in the case of Sundaram Finance Limited and Anr. Vs. T. Thankam - (2015)
14 SCC 444 has held that once there is an agreement between the parties to refer the disputes
or differences arising out of the agreement to arbitration, and in case either party, ignoring the
terms of the agreement, approaches the civil court and the other party, in terms of the Section 8
of the Arbitration Act, moves the court for referring the parties to arbitration before the first
statement on the substance of the dispute is filed, in view of the peremptory language of Section
8 of the Arbitration Act, it is obligatory for the court to refer the parties to arbitration in terms of
the agreement. It is held that once an application in due compliance of Section 8 of the
Arbitration Act is filed, the approach of the civil court should be not to see whether the court
has jurisdiction. It should be to see whether its jurisdiction has been ousted. Supreme Court in
the said judgment followed the judgment in the case of Sukanya Holdings (P) Ltd. Vs. Jayesh
H. Pandya & Anr.- 2003 (5) SCC 531.

 Supreme Court in the case of Rastriya Ispat Nigam Ltd. Vs. Verma Transport Company --
2006 (7) SCC 275 has held that filing of reply to interim injunction application would not
amount to filing of first statement on the substance of dispute and thus an application under
Section 8(1) of the Arbitration and Conciliation Act, 1996 in a pending suit in respect of the
dispute covered by arbitration agreement can be made even after filing of reply in the
interlocutory proceedings. Restrictions contained in sub-section (1) of Section 8 in such a
situation would not attract.

 Supreme Court in the case of Sukanya Holdings (P) Ltd. Vs. Jayesh H. Pandya & Anr.-
2003 (5) SCC 531 has held that a matter is not required to be referred to the arbitration if no
application is made before the judicial authority seeking such reference. Application under
Section 8 is mandatory. The judicial authority or the Court has no suo motu jurisdiction to
refer the disputes between the parties to the arbitration. Application under Section 8 has to be
filed before the first statement on the substance of the dispute is filed. It is held that if the
subject matter of the dispute includes the subject matter of the arbitration agreement as well as
the other disputes, the Court has no power under Section 8 to bifurcate either the causes of
action and/or parties and in such event, Court cannot entertain an application under Section 8.

16
 Bombay High Court in Tanzeem Shakil Ahmed Siddiqui vs. Shailesh Nemichand Kasliwal
2021 SCC OnLine Bom 426 has held that when provisions of Section 8 of the Arbitration Act
are invoked, correct approach by Civil Court is to find out whether jurisdiction is excluded and
not to find out whether jurisdiction exist.

 Bombay High Court in the case of Indapur Dairy and Milk Products Limited Vs. Global
Energy Private Limited 2019 SCCOnline Bom 1678 has held that the judicial authority
before which an action is brought in a matter which is the subject of an arbitration agreement,
would have jurisdiction, to mandatorily refer the parties to arbitration unless it finds that prima
facie there does not exist any valid arbitration agreement. An application under Section 8 has to
be made by the defendant being a party to the arbitration praying for reference of the disputes
in the suit to arbitration, before filing his first statement on the substance of the disputes. The
Court has power to consider an application of the plaintiff for withdrawal of the suit when
there is an arbitration agreement before the defendant submitting the first statement on the
substance of the dispute and to refer the parties to the arbitration.

 Bombay High court in the case of M/s.Anacon Process Control Pvt. Ltd. Vs. Gammon India
Limited - 2016 SCCOnline Bom 10076 has held that “referring the parties to arbitration”
cannot amount to constitution of an arbitral tribunal. Once a judicial authority under Section
8(1) of the Act refers the parties to arbitration, the suit or the other proceedings comes to an
end before the said judicial authority and it becomes functus officio after referring the parties
to arbitration.

 Bombay High Court in the case of National Spot Exchange Ltd., Applicant, In the matter
of Lotus Refineries Private Ltd. Vs. National Spot Exchange Ltd. -2014 SCC OnLine
Bom 1060 has held that a party making an application under Section 8 of the Arbitration
and Conciliation Act, 1996 has to fulfil various conditions such as (i) there is an arbitration
agreement; (ii) a party to the agreement brings an action against the other party to the
agreement; (iii) the subject-matter of the action is the same as the subject-matter of the
arbitration agreement; and (iv) the other party moves the court for referring the parties to
arbitration before submission of its first statement on the substance of the dispute. It is for the
Court to decide whether those conditions have been satisfied or not.

17
 Whether the allegations of fraud, fabrication, malpractice etc.
can be referred to arbitration :-

 A three Judges Bench of Supreme Court in case of Rashid Raza v/s. Sadaf Akhtar, 2019
SCCOnline SC 1170 has held that there is a distinction between serious allegations of
forgery/fabrication in support of the plea of fraud as opposed to “simple allegations”. Supreme
Court held that as there were no allegation of fraud which would vitiate the partnership deed as
a whole or in particular the arbitration clause concerned in the said partnership deed, since the
allegations pertain to the affairs of the partnership and siphoning of funds therefrom and not to
any matter in the public domain, disputes raised between the parties were arbitrable and
application under Section 11 of the Arbitration Act would be maintainable.

 A two Judges Bench of Supreme Court in case of Zenith Drugs & Allied Agencies Pvt. Ltd. v/s.
Nicholas Piramal India Ltd., 2019 SCCOnline SC 946 has held that the parties can be referred
to arbitration in an application filed under Section 8 of the Arbitration Act only if the subject
matter of the action before the judicial authority relates to dispute which is the subject matter of
the arbitration agreement. The conditions prescribed in Section 8 have to be satisfied for
referring the parties to arbitration. Such an application can be made only if the subject matter of
the suit is also the same as the subject matter of arbitration. Only those disputes which are
specifically agreed to be resolved through arbitration can be the subject matter of the arbitration
and upon satisfaction of the same, the Court can refer the parties to arbitration. Supreme Court
held that in view of a party challenging the compromise decree alleging that it has been
obtained by inducement and fraud, parties cannot be referred to arbitration. The merits of such a
plea could be decided only by the Civil Court upon consideration of the evidence adduced by
the parties.

 Supreme Court in the case of Ameet Lalchand Shah & Ors. Vs. Rishabh Enterprises & Anr.
(2018) 15 SCC 678 has held that reference of the disputes between the parties to the
arbitration agreement cannot be refused on mere allegation of fraud against one party by
another party made in the plaint.

 Supreme Court in the case of A. Ayyasamy Vs. A. Paramasivam & Ors. - (2016) 10 SCC 386
has held that when case of fraud is set up and on that basis, party wants to wriggle out of

18
 arbitration agreement, strict and meticulous inquiry into allegations of fraud is needed. Hence,
the Court has to pronounce upon arbitrability or non-arbitrability of disputes. Only when Court
is satisfied that allegations are of serious and complicated nature that it would be appropriate
for Court to deal with subject matter rather than relegating parties to arbitration, then alone
such an application under Section 8 should be rejected. It is held that if the allegations of fraud
are so serious which make a virtual case of criminal offence or allegations of fraud are so
complicated, it cannot be decided by an arbitrator, only such allegations of fraud can be
decided by the Civil Court and not by the arbitral tribunal.

How to initiate arbitration - Notice invoking Arbitration,

precautions to be taken, Section 21

 Before initiating arbitration, a party must examine arbitration agreement and to see whether
such arbitration agreement provides for any procedure to be followed before invoking
arbitration agreement. If any procedure is required to be followed as a condition precedent
before invoking arbitration agreement, such procedure has to be followed before invoking
arbitration agreement. If such mandatory procedure is not followed before invoking
arbitration agreement, the opponent may raise an objection about non-compliance of the
mandatory procedure provided in the agreement before invoking arbitration agreement. If no
such mandatory procedure is followed by the party who seeks to invoke arbitration
agreement but no objection is raised by the opponent before the arbitral tribunal, it would
amount to waiver under Section 4 of the Arbitration and Conciliation Act, 1996. A party who
seeks to invoke the arbitration agreement has to be careful in drafting notice invoking
arbitration agreement.

 When disputes and differences arise between the parties, a party to the arbitration agreement as
defined under Section 2(1)(h) has to issue notice invoking arbitration agreement and has to call
upon the opponent to appoint an arbitrator in accordance with the arbitration agreement. If the
arbitration agreement provides for appointment of sole arbitrator or if the arbitration agreement
is silent about the number of arbitrators, the arbitral tribunal shall consist of a sole arbitrator.
A party who invokes the arbitration agreement can suggest the name of few arbitrators and
may call upon the opponent to agree to one of the names suggested by that party or to suggest
any other names if the names suggested by that party is not agreeable by the other party within
thirty days from the date of receipt of the said notice. Section 43(2) provides that for the
19
 purposes of Section 43 of the Arbitration and Conciliation Act, 1996 and the Limitation Act,
1963, arbitration proceedings shall be deemed to have commenced on the date referred in
Section 21.

 Section 21 of the Arbitration and Conciliation Act, 1996 provides that unless otherwise agreed
by the parties, the arbitral proceedings in respect of a particular dispute commence on the
date on which a request for that dispute to be referred to arbitration is received by the
respondent. Limitation in respect of which a request is made by one party to other party to
refer such dispute to the arbitration stops when such notice is received by other party.

 Supreme Court in the case of Andhra Pradesh Power Coordination Committee & Ors. Vs.
Lanco Kondapalli Power Ltd. & Ors.-(2016) 3 SCC 468 has held that notice of arbitration
amounted to initiation of the arbitral proceedings as contemplated under Section 21 of the
Arbitration and Conciliation Act, 1996.

 Supreme Court in the case of Voltas Limited Vs. Rolta India Limited- (2014) 4 SCC 516 has
adverted to the judgment of the Supreme Court in the case of State of Goa Vs. Praveen
Enterprises -(2012) 12 SCC 581 and has held that the counter claim filed before the arbitral
tribunal was barred by law of limitation.

 Supreme Court in the case of State of Goa Vs. Praveen Enterprises - (2012) 12 SCC 581 has
held that the limitation for counter claim should be computed, as on the date of service of
notice under Section 21 of the Arbitration and Conciliation Act, 1996 of such claim on the
claimant and not on the date of filing of the counter claim.

 Bombay High Court in the case of Malvika Rajnikant Mehta vs. JESS Constructions, 2022
SCC OnLine Bom 920 has held that the exclusionary clause, “unless otherwise agreed by the
parties”, under Section 21 of the Act, implies that the parties can by agreement provide that the
arbitral proceedings shall commence on the date other than when a request was made by one of
the parties to refer the dispute to arbitration. The Court also held that, the requirement of notice
under Section 21 of the Act can be waived. However, with respect to the facts of the instance
case the Court held that the mere fact that the parties have named the Arbitrator, would not

20
 imply that the parties have agreed to waive the requirement of the notice contemplated under
Section 21 of the Act.

 Bombay High Court in the case of Bhanumati J. Bhuta Vs. Ivory Properties and Hotels
Private Limited, 2020 SCC OnLine Bom 157 has held that the arbitral proceedings
commences in respect of dispute when notice invoking arbitration agreement is received by
other side and not when such notice is only served upon the arbitral Tribunal. The onus is on
the applicant who had issued such notice to prove the delivery of such notice upon the other
side.

 Division Bench of the Bombay High Court in the Jethmal Mulji Thakkar Vs. Maharashtra
State Co-operative Marketing Federation Ltd. - (2017) SCCOnline Bom 144 has held that if
there is no dispute and the denial to the amount so claimed and demand is made from time to
time, but the opponent has delayed the payment, the request of the claimant made for the first
time should have been treated as first communication to refer the dispute to arbitration as
contemplated under Section 21 of the Arbitration and Conciliation Act, 1996. Merely because
the claimant invoked the Arbitration Agreement at second time, that in no way be treated
and/or interpreted to mean that the earlier invocation of arbitration clause was superseded
and/or required to be overlooked. Once the arbitration clause is invoked, the mandate of
Arbitration Act needs to be followed and noted by all the concerned. Mere sending another
notice in no way should have been taken as foundation to deny the undisputed claims of the
claimant. Division Bench has set aside the judgment of the learned Single Judge holding that
limitation would stop when second notice invoking arbitration agreement under Section 21 of
the Arbitration and Conciliation Act, 1996 was issued.

 Bombay High Court in the case of M/s.Anacon Process Control Pvt. Ltd. Vs. Gammon
India Limited - 2016 SCCOnline Bom 10076 has held that a party to an Arbitration
Agreement is bound to invoke arbitration in terms of Section 21 of the Arbitration and
Conciliation Act, 1996 which is sine qua non for commencement of the arbitration
proceedings. An application made under Section 8 of the Act or any order passed thereunder
does not mean that the applicant has already invoked arbitration in terms of Section 21 of the
Act. Section 21 and Section 8 of the Act completely operate in different spheres. Bombay High
Court adverted to the judgment of the Supreme Court in the case of State of Goa Vs. Praveen
21
 Enterprises -(2012) 12 SCC 581. Supreme Court judgment in the said judgment has held that
in view of section 21 of the Act providing that the arbitration proceedings shall be deemed to
commence on the date on which "the request for that dispute to be referred to arbitration is
received by the respondent" the said confusion is cleared. Therefore the purpose of section 21
of the Act is to determine the date of commencement of the arbitration proceedings and is
relevant mainly for deciding whether the claims of the claimant are barred by limitation or not.

 Bombay High Court in the case of Board of Trustees of Jawaharlal Nehru Port Trust Vs.
Three Circles Contractors - (2015) SCCOnline Bom 951 has held that the arbitration
proceeding commences in respect of the disputes which are referred in the notice invoking
arbitration agreement on the date on which such notice is received by the respondent in respect
of such disputes. In that case, the claimant had made a claim of specific amount for specific
quantity at particular rate in the notice invoking arbitration agreement. It is held that the
arbitration proceedings thus commenced in respect of those specific disputes which were raised
in the said notice invoking arbitration agreement. The limitation stopped only in respect of such
disputes which were referred to in the said notice invoking arbitration agreement. It is held that
the limitation in respect of the additional claims/disputes would stop only on the date of
application for such amendment and will not relate back. It is held that merely because the
respondent had reserved their right to amend the statement of claim in future, such plea would
not extend the period of limitation till the date of filing the amendment application whenever
they apply in future.

Section 9 provides for interim measures which can be granted by a

Court before or during the arbitral proceedings or any time after
making of the arbitral award but before it is enforced in
accordance with Section 36. In view of amendment w.e.f. 23rd
October 2015, if an order of interim measures for protection is
granted by a Court before commencement of the arbitral
proceedings, the arbitral proceedings shall be commenced within a
period of ninety days from the date of such order or within such
further time as the Court may determine. However, once the arbitral
tribunal has already been constituted, the Court shall not entertain
22
 an application under Section 9, unless the Court finds that
circumstances exist which may not render the remedy provided
under Section 17 efficacious.

 Supreme Court in Essar House Pvt. Ltd. vs. Arcellor Nippon 2022 SCC OnLine SC 1219 has
held that the powers of the Court under Section 9 of the Arbitration and Conciliation Act, 1996
are wider than the powers exercised under the Code of Civil Procedure, 1908. Technicalities of
the Code of Civil Procedure, 1908 cannot prevent the Court from securing the ends of justice.

 Supreme Court in Sanghi Industries Limited vs. Ravin Cables Ltd. & Anr. 2022 SCC OnLine
SC 1329 has held that unless and until the pre-conditions under Order XXXVIII Rule 5 of the
CPC are satisfied and unless there are specific allegations with cogent material and unless
prima-facie the Court is satisfied that the appellant is likely to defeat the decree/award that may
be passed by the arbitrator by disposing of the properties and/or in any other manner, the
Commercial Court could not have passed an order to secure the amount in dispute in exercise of
powers under Section 9 of the Arbitration Act, 1996. It is held that there were very serious
disputes on the amount claimed by the rival parties, which were to be adjudicated upon in the
proceedings before the arbitral tribunal.

 Supreme Court in Sepco Electric Power Construction Corporation vs. Power Mech Projects
Limited 2022 SCC OnLine SC 1243 has held that Section 9 of the Arbitration Act confers wide
power on the Court to pass orders securing the amount in dispute in arbitration, whether before
the commencement of the Arbitral proceedings, during the Arbitral proceedings or at any time
after making of the arbitral award, but before its enforcement in accordance with Section 36 of
the Arbitration Act. All that the Court is required to see is, whether the applicant for interim
measure has a good prima facie case, whether the balance of convenience is in favour of interim
relief as prayed for being granted and whether the applicant has approached the court with
reasonable expedition.

 Supreme Court in Arcelor Mittal Nippon Steel India Limited vs. Essar Bulk Terminal Limited
2021 SCC OnLine SC 718 held that Section 9(3) of the Arbitration Act has two limbs. The first
limb prohibits an application under Section 9(1) from being entertained once an Arbitral
Tribunal has been constituted while the second limb carves out an exception to that prohibition,
23
 if the Court finds that circumstances exist, which may not render the remedy provided under
Section 17 effacacious. The Court further held that there is no reason why the Court should
continue to take up application for interim relief, once the Arbitral Tribunal is constituted and is
in seisin of the dispute between the parties, unless there is some impediment in approaching the
Arbitral Tribunal, or the interim relief sought cannot expeditiously be obtained from the Arbitral
Tribunal.

 The Supreme Court in case of S.B.P. & Co. vs. Patel Engineering AIR 2006 SC 450, has held
that when a party raises a plea that the dispute involved was not covered by the arbitration
clause or that the Court which was approached had no jurisdiction to pass any order under
section 9 of the Arbitration Act that Court has necessarily to decide whether it has jurisdiction,
whether there is an arbitration agreement which is valid in law and whether the dispute sought
to be raised is covered by that agreement. It is also held that when an application under section
8 is made before the judicial authority or Court that the subject matter of the claim is not
covered by an agreement or existence of the valid arbitration agreement is disputed, the Court
or the judicial authority has to decide the said issue before referring the parties to arbitration.

 When an application under section 9 is filed before the commencement of the arbitral
proceedings, there has to be manifest intention on the part of the applicant to take recourse to
arbitral proceedings. In case of Firm Ashok Traders vs. Gurumukh Das Saluja (2004) 3 SCC
155, the Supreme Court held that a party invoking section 9 may not have actually commenced
the arbitral proceedings but must be able to satisfy the Court that the arbitral proceedings are
actually contemplated or manifestly intended and/or positively going to commence within a
reasonable time.

 Bombay High Court in Chetan Iron LLP vs. NRC Ltd. (2022) SCC OnLine Bom 159 has held
that the court exercising powers under Section 9 of the Act cannot direct the specific
performance of a determinable contract. Further, the principles contained in Section 14(d) r/w
Section 41(e) of the Specific Relief Act are applicable even when a court is considering an
application u/s 9 of the Arbitration Act, 1996.

 Bombay High Court in Dy. Chief Enginner (Construction) Central, Central Railway,
Bhusawal vs. M/s.B.N.Agrawal (2021) SCC OnLine Bom 1533 has held that an interim
24
 measure by Court is only of a prima facie nature and any finding, observation, reasoning given
by Court in a judgment/order by Court does not bind arbitral tribunal, while deciding dispute.
The Court also held that a party making an application for interim measure may invoke any of
provisions, independently of each other as grant of an interim measure under any of clauses of
Section 9(1) and (2) as they are not inter-dependent or inter linked with each other.

 Bombay High Court in Minochar A. Irani vs. Deenyar S. Jehani 2014 SCC OnLine Bom 901,
has held that a party who has no intention to ultimately refer the dispute to arbitration and seek
final relief cannot be permitted to seek interim relief. Interim relief is in aid of final relief.

 The Bombay High Court held in the case of Welspun Infrateck Ltd. vs. Ashok Khurana 2014
SCC OnLine Bom 39 that the parties not parties to the arbitration agreement can still be
impleaded in an application under section 9 if they are likely to be affected by the reliefs
claimed in the application under section 9.

 The Bombay High Court held in the case of Rameshkumar N. Chordiya vs. Principal District
Judge 2013 SCC OnLine Bom 1426 that the application for stay of the arbitration proceedings
not maintainable under section 9 of the Arbitration Act read with section 151 of the Code of
Civil Procedure.

 The Division Bench of the Bombay High Court in case of Deccan Chronicle Holdings Ltd. vs.
L & T Finance Limited – 2013 SCC OnLine Bom 1005 has held that when the Court decides
the petition under section 9, the principles which have been laid down in the Code of Civil
Procedure, 1908 for grant of interlocutory reliefs furnish a guide to the Court. Similarly in an
application for attachment, underlined basis of order XXXVIII Rule 5 would have to be kept in
mind.

 The Bombay High Court held in the case of Ratnam Sudesh Iyer vs. Jackie K. Shroff 2013
SCC OnLine Bom 605 that the Court should be satisfied while granting interim measures under
section 9 read with Order XXXVIII Rule 5 that there are reasonable chances of decree in favour
of the petitioner and grant of just or valid claim is not sufficient.

25
 The Bombay High Court held in the case of Tata Capital Services Ltd. vs. Ramasarup
Industries Limited 2013 SCC OnLine Bom 260 that the steps taken to enforce the consent
order passed under section 9 are not barred under section 22 of the Sick Industrial Companies
(Special Provisions) Act, 1985. The proceedings under section 9 cannot be equated with a suit
contemplated under section 22 of the said Act.

 The Bombay High Court held in the case of Rockwood Hotels Resort Ltd. vs. Starwood Asia
Pacific Hotels & Resort Ltd. -- (2013) SCC OnLine Bom 79 that the parties agree to have seat
of arbitration at Singapore and governed by SIAC Rules - Section 9 cannot be resorted to.
Bombay High Court has no jurisdiction to entertain the petition under section 9 in this
circumstances.

 Bombay High Court in case of Tata Capital Financial Services Limited vs. Deccan Chronicles
Holdings Ltd. 2013 (3) Bom.C.R. 205, has held that the Court can grant interim measures under
section 9 (2) (b), (d) and (e) even if the properties or things are not the subject matter of the
dispute in arbitration. It is held under Order XXXIV Rule 14 of the Code of Civil Procedure,
1908 that there is no bar in filing a money claim even by the mortgagee notwithstanding
contained under Order II Rule 2 of the Code of Civil Procedure. It is for the claimant to decide
whether to file a money claim before the Arbitral Tribunal and file a separate suit for
enforcement of the mortgage after complying with the provisions of Order II Rule 2 of the
Code of Civil Procedure. Proceedings under section 9 for interim measures cannot be equated
with the proceedings filed in a pending suit for referring the parties to arbitration under section
8 of the Arbitration & Conciliation Act, 1996.

 The Bombay High Court held in the case of Goldstar Metal Solutions vs. Dattaram Gajanan
Kavtankar 2013 SCC OnLine Bom 448 that the Court is bound to decide the existence of the
arbitration agreement before proceeding with the application under section 9 on merits.

 The Bombay High Court held in the case of Spice Digital Ltd. vs. Vistaas Digital Media Pvt.
Ltd., 2012 SCC OnLine Bom 1536 held that no injunction can be granted under section 9 if the
specific relief cannot be granted in terms of section 41(e) of the Specific Relief Act. The
contract which is determinable cannot be specifically enforced .

26
 Whether the Court can grant interim measures under section 9
though the claim is rejected by the Arbitral Tribunal :-

 The Division Bench of the Bombay High Court in case of Dirk India Private Limited vs.
Maharashtra State Electricity Generation Company Limited – 2013(7) Bom.C.R. 493 has held
that the interim measures or protection within the meaning of section 9 (ii) is intended to
protect through measure, fruits of the successful conclusion of the arbitral proceedings and the
party whose claim has been rejected in the courts of the arbitral proceedings cannot obviously
have an arbitral award enforced in accordance with section 36.

Whether interim measure under section 9 can be granted

if a document required to be stamped, is not stamped

 Full Bench of the Bombay High Court in the case of Gautam Landscapes Private Limited
Vs. Shailesh S. Shah & Anr., 2019 SCCOnline Bom 563 has held that the Court under the
Arbitration and Conciliation Act can entertain and grant any interim or ad-interim relief on an
application under Section 9 when an arbitration agreement is contained in a document, i.e.
unstamped or insufficiently stamped. The part of the said judgment holding that in view of
Section 11 (6A) of the Act, it would not be necessary for the Court before considering and
passing final orders on an application under Section 11(6) of the Act to await the adjudication
by the stamp authorities, in a case where the document objected to, is not adequately stamped is
overruled by the Supreme Court in the case of Garware Wall Ropes Ltd. Vs. Coastal Marine
Constructions & Engineering Ltd., 2019 SCCOnline SC 515.

 The Bombay High Court in case of Jairaj Devidas & Ors. vs. Nilesh Shantilal Tank & Anr. --
2014 (6) Bom.C.R. 92, has after adverting to the judgment of the Division Bench in case of
Lakadawala Developers Pvt. Ltd. vs. Badal Mittal in Appeal (L) No.272 of 2013 delivered on
25th June, 2013 and the judgment of the Supreme Court in case of SMS Tea Estates Pvt. Ltd.
vs. Chandmari Tea Company Pvt. Ltd. -- 2011 (4) Arb.L.R. 265, has held that insufficiently
paid instrument cannot be acted upon before the Court including arbitration agreement and till
such time such document is properly stamped, no relief under section 9 can be granted. Such

27
document can be impounded and can be sent to the Collector of Stamps for adjudication under
the provisions of the Maharashtra Stamp Act.

Section 10 provides that the parties are free to determine the number
of arbitrators, provided that such number shall not be an even
number, failing which the arbitral tribunal shall consist of a sole
arbitrator.

Section 11 provides that if a party does not appoint an arbitrator

within 30 days from the date of receipt of a request to do so, the
other party may apply for appointment of an arbitrator by filing an
application under section 11(6). Even if two arbitrators nominated
by the parties do not appoint a presiding officer, an application can
be made to the Court for appointment of the presiding arbitrator.

By 2019 Amendment, Sub-Section (3-A) is inserted in Section 11

which provides that the Supreme Court and the High Court shall
have the power to designate, arbitral institutions, from time to time,
which have been graded by the Council under Section 43-I for the
purposes of the Arbitration Act. It is however, subject to proviso,
that in respect of those High Court jurisdiction, where no graded
arbitral institution are available, then , the Chief Justice of the
concerned High Court may maintain a panel of arbitrators for
discharging the functions and duties of arbitral institution and any
reference to the arbitrator shall be deemed to be an arbitral
institution for the purposes of this section and the arbitrator
appointed by a party shall be entitled to such fee at the rate as
specified in the Fourth Schedule. It further provides that High
Court may, from time to time, review the panel of arbitrators.

By 2019 Amendment, Sub-Section (4) of Section 11, the words for

the portion beginning with “the appointment shall be made” and
ending with “designated by such Court” are substituted as “the
28
appointment has to be made by the arbitral institution designated
by the Supreme Court, in the case of international commercial
arbitration, or by the High Court, in the case of arbitrations other
than international commercial arbitration, as the case may be, on
an application of the party.

In view of amendment to Section 11 by insertion of Sub-section

(6-A), the powers of the Court while appointment of arbitrators is
confined to the examination of the existence of an arbitration
agreement notwithstanding any judgment, decree or order of any
Court. Even if powers of any person or institution designated by
the Supreme Court or High Court under Section 11 to appoint
arbitrators shall not be regarded as a delegation of judicial power
by the Supreme Court or the High Court. The order passed by the
Supreme Court or the High Court or person or institution designated
by such Court is final. No appeal including Letters Patent Appeal
shall lie against such decision. The proceedings however under
Article 136 of the Constitution of India can be filed. Under Section
11(8), the Court or the person or institution designated by such
Court has to seek a disclosure in writing from the prospective
arbitrator before appointing arbitrators having due regard to any
qualifications required for the arbitrator by the agreement of the
parties and the contents of the disclosure and other considerations
which are likely to secure the appointment of an independent and
impartial arbitrator.

By 2019 Amendment, it is provided that sub-Section (6-A) and Sub-

Section (7) and Sub-Section (10) shall be omitted. In Sub-Section
(8) of Section 11, the words “The Supreme Court or, as the case
may be, the High Court or the person or institution designated by
such court,” the words, brackets and figures “The arbitral
institution referred to in Sub-Sections (4), (5) and (6)” shall be
substituted. Under Section 11(11) to 11(14), where more than one
29
 request has been made to different arbitral institutions, the arbitral
institution to which the request has been first made shall be
competent to appoint the arbitrator.

By 2019 Amendment to Section 11(12), it is provided that where the

matter referred to in sub-sections (4), (5), (6) and (8) arise in an
international commercial arbitration or any other arbitration, the
reference to the arbitral institution in those sub-sections shall be
construed as a reference to the arbitral institution designated
under sub-section (3-A).

Under Section 11(13), an application for appointment of an

arbitrator or arbitrators shall be disposed of by the Supreme Court
or the High Court or the person or institution designated by such
Court, as the case may be, as expeditiously as possible and an
endeavour shall be made to dispose of the matter within a period of
sixty days from the date of service of notice on the opposite party.

 Under Section 11(14), Bombay High Court has framed Rules determining the fees of the
Arbitral Tribunal after considering the rates specified in the Fourth Schedule. Section 11 is
amended by The Arbitration and Conciliation (Amendment) Act, 2019.

 Under Section 43B the Central Government is empowered to establish a Council to be known
as Arbitration Council of India to perform the duties and functions under the Act. Such Council
shall be a body corporate and shall have perpetual succession and a common seal with power,
subject to the provisions of the Act. The Council shall consist of various members. A person
who has been a Judge of Supreme Court or Chief Justice of High Court or a Judge of High
Court or an eminent person having special knowledge and experience in the conduct or
administration of arbitration to be appointed by the Central Government in consultation with
Chief Justice of India, would be Chairperson of the said Council.

 Council is empowered to make grading of the arbitration institution defined under Section
2(ca), which means a arbitral institution designated by the Supreme Court or a High Court
30
 under the Arbitration Act. Under Section 11(3), the Supreme Court and the High Court has
power to designate, arbitration institution from time to time, which have been graded by the
Council under Section 43(i) for the purpose of Arbitration Act. It is provided that where no
graded arbitration institutions are available then the Chief Justice of concerned High Court may
maintain a panel of arbitrators for discharging the functions and duties of arbitral institution and
any reference to the arbitrator shall be deemed to be a arbitral institution for the purposes of the
said Section. The arbitrator appointed by the party shall be entitled to such fee at the rate
specified in the Fourth Schedule.

 Section 11(4) provides that the appointment shall be made on an application of the party by the
arbitral institution designated by the Supreme Court in case of International Commercial
Arbitration or by the High Court in case of an Arbitration other than International Commercial
Arbitration as the case may be. Section 11(6A) and 11(7) are deleted.

 Such arbitration institution has to dispose of an application for appointment of an arbitrator

within a period of 30 days from the date of service of notice on the opposite party. The
arbitration institution shall determine the fees of the Arbitral Tribunal and the manner of its
payment to the Arbitral Tribunal, subject to the rates specified in the Fourth Schedule. Section
11(11) to (14) does not apply to International Commercial Arbitration and in Arbitration (other
than International Commercial Arbitration) where parties have agreed for determination of fees
as per the rules of an arbitral institution. Section 2 and 3 of the Arbitration and Conciliation
(Amendment) Act, 2019, which inserts Section 2(1)(ca) and amend Section 11, has not
been notified by the Central Government and have not come into effect as on today.

 Supreme Court in the case of Dharmaratnakara Rai Bhahdur Arcot Narainswamy Mudaliar
Chattram & Other Charities and Ors. Vs. Bhaskar Raju & Brothers & Ors., (2020) 4 SCC
612 has held that when a lease deed or any other instrument is relied upon as containing the
arbitration agreement, the Court is required to consider at the outset, whether the document is
properly stamped, even if an objection in that behalf is not raised. If Court comes to the
conclusion that it is not properly stamped, it shall be impounded and dealt with in the
manner specified in Section 38 of the Stamp Act. The court cannot act upon such a document
or the arbitration clause therein. If there is deficit payment of duty and penalty, till such time,

31
 the deficit duty and penalty is paid in the manner prescribed under Stamp Act, Arbitrator
cannot be appointed.

 Supreme Court in the case of Perkins Eastman Architects DPC & Anr. Vs. HSCC (India)
Ltd., 2019 SCC OnLine SC 1517 has held that in a case where only one party has a right to
appoint a sole arbitrator, its choice will always have an element of exclusivity in determining or
charting the course for dispute resolution. The person who has an interest in the outcome or
decision of the dispute must not have the power to appoint a sole arbitrator. That has to be taken
as the essence of the amendments brought in by the Arbitration and Conciliation (Amendment)
Act, 2015. Supreme Court has set aside the appointment of an arbitrator appointed by one of
the parties having exclusive right to appoint and appointed an independent arbitrator in the
application filed under Section 11(6) of the Arbitration Act.

 Supreme Court in case of Garware Wall Ropes Ltd. v/s. Coastal Marine Constructions &
Engineering Ltd., 2019 SCCOnline SC 515 has held that the introduction of Section 11(6A)
does not, in any manner, deal with or get over the basis of the judgment in SMS Tea Estates v/s.
Chandmari Tea Co. (P) Ltd., (2011) 14 SCC 66. When an arbitration clause is contained “in a
contract”, it is significant that the agreement only becomes a contract if it is enforceable by law
under Indian Stamp Act. An agreement does not become a contract, namely that it is not
enforceable in law, unless it is duly stamped. After construing Section 11(6A) read with Section
7(2) of the Arbitration Act and Section 2(h) of the Contract Act, it is held that an arbitration
clause in an agreement would not exist when it is not enforceable by law. While proceeding
with Section 11 application, the High Court must impound the instrument which has not borne
stamp duty and hand it over to the authority under the Maharashtra Stamp Act, who will then
decide issues qua payment of stamp duty and penalty, if any, as expeditiously as possible and
preferably within a period of 45 days from the date on which the authority receives the
instrument. As soon as stamp duty and penalty, if any, are paid on the instrument, any of the
parties can bring the instrument to the notice of the High Court, which will then proceed to
expeditiously hear and dispose of the Section 11 application. The Supreme Court rejected the
argument in the facts of that case that the appellant who had to pay the stamp duty cannot take
advantage of his own wrong, on the ground that there was an issue of application of mandatory
provision of law.

32
 ISSUE PENDING BEFORE CONSTITUTION BENCH OF SUPREME COURT:
Supreme Court in SMS Tea Estates (P) Ltd. vs. Chandmari Tea Co.(P) Ltd. (2011) 14 SCC 66
(bench consisting of two judges) has held that an unstamped arbitration clause in an agreement
that is compulsorily registrable or chargeable to stamp duty cannot be the basis for the
appointment of an arbitrator. Supreme Court in Garware Wall Ropes vs. Coastal Marine
Constructions & Engineering Ltd., 2019 SCCOnline SC 515 (comprising of two judges
bench) reiterated the view taken by Supreme Court in SMS Tea Estate (P) Ltd. (supra). Once
again the Supreme Court in Vidya Drolia vs. Durga Trading Corporation 2020 SCC OnLine
SC 1018 (comprising of three judges bench) reiterated the view taken by the Supreme Court in
Garware Wall Ropes case (supra). However, Supreme Court in N.N. Global Mercantile Private
Limited vs. Indo Unique Flame Limited (2021) 4 SCC 379 (comprising of three judges bench)
doubted the proposition of law decided in the above cases and held that the following issue be
referred to the Constitution Bench of Supreme Court comprising of five judges: Whether the
statutory bar contained in Section 35 of the Indian Stamp Act, 1899 applicable to instruments
chargeable to Stamp Duty
under Section 3 read with the Schedule to the Act, would also render
the arbitration agreement contained in such an instrument, which is
not chargeable to payment of stamp duty, as being non-existent, un-
enforceable, or invalid, pending payment of stamp duty on the
substantive contract / instrument ? . The Constitution Bench of Supreme Court has after
hearing the parties, reserved judgment on the aforesaid issue.

 Supreme Court in case of Union of India v/s. Parmar Construction Company, 2019
SCCOnline SC 442 has held that the Court has to put emphasis to act on the agreed terms and
to first resort to the procedure as prescribed and open for the parties to the agreement to settle
differences/disputes arising under the terms of the contract through appointment of a designated
arbitrator but emphasis should always be on the terms of the arbitration agreement to be
adhered to or given effect as closely as possible. Where the impartiality of the arbitrator in
terms of the arbitration agreement is in doubt or where the Arbitral Tribunal appointed in terms
of the arbitration agreement has not functioned or has failed to conclude the proceedings or to
pass an award without assigning any reason and it became necessary to make a fresh
appointment, Chief Justice or his designate in the given circumstances after assigning cogent

33
 reasons in appropriate cases may resort to an alternative arrangement to give effect to the
appointment of independent arbitrator under Section 11(6) of the Act.

 Supreme Court in case of Black Pearl Hotels Private Limited Vs. Planet M. Retail Limited
(2017) 4 SCC 498 that the Court has to consider the nature of agreement to decide whether the
documents require stamp duty before appointment of arbitrator.

 Supreme Court in case of Duro Felguera, S.A. Vs. Gangavaram Port Limited -- (2017) 9
SCC 729 that after the amendment of 2015, the Court has to only see whether the arbitration
agreement exists and nothing more. Powers of Court are limited, notwithstanding the order or
decree passed by the Supreme Court or High Court.

 Bombay High Court in Omkar Realtors & Developers Private Limited vs. Tenants Co-
operative Housing Society Limited 2023 SCC OnLine Bom 593 referred the parties to
arbitration when the arbitration clause was contained in the tender, though no formal agreement
was executed, since the parties had taken effective steps pursuant to tender.

 Bombay High Court in the case of Quick Heal Technologies Limited Vs. NCS Computech
Private Limited & Ors., (2020) SCCOnline Bom 687 construed the arbitration clause “all
disputes under this Agreement shall be amicably discussed for resolution by the designated
personnel of each party, and if such dispute/s cannot be resolved within 30 days, the same may
be referred to arbitration in the manner prescribed therein.” It is held that such clause which
refers to a situation where in the earlier clause, parties had agreed through a fresh consent to
refer their disputes to arbitration. After failure of the amicable settlement process, such clause
cannot operate independently and cannot be used to initiate an arbitration process, if both the
parties did not agree to refer their disputes to arbitration. It is held that there is no binding
agreement and accordingly dismissed the arbitration petition under Section 11(6) of the Act.

 Bombay High Court in case of Earnest Business Services Private Limited v/s. Government of
the State of Israel, 2019 SCCOnline Bom 1793 has held that parties can agree for appointment
of an arbitrator in any proceedings in Court without filing the application under Section 11(6) or
11(9) as the case may be including in petition under Section 9 or even without intervention of

34
 Court. If the parties had already agreed to the appointment of the sole arbitrator in accordance
with the procedure prescribed under the arbitration agreement, there is no occasion to file an
application under Section 11(6) or Section 11(9) of the Arbitration Act. This Court also held that
the claim for set-off for the period prior to 3 years of the date of filing statement of claim by the
claimant, which would be the date for filing plea of set-off, in view of Section 3(ii)(b)(i) of the
Limitation Act, 1963 would be time barred.

 Bombay High Court in the case of Porwal Sales Vs. Flame Control Industries, 2019
SCCOnline Bom 1628 has held that there is no bar under Section 18(4) of the Micro, Small
and Medium Enterprises Development Act, 2006 to the institution of any proceedings other
than under Section 18(1) of the said Act to seek appointment of arbitral tribunal. It is held that
Section 18(1) of the said Act would be applicable when any amount is due under section 17 to
a supplier and when there is a liability of the buyer to make payment to the supplier. Bombay
High Court accordingly exercised powers under Section 11(6) of the Arbitration and
Conciliation Act, 1996 and appointed an arbitrator.

SECTION 11(6A)

 In view of the amendment to Section 11(6) and 11 (6-A) of the Arbitration and Conciliation
Act, 1996, since a request for appointment of arbitrator/s has to be made before the Supreme
Court or as the case may be, the High Court or any person or institution designated by such
Court, those proceedings which are for appointment of arbitrator/s before the Supreme Court
or the High Court, the orders passed by the Supreme Court or the High Court, as the case may
be, would have precedentiary value.

 If the arbitration clause entered into between the parties refers to a particular rules of
arbitration providing for a particular method or procedure for reference to the arbitration, the
parties will have to follow such method or procedure for reference to the arbitration and if
inspite of such procedure having been follwed, the arbitral tribunal is not appointed, the
application under Section 11(6) and 11(9) can be made before the High Court or the Supreme
Court as the case may be, or any person or institution designated by such Court.

35
 Supreme Court in VGP Marine Kingdom Pvt. Ltd. vs. Kay Ellen Arnold (2023) 1 SCC 597,
has held that merely because proceedings of oppression and mismanagement are pending before
NCLT, the application under Section 11 of the Arbitration and Conciliation Act, 1996 could not
be dismissed. The Supreme Court accordingly appointed an arbitrator leaving the issue of
arbitrability to be decided by the Arbitrator.

 Supreme Court in Babanrao Rajaram Pund vs. Samarth Builders and Developers & Anr.
(2022) 9 SCC 691 has held that when there is discernible intention of parties in the agreement
to refer disputes to arbitration, application under Section 11 of the Arbitration is maintainable.
Section 7 of the Arbitration Act does not mandate any particular form of arbitration clause. The
deficiency in words in agreement which otherwise fortifies intention of parties to arbitrate their
disputes, cannot legitimise annulment of arbitration clause.

 Supreme Court in Emaar India Ltd. vs.Tarun Aggarwal Projects LLP & Anr. 2022 SCC
OnLine SC 1328 held that when a specific plea was taken that the dispute falls within ‘excepted
matters’ and therefore not arbitrable, the High Court was atleast required to hold a preliminary
inquiry/review and prima facie come to conclusion on whether the dispute is arbitrable or not.

 Supreme Court in Durga Welding Works vs. Chief Engineer, Railway Electrification (2022)
3 SCC 98 has held that the settled position of law is that a party forfeits its right to appoint an
arbitrator as per the clause if it does not make an appointment before the filing of an application
under Section 11(6).

 Supreme Court in Tantia Constructions vs. Union of India, S.L.P No.10722/22, Judgment
dated 15.07.2022 observed that there cannot be two arbitration proceedings with respect to the
same contract/transaction.

 Supreme Court in Intercontinental Hotels Group (India) Pvt. Ltd. vs. Waterline Hotels Pvt.
Ltd. 2022 SCC OnLine SC 83 has held that once a party has paid the stamp duty, any objection
regarding its sufficiency cannot be decided by a court exercising powers under Section 11 of the
Act.

 Supreme Court in Swadesh Kumar Agarwal vs. Dinesh Kumar Agarwal & Ors. (2022) 10
SCC 235 held that an application seeking termination of the mandate of the sole arbitrator on
36
 the ground that he has become de jure and/or de facto unable to perform his functions on the
ground of delay in concluding the arbitration proceedings or on the grounds mentioned in
Section 14(1)(a) of the Arbitration Act, such a dispute has to be raised before the “Court”
defined under Section 2(1)(e) of the Arbitration Act and such a dispute cannot be decided on an
application filed under Section 11(6) of the Arbitration Act.

 Supreme Court in Weatherford Oil Tool Middle East Limited vs. Baker Hughes Singapore
PTE 2022 SCC OnLine SC 1464 referred the parties to Arbitration pending the issue regarding
payment of stamp duty on the substantive contract even though the issue was pending before
the larger bench for consideration. By relying upon the observations made in Intercontinental
Hotels Group (India Pvt. Ltd.) vs. Waterline Hotels Private Limited that the matters which are
still pending at pre-appointment stage, cannot be left hanging until the larger bench settles the
issue. Following the said proposition and considering the time sensitivity in the arbitration
cases, Supreme Court thought fit to allow the applications to appoint arbitrators.

 Supreme Court in Mohammed Masroor Shaikh vs. Bharat Bhushan Gupta & Ors. (2022) 4
SCC 156 has held that while dealing with petition under Section 11 of the Arbitration Act, the
Court by default would refer the matter when contentions relating to non-arbitrability are
plainly arguable and in such case, the issue of non-arbitrability is left open to be decided by the
Arbitral Tribunal.

 Supreme Court in Meenakshi Solar Power Pvt. Ltd. vs. Abhyudaya Green Economic Zones
Pvt. Ltd. (2022) SCC OnLine SC 1616 has held that the High Court was not right in dismissing
the petition under Section 11(6) of the Act of 1996 by giving a finding on novation of the Share
Purchase Agreement between the parties as the said aspect would have a bearing on the merits
of the controversy between the parties. Therefore, it must be left to the Arbitrator to decide on
the said issue.
 Supreme Court in Vishram Varu & Co. vs. Union of India 2022 SCC OnLine SC 487
dismissed an application for appointment of an Arbitrator under Section 11(6) of the Act as it
was barred by limitation and being a stale claim made after a period of 32 years.

 Supreme Court in Indian Oil Corporation Limited vs. NCC Limited 2022 SCC OnLine SC
896 has held that even at the stage of deciding Section 11 application, the Court could prima

37
 facie consider the aspect regarding ‘accord and satisfaction’ of the claims. The Court could also
decide whether the dispute is non-arbitrable or falls within the excepted clause if the facts were
“very clear and glaring” and the clauses in the agreement were specific.

 The Supreme Court in M.P. Housing and Infrastructure Development Board & Anr. vs.
K.P.Dwivedi (2022) 3 SCC 783 has held that when the award passed by the arbitrator appointed
by the Court under the 1996 Act was with consent of both the parties despite the existence of
the M.P.Madhyastham Adhikaran Adhiniyam, 1983 and the same has attained finality i.e. not
appealed against, subsequent invocation of arbitration under the 1983 Act regarding identical
claims i.e. after the award has already been rendered by the arbitrator appointed under the 1996
Act is impermissible.

 Supreme Court in V.Sreenivasa Reddy vs. B.L.Rathnama 2021 SCC OnLine SC 294 has held
that whether the dispute which had arisen at the first instance has been settled earlier between
the parties for which fresh arbitration is invoked; if the dispute subsisted, whether the claim is
within the period of limitation, the nature of relief if any and all other contention on merits are
to be considered in the arbitral proceedings. By taking the aforesaid view, the Court upheld the
sole Arbitrator appointed to resolve the dispute between the parties.

 In Chief General Manager (IPC) MP Power Trading Co. Ltd. & Anr. vs. Narmada
Equipments Pvt. Ltd. 2021 SCC OnLine SC 255 the Appellant was aggrieved by the order
appointing an arbitrator passed by the High Court in the Respondent’s application under Section
11 of the A&C Act. The Appellant objected to the appointment on the grounds that under
Section 86 (1) (f) of the Electricity Act 2003, the State Electricity Commission was vested with
exclusive jurisdiction to adjudicate the disputes between licensees and power-generating
companies. The Supreme Court held that inherent lack of jurisdiction cannot be overcome even
with the consent of parties. Thus, the fact that the appellant had agreed to the appointment of
arbitrators in an earlier round of litigation does not preclude it from raising the plea of bar under
Section 86 (1) (f) of the Electricity Act, 2003. The Court set aside the judgment of the High
Court appointing arbitrators.

 Supreme Court in Sanjiv Prakash vs. Seema Kukreja & Ors. (2021) 9 SCC 732 has held that
there is a limited interference by Court at referral stage particularly after the 2015 amendment.

38
 The interference by Court at the referral stage is restricted to cases where it is manifest that the
claims are ex facie time-barred and dead, or there is no subsisting dispute. The Court exercising
powers under Section 11 would refer the matter to arbitration when contentions relating to non-
arbitrability are plainly arguable or when facts are contested. Further, the Court cannot at
referral stage, enter into a mini trial or elaborate review of facts and law which would usurp the
jurisdiction of the arbitrator.

 Supreme Court in Pravin Electricals Private Limited vs. Galaxy Infra and Engineering
Private Limited (2021) 5 SCC 671 has held that when there is a dispute regarding the existence
of the arbitration agreement, the Court can exercise prima facie review at the referral stage i.e.
prima facie examination to weed out manifestly and ex facie non-existent and invalid arbitration
agreements and non-arbitrability disputes. Where such prima facie review would be
inconclusive/inadequate as matter requires detailed examination of documentary evidence and
cross-examination of witnesses, in such cases, issue of existence of arbitration agreement to be
referred to arbitrator for determination as a preliminary issue.

 Supreme Court in the case of Mankastu Impex Private Limited Vs. Airvisual Limited, (2020)
5 SCC 399 has considered the fact that parties had agreed that place of arbitration is at Hong
Kong. The petitioner was incorporated in India and the respondent-company was incorporated
under the laws of Hong Kong. Hong Kong was the place of arbitration. It would not lead to
the conclusion that the parties have chosen Hong Kong as seat of arbitration. The reference to
Hong Kong as “place of arbitration” is not a simple reference as the “venue” for the arbitral
proceedings; but a reference to Hong Kong is for final resolution by arbitration administered in
Hong Kong. Section 11 has no application to international commercial arbitration seated
outside India. Petition filed under Section 11(6) is held not maintainable.

 Supreme Court in the case of The Oriental Insurance Co. Ltd. & Ors. Vs. Dicitex Furnishing
Ltd., (2020) 4 SCC 621 has held that application under Section 11(6) is in the form of a
pleading which merely seeks an order of the court, for appointment of an arbitrator. It cannot be
conclusive of the pleas or contentions that the claimant or the concerned party can take, in the
arbitral proceedings. The court which is required to ensure that an arbitrable dispute exists, has
to be prima facie convinced about the genuineness or credibility of the plea of coercion. It
cannot be too particular about the nature of the plea, which necessarily has to be made and

39
 established in the substantive proceeding. Supreme Court considered plea of economic duress
while signing the “no claim certificate” by the original applicant and did not interfere with the
order passed by the High Court appointing arbitral tribunal.

Supreme Court in the case of WAPCOS Ltd. Vs. Salma Dam Joint Venture & Ors., (2020) 3
SCC 169 has held that if the parties have executed an agreement whereby the contractor
gave up all his claims and consented to the new arrangement specified in the new agreement
including that there will be no arbitration for the settlement of any claims by the contractor in
future, it is not open to the contractor to now take recourse to arbitration process or to resurrect
the claim which has been resolved in terms of the amended agreement. Application under
Section 11(6) filed by the contractor is held not maintainable.

 Supreme Court in case of Mayavti Trading Pvt. Ltd. v/s. Pradyuat Deb Burman, 2019
SCCOnline SC 1164 has held that law prior to the 2015 Amendment that has been laid down by
the Supreme Court, which would have included going into whether accord and satisfaction has
taken place, has now been legislatively overruled. It is held that Section 11(6A) is confined to
the examination of the existence of an arbitration agreement and is to be understood in the
narrow sense as has been laid down in the judgment Duro Felguera, S.A. v/s. Gangavaram
Port Limited, (2017) 9 SCC 729. Supreme Court overruled the judgment delivered by two
Judges Bench in case of United India Insurance Company Limited v/s. Antique Art Exports
Private Limited, (2019) 5 SCC 362.

 Supreme Court in the case of M/s.ONGC Mangalore Petrochemicals Ltd. Vs. M/s. ANS
Constructions Ltd. & Anr. – 2018 SCCOnline Sc 99 has held that if the Court finds while
dealing with an application under Section 11 of the Act that the applicant had given “No
Dues/No Claim Certificate” and had accepted the final payment in full and final satisfaction of
all its claims and there was accord and satisfaction, no arbitrable dispute exists and thus the
dispute was not referred to the arbitration. Supreme Court did not consider Section 11(6-A) in
this judgment.

 Supreme Court in the case of Walter Bau AG, Legal Successor of the Original Contractor,
Dyckerhoff & Widmann A.G. Vs. Municipal Corporation of Greater Mumbai & Anr. - (2015)
3 SCC 800 has held that appointment of an arbitrator by the Municipal Corporation beyond the
40
 period of 30 days from the date of receipt of the notice from other party was contrary to the
agreed procedure contemplated in the arbitration agreement which contemplated appointment
made by the Municipal Corporation from the panel submitted by the Indian Council of
Arbitration and was thus non est in law. Supreme Court appointed a retired Judge of this Court
on behalf of the Municipal Corporation in the application filed under Section 11(9) by other
party before the Supreme Court for appointment of nominee arbitrator of the Municipal
Corporation.

 Bombay High Court in TLG India Pvt. Ltd. vs. Rebel Foods Pvt. Ltd., (2023) SCC OnLine
Bom 105 has held that limitation aspect of the substantive claim is to be looked into by the
arbitral tribunal and not by the Court. The only exception being, if the claim to be referred to
arbitration is hopelessly barred by limitation and this should be apparent from the admitted facts
and documents.

 Bombay High Court in K.R. Traders vs. Union of India 2023 (1) Mh. L.J. 336 has held that
when a mandate of arbitrator terminates, a substitute arbitrator is to be appointed only in
accordance with rules that were applicable to appointment of arbitrator. Even when arbitration
award is set aside by Court, only course of action available to the parties for resolving existing
dispute is to initiate arbitration proceedings afresh only condition being that such arbitration
proceeding would necessarily proceed strictly in terms of arbitration agreement between parties.

 Bombay High Court in Jasani Realty Pvt. Ltd. vs. Vijay Corporation (2022) SCC OnLine Bom
879 has held that mere pendency of an insolvency petition is not a bar to the application under
Section 11 of the Act. The Court held that it is only when the insolvency petition is admitted by
the National Company Law Tribunal (NCLT) that the embargo would apply.

 Bombay High Court in Antikeros Shipping Corporation vs. Adani Enterprises Limited 2020
SCC OnLine Bom 277 has held that review against an order appointing arbitrator under Section
11 is not maintainable.

 Bombay High Court in the case of Deepdharshan Builders Pvtt. Ltd. Vs. Saroj w/o Satish
Sunderrao Trasikar – 2018 SCC OnLine Bom 4885 has held that the judgment of the
Hon'ble Supreme Court in the case of Board of Control for Cricket in India Vs. Kochi
41
 Cricket Pvt. Ltd. and Ors.- (2018) 6 SCC 287 is not a precedent on the proposition that the
expression "arbitral proceedings" prescribed in second part of Section 26 of the Arbitration and
Conciliation (Amendment) Act, 2015 would include the arbitral proceedings filed under Section
11(6) of the Arbitration Act before the High Court. It is held that the arbitral proceedings filed
under Section 11(6) of the Arbitration Act are the proceedings before the Court in view of the
amendment to various sub-sections of Section 11 of the Arbitration Act and thus Article 137 of
the Schedule to the Limitation Act, 1963 would apply to the application under Section 11(6).
It is held that whether the application under Section 11(6) is within the time prescribed under
Article 137 of the Schedule to the Limitation Act, 1963 or not has to be decided by the Court
while considering such application under Section (6) of the Act. Such issue cannot be left
open to be decided by the arbitral tribunal. It is held that Section 5 of the Limitation Act, 1963
is applicable to the application under Section 11(6) of the Arbitration Act. Limitation period
applicable to the application under Sections 11(6) or 11(9) of the Arbitration Act cannot be
mixed up with the period of limitation applicable to the claim prescribed in various other
Articles of the Schedule to the Limitation Act, 1963. Both the periods of limitation are
different and cannot be made applicable to each other.

 Bombay High Court in the case of Padmini C. Menon vs. Vijay C. Menon and Ors. – 2018
SCCOnline Bom 9 has held that in view of the agreement between the parties that the
statutory amendment or repeal of the provisions of the Arbitration and Conciliation Act, 1996
also would be applicable to the parties, even if such agreement was entered into prior to 23 rd
October 2015, the parties would be governed by the provisions of the Arbitration and
Conciliation (Amendment) Act, 2015, even if the proceedings were pending in Court as on
23rd October 2015 or even thereafter. It is also held that powers of Courts are confined to the
examination of the existence of an arbitration agreement notwithstanding any judgment or
decree or order of any Court in view of Section 11(6-A) of the Arbitration and Conciliation
(Amendment) Act, 2015.

Whether the order passed under Section 11 is judicial or administrative,

ramifications of the judgments holding it to be judicial

 Supreme Court in the case of S.B.P. & Co. Vs.Patel Engineering Ltd. & Anr.- 2005(8) SCC
618 has held that the powers exercised by the Chief Justice or his designate under Section 11(6)
42
 of the Arbitration and Conciliation Act, 1996 are judicial powers. It is held that the Chief
Justice or his designate has to decide (i) whether the party approaching the Court had
approached the right High Court; (ii)the Applicant had satisfied the conditions for appointing
an arbitrator; (iii) the existence of the arbitration agreement, and whether the Applicant was a
party thereto; (iv) whether the claim was a dead and/or a long barred one; and (v) to
determine the foregoing, the Chief Justice could either proceed on the basis of affidavits and
documents, or record such evidence as may be necessary. Supreme Court in the said judgment
however held that the proceedings before the Chief Justice or his designate were not before the
Court.

Under Section 12, when a person is approached in connection with

his possible appointment as an arbitrator, is bound to disclose in
writing any circumstances, such as the existence either direct or
indirect, of any past or present relationship with or interest in any of
the parties or in relation to the subject-matter in dispute, whether
financial, business, professional or other kind, which is likely to give
rise to justifiable doubts as to his independence or impartiality; and
which are likely to affect his ability to devote sufficient time to the
arbitration and in particular his ability to complete the entire
arbitration within a period of twelve months. Various grounds are set
out in the Fifth Schedule as a guide in determining whether
circumstances exist which give rise to justifiable doubts as to the
independence or impartiality of an arbitrator. The disclosure shall be
made by such person in the form specified in the Sixth Schedule. An
arbitrator may be challenged by the parties only if any
circumstances referred to Section 12 (3) subject to Sub-section (4)
of Section 13 which provides for an agreement between the parties
for such procedure for challenge. If such challenge is unsuccessful,
the party may make an application for setting aside an arbitral
award in accordance with Section 34.

 Supreme Court in Ellora Paper Mills vs. State of Madhya Pradesh (2022) 3 SCC 1 held that an
arbitral tribunal constituted before the 2015 amendment to the Arbitration and Conciliation Act
43
 1996 will lose its mandate if it violates the neutrality clause under Section 12(5) read with the
Seventh Schedule.

 Supreme Court in Haryana Space Application Centre (HARSAC) & Anr. vs. Pan India
Consultant Private Limited (2021) 3 SCC 103 has held that the provisions of Section 12(5)
read with Seventh Schedule of the 1996 Act are mandatory and non-derogable provisions. In
the above case, even though a period of 4 years elapsed, award was not pronounced. The Court
thus exercised powers under Section 29(A)(6) substituted the arbitrator and passed directions to
pass an award within 6 months.

 Supreme Court in the case of S.P. Singla Constructions Private Limited Vs. State of
Himachal Pradesh & Anr., (2019) 2 SCC 488 while dealing with amended Section 12(5)
has held that provisions of Amendment Act, 2015 w.e.f. 23rd October 2015 cannot have
retrospective operation in arbitral proceedings already commenced unless parties otherwise
agree. Termination of arbitration proceedings is not permissible owing to default of
claimant/failure of claimant in communicating his statement of claim unless the arbitrator
indicates that no adjournments would be given.

 Supreme Court in the case of the Government of Government of Haryana PWD Haryana (B
and R) Branch Vs. M/s.G.F. Toll Road Pvt. Ltd. & Ors. - (2019) 3 SCC 505 after considering
the 2015 amendment has held that since the appointment of the arbitrator was made prior to the
2015 Amendment Act when the Fifth Schedule was not inserted, the objection raised by a party
that an arbitrator was an ex-employee of a party could not be entertained. It is held by the
Supreme Court that the Arbitration Act does not disqualify a former employee from acting as
an arbitrator, provided that there are no justifiable doubts as to his independence and
impartiality. The Supreme Court after considering entry 1 of Fifth and Seventh Schedule has
held that an arbitrator who has “any other” past or present “business relationship” with the party
is also disqualified. The word “other” used in entry 1 would indicate a relationship other than an
employee, consultant or an advisor. The word “other” cannot be used to widen the scope of
entry to include past/former employees. It is held that the entry 1 indicates that a person, who is
related to a party as an employee, consultant or an adviser is disqualified to act as an arbitrator.
The words “as an” indicate that the person so nominated is only disqualified if he/she is the
present/current employee, consultant or adviser of one of the parties.
44
 Supreme Court in case of Bharat Broadband Network Limited v/s. United Telecoms Limited,
AIR 2019 SC 2434 after construing Section 12(5) of the Arbitration Act read with Fifth, Sixth
and Seventh Schedule held that the Managing Director of the party, who was a named
arbitrator, could not act as arbitrator nor could be allowed to appoint another arbitrator. The
disclosure of a prospective arbitrator has to be made in the form specified in the Sixth Schedule
and the ground stated in the Fifth Schedule are to serve as a guide in determining whether
circumstances exist which give rise to justifiable doubts as to the independence or impartiality
of an arbitrator. Any prior agreement to the contrary is wiped out by the non-obstante clause in
Section 12(5) the moment any person whose relationship with the parties or the counsel or the
subject matter of the dispute falls under the Seventh Schedule. The sub-section then declares
that such person shall be ineligible to be appointed as arbitrator. Such ineligibility can be
removed by an express agreement in writing. It is held that learned arbitrator had become de
jure inability to perform his function as an arbitrator.

 Supreme Court in the case of Rajasthan Small Industries Corporation Ltd. Vs. M/s. Ganesh
Containers Movers Syndicate – 2019 SCC OnLine SC 65 held that after the amendment to
the Arbitration and Conciliation Act, 1996 in 2015, Section 12(5) prohibits the employee of one
of the parties from being an arbitrator. Supreme Court interpreted Section 26 of the Amendment
Act and held that the provision of the Amendment Act, 2015 shall not apply to the arbitration
proceedings commenced in accordance with the provision of Section 21 of the principle Act,
before the commencement of the Amendment Act, 2015 unless the parties otherwise agree.
Mere neglect of an arbitrator to act or delay in passing the order by itself cannot be the ground
to appoint any arbitrator in deviation from the terms agreed to by the parties. After termination
of the mandate of the arbitrator, the appointment of substitute arbitrator shall be in accordance
with the rules applicable to the appointment of an arbitrator who is being replaced. Section
11(6) has application only when the party or the person concerned had failed to act in terms of
the arbitration agreement. The Supreme Court also considered the fact that the arbitration
proceedings were started in the year 2009 i.e. much prior to the 2015 amendment came into
force and thus 2015 amendment was not applicable to the case in hand. The statutory provisions
that would govern the matter are those which were then in force before the Amendment Act.

45
 Supreme Court in the case of M/s.Voestalpine Schienen GMBH Vs. Delhi Metro Rail
Corporation Ltd.- (2017) 4 SCC 665 has construed Section 12(5) of the Arbitration and
Conciliation (Amendment) Act, 2015 and also the Seventh Schedule to the Arbitration Act and
has held that under Section 12(5) of the Act, notwithstanding any prior agreement to the
contrary, any person whose relationship, with the parties or counsel or the subject matter of the
dispute, falls under any of the categories specified in the Seventh Schedule shall be ineligible
to be appointed as an arbitrator. It is held that in such an eventuality, when the arbitration clause
finds foul with the amended provisions i.e. Section 12(5), the appointment of an arbitrator
would be beyond pale of arbitration agreement, empowering the Court to appoint such
arbitrator(s), as may be permissible. Other party cannot insist for appointment of an arbitrator in
terms of the arbitration agreement. In such situation, that would be the effect of non-obstante
clause contained in Section 12(5) of the Act.

 The Supreme Court in case of T.R.F. Limited vs. Energo Engineering Projects Limited, (2017)
8 SCC 377 has held that by virtue of section 12(5) of the Arbitration & Conciliation Act, 1996,
if any persons, who falls under any of the category specified in the Seventh Schedule shall be
ineligible to be appointed as an Arbitrator. It is held that the amended law under Section 11(6-
A) requires the Court to confine examination of the existence of an arbitration agreement
notwithstanding in the judgment of the Supreme Court or the High Court while considering an
application under section 11(6) of the Arbitration & Conciliation Act, 1996. The designated
arbitrator whose ineligibility to act as an arbitrator by virtue of amendment to Section 12 of
the Arbitration and Conciliation (Amendment) Act, 2015 does not have power even to nominate
any other person as arbitrator. The Court in certain circumstances have exercised jurisdiction to
nullify the appointments made by the authority in such situation.

 Bombay High Court in Prakash Askram Jain vs. State of Maharashtra 2021 SCC OnLine
Bom 1254 has held that mandate of Section 12 of the 1996 Act would apply to pending
arbitration proceedings and not to proceedings which already stood concluded by passing of an
award.

 Bombay High Court in the case of Afcons Infrastructure Limited Vs. Konkan Railway
Corporation Limited, (2020) SCCOnline Bom 681 has held that in view of the amendment
to Section 12 of the Arbitration Act, by amendment Act 2015, the officers of the Railway
46
 who could be part of the Arbitral Tribunal in accordance with arbitration clause are simply
ineligible to be appointed as the arbitrators. The procedure of appointment which does not
vest free choice to nominate an arbitrator with the contractor and conversely, vests the power to
appoint the presiding arbitrator with the managing director of the respondent also militates
against the principles of party autonomy and neutrality and impartiality respectively.
Bombay High Court accordingly permitted the parties to constitute an independent Arbitral
Tribunal.

 Bombay High Court in the case of Mangalam Chaudhary Company Vs. Hindustan
Construction Company Ltd. 2019 SCC OnLine Bom 2054 has held that the arbitral
proceedings having been commenced prior to 23rd October 2015, Section 12(5) of the
Arbitration Act duly amended by the Arbitration and Conciliation (Amendment) Act 2019 read
with 5th and 7th Schedule would not apply in view of Section 87 inserted by the Arbitration
and Conciliation (Amendment) Act 2019 which states that unless otherwise parties agree, the
amendments made to the Arbitration Act by the Arbitration (Amendment) Act, 2015 would not
apply to the arbitral proceedings commenced before the commencement of the Arbitration &
Conciliation (Amendment) Act, 2015.

 Bombay High Court in the case of Sawarmal Gadodia Vs. Tata Capital Financial Services
Limited, 2019 SCC OnLine Bom 849 has held that under Section 12, an arbitrator is bound
to make the necessary disclosure in the event of him having been appointed as an Arbitrator on
two or more occasions by one of the parties, or an affiliate of one of parties, within the past
three years, against Item 4 of his Disclosure in the form set out in the Sixth Schedule. He is
bound to disclose the "circumstances disclosing any past or present relationship with or
interest in any of the parties or in relation to the subject-matter in dispute, whether financial,
business, professional or other kind, which is likely to give rise to justifiable doubts as to your
independence or impartiality.” Learned arbitrator is bound to specify the exact number of the
ongoing arbitrations before him and not an 'approximate number'. Learned arbitrator not having
disclosed that he was appointed by the respondent company in 252 arbitration petitions where
the respondent company was the claimant in view of Item No.22 of the Fifth Schedule, the
said fact constitutes a ground giving rise to justifiable doubts as to the independence or
impartially of the arbitrator. The arbitral awards are accordingly set aside on that ground.

47
 Bombay High Court in the case of Roadways Solution India Pvt. Ltd. & Anr. Vs. L & T
Finance Ltd. delivered on 5th March 2018 in Commercial Arbitration Petition No.133 of
2018 has construed the arbitration agreement recording that the provisions of not only the
Arbitration and Conciliation Act, 1996 would apply but also the amendment thereto from time
to time would apply and has held that since the parties have agreed to such clause, the parties
would be thus governed by the provisions of Arbitration and Conciliation (Amendment) Act,
2015 though such arbitration agreement was entered into prior to 23 rd October 2015. This
Court accordingly directed the learned arbitrator to file affidavit of disclosure under Section
12(1) read with Fifth Schedule of the Arbitration and Conciliation Act, 1996 though notice
invoking arbitration agreement was issued prior to 23rd October 2015.

 Supreme Court in case of HRD Corporation (Marcus Oil and Chemical Division) vs. Gail
(India) Limited (Formerly Gas Authority of India Ltd.), 2017 SCCOnline SC 1024 has held
that if the learned arbitrator fails to file disclosure in terms of section 12(1) read with Fifth
Schedule of the Arbitration and Conciliation Act, 1996, the remedy of the party in that event
would be to apply under section 14(2) of the Arbitration and Conciliation Act, 1996 to the court
to decide about the termination of the mandate of the arbitral tribunal on that ground.

Section 14 provides that the mandate of an arbitrator shall

terminate and he shall be substituted by another arbitrator if he
becomes de jure or de facto unable to perform his functions or for
other reasons fails to act without undue delay and he withdraws
from his office or the parties agree to the termination of his mandate.

 Bombay High Court in the case of Parekh Industries Limited Vs. Diamond India Limited,
2019 SCC OnLine Bom 851 has held that the approach of the learned arbitrator to adjust
the already paid fees to be utilized for the future hearings, while demanding fresh fees from the
petitioner, for the cancelled hearings only qua the petitioner’s claim was contrary to the proviso
to Sub-Section (2) of Section 38. It is held that the petitioner had lost confidence in the arbitral
tribunal. These are the sufficient grounds for exercising jurisdiction under Section 14 read
with Section 15 of the Arbitration Act and to declare that the mandate of the arbitral tribunal
stands terminated.

48
 The Bombay High Court in case of Wanbury Ltd. vs. Candid Drug Distributors – 2015
SCCOnline Bom 3810 has held that the power of the arbitral tribunal to issue directions to file
pleadings and documents, includes the power to grant extension of time. Such orders passed by
the arbitral tribunal are procedural and can be recalled if sufficient case is made out.

Section 15 provides that the mandate of arbitrator is also

terminated if he withdraws from office for any reason or by or
pursuant to agreement of the parties. In such an event, the substitute
arbitrator shall be appointed according to the rules that were
applicable to the appointment of the arbitrator being replaced. If
such an arbitrator is replaced, any hearing previously held may be
repeated at the discretion of the arbitral tribunal unless otherwise
agreed by the parties. The earlier order or ruling of the arbitral
tribunal made prior to the replacement of an arbitrator shall not be
invalid unless otherwise agreed by the parties.

 Delhi High Court in the case of DSC Ventures Private Limited Vs. Ministry of Road
Transport and Highways, Union of India, 2020 SCC OnLine Del 669 has held that Section
15(2) does not expressly or by necessary implication make the provisions of Section 11 of the
Arbitration Act, applicable to the appointment of a substitute arbitrator in place of the
arbitrator who has become unable to perform his functions. When an arbitrator withdraws
from the office for any reason is within the purview of Section 15(1)(a) of the Act. Section
15(2) would be attracted and a substitute arbitrator has to be appointed according to the rules
that are applicable for the appointment of the arbitrator to be replaced. Section 11(6) of the
Act has application only when a party or the concerned person had fails to act in terms of the
arbitration agreement.

 Supreme Court in the case of Shailesh Dhairyawan Vs. Mohan Balkrishna Lulla- (2016) 3
SCC 619 has held that where the mandate of an arbitrator is terminated, an appointment of a
substitute arbitrator may be in accordance with the arbitration agreement unless such arbitration
agreement, either expressly or by necessary implication excludes the substitution of an
arbitrator, whether named or otherwise. The learned arbitrator named, in that matter, in the

49
 consent order passed by the Bombay High Court had resigned. Supreme Court upheld the
judgment of the Bombay High Court appointing substituted arbitrator.

Under Section 16, the arbitral tribunal is empowered to rule on its

own jurisdiction including ruling on any objection with respect to the
existence or validity of arbitration agreement. Such plea shall be
raised not later than the submission of the statement of defence. If
such plea is rejected by the arbitral tribunal, it has to proceed with
the arbitral proceedings and declare an award. If plea of jurisdiction
is accepted by the arbitral tribunal, the respondent may file an
appeal under section 37. If plea of jurisdiction is not accepted, the
respondent may challenge such ruling along with award under
section 34.

 Supreme Court in the case of Bharat Petroleum Corporation Limited Vs. Go Airlines (India)
Limited, (2019) 10 SCC 250 has held that plea of jurisdiction in respect of counter claim being
not arbitrable and falling beyond the scope of reference to the arbitration and such other related
questions are to be determined only during enquiry by the arbitral Tribunal and counter claim
cannot be rejected at the threshold on the ground that the arbitral Tribunal has no jurisdiction.

 Supreme Court in case of National Aluminium Company Limited v/s. Subhash Infra
Engineers Pvt. Ltd. and another, 2019 SCCOnline SC 1091 has held that any objection with
respect to existence or validity of the arbitration agreement can be raised only by way of an
application under Section 16 of the Arbitration Act. Such party who seeks to raise such
objection cannot maintain a suit for declaration and injunction with such plea before the Civil
Court.

 Supreme Court in the case of Indian Farmers Fertilizer Cooperative Limited Vs. Bhadra
Products, (2018) 2 SCC 534 has held that ruling on issue of limitation is not a ruling on
issue of jurisdiction of arbitrator. It is held that plea of the limitation rejected by the Arbitral
Tribunal at the threshold is an interim award and can be challenged under Section 34 and not
under Section 37(2)(a) of the Arbitration and Conciliation Act, 1996. The jurisdiction to
make an interim arbitral award extends to “any matter” with respect to which it may make a
50
 final arbitral award. Any point of dispute between the parties which has to be answered by the
Arbitral Tribunal can be the subject matter of an interim arbitral award.
 Bombay High Court in Ambey Mining Pvt. Ltd. vs. Western Coalfileds Limited 2021 SCC
OnLine Bom 1539 held that Section 16(1) of the 1996 Act empowers Arbitral Tribunal to rule
upon its own jurisdiction, including ruling on any objection with respect to all aspects of non-
arbitrability, including validity of arbitration agreement.

Section 17 duly amended w.e.f. 23rd October 2015 now empowers

the arbitral tribunal with the identical powers that of Court to order
interim measures. The arbitral tribunal is also empowered to grant
interim measures during the arbitral proceedings or at any time
after making of the arbitral award but before it is enforced in
accordance with Section 36. Under Section 17(2), subject to any
order in appeal under Section 37, any order issued by the arbitral
tribunal under Section 17(1) shall be deemed to be an order of the
Court for all purposes and shall be enforceable under the Code of
Civil Procedure, 1908 in the same manner as if it were an order of
the Court.

By 2019 Amendment, Section 17 of the Arbitration Act, the words in

Sub-Section (1) of Section 17, “or at any time after the making of
the arbitral award but before it is enforced in accordance with
section 36” is omitted.

 The Supreme Court in Amazon.com NV Investment Holdings LLC vs. Future Retail Limited
& Ors. (2022) 1 SCC 209 has held that an order granting interim relief delivered by an
Emergency Arbitrator under the SIAC Rules would be an order under Section 17(1) of
the Arbitration and Conciliation Act 1996. It is further held that an order passed under Section
17(2) of the 1996 Act in enforcement of the emergency award is not appealable.

 Bombay High Court in the case of Yusuf Khan Vs. Prajita Developers Pvt. Ltd., 2019
SCCOnline Bom 505 has held that before granting any interim relief by the Arbitral Tribunal,
atleast in relation to granting any injunction or securing the claim in the arbitration or for
51
 appointing a receiver, the Tribunal has to be satisfied that a prima facie case has been made out
for grant of interim relief. The Arbitral Tribunal has to examine that there is a serious question
to be tried at the hearing and there is a probability that the party seeking the interim relief is
entitled to it; that the interference of the Tribunal is necessary to protect the party from that
species of injuries which the Tribunal feels are irreparable before its legal rights are established
at the trial; and see that the comparative mischief or inconvenience which is likely to arise from
withholding the grant of interim relief will be greater than which is likely to arise from granting
it.

 Bombay High Court in the case of M/s.Shakti International Pvt. Ltd. Vs. M/s.Excel Metal
Processors Pvt. Ltd.- (2017) 3 ABR 388 has held that the arbitral tribunal cannot appoint a
Court Receiver, Bombay High Court under Section 17 of the Act.

Under section 18, the arbitral tribunal has to treat both parties
equally.

Section 19 provides that the arbitral tribunal shall not be bound by

the Code of Civil Procedure, 1908 or Indian Evidence Act, 1872. The
arbitral tribunal has power to determine the admissibility, relevance,
materiality and weight of any evidence subject to section 19(3).

Section 20 provides for determining the place of arbitration.

 Supreme Court in BBR (India) Pvt. Ltd. vs. S.P.Singla Constructions, 2022 SCC OnLine SC
642, held that the seat of the arbitration would not be changed merely because a new arbitrator
holds arbitration proceedings at a different place than the respective predecessor. The Supreme
Court observed that it is highly desirable in commercial matters that there should be certainty as
to the Court that should exercise jurisdiction. Thus, the seat once fixed by the arbitral tribunal
under Section 20(2), should remain fixed , whereas the venue of the arbitration can change.

Under Section 23, the claimant has to state the facts supporting his
claim, the points at issue and the relief or remedy sought whereas
the respondent has to state his defence in respect of those
52
 particulars, unless the parties have otherwise agreed as to the
required elements of those statements. The parties are also allowed
to submit their statements and all documents which they considered
to be relevant. In view of the amendment to Section 23, the
respondent is also permitted to submit a counter claim or plead a set-
off which also shall be adjudicated upon by the arbitral tribunal, if
such counter claim or set off falls within the scope of the arbitration
agreement. The parties are also permitted to amend or supplement
his claim or defence during the course of arbitral proceedings, unless
otherwise agreed by the parties and unless the arbitral tribunal
considers it inappropriate to allow the amendment or supplement
having regard to the delay in making it.

 By 2015 Amendment, Section 23 of the Act is amended. After sub-section (2) of Section 23,
sub-section (2-A) is inserted. It provides that the respondent is entitled to submit a
counterclaim or plead a set-off, which shall be adjudicated upon by the arbitral tribunal, if such
counterclaim or set-off falls within the scope of the arbitration agreement.

 By 2019 Amendment sub-Section (4) is inserted in Section 23. It is provided that the Statement
of claim and defence shall be completed within a period of six months from the date the
arbitrator or all the arbitrators, as the case may be received notice in writing of their
appointment.

Section 24 provides that the arbitral tribunal shall, as far as

possible, hold oral hearings for the presentation of evidence or for
oral argument on day-to-day basis, and shall not grant any
adjournments unless sufficient cause is made out, and may impose
costs including exemplary costs on the party seeking adjournment
without any sufficient cause. It is for the arbitral tribunal to decide
oral hearings for the presentation of evidence or for oral argument
unless otherwise agreed by the parties. The parties shall be given
sufficient advance notice of any hearing and of any meeting of the
arbitral tribunal for the purposes of inspection of documents, goods
53
 or other property. All statements, documents or other information
supplied to, or applications made to the arbitral tribunal by one
party shall be communicated to the other party, and any expert
report or evidentiary document on which the arbitral tribunal may
rely in making its decision shall be communicated to the parties.

 By 2015 Amendment, Section 24 of the Act is amended. Proviso to sub-section (1) of Section
24 is inserted. It is provided that the arbitral tribunal shall, as far as possible, hold oral
hearings for the presentation of evidence or for oral argument on day-to-day basis, and not grant
any adjournments unless sufficient cause is made out, and may impose costs including
exemplary costs on the party seeking adjournment without any sufficient cause.

 Section 25 of the Act is also amended. In view of amendment in clause (b) of Section 25, the
arbitral tribunal has discretion to treat the right of the respondent to file such statement of
defence as having been forfeited in case of failure of the respondent to communicate his
statement of defence in accordance with sub-section (1) of Section 23.

Section 27 provides for Court assistance in taking evidence. Under

Section 27(5), if any person fails to attend in accordance with such
process issued by the Court under Section 27(1) or commits any
other default or refuses to give their evidence or guilty of any
contempt to the arbitral tribunal during the conduct of arbitral
proceedings, such person shall be subject to the like disadvantages,
penalties and punishments by order of the Court on the
representation of the arbitral tribunal as they would incur for the
like offences in suits tried before the Court.

 Bombay High Court in the case of Dilip vs. Errol Moraes 2022 SCC OnLine Bom 129,
held that Section 27 needs to be read on the touchstone of Section 5 read with Section 19 of
the Act, which clearly brings out a legal consequence that under Section 27 of the
Arbitration Act. The Court has not been conferred with any adjudicatory powers being a
provision merely intended to enable the parties to seek assistance of the Court in taking
evidence, which is particularly clear from the provisions of Section 27(1) of the Act.
54
 Section 28 (1) of the Act provides that the where the place of
arbitration is situate in India, in an arbitration other than an
international commercial arbitration, the arbitral tribunal shall
decide the dispute submitted to arbitration in accordance with the
substantive law for the time being in force in India. Section 28(3)
provides that in all cases the arbitral tribunal shall decide in
accordance with the terms of the contract and shall take into account
the trade usages applicable to the transaction. Section 31 provides
for form and contents of an arbitral award. Section 32 provides for
termination of arbitral proceedings.

 Section 28 of the Act is amended in 2015. Sub-section (3) of Section 28 is substituted which
provides that the arbitral tribunal shall, in all cases, take into account the terms of the
contract and trade usages applicable to the transaction.

Sub-section (1) of Section 29-A of the Arbitration and Conciliation

Act, 1996 provides that the award shall be made within a period of
twelve months from the date the arbitral tribunal enters upon the
reference. The explanation to the said provision provides that an
arbitral tribunal shall be deemed to have entered upon the reference
on the date on which the arbitrator or all the arbitrators, as the case
may be, have received notice, in writing, of their appointment. Sub-
section (2) of Section 29-A of the Arbitration and Conciliation Act,
1996 provides that if the award is made within a period of six
months from the date the arbitral tribunal enters upon the reference,
the arbitral tribunal shall be entitled to receive such amount of
additional fees as the parties may agree. Sub-section(3) of Section 29-
A of the Arbitration and Conciliation Act, 1996 provides that the
parties may, by consent, extend the period specified in sub-section (1)
for making award for a further period not exceeding six months.
Sub-section (4) of Section 29-A of the Arbitration and Conciliation
Act, 1996 provides that if the award is not made within the period
55
 specified in sub-section (1) or the extended period specified under
sub-section (3), the mandate of the arbitrator(s) shall terminate
unless the Court has, either prior to or after the expiry of the period
so specified, extended the period. If the Court finds that the
proceedings have been delayed for the reasons attributable to the
arbitral tribunal, then, the Court may pass an order for reduction of
fees of arbitrator(s) by not exceeding five per cent for each month of
such delay. Sub-section(5) of Section 29-A of the Arbitration and
Conciliation Act, 1996 provides that the extension may be granted
only for sufficient cause and on such terms and conditions as may be
imposed by the Court. Pleadings have to be filed within six months
from the date the arbitrator or all the arbitrators, as the case may
be, received notice, in writing, of their appointment as per Section
23(4) of the Arbitration Act.

By 2019 Amendment, Sub-Section 1(a) of the Section 29-A is

substituted by the words “the award in matters other than
international commercial arbitration shall be made by the arbitral
tribunal within a period of twelve months from the date of
completion of pleadings under sub-section (4) of Section 23. The
award in the matter of international commercial arbitration may
be made as expeditiously as possible and endeavour may be made to
dispose of the matter within a period of twelve months from the
date of completion of pleadings under sub-section (4) of Section 23.

In Section 29-A, proviso is inserted in Sub-Section (4) that

where an application under sub-section (5) of Section 11 is pending,
the mandate of the arbitrator shall be continued till the disposal of
the said application for extension of time.

 Supreme Court in Tata Sons Pvt. Ltd. (Formerly Tata Sons Ltd.) vs. Siva Industries and
Holdings Ltd. & Ors. 2023 SCC OnLine SC 23 has held that Section 29A of Arbitration
and Conciliation Act is not applicable to International Commercial Arbitration. The award
56
 in International Commercial Arbitration may be made as expeditiously as possible and
endeavor may be made to dispose of the matter within a period of twelve months from the
date of completion of pleadings.

 Delhi High Court in the case of Shapoorji Pallonji & Co. Pvt. Ltd. Vs. Jindal India
Thermal Power Limited, 2020 SCC OnLine Del 2611 has held that the amended Section
23(4) and 29(A) of the Arbitration Act inserted by 2015 Amendment being procedural
law, would not apply to pending arbitrations as on the date of the amendment.

 Bombay High Court in the case of Cabra Instalaciones Y. Servicios, S.A. Vs.
Maharashtra State Electricity Distribution Company Limited, 2019 SCCOnline Bom
1437 has held that Section 29A is a substantive and a comprehensive provision inter alia
dealing with the time limits for making of an arbitral award and extension of such time
limits. Such extension of time may be granted only for sufficient cause and/or on such
terms and conditions, as may be imposed by the Court. It is held that since the arbitral
tribunal was appointed by the Supreme Court exercising powers under Section 11(5) read
with Section 11(9) of the Act, Bombay High Court will not have jurisdiction to pass any
orders under Section 29A of the Act.

 Bombay High Court in the case of Sanjay R. Dhote & Anr. Vs. Karla Farms & Ors.
delivered on 4th April 2018 in Commercial Arbitration (L) No.323 of 2018 has held that
even if the arbitral proceedings are terminated under Section 29-A(4) of the Arbitration and
Conciliation Act, 1996, arbitration agreement which is entered into between the parties
does not come to an end.

 Bombay High Court in the case of FCA India Automobiles Pvt. Ltd. Vs. Torque Motor
Cars Pvt. Ltd. & Anr.- 2018 SCCOnline Bom 4371 has held that the application under
Section 29-A(4) can be made not only before expiry of the period prescribed under
Section 29-A(1) and before expiry of period of six months extension agreed by and
between the parties but may also be made after expiry of such extended period.

Under Section 31, the arbitral award has to be made in writing and
has to be signed by the members of the arbitral tribunal. In case of
57
 arbitral tribunal, the signatures of the majority of all the members of
the arbitral tribunal shall be sufficient if the reason of any omitted
signature is stated. The arbitral award shall state the reasons upon
which it is based, unless otherwise agreed by the parties or unless
the award is an arbitral award on agreed terms under section 30.
Under Section 31(5), a signed copy of the arbitral award has to be
delivered to each party by the arbitral tribunal. The arbitral
tribunal is empowered to make an interim arbital award on any
matter with respect to which it may make a final arbitral award.
The arbitral tribunal is empowered to award interest at such rate as
he deems reasonable, on the whole or any part of the money, for
the whole or any part of the period between the date on which the
cause of action arose and the date on which the award is made
unless otherwise agreed by the parties. In view of amendment to
Section 31(7)(b) w.e.f. 23rd October 2015, if the arbitral award is
silent, in so far as the interest is concerned, from the date of the
award to the date of payment, a sum directed to be paid by an
arbitral award shall, unless the award otherwise directs, carry
interest at the rate of two per cent higher than the current rate of
interest prevalent on the date of award.

'Current rate of interest' shall have the same meaning as assigned

to it under clause 2(b) of the Interest Act, 1978. The arbitral
tribunal has to fix costs of an arbitration under Section 21(8) in
accordance with Section 31-A.

 Supreme Court in Morgan Securities & Credits Private Limited vs. Videocon Industries
Limited (2023) 1 SCC 602 has held that the phrase “unless the award otherwise directs” in
Section 31(7)(b) only qualifies the rate of interest. According to Section 31(7)(b), if the
arbitrator does not grant post-award interest, the award holder is entitled to post-award
interest at eighteen per cent. Section 31(7)(b) does not fetter or restrict the discretion the
arbitrator holds in granting post-award interest. The arbitrator has the discretion to award
post-award interest on a part of the sum. The arbitrator must exercise the discretionary
58
 power to grant post-award interest reasonably and in good faith, taking into account all
relevant circumstances.

 Supreme Court in Executive Engineer (R and B) & Ors. Vs. Gokul Chandra Kanungo
(Dead) through his legal representatives 2022 SCC OnLine SC 1336 has held that in terms
of Section 31(7)(a) of the A&C Act an arbitrator is required to assign reasons for awarding a
particular rate of interest. Further, it held that the arbitrator cannot award interest to a party
that itself was to be blamed for the delay. Therefore, the Court, by exercising power under
Article 142, reduced the rate of interest on the ground of long lapse of time and latches on
the part of the award holder.

 Supreme Court in UHL Power Company Limited vs. State of Himachal Pradesh, (2022) 4
SCC 116 has held that the Arbitral Tribunal is empowered to grant compound interest.
Arbitral Tribunal may award interest on the sum directed to be paid by the award, meaning
a sum inclusive of principal sum adjudged and interest.

 Supreme Court in Union of India vs. Manraj Enterprises 2021 SCC OnLine SC 1081 has
held that an arbitrator cannot award interest contrary to the terms of the agreement/contract
between the parties in view of the bar under specific clause of the contract/agreement that
no interest would be payable upon earnest money or security deposit or amounts payable
under the contract. Arbitral Tribunal independently of the contract and on equitable grounds
and/or to do justice, cannot award interest pendent lite or future interest.

 Supreme Court in Oriental Structural Engineers Pvt. Ltd. vs. State of Kerela (2021) 6 SCC
150 held that interest of delayed payments is grantable when the contract permits it, even
though the space earmarked for filing rate of interest might be left blank in the bid
documents. Leaving the space earmarked for filing rate of interest as blank is not to be
inferred as “zero” or “nil” interest rate. In such a case the Arbitral Tribunal to take decision
for awarding reasonable interest be guided by the principles as enunciated in Section 31 of
the Arbitration Act.

 Supreme Court in the case of A.S. Patel Trust & Ors. Vs.Wall Street Finance Limited,
2019 SCC OnLine Bom 1328 has held that since there was no prayer for recovery of

59
 possession of the premises under Leave and License Agreement made by the claimant and
the prayer was only for refund of security deposit made by the licensee in the arbitral
proceedings, such prayer was within the jurisdiction of the arbitral tribunal and was not
within the jurisdiction of Small Cause Courts under section 41 of the Presidency Small
Cause Courts Act. Bombay High Court has held that since there was no bar under the
contract entered into between the parties from making claim for payment of interest, in
view of Section 31(7)(a) of the Arbitration and Conciliation Act, the arbitrator has power
to award interest on payment of money, at such rate as it deems reasonable, on the whole or
any part of the money, for the whole or any part of the period between the date on which the
cause of action arose and the date on which the award is made. It is also held in the said
judgment that since the findings rendered by the arbitral tribunal are rendered ignoring
vital evidence produced by the petitioner, it would fall under the ground of patent illegality.

 In case of Jaiprakash Associates Ltd. v/s. Tehri Hydro Development Corporation India
Ltd., 2019 SCCOnline SC 143 has held that Arbitral Tribunal cannot award interest if such
claim is prohibited under the terms of the contract entered into between the parties.

 Supreme Court in case of National Highways Authority of India v/s. Gayatri Jhansi
Roadways Limited, 2019 SCCOnline SC 906 has held that parties having agreed to pay fees
of the Arbitral Tribunal under an agreement, Arbitral Tribunal would be entitled to charge
their fees in accordance with the said agreement and not in accordance with the Fourth
Schedule to the Arbitration Act. Supreme Court upheld the order passed by Delhi High
Court holding that the change in language of Section 31(8) read with Section 31A, which
deals only with the costs generally and not with arbitrator’s fees. Arbitrator’s fees may be a
component of costs to be paid but it is a far cry thereafter to state that Section 31(8) and
31A would directly govern contracts in which a fees structure has already been laid down.

 Supreme Court in the case of Post Graduate Institute of Medical Education and
Research, Chandigarh Vs. Kalsi Construction Company, (2019) 8 SCC 726 has held that
in absence of agreement to contrary between the parties, Section 31(7)(a) confers
jurisdiction upon arbitral Tribunal to award interest unless otherwise agreed by parties, at
such rate as Arbitral Tribunal considers reasonable, on whole or any part of money, for
whole or any part of period between date of cause of action and date of award.
60
 The Supreme Court held in the case of Chittaranjan Maity Vs. Union of India (2017) 9
SCC 611 Section 31(7)(a) that interest cannot be awarded by the arbitrator if the agreement
prohibits the award of interest for the pre-award

 The Supreme Court in case of Hyder Consulting (UK) Ltd. vs. Governor, State of Orissa –
(2015) 2 SCC 189 has held that under section 31(7)(a) of the Arbitration Act, the arbitral
tribunal has power to award interest for pre-award period, interest pendente lite and interest
post award on whole or part of the money and for the whole or any part of the period
between the date on which the cause of action arose and the date on which the award is
made however, subject to the contract to the contrary.

 Bombay High Court in the case of Jawaharlal Nehru Port Trust Vs. Seatrans Shipping
Ltd., 2020 SCCOnline Bom 641 has held that under Section 31(7) of the Arbitration Act
if interest is prohibited under the contract entered into between the parties, pre-reference or
pendente lite interest cannot be allowed.

 Bombay High Court in the case of Ashesh Busa Vs. Atul Gandhi 2019 SCCOnline
Bom 1102 has considered Section 31(2) of the Arbitration Act and has held that though
one of the three arbitrators had not signed the arbitral award, in view of such arbirator
confirming the award by sending a separate e-mail confirming his participation jointly
with the other two arbitrators and concurring with the views taken by the other two
arbitrators, it would amount to substantial compliance under section 31(2) of the
Arbitration and Conciliation Act, 1996 and thus the impugned award cannot be set aside on
that ground.

 Bombay High Court in the case of Sphere International Vs. Ecopack India Paper Cup
Pvt. Ltd., 2019 SCCOnline Bom 1490 has held that the interim award under Section 31(6)
of the Arbitration Act can be made by the arbitral tribunal only if the alleged admission or
acknowledgment of the liability on the part of the respondent before the arbitral tribunal is
clear, unambiguous and definite and does not require any evidence to prove such admission
at the stage of trial. If there are serious disputed questions raised by the respondent in the
arbitral proceedings about the claim made by the claimant which requires detailed evidence
61
 at the stage of trial, the arbitral tribunal can not exercise its discretion under Order XII Rule
6 of the Code of Civil Procedure, 1908 and to make any interim award.

 The Bombay High Court in case of Haresh Advani vs. Suraj Jagtiani – (2015) 7 Bom CR
887 has held that the power of the arbitrator under section 31(7) is not restricted to award
interest on principal only and has also power to award interest on damages prior to the date
of the award even if no notice under section 3(b) of the Interest Act, 1978 is issued by the
claimant.

After Section 31, Section 31-A is inserted. The arbitral tribunal,

notwithstanding anything contained in the Code of Civil
Procedure,1908, shall have the discretion to determine the amount
of costs.

Section 32 provides for Termination of proceedings. If the claimant

withdraws his claim, unless the respondent objects to the order and
the arbitral tribunal recognises a legitimate interest on his part in
obtaining a final settlement of the dispute or the parties if agrees on
the termination of the proceedings or the arbitral tribunal finds
that the continuation of the proceedings has for any other reason
become unnecessary or impossible.

 Supreme Court in case of Sai Babu v/s. M/s. Clariya Steels Pvt. Ltd., 2019 (5) SCJ 503 has
held that there is a distinction between the mandate terminated under Section 32 and
proceedings coming to an end under Section 25. Arbitral Tribunal has no power to entertain
an application for recall order under Section 32(3) of the Arbitration Act, which was passed
under Section 32(2)(c) of the Arbitration Act.

Under Section 33, the arbitral tribunal is empowered to correct and

interpret the award and has to make an additional award within
the time prescribed therein, to correct any computation errors, any
clerical or typographical errors or any other errors of a similar

62
 nature occurring in the award, to give an interpretation of a
specific point or part of the award.

 Supreme Court in Gyan Prakash Arya vs. Titan Industries Limited 2021 SCC OnLine SC
1100 has held that power of modification of award under Section 33 of the Arbitration and
Conciliation Act can be modified only to the extent of correcting arithmetical and/or clerical
error without any material changes.

 Supreme Court in the case of State of Arunachal Pradesh Vs. Damani Construction Co.,
(2007) 10 SCC 742 has held that since an application under Section 33 for seeking
review of the interim award itself was misconceived and was not within the parameters of
Section 33, there is no fresh cause of action to move an application under section 34(3) for
challenging an award and taking it as the starting point of limitation from the date of reply
given by the arbitrator to such misconceived application filed under Section 33.

 Bombay High Court in Shriram Transport Finance Company Limited, Aurangabad vs.
State of Maharashtra, W.P. No.6149 of 2021 dated 27.07.2022, quashed the impugned
order of the executing Court insisting that decree holder should produce
evidence/documents showing compliance of Section 31(5) of Act. The Court held that under
Section 31(5) it is the duty of arbitrator/Arbitral Tribunal to deliver signed copy of award to
each party. Decree holder is not under obligation to produce evidence/documents showing
compliance of Section 31(5) of Act.

 Bombay High Court in the case of Dr.Writers Food Products Pvt. Ltd. & Ors. Vs. The
Cosmos Co-operative Bank Ltd. 2019 SCC OnLine Bom 2140 has held that limitation of
30 days in filing an application under Section 33(1) of the Arbitration and Conciliation
Act, 1996 cannot be extended unless both the parties agree for another period of time for
making such application for correction and interpretation of the award or additional award.
Application filed by a party under Section 33(1) for correction of the award beyond
period of limitation and the order passed by the arbitrator on such application would not
extend the period of limitation prescribed under Section 34(3) of the Arbitration and
Conciliation Act, 1996. Time prescribed under Section 34(3) to challenge the original
award already having expired, belated application made under Section 33(1)(a) and the
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order passed by the learned arbitrator on such application therefore, would be of no
significance. The challenge to the original arbitral award thus held as barred by limitation
prescribed under Section 34(3) of the Act.

An arbitral award can be set aside on the grounds set-out in section

34 (2) (a) and (b) and if an application for setting aside such award is
made by a party not later than three months from the date from
which the party making such application had received the arbitral
award or if a request had been made under section 33, from the date
on which that request had been disposed of by the arbitral tribunal.
If the court is satisfied that the applicant was prevented by sufficient
cause from making the application within the said period of three
months, it may entertain the application within a further period of
30 days but not thereafter.

Section 34 of the Act reads as under :-

34.Application for setting aside arbitral award :-

(1) Recourse to a Court against an arbitral award may be made only by

an application for setting aside such award in accordance with sub-
section (2) and sub-section (3).
(2) An arbitral award may be set aside by the Court only if —
(a) the party making the application furnishes proof that—
a party was under some incapacity, or
the arbitration agreement is not valid under the law to which
the parties have subjected it or, failing any indication thereon, under
the law for the time being in force; or
(iii) the party making the application was not given proper notice of the
appointment of an arbitrator or of the arbitral proceedings or was
otherwise unable to present his case; or
(iv) the arbitral award deals with a dispute not contemplated by or not
falling within the terms of the submission to arbitration, or it contains

64
decisions on matters beyond the scope of the submission to arbitration:
-

Provided that, if the decisions on matters submitted to

arbitration can be separated from those not so submitted, only that part
of the arbitral award which contains decisions on matters not
submitted to arbitration may be set aside; or

the composition of the arbitral tribunal or the arbitral

procedure was not in accordance with the agreement of the parties,
unless such agreement was in conflict with a provision of this Part
from which the parties cannot derogate, or, failing such agreement,
was not in accordance with this Part; or
(b) the Court finds that —
(i) the subject - matter of the dispute is not capable of settlement by
arbitration under the law for the time being in force, or
(ii) the arbitral award is in conflict with the public policy of India.
[Explanation 1.— For the avoidance of any doubt, it is clarified that
an award is in conflict with the public policy of India, only if, —
(i) the making of the award was induced or affected by fraud or
corruption or was in violation of section 75 or section 81; or
(ii) it is in contravention with the fundamental policy
of Indian law; or
(iii) it is in conflict with the most basic notions of morality or justice.

Explanation 2.— For the avoidance of doubt, the test as to whether

there is a contravention with the fundamental policy of Indian law
shall not entail a review on the merits of the dispute.]

The words “furnishes proof that” prescribed under Section 34(2)

is substituted by the words “establishes on the basis of the record of the
arbitral tribunal that”.

65
[(2A) An arbitral award arising out of arbitrations other than
international commercial arbitrations, may also be set aside by the
Court, if the Court finds that the award is vitiated by patent illegality
appearing on the face of the award:

Provided that an award shall not be set aside merely on the ground
of an erroneous application of the law or by reappreciation of
evidence.]

(3) An application for setting aside may not be made after three months
have elapsed from the date on which the party making that application
had received the arbitral award or, if a request had been made under
section 33, from the date on which that request had been disposed of by
the arbitral tribunal:
Provided that if the Court is satisfied that the applicant
was prevented by sufficient cause from making the application within
the said period of three months it may entertain the application within
a further period of thirty days, but not thereafter.

On receipt of an application under sub-section (1), the

Court may, where it is appropriate and it is so requested by a party,
adjourn the proceedings for a period of time determined by it in order
to give the arbitral tribunal an opportunity to resume the arbitral
proceedings or to take such other action as in the opinion of arbitral
tribunal will eliminate the grounds for setting aside the arbitral award.

An application under this section shall be filed by a party

only after issuing a prior notice to the other party and such application
shall be accompanied by an affidavit by the applicant endorsing
compliance with the said requirement.

66
 (6) An application under this section shall be disposed of expeditiously,
and in any event, within a period of one year from the date on which
the notice referred to in sub-section (5) is served upon the other party.

 By 2019 Amendment, in Section 34(2) in clause (a), the words “furnishes proof that”, the
words “establishes on the basis of the record of the arbitral tribunal that” is substituted.

 Supreme Court in Alpine Housing Development Corporation Pvt. Ltd. vs. Ashok S.
Dhariwal & Ors. 2023 SCC OnLine SC 55 has held that in an exceptional case being
made out and if it is brought to the court on the matters not containing the record of the
arbitrator that certain things are relevant to the determination of the issues arising
under Section 34(2)(a), then the party who has assailed the award on the grounds set
out in Section 34(2)(a) can be permitted to file affidavit in the form of evidence.

 Supreme Court in Indian Oil Corporation vs. Shree Ganesh Petroleum

Rajgurunagar 2022 (4) SCC 463 has held that an Arbitral Tribunal is a creature of
contract and his bound to act as per its terms. An award is patently illegal when the
tribunal has failed to act in terms of the contract or has ignored the specific terms of
the contract.

 Supreme Court in Mutha Constructions vs. Strategic Brand Solutions (I) Pvt. Ltd.
SLP No.1105 of 2022 dated 04.02.2022 has discussed the circumstances in which a
matter may be remitted to an Arbitrator for a fresh decision. The Supreme Court
opined that when an arbitral award is set-aside under Section 34 of the Arbitrator Act,
the parties to Arbitration can agree for a fresh arbitration to be conducted by the same
Arbitrator. In such cases, the Court acting in Section 34 proceedings would be
empowered to remit the matter for the fresh reasoned award. Further, the Supreme
Court also clarified that when both parties agree to remit the matter back to the same
Arbitrator for a reasoned award, it is not open to either of them to contend that the
matter may not be or ought not to have been remanded to the same arbitrator.

 Supreme Court in National Highways Authority of India vs. P.Nagaraju 2022 SCC
OnLine SC 864 observed that it is not open for a Court acting under Section 34 or
67
 Section 37 of the Arbitration Act to modify the arbitral award. The correct course to be
adopted is to set-aside the arbitral award.

 Supreme Court in the case of I-pay Clearing Services Pvt. Ltd. vs. ICICI Bank
Limited, (2022) 3 SCC 121 has held that Section 34(4) of the Act itself makes it clear
that it is the discretion vested with the Court for remitting the matter to an arbitral
tribunal to give an opportunity to resume the arbitral proceedings or to take such other
action as in the opinion of the arbitral tribunal will eliminate the grounds for setting
aside the arbitral award. The words “where it is appropriate” itself indicates that it is
an discretion to be exercised by the Court, to remit the matter when requested by a
party.

 Supreme Court in Mahindra and Mahindra Financial Services Limited vs.

Maheshbhai Tinabhai Rathod & Ors. (2022) 4 SCC 162 set-aside the order which
condoned the delay beyond the period of 3 months plus 30 days i.e. beyond the period
of 30 days after expiry of prescribed period of 3 months in filing an application for
setting aside arbitral award. If a petition is filed under Section 34 of the Arbitration Act
beyond the prescribed period of 3 months, the Court has the discretion to condone the
delay only to an extend of thirty days, provided sufficient cause is shown. Section 5 of
the Limitation Act is not applicable to condone the delay beyond the period prescribed
under Section 34(3).

 Supreme Court in Tirupati Steels vs. Shubh Industrial Component & Anr. (2022) 7
SCC 429 has held that in an application under Section 34 of Arbitration Act read with
Section 19 of the MSMED Act 2006, requirement of deposit of 75% of the amount in
terms of award as a pre-deposit as per Section 19 of MSMED Act is mandatory. The
order passed by the High Court in entertaining application without insisting on 75%
was set-aside. Court further observed that unless and until 75% pre-deposit is made,
application under Section 34 shall not be entertained and decided on merits and in that
case execution proceedings may continue.

 Supreme Court in Gujarat State Disaster Management Authority vs. Aska

Equipments Limited 2021 SCC OnLine SC 917 has held that challenge to the award
68
 under Section 34 read with Section 19 of the MSMED Act, requirement of deposit of
75% pre-deposit is mandatory. Court has no discretion to deviate from condition of
75% of the awarded amount under Section 19 of the MSMED Act as a pre-deposit. At
the most, considering hardship which may be projected before the Court and if the
Court is satisfied that there shall be undue hardship caused to the Applicant to deposit
75% of the awarded amount as pre-deposit in one go, the Court may allow the pre-
deposit to be made in installments.

 Supreme Court in Narinder Singh & Sons vs. Union of India through Divisional
Superintendent Engineer 2021 SCC OnLine SC 1082 set-aside an arbitral award on
the ground that there was violation of the principles of natural justice and lack of full
opportunity as envisaged by Section 18 of the Arbitration Act thereby impeding a fair
and just decision. The Court held that the award therefore suffers and is liable to be set
aside in terms of clause (iii) to Section 34(2)(a) as well as clause (ii) to Section
34(2)(b) of the Arbitration Act.

 Supreme Court in Ratnam Sudesh Iyer vs. Jackie Kakubhai Shroff (2021) SCC
OnLine SC 1032 has held that provisions of amended Section 34 of the Arbitration Act
is inapplicable to proceedings under Section 34 commenced prior to 23.10.2015.
Patent illegality as a ground for setting aside domestic award arising from an
international commercial arbitration applies only to Section 34 applications that have
been made to the Court on or after 23.10.2015, irrespective of the fact that the
arbitration proceedings may have commenced prior to that date.

 Supreme Court in State of Chattisgarh & Anr. vs. Sal Udyog Private Limited 2021
SCC OnLine SC 1027 has held that failure of the part of the arbitrator to decide in
accordance with terms of the contract governing parties, would certainly attract “patent
illegality ground”, as said oversight amounts to gross contravention of Section 28(3) of
the 1996 Act, that enjoins Arbitral Tribunal to take into account terms of contract while
making an award. The said ‘patent illegality’ is not only apparent on face of award but
also it goes to the root of matter and deserves interference.

69
 Supreme Court in Project Director, National Highway No.45 E and Anr. vs.
M.Hakeem & Anr. (2021) 9 SCC 1 has held that power of the Court under Section 34
to “set aside” award does not include power to modify such an award. The Court
further held that given the limited scope of judicial interference with award under
Section 34 on extremely limited grounds not dealing with merits of an award, “limited
remedy” under Section 34, held, is coterminous with “limited right”, namely, either to
set aside an award or remand matter under circumstances mentioned in Section 34.
Section 34 jurisdiction cannot be assimilated with revisional jurisdiction under Section
115 of Code of Civil Procedure, 1908.

 Supreme Court in Dakshin Haryana Bijli Vitran Nigam Limited vs. Navigant
Technologies Private Limited (2021) 7 SCC 657 has held that period of limitation for
challenging the award under Section 34 of the Arbitration Act commences from the
date on which the party making the application has “received” a signed copy of the
arbitral award, as required by Section 31(5) i.e. only after a valid delivery of the award
(including dissenting opinion, if any) takes place under Section 31(5).

 Supreme Court in the case of South East Asia Marine Engineering & Constructions
Ltd. Vs. Oil India Limited, (2020) 5 SCC 164 has held that the thumb rule of interpretation
is that the document forming a written contract should be read as a whole and so far as
possible as mutually explanatory. If the basic rule of interpretation is ignored by the Arbitral
Tribunal while interpreting the clause, such award can be interferred with under Section
34.

 Supreme Court in the case of Patel Engineering Ltd. Vs. North Eastern Electric Power
Corporation Ltd., AIR 2020 SC 2488 has held that ground of patent illegality is the
ground available under the statute for setting aside a domestic award. Supreme Court held
that if the decision of an arbitrator is found to be perverse or so irrational that no
reasonable person would have arrived at the same, or the construction of the contract is
such that no fair or reasonable person would take or that the view of the arbitrator is not
even a possible view, it would fall under the ground of patent illegality. Supreme Court
reiterates the test set out for interference with an arbitral award in the case of Associate
Builders Vs. Delhi Development Authority (2015) 3 SCC 49 and in the case of Ssangyong
70
 Engineering & Construction Co. Ltd. v/s. National Highways Authority of India, 2019
SCCOnline SC 677.

 Supreme Court in the case of Mitra Guha Builders (India) Company Vs. Oil and Natural
Gas Corporation Limited, 2020 3 SCC 222 has held that parties having agreed that the
decision of the Superintending Engineer in levying compensation is final and the same is an
“excepted matter” and the determination shall be only by the Superintending Engineer and
the correctness of his decision cannot be called in question in the arbitration proceedings,
dispute raised arising out of such excepted matters would not be arbitrable and can be set
aside under Section 34.

 Bombay High Court in Thomas Cook (India) Ltd. vs. Red Apple Chandrarat Travels 2023
SCC OnLine Bom 97 has held that the ground of limitation being a mixed question of law
and fact, can never be a ground which would involve any basic notion of morality of justice
for an arbitral award to be set aside otherwise it would also entail a review of the award on
merits of the disputes.

 Bombay High Court in Hanuman Motors Pvt. Ltd. vs. Tata Motors Finance Ltd. 2023
SCC OnLine Bom 523 set aside an arbitral award on the ground that a party had unilaterally
appointed an arbitrator. Court further held that a party can raise such ground in proceedings
under Section 34. Court further held that mere participation on the part of the party would
not dis-entitle a party from raising such an objection and such participation would not
amount to waiver unless a party has agreed to waive such objection in writing.

 Bombay High Court in BST Textile Mills Pvt. Ltd. vs. Cotton Corporation of India Ltd.
2023 SCC OnLine Bom 318 was dealing with an issue whether the award is liable to be set-
aside on the ground that that disputes arising out of contracts were consolidated and single
statement of claim filed on behalf of the Claimant was entertained and allowed in favour of
the Claimant despite the fact that the Respondent had not consented to it and raised a
specific objection. The Court while rejecting the application for setting aside award
observed that when specific claims pertaining to each of the contracts were placed distinctly
in the statement of claim filed on behalf of the Claimant, to which the Respondent had
ample opportunity to respond and the fact that the Respondent also chose to file a
71
 consolidated counter claim pertaining to all the contracts, it cannot be said that the learned
arbitrator committed a jurisdictional error in proceeding with the arbitration.

 Bombay High Court in Naresh Kanayalal Rajwani vs. Kotak Mahindra Bank (2022) SCC
OnLine Bom 6204 has held that the ground of proceedings being vitiated from the inception
due to Section 12(5) goes to the very root of the matter. The said ground, even though not
specifically raised in the petition, gets covered under the ground of being “perverse, against
settled provisions of law and public policy”.

 Bombay High Court in Board of Control for Cricket in India vs. Deccan Chronicle
Holdings Ltd. 2021 SCC OnLine Bom 834 has held that the arbitrator has to decide the
dispute in terms of the contract agreed between the parties, it cannot transgress the four
corners of the contract and decide a dispute contrary to the terms agreed to between the
parties.

 Bombay High Court in Sarjuprasad s/o Sangmlal Gupta vs. National Highways Authority
of India 2021 SCC OnLine Bom 2343 has held that when the lands are acquired by NHAI
and award made by Land Acquisition Officer is challenged under Section 34 of the
Arbitration Act before District Court, the directions given by District Court for payment of
Solatium and interest under Section 23(2) and Section 28 of the Land Acquisition Act does
not amount to modification of Award.

 Bombay High Court in the case of the Kokan Irrigation Development Corporation,
Water Resources Department Vs. M/s. F.A.Enterprises & Ors. 2019 SCC OnLine Bom
3109 has held that Arbitral Tribunal declaring the Government Resolution which is in the
nature of subordinate legislation as invalid and null and void in law is without
jurisdiction and shows patent illegality. High Court under Section 34 while deciding the
application for setting aside such award declaring the Government Resolution as invalid
and void ab initio cannot exercise any power under Section 34 and to declare such
Government Resolution as invalid and void ab initio. Court under Section 34 cannot
probe in the mind of the Arbitral Tribunal and consider the submissions and the
documents produced by a party who had succeeded in the arbitral proceedings which
were not considered while rendering an award in favour of such successful party and to
72
 hold that those submissions and documents must have been kept in mind by the Arbitral
Tribunal while allowing such claim made by such party. Arbitral award itself shall speak
and shows reason. Arbitral Tribunal cannot exercise the power of a writ court in the
arbitration proceedings by holding that any of the clauses of the contract was bad by
holding that there was any unequal bargaining between the parties and such clauses of the
contract would render the provisions of Section 73 of the Indian Contract Act nugatory. It is
held that interest awarded contrary to the contract shows perversity and thus warrants
interference.

 Bombay High Court in the case of Slum Rehabilitation Authority through its Chief
Executive Officer Vs. M.M. Project Consultants Private Limited, 2020 SCCOnline
Bom 715 has set aside the arbitral award on the ground of patent illegality demonstrated
from the arbitral award.

 Supreme Court in the case of Noy Vallensina Engineering SpA (now known as Noy
Ambiente S.p.a.) Vs. Jindal Drugs Limited & Ors. (2021) 1 SCC 382 has held that
arbitration petition under Section 34 of the Arbitration Act is not maintainable against
foreign arbitration award.

 Bombay High Court in the case of Kalpataru Power Transmission Ltd. Vs. Maharashtra
State Electricity Transmission Co. Ltd., 2020 SCCOnline Bom 120 has held that the
provisions of the Arbitration Act do not exclude the powers of High Court to exercise its
plenary powers and to exercise procedural review in case of errors apparent on the face of
the record causing miscarriage of justice or shows grave and palpable errors committed by
it. Procedural review can be exercised by Court under plenary jurisdiction. The provisions
of Code of Civil Procedure, 1908 can be applied to the proceedings in Court to the extent of
the provisions thereof not inconsistent with the provisions of the Arbitration Act. None of
the provisions of the Arbitration Act bars High Court for procedural review by exercising
plenary jurisdiction.

 Bombay High Court in the case of Bombay Slum Redevelopment Corporation Ltd. Vs.
Samir Narain Bhojwani, 2019 SCCOnline Bom 1853 has held that the Arbitral Tribunal
was constituted to adjudicate upon the disputes between the parties and thus could not have
73
 any jurisdiction to give any directions to any authority nor was the tribunal supposed to
substitute any direction given by the Slum Rehabilitation Authority or any other agency in
respect of the obligation to be carried out by the parties in relation to a third party. Arbitral
Tribunal could not have rendered any finding based on documents taken behind the back
of the parties and without first disclosing to the parties about such documents not relied
upon by the parties while considering in the award. If interpretation of the arbitrator is a
not possible interpretation, it would amount to patent illegality and would warrant
interference by the Court under Section 34.

 Supreme Court in case of Ssangyong Engineering & Construction Co. Ltd. v/s. National
Highways Authority of India, 2019 SCCOnline SC 677 has held that under Section 34 (2A)
of the Arbitration Act, a decision which is perverse while no longer being a ground for
challenge under “public policy of India”, would certainly amount to a patent illegality
appearing on the face of the award. A finding based on the documents taken behind the back
of the parties by the arbitrator would also qualify as a decision based on no evidence
inasmuch as such decision is not based on evidence led by the parties and therefore would
also have to be characterised as perverse. It is held that a finding based on no evidence at all
or an award which ignores vital evidence in arriving at its decision would be perverse and
liable to be set aside on the ground of patent illegality.

 Supreme Court in the case of Parsa Kente Collieries Limited Vs. Rajasthan Rajya Vidyut
Utpadan Nigam Limited, (2019) 7 SCC 236 has held that an arbitral Tribunal must decide
in accordance with the terms of the contract. If an arbitrator construes a term of the contract
in a reasonable manner and if such interpretation is possible or plausible interpretation,
award cannot be set aside. The construction of the terms of a contract is primarily for an
arbitrator. The Court does not act as a court of appeal when a court is applying the "public
policy" test to an arbitration award. It is held that if the arbitral award is contrary to the
evidence on record, it can be set aside by the Court under Section 34.

 Supreme Court in the case of Simplex Infrastructure Limited Vs. Union of India, (2019)
2 SCC 455 has held that Section 5 of the Limitation Act, 1963 has no application to an
application challenging an arbitral award under Section 34 of the Arbitration Act. Section

74
 14 of the Limitation Act does not provide for fresh period of limitation but only provide
for exclusion of certain period.

 Supreme Court in the case of Emkay Global Financial Services Ltd. Vs. Girdhar Sondhi-
2018 (9) SCC 49 has held that an application for setting aside an arbitral award will not
ordinarily require anything beyond the record that was before the Arbitrator. However, if
there are matters not contained in such record, and are relevant to the determination of
issues arising under Section 34(2)(a), they may be brought to the notice of the Court by way
of affidavits filed by both parties. Cross-examination of persons swearing to the affidavits
should not be allowed unless absolutely necessary, as the truth will emerge on a reading of
the affidavits filed by both parties.

 Supreme Court in the case of M/s.Canara Nidhi Limited Vs. M. Shashikala & Ors. 2019
SCCOnline SC 1244 has held that proceedings under Section 34 of the Act is summary in
nature. The scope of enquiry in the proceedings under Section 34 of the Act is restricted to a
consideration whether any of the grounds mentioned in Section 34(2) or Section 13(5) or
Section 16(6) are made out to set aside the award. The grounds for setting aside the award
are specific. It is imperative that the arbitration cases under Section 34 of the Act should be
decided only with reference to the pleadings and the evidence placed before the Arbitral
Tribunal and the grounds specified under Section 34(2) of the Act. Legal position is
clarified that an application for setting aside an arbitral award will not ordinarily require
anything beyond the record that was before the arbitrator. cross-examination of persons
swearing in to the affidavits should not be allowed unless absolutely necessary. It is held
that High Court did not keep in view that respondents had not made out grounds that it is
an exceptional case to permit them to adduce evidence in the application under Section34 of
the Act. The said directions of the High Court amount to retrial on the merits of the issues
decided by the arbitrator.

 Supreme Court in case of MMTC Limited v/s. Vedanta Limited, (2019) 4 SCC 163 has held
that the Court does not sit in appeal over the arbitral award and may interfere on merits on
limited ground provided under Section 34(2)(b)(ii) i.e. if the award is against the public
policy of India. It is only if one of these conditions set out in Section 34(2)(b)(ii) is met that
the Court may interfere with an arbitral award under the said provision but such interference
75
 does not entail a review on the merits of the dispute and is limited to situations where the
findings of the arbitrator are arbitrary, capricious or perverse or when the conscience of the
Court is shocked or when the illegality is not trivial but goes to the root of the matter. An
arbitral award may not be interfered with if the view taken by the arbitrator is a possible
view based on facts. It is held that interference under Section 37 cannot travel beyond the
restrictions laid down under Section 34. Under Section 37, the Court cannot undertake an
independent assessment of the merits of the award and must only ascertain that the exercise
of power by the Court under Section 34 has not exceeded the scope of the provision.

 Supreme Court in case of Tulsi Narayan Garg v/s. M.P. Road Development Authority and
Others (2019) SCCOnline 1158 after adverting to the judgment in case of State of
Karnataka v/s. Shree Rameshwara Rice Mills Thirthahalli, (1987) 2 SCC 160 has held
that a party cannot become an arbiter in its own cause and unless the dispute is settled by a
procedure prescribed under the law, such party would not be held to be justified in initiating
recovery proceedings invoking the procedure under the Land Revenue Act though the
matter is before the arbitrator and no adjudication has taken place.

 Supreme Court in case of National Highways Authority of India and Anr. v/s. Subhash
Bindlish and Ors. dated 14th August, 2019 in Special Leave Petition (Civil) Diary No.
17812 of 2019 has held that what is provided under Section 34(3) is the outer limit within
which the application can be preferred for setting aside the arbitral award. It is held that the
subsequent amendment in 2015 would not change the character of the mandate under
Section 34(3) of the Arbitration Act. Supreme Court did not interfere with the order passed
by the High Court refusing to interfere in an application for setting aside arbitral award,
which was preferred beyond 120 days in view of specific bar under Section 34(3) of the
Arbitration Act.

 Supreme Court in the case of Oriental Insurance Company Limited Vs. Tejparas
Associates and Exports Private Limited, (2019) 9 SCC 435 has held that Section 5 to
the Limitation Act, 1963 is not applicable beyond the statutory period under Section 34(3)
of the Arbitration Act. When the arbitration petition is returned to be re-presented before
the Court of competent jurisdiction under Order VII Rule 10 and 10-A of the Code of Civil
Procedure, re-presentation of the petition in Court which is indicated in order for return
76
 cannot be considered as a fresh filing in all circumstances when it is returned to the plaintiff
for such re-presentation.

 Supreme Court in the case of P. Radha Bai & Ors. Vs. P. Ashok Kumar & Anr., (2019)
13 SCC 445 has held that once the respondents received the award, the time under
Section 34(3) commenced and any subsequent disability was immaterial. Even if the
appellant had committed some fraud, it would not affect the right of the respondents to
challenge the award if the facts entitling the filing of a Section 34 application were
within their knowledge.

 The Supreme Court in the case of Northern Railway Vs. Pioneer Publicity Corpn. (P)
Ltd. (2017) 11 SCC 234 held that re-filing of application after curing defects in application
does not amount to fresh filing of application for counting limitation under Section 34(3).

 The Supreme Court in case of Associate Builders vs. Delhi Development Authority –
(2015) 3 SCC 49, has held that the interference with an arbitral award is permissible only
when the findings of the arbitrator are arbitrary, capricious or perverse or when conscience
of the Court is shocked or when illegality is not trivial but goes to the root of the matter. It is
held that once it is found that the arbitrator's approach is neither arbitrary nor capricious, no
interference is called for on facts. The arbitrator is ultimately a master of the quantity and
quality of evidence while drawing the arbitral award. Patent illegality must go to the root of
the matter and cannot be of trivial nature.

 The Supreme Court in case of O.N.G.C. vs. Western Geco International Ltd. (2014) 9 SCC
263, has held that in every determination whether by a Court or other authority that affects
the rights of a citizen or leads to any civil consequences, the Court or the authority
concerned is bound to adopt what is in legal parlance “judicial approach” in the matter. The
duty to adopt a judicial approach arises from the very nature of power exercised by the
Court or the authority does not have to be separately or additionally enjoined upon the fora
concerned. The Court, Tribunal or Authority exercising such powers cannot act in an
arbitrary, capricious or whimsical manner. The Courts or quasi judicial authority while
determining the rights and application of the parties before it has to act in accordance with
the principles of natural justice. It is held that a decision which is perverse or so irrational
77
 that no reasonable person would have arrived at the same, will not be sustainable in Court of
law.

 In case of Sachin Gupta vs. K.S.Forge Matel (Pvt.) Ltd. -- (2013) 10 SCC 540, it is held
that an award rendered without notice and without hearing the party is illegal and liable to
be set aside.

 In case of P.R. Shah, Shares and Stock Brokers Pvt. Ltd. vs. B.H.H. Securities Pvt. Ltd. &
Ors. – 2012 (3) Mh.L.J. 737, it is held by the Supreme Court that the Court does not sit in
appeal over the award of an arbitral tribunal by reassessing or re-appreciating the evidence
and the award can be challenged only under the grounds mentioned in section 34(2) of the
Arbitration & Conciliation Act, 1996 and in the absence of any grounds under the said
provision, it is not possible to re-examine the facts to find out whether a different decision
can be arrived at. It is held that the arbitral tribunal cannot make use of their personal
knowledge of the facts of the dispute which is not part of the record, to decide the issue but
can use their expert or technical knowledge or general knowledge about the particular trade
in deciding the matter.

 In case of Rashtriya Ispat Nigam Limited vs. Dewan Chand Ram Saran --(2012) 5 SCC
306, it is held by the Supreme Court that if the view taken by the arbitrator is clearly
possible, if not plausible, and it is not possible to say that the arbitrator had travelled outside
his jurisdiction, the Court cannot substitute its views in place of the interpretation accepted
by the arbitrator.

 Supreme Court in the case of Assam Urban Water Supply and Sewerage Board Vs.
Subash Projects and Marketing Limited – (2012) 2 SCC 624 has held that “Prescribed
period” of limitation for making an application for setting aside the arbitral award is 3
months and not 3 months and 30 days. The period of 30 days is beyond the period of 3
months. Benefit of Section 4 of the Limitation Act, 1963 will not be available if 30 th
day expires on a day when the Court is closed. Since the arbitration petition was filed on
next working day after expiry of 30 days after 3 months period, the arbitration petition
was dismissed as time barred and upheld by Supreme Court.

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 In case of Satyanarayan Construction Co. vs. Union of India – (2011) 15 SCC 101, it is
held that an arbitrator cannot rewrite the contract and if rate higher than agreed in the
contract is awarded, it would be beyond his competency & authority and such award is
liable to be set aside.

 In case of Ravindra And Associates vs. Union of India-- (2010) 1 SCC 80, it is held that
court cannot interfere with findings of fact rendered by the arbitrator. It is held that if a
clause in the contract or any issue is outside the purview of arbitration, it is necessary to
comply with such restriction strictly. An arbitrator cannot decide contrary to the terms of
the contract.

 The Supreme Court in case of State of Maharashtra vs. Hindustan Construction Co. Ltd. -
- AIR 2010 SC, 1299, held that incorporation of additional grounds by way of amendment
in the application under section 34 does not tantamount to filing of fresh application in all
situations and circumstances. If an application under section 34 has been made within
prescribed time, to grant leave to amend such application if the very peculiar circumstances
of the case so warrant and it is so required in the interests of justice, amendment to the
petition can be allowed.

 In case of Fiza Developers and Inter-Trade Private Limited vs. AMCI (India) Private
Limited and another -- (2009) 17 SCC 796, Supreme Court has held that applications under
section 34 are summary proceedings. The scope of enquiry in a proceeding under section 34
is restricted to consideration whether any one of the grounds mentioned in section 34 (2)
exists for setting aside the award which grounds are specific. It is held that issues under
order 14 and order 18 need not be framed in applications under section 34 of the Act. An
application under section 34 of the Act is a single issue proceeding. Provisions of Civil
Procedure Code will be applicable only to the extent considered necessary or appropriate by
the court. There is no wholesale or automatic import of all the provisions of the Code of
Civil Procedure into proceedings under section 34 of the Act as that would defeat the very
purpose and object of the Act.

 In case of Oil & Natural Gas Limited vs. Garware Shipping Corporation Limited – AIR
2008 SC 456, it is held by the Supreme Court that there is no proposition that the courts
79
 could be slow to interfere with the arbitrator's award even if the conclusions are perverse
and even when very basis of the arbitrator's award is wrong.

 In case of Numaligarh Refinery Ltd. vs. Daelim Industrial Co. Ltd. -- (2007) 8 SCC 466, it
is held that in case it is found that the arbitrator has acted without jurisdiction and has put an
interpretation on the clause of the agreement which is wholly contrary to law, then in that
case there is no prohibition for the court to set things right.

 The Supreme Court in case of Mcdermott International Inc. vs. Burn Standard Co. Ltd.
and others -- (2006) 11 SCC 181, has held that the intervention of the Court under the
provisions of the Arbitration Act, 1996 is envisaged in few circumstances, like in case of
fraud or bias by the arbitrator, violation of natural justice etc. The Court cannot correct the
errors of the arbitrators. It can only quash the award leaving the parties free to begin
arbitration again if it is desired. It is held that “patent illegality” must go to the root of the
matter. Public policy violation indisputably should be so unfair and unreasonable as to
shock conscience of the Court. If the arbitrator has gone contrary to or beyond express law
of contract or granted relief in the matter not in dispute would come within the purview of
section 34 of the Act.

 In case of M.Anasuya Devi and another vs. M.Manik Reddy and others – (2003) 8 SCC
565, it is held by the Supreme Court that an award cannot be set aside under section 34 for
want of stamping and registration. Question as to whether there was any deficiency in
stamping or registration are not within the purview of section 34 and such question falls
within the ambit of section 47 of CPC and such questions can be agitated only at the stage
of enforcement of award under section 36.

 In case of Oil and Natural Gas Corporation Ltd. vs. Saw Pipes Ltd. -- (2003) 5 SCC 705, it
is held that award has to be in accordance with the terms of the contract. Phrase 'public
policy of India' referred in section 34(2) (b) (ii) should be given a wider and not a narrower
meaning. Court can set aside the award if it is (1) contrary to (a) fundamental policy of
Indian law or (b) the interest of India or (c) justice or morality or (ii) is patently illegal or
(iii) is so unfair and unreasonable that it shocks the conscience of the court. Supreme Court

80
 has interpreted section 34 and has enumerated various grounds of challenge to an arbitral
award.

 Bombay High Court in the case of Bharat Sanchar Nigam Limited Vs. Unity Telecom
Infrastructure Ltd., 2019 SCCOnline Bom 1675 has considered a situation where the
signed copy of the award was personally collected by the authorized representative of the
party from the arbitral tribunal and thus time taken in obtaining instructions from the
higher authority or on opinion from a lawyer would not extend the period of limitation.
The Court has no power to condone delay beyond 30 days after expiry of the period of
limitation i.e. from the date of service of signed copy of the award by the arbitral tribunal
upon the party.

 Bombay High Court in the case of Union of India Vs. Richa Constructions, 2019
SCCOnline Bom 917 has held that the arbitral tribunal has no jurisdiction to award any
claim contrary to the terms of the contract and more particularly the claims which are
prohibited under the contract.

 Bombay High Court in the case of Dinesh Jaya Poojary Vs. Malvika Chits India Pvt.
Ltd., 2019 SCCOnline Bom 1121 has held that the Chit Funds Act, 1982 is a self-
contained Code which provides for remedy of adjudication of dispute under the said Act
which remedy cannot be varied by an agreement of parties by referring the dispute to
private arbitral forum contrary to Section 3 of the said Chit Funds Act.

 Bombay High Court in the case of Mohammed Kader Hassan Vs. Sree Gokulam Chit &
Finance Co.(P) Ltd., 2019 SCCOnline Bom 1285 has construed the provisions of Chit
Funds Act, 1982 and has held that the said Act provides for a self-contained machinery for
the settlement of the disputes between a foreman and the subscribers by means of an
arbitration before the authority provided under the said Act which cannot be varied by a
private agreement between the parties.

 Bombay High Court in the case of Star Track Fasteners Private Limited Vs. Union of
India, 2019 SCCOnline Bom 1453 has held that the Court has no power to allow any
claim which is rejected by the arbitral tribunal as the Court cannot correct errors made by
81
 the learned arbitrator. Court can either set aside the award or can upheld the award or in
appropriate case, modify the award if such part is severable.

 Bombay High Court in the case of Abhudaya Co-operative Bank Ltd. Vs. M/s.
Rainproof and Anr., decided on 6th August 2019 in Commercial Arbitration Petition
No.119 of 2016 has held that if the arbitral tribunal has decided beyond the scope of
reference, it would amount to exceeding jurisdiction conferred on the arbitral tribunal and
such award can be set aside.

 Bombay High Court in the case of Schokhi Industries Pvt. Ltd. Vs. Maharashtra State
Power Generation Co. Ltd., 2019 SCC OnLine Bom 1513 has held that time prescribed
under Section 34(3) has to be read with time prescribed in Section 33(1) of the Arbitration
and Conciliation Act, 1996. Since, the application filed under Section 33(1) itself was not
within the time prescribed under the said provision, limitation for filing an arbitration
petitioner under Section 34(3) would not commence from the date of disposal of the request
made by such party under Section 33(1) but would commence from the date of service of
signed copy of the original award. It is held that the arbitrator has no power to condone
delay in filing application under Section 33(1) after 30 days from the date of getting the
signed copy of the arbitral award.

 Bombay High Court in case of Fermenta Biotech Limited Vs. K.R. Patel in Arbitration
Petition No.545 of 2017 2018 SCC OnLine Bom 21232 after considering the amended
Section 34 and more particularly explanation 1 to clause (b) of Sub-section (2) of
Section 34 and Sub-section (2-A) has held that -
(A) the ground of conflict with public policy is restricted to -
(i) inducement or affectation by fraud or corruption or violation of section 75 or section
81 in making of the award,
(ii) contravention of the fundamental policy of Indian Law,
(iii) conflict with the most basic notions of morality or justice.

(B) Under Sub-section (2-A) of Section 34 for making out the case of patent
illegality, it must be shown that the award contravenes -

82
 (i) the substantive law of India on an aspect which goes to the root of the matter
and which is not of a trivial nature or
(ii) the Arbitration and Conciliation Act, 1996 itself or
(iii) the contract between the parties, as explained in Associate Builders case.
(iv) It must further be shown that such illegality appears on the face of the award.
(v) The illegality, in other words, must be so self-evident and plain as not to admit of
any dichotomy of opinions; it should not be necessary to, firstly, refer to any document
or matter which is not made part of the award to assess such illegality and, secondly, it
should be obvious and not require any elaborate or intricate explanation.
(vi) It is not good enough to say that the Arbitrator has wrongly applied the law or
has not properly appreciated the evidence. If the arbitrator note or acts on a correct
principle or provision of law, but makes a mistake in applying it to the facts of the case,
such error is not amenable to a challenge under Section 34. That is now clarified by
the explanation to sub-section (2-A) of Section 34 of the Act.

 Bombay High Court in a judgment dated 2nd April 2016 in the case of M/s.Tirumala
Roadways Vs. Indian Oil Corporation Ltd. and Anr. – 2016(5) Mh.L.J. 679 has adverted
to the judgment of the Supreme Court in the case of Assam Urban Water Supply and
Sewerage Board Vs. Subash Projects and Marketing Limited, reported in (2012) 2 SCC
624 and has held that the period of 30 days after expiry of 3 months prescribed in Section
34(3) of the Arbitration and Conciliation Act, 1996 would not be the period of limitation
and thus Section 4 read with Section 2(j) of the Limitation Act, 1963 would not apply to
such application filed under Section 34 of the Arbitration and Conciliation Act, 1996
beyond a period of 3 months.

 It was held by Bombay High Court in the case of Siddhivinayak Realty Pvt. Ltd. vs. V.
Hotels Ltd. Arbitration Petition No.667 of 2011, dated 10.05.2013 that the award if
contrary to the terms of the contract, in violation of the statutory provisions and ignoring
the material piece of evidence can be set aside.

 It was held in the case of Pradyuman Kumar Sharma vs. Jaysagar M.Sancheti (2013) 5
Mh.LJ 86 Principles of natural justice applies to arbitration. Disputed documents not
proved cannot be considered by the Arbitrator as a piece of evidence.
83
 Whether a person not a party to the arbitration agreement
can file an arbitration petition under section 34 :-

 Bombay High Court in the case of Mukesh Nanji Gala and Ors. Vs. M/s.Heritage
Enterprises & Anr. – 2015(2) Bom.C.R. 123 has held that a third party who is not a party
to the arbitration agreement cannot be allowed to be impleaded as a party to the arbitral
proceedings. However if a person is wrongly impleaded as party to the arbitral proceedings
and is aggrieved by arbitral award, such person can invoke section 34 of the Arbitration and
Conciliation Act, 1996 and can challenge such arbitral award. A similar view has been
taken by the Bombay High Court in the case of Smt.Prema A.Gera Vs. The Memon Co-
operative Bank Ltd. and Anr. – 2017 (2) Bom CR 800 and has allowed a third party to file
a petition under Section 34 for challenging the arbitral award in which he was erroneously
impleaded as a party and an adverse order was passed against him by the learned
arbitrator.

Limitation in filing petition under section 34 –

Power of condonation of delay – Applicability of section 14 of the Limitation Act, 1963 :-

 Section 14 of the Limitation Act, 1963 is applicable to Section 34(3) of the Arbitration and
Conciliation Act, 1996. Supreme Court has held in the case of M.P. Housing Board Vs.
Mohanlal and Co. (2016) 14 SCC 199 that exclusion of time spent proceeding bona fide
in Court without jurisdiction is excluded while computing the limitation under Section
34(3).

 Supreme Court in case of Coal India Ltd. vs. Ujjal Transport Agency (2011) 1 SCC 117
and in case of State of Goa vs. M/s.Western Builders, AIR 2006 SC 2525 has held that
section 14 of Limitation Act is applicable while considering application under section 34
and if time taken in prosecuting the matter before a wrong court having no jurisdiction
bonafide and with due diligence, such time taken can be excluded while computing
limitation under section 34(3).

84
 Supreme Court in case of State of Maharashtra vs. M/s.Ark Builders Pvt. Ltd. -- AIR 2011
SC 1374, has held that the period of limitation prescribed under section 34(3) would start
running only from the date of a signed copy of award is delivered to/received by a party
making the application for setting aside the award under section 34(1).

 Supreme Court in case of Venture Global Engineering vs. Satyam Computer Services Ltd.
& Anr. -- AIR 2010 SC 3371 has held that when an award is induced or affected by fraud or
corruption, the same would fall within the ground of excess of jurisdiction and a lack of due
process and can be set aside. It is held that concealment of relevant and material facts
which should have been disclosed before the arbitrator is an act of fraud and if the
concealed facts disclosed after the passing of the award have a causative link with the facts
constituting or inducing the award, such facts are relevant in a setting aside proceeding and
award may be set aside as affected or induced by fraud.

 Supreme Court in case of Union of India vs. Popular Constructions-- AIR 2001 SC 4010
and in case of Consolidated Engineering Pvt. Ltd. vs. Irrigation Department --(2008) 7
SCC 169 has held that section 5 of the Limitation Act is not applicable to section 34 (3) of
the Arbitration and Conciliation Act, 1996 in view of express inclusion within the meaning
of section 29(2) of the Limitation Act, 1963. It is held that court cannot condone delay
beyond a period of 30 days and that also only if sufficient cause is shown as to how the
applicant was prevented from making application within the period of three months and not
thereafter.

 Bombay High Court in case of E-square Leisure Pvt. Ltd. vs. K.K. Jani Consultants and
Engineering Company -- (2013) 2 Bom.C.R. 689, has held that the limitation for making an
application under section 34(3) for setting aside an arbitral award would commence only
after a signed copy of the award is received by a party from the arbitral tribunal under
section 31(5) of the Arbitration Act.

Whether the Court under section 34 can allow

the claim rejected by the arbitrator

85
 The Supreme Court in case of Mcdermott Inc. Vs. Burn Standard Co. Ltd. and others --
(2006) 11 SCC 181, has held that the Court cannot correct the errors of the arbitrator. It can
only quash the award leaving the parties free to begin the arbitration again if it is desired.

 The Bombay High Court in BMA Commodities Pvt. Ltd. vs. Kaberi Mondal & Anr. --
(2015) 2 Bom.C.R. 457 has held that the Court cannot correct the errors of the arbitral
tribunal under section 34 of the Act. It can set aside the award wholly or partly and cannot
make an award under section 34.

Whether the Court has power to remand the proceedings back to

the Arbitral Tribunal once the award is set-aside under section 34

 Supreme Court in the case of Kinnari Mullick & Anr. Vs. Ghanshyam Das Damani –
AIR 2017 SC 2785 has construed Section 34(4) and has held that the Court can defer the
hearing of the application filed by the petitioner for setting aside the award on a written
request made by a party to the proceedings to facilitate the arbitral tribunal by resuming
the arbitral proceedings or to take such other action as in the opinion of arbitral tribunal
will eliminate the grounds for setting aside the arbitral award. The Court has not been
invested with power to remand the matter to the arbitral tribunal except to adjourn the
proceedings for the limited purpose mentioned in Section 34(4).

 The Supreme Court in case of Som Datt Builders Ltd. vs. State of Kerala -- (2009) 10 SCC
259, has held that if the arbitral tribunal does not give reasons under section 31(3), the Court
can pass an order under section 34(4) and can give an opportunity to the arbitral tribunal to
give reasons. It is held that by remitting the award to the arbitral tribunal for recording of
reasons in support of its award would be fair and reasonable.

 Bombay High Court in the case of Store One Retail India Ltd. Vs. I.R. C. Limited, 2019
SCCOnline Bom 1281 has held that there is a presumption in law that the Judge deals
with all the points which have been pressed before him. It will be presumed that the
appellant gave up the other points, otherwise, he would have dealt with them also. If such
party contends that he had pressed that point also which has not been dealt with in the

86
 impugned judgment, it is open to him to file an application before the same Judge who
delivered the impugned judgment.

 The Full Bench of the Bombay High Court in R.S. Jiwani vs. Ircon International Ltd. –
2010 (1) Bom.C.R. 529, has held that the Court has discretion under section 34 of the
Arbitration Act which takes within its ambit power to set-aside the award partially or wholly
depending upon the facts and circumstances of each case. Section 34(2) do not admit of
interpretation which will divest the Court of the competent jurisdiction to apply the
principle of severability to the award by the arbitral tribunal, legality of which is questioned
before the Court. It is held that the Court vests powers under section 34 to set-aside the
award and even to adjourn the matter and to do such act and deeds by the arbitral tribunal at
the instance of the party which would help in removing the grounds of attack for setting
aside the arbitral award.

 Supreme Court in the case of State of Bihar & Ors. Vs. Bihar Rajya Bhumi Vikas Bank
Samiti-(2018) 9 SCC 472 has held that requirement of issuance of prior notice to other
party and filing of an affidavit endorsing compliance with the requirement under Section
34(5) is directory and not mandatory.

 Provision of sub-section (5) of Section 34 has been held as directory by the Bombay High
Court in the case of Global Aviation Services Private Limited Vs. Airport Authority of
India – 2018 SCCOnline Bom 233. Bombay High Court after construing the provisions of
Section 26 of the Arbitration and Conciliation (Amendment) Act, 2015 and Sections 34(5)
and 34(6) of the Arbitration and Conciliation Act, 1996 has held that if the notice invoking
arbitration agreement is received by other party prior to 23 rd October 2015, the arbitration
proceedings would commence prior to 23rd October 2015. The provisions of the Arbitration
and Conciliation Act, 1996 in force prior to 23 rd October 2015 would be applicable in
such matters for all the purposes. It is held that if the notice invoking arbitration clause is
received by other party after 23rd October 2015, the parties will be governed by the
provisions of the Arbitration and Conciliation (Amendment) Act, 2015 for all the purposes.
The date of filing of the arbitration petition under Section 34(1) is not relevant for the
purpose of deciding the applicability of the provisions of the Arbitration and Conciliation
Act, 1996 i.e. pre-amendment or post amendment. In view of sub-section (5) of Section 34,
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 an application has to be disposed of expeditiously, and in any event, within a period of one
year from the date on which the notice referred to in sub-section (5) is served upon the other
party.

Whether the Court is bound to pass an order of deposit of the awarded sum
u/s 34 of the Arbitration & Conciliation Act, 1996
to the matters prior to 23rd October 2015

 The Supreme Court in National Aluminium Co. Ltd. vs. Pressteel & Infrastructure (P)
Ltd., (2004) 1 SCC 540, has held that there is automatic stay of the award during the period
of pendency of the arbitration petition under section 34 and the award becomes un-
executable until the challenge under section 34 is refused. This judgment was delivered
prior to the amendment to Section 36. This judgment was delivered considering unamended
Section 36.

 Bombay High Court in an order dated 13th September, 2019 in case of Godrej Industries
Limited v/s. Darius Rutton Kavasmaneck and Ors., 2019 SCC OnLine Bom 12124 has
held that in view of Section 87 inserted by the Arbitration and Conciliation (Amendment)
Act, 2019, since the arbitral proceedings commenced prior to 23 rd October, 2015, Section 36
of the Arbitration and Conciliation Act amended by Arbitration and Conciliation
(Amendment) Act, 2015 would not apply. The arbitral award thus would not enforceable
during the pendency of the arbitration petition.

 The Bombay High Court in case of Afcons Infrastructure Ltd.Vs.Board of Trustees of Port
of Mumbai -- 2014 (1) Bom.C.R. 794, has held that the Court cannot pass an order for
deposit of the arbitral award since the award remains un-executable and not enforceable
during the pendency of the arbitration petition under section 34.

Under section 36, when the time for making an application under
section 34 for setting aside an arbitral award has expired then
subject to the provisions of Sub-section (2) of Section 36, such award
shall be enforced under the provisions of the Code of Civil
Procedure, 1908 in the same manner as if it were a decree of the
court. In view of amendment to Section 36 w.e.f. 23rd October 2015,
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 there is no automatic stay merely on filing of an application under
Section 34 for challenging the arbitral award. The applicant has to
make a separate application for seeking an order of stay of operation
of the arbitral award in accordance with the provisions of Section
36(3). It is provided that while considering the application for grant
of stay of arbitral award for payment of money, the Court shall
have due regard to the provisions for grant of stay of a money decree
under the provisions of the Code of Civil Procedure, 1908.

On 4th November 2020, Ministry of Law and Justice issued an

Ordinance i.e. The Arbitration and Conciliation (Amendment)
Ordinance 2020 which is brought into force on the date of such
notification. By the said Ordinance, a proviso is inserted in
Section 36(3) with effect from 23rd October 2015 which provides
that Court has to grant unconditional stay of award during the
pendency of arbitral proceedings if the Court is satisfied that a
prima facie case is made out –
(a) that the arbitration agreement or contract which is the basis of
the award; or
(b) the making of the award was induced or effected by fraud or
corruption.

Amendment will apply irrespective of whether the arbitral or court

proceedings were commenced prior to or after the commencement of
the Arbitration and Conciliation (Amendment) Act, 2015.

 Section 87 is inserted by 2015 Amendment. It was provided that unless the parties otherwise
agree, the amendment made to the Arbitration Act by the Arbitration and Conciliation
(Amendment) Act, 2015 shall not apply to (i) arbitral proceedings commenced before the
commencement of the Arbitration and Conciliation (Amendment) Act, 2015, (ii) Court
proceedings arising out of or in relation to such arbitration proceedings irrespective of
whether such court proceedings are commenced prior to or after commencement of the
Arbitration and Conciliation (Amendment) Act, 2015 and (iii) apply only to arbitration
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 proceeding commenced on or after the commencement of the Arbitration and Conciliation
(Amendment) Act, 2015 and to Court proceedings arising out of or in relation to such
arbitral proceedings.

 In view of insertion of Section 87, which is inserted with retrospective effect, all
proceedings where notice for appointment of an arbitrator was received by the other party
prior to 23rd October, 2015, arbitration proceedings in respect of particular dispute would
commence before commencement of the Arbitration and Conciliation (Amendment) Act,
2015 and such proceedings would be governed by the provision of the Arbitration Act prior
to the enactment of Arbitration and Conciliation (Amendment) Act, 2015. Section 87 is
deemed to have been inserted w.e.f. 23rd October, 2015. Section 26 of the Arbitration and
Conciliation (Amendment) Act, 2015 is omitted w.e.f. 23 rd October, 2015.

 Supreme Court in the case of Hindustan Construction Company Limited and Anr.
Vs.Union of India & Ors., 2019 SCC OnLine SC 1520 has struck down Section 87 of
the Arbitration Act as violative of Article 14 of the Constitution of India and has restored
Section 26 of the 2015 Amendment Act. It is is held that deletion of Section 26 of 2015
Amendment Act together with insertion of Section 87 under the Arbitration Act, 1996 by
the 2015 Amendment Act is manifestly arbitrary under Article 14 of the Constitution of
India. Judgment of the Supreme Court in the case of Board of Control for Cricket in India
Vs. Kochi Cricket Pvt. Ltd. and Ors.- (2018) 6 SCC 287 would continue to apply so as to
make applicable the salutary amendments made by 2015 Amendment Act to all the Court
Proceedings after 23rd October 2014.

 Supreme Court in case of Pam Developments Private Ltd. v/s. State of West Bengal, 2019
SCCOnline SC 852 has construed Section 36 of the Arbitration Act and Order XXVII Rule
8A of Civil Procedure Code, 1908 and has held that the Arbitration Act is a self-contained
Act. The provisions of CPC will apply only insofar as the same are not inconsistent with the
spirit and provisions of the Arbitration Act. Mere reference to CPC in Section 36 cannot be
construed in such a manner that it takes away the power conferred in the Arbitration Act
itself. It is to be taken as a general guideline, which will not make the main provision of the
Arbitration Act inapplicable. The provisions of CPC are to be allowed as a guidance,
whereas the provisions of the Arbitration Act are essentially to be first applied. Provisions
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 of the CPC are to be taken into consideration while considering an application for stay
under Section 36 in case of stay of money decree however they are not mandatory but in
essence directory.

 Bombay High Court in a judgment delivered on 16th December 2016 in the case of
M/s.PFS Shipping (India) Limited Vs. Capt. V.K. Gupta & Anr.-- 2016 SCCOnline
10048 has construed Section 36 of the Arbitration and Conciliation Act, 1996 amended by
the Arbitration and Conciliation (Amendment) Act, 2015 and has held that while
considering an application for grant of stay in the case of an arbitral award for payment of
money, the Court has been granted discretion to consider security required to be furnished
by the petitioner seeking stay or whether stay has to be granted unconditionally or on
furnishing such security so as to secure part of the claim depending upon the facts and
circumstances of each case. It is held that while considering an application for grant of stay
under Section 36(3) inserted by the Arbitration and Conciliation (Amendment) Act, 2015,
due regard to the provisions for grant of stay of a money decree under the provisions of the
Code of Civil Procedure, 1908 has to be given. However, in appropriate cases, the Court can
grant stay even on the petitioner furnishing security to secure part of the awarded amount or
may grant unconditional stay depending upon the facts and circumstances of each case. If
the award is prima facie perverse and is contrary to the provisions of law, the Court is not
bound to direct the petitioner to deposit the entire amount of the arbitral award for payment
of money.

 Execution proceedings for executing an arbitral award

to be filed in which Court :-

 The Supreme Court in the case of Sundaram Finance Limited v. Abdul Samad & Anr.,
(2018) 3 SCC 622 that execution application can be filed in any Court in India where such
decree can be executed. There is no requirement for obtaining transfer of decree from Court
which would have jurisdiction on the arbitral proceedings.

 The Supreme Court held in the case of Centrotrade Minerals and Metal Inc. Vs.
Hindustan Copper Limited (2017) 2 SCC 228 that even if the award is not enforced, it is

91
 not a waste paper. Once the award is made on a subject matter, no action can be started
again on the original claim.

 The Supreme Court held in the case of Punjab State Civil Supplies Corpn. Ltd. Vs. Atwal
Rice and General Mills – (2017) 8 SCC 116 that the Executing Court cannot hold any
kind of factual enquiry which may have the effect of nullifying the decree itself but it can
undertake limited inquiry regarding jurisdictional issues which goes to the root of the
decree and has the effect of rendering the decree nullity.

 In case of Leela Hotels Pvt. Ltd. vs. Urban Development Corporation Ltd. – (2012) 1 SCC
302 it is held that an arbitral award has to be enforced under CPC in the same manner as if it
were a decree of the court.

Section 37 provides for orders which are appealable under the

Arbitration and Conciliation Act, 1996 i.e. -
(a) refusing to refer the parties to arbitration under
section 8;
(b) granting or refusing to grant any measure under section 9;
(c) setting aside or refusing to set aside an arbitral award under section
34.

An appeal is also maintainable against the order of the arbitral

tribunal -
(a) accepting the plea referred to in sub - section (2) or sub - section
(3) of section 16; or
(b) granting or refusing to grant an interim measure under section
17.

No second appeal is maintainable from an order passed in appeal u/s

37.
The right to appeal to the Supreme Court is however not taken away
under the said provisions.

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 By 2019 Amendment, in Section 37(1), the words “An appeal” is
substituted by words “Notwithstanding anything contained in any
other law for the time being in force, an appeal.”

 Supreme Court in Dr. A. Parthasarathy & Ors. Vs. E Springs Avenues Pvt. Ltd. & Ors.
(2022) SCC OnLine SC 719 has held that under Section 37 of the Arbitration Act, the
Court cannot remand the matter to the Arbitrator for fresh decision. Only two options are
available to the Court considering the appeal under Section 37 of the Arbitration Act. The
High Court either may relegate the parties for fresh arbitration or to consider the appeal on
merits on the basis of the material available on record within the scope and ambit of the
jurisdiction under Section 37 of the Arbitration Act. However, the High Court has no
jurisdiction to remand the matter to the same Arbitrator unless it is consented by both the
parties that the matter be remanded to the same Arbitrator.

 Supreme Court in Haryana Tourism Limited vs. Kandhari Beverages Limited (2022) 3
SCC 237 held that in an appeal under Section 37, Court cannot enter into merits of the
claim. As per settled position of law, an award can be set aside under Section 37 only if
award is found to be contrary to: (a) fundamental policy of Indian law; or (b) interest of
India; or (c) justice or morality; or (d) if it is patently illegal.

 Supreme Court in Government of Maharashtra (Water Resource Department) represented

by Executive Engineers vs. Borse Brothers Engineers and Contractors Private Limited
(2021) 6 SCC 460 has held that (I) Limitation period for filing appeal under Section 37 in
respect of cases falling under Commercial Courts Act i.e. where specified value is not less
than three lakh rupees, a period of 60 days (under Section 13(1-A) of the Commercial
Courts Act) is provided for filing appeals. (II) Limitation period for filing appeal under
Section 37 in respect of cases not falling under Commercial Courts Act i.e. where the
specified value is less than three lakh rupees, it is limitation period prescribed under Article
116 and Article 117 of the Limitation Act which is applicable. Thus limitation period would
be 90 days or 30 days, depending upon whether the appeal is from any other Court to a
High Court or an intra-High Court appeal. Section 5 of the Limitation Act is applicable to
condone the delay in filing appeal however subject to “sufficient cause” being shown to the

93
 satisfaction of the Court and keeping in mind the object of the Arbitration Act. Long delay
may not be condoned as a rule.

 Supreme Court in Chintels India Limited vs. Bhayana Builders Private Limited (2021) 4
SCC 602 has held that an appeal against an order refusing to condone delay in filing of
application under Section 34 held is maintainable under Section 37(1)I, as such order
amounts to order refusing to set aside award.

 Supreme Court in the case of N.V. International Vs. State of Assam & Ors., (2020) 2
SCC 109 has held that delay beyond the period of 120 days in filing an appeal under
Section 37 is not condonable arising out of an application being either dismissed or
allowed under section 34. Period of 120 days comprises of a grace period of 30 days
under Section 5 of the Limitation Act which is added to the prescribed period of 90 days.

 Bombay High Court in Essar Oil and Gas Exploration and Production Limited vs.
Toshiba Water Solutions Private Limited (2021) SCC OnLine Bom 294 has held that no
appeal is permitted under Section 37 of the 1996 Act against the order passed in an
application for stay of the arbitral award and more particularly under Section 36 of the 1996
Act. Merely because the Notice of Motion for stay under Section 36 of the Arbitration and
Conciliation Act, 1996 was filed in the petition filed under Section 34 of the Arbitration and
Conciliation Act, 1996, the order passed in such Notice of Motion/Interim Application
cannot be construed as an order under Section 34 of the Arbitration and Conciliation Act,
1996.

 Bombay High Court in Valentine Maritime Ltd. vs. Kreuz Subsea PTE Ltd. & Anr. (2021)
SCC OnLine Bom 75 held that provisions under Sections 9 and 17 of the Arbitration and
Conciliation Act are meant for the purpose of protecting the subject matter of the dispute till
the arbitration proceedings culminates into an award. Further, the Court relied on the
decision of a Division Bench of in Numbus Communications Ltd. vs. Board of Control for
Cricket in India and held that in deciding an application under Section 9, the Court would
while bearing in mind the fundamental principles underlying the provisions of the Code of
Civil Procedure, at the same time, have the discretion to mould the relief in appropriate
cases to secure the ends of justice and to preserve the sanctity of the arbitral process. In
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 crux, the underlying basis of Order 38 Rule 5 therefore must be borne in mind while
deciding an application under Section 9(ii) (b) of the Arbitration Act.

 Bombay High Court in Oil and Natural Gas Corporation Limited vs. A Consortium of
Sime Darby Engineering Sdn. Bhd. 2021 SCC OnLine Bom 985 refused to entertain an
appeal under Section 37 of the Arbitration and Conciliation Act as it did not fall within any
of the categories specified in Section 37 of the said Act.Bombay High Court in Hasina
Mohamed Shafik Laljee vs. Fatima Correa Nee Fatima Yakubali 2021 SCC OnLine Bom
876 held that scope of powers of Appellate Court under Section 37 of 1996 Act are more
limited than limited powers of Court hearing petition under Section 34 of the Arbitration
Act.

 Bombay High Court in the case of Prabhat Steel Traders Pvt. Ltd. Vs. Excel Metal
Processors Pvt. Ltd., 2018 SCCOnline Bom 2347 held that a party who is not a party to
the arbitration agreement and if aggrieved by an order of interim measures passed by the
arbitral tribunal has locus standi to file an appeal under Section 37 of the Arbitration Act
after obtaining leave from such Appellate Court. The validity of the order passed by the
arbitral tribunal under Section 17 cannot be challenged in a Civil Court.

 Cross objection under Order XLI Rule 21 of the Code of Civil Procedure cannot be filed
in Appeal under Section 37 of the Arbitration and Conciliation Act, 1996. – MTNL Vs.
Applied Electronics Ltd. – (2017) 2 SCC 37.

 Division Bench of Bombay High Court in case of Kakade Construction Company Ltd. v/s.
Vistra ITCL (India) Ltd., 2019 SCCOnline Bom 1521 has held that an appeal under Section
37 of the Arbitration Act is not maintainable against the order passed by the Executing
Court appointing receiver while exercising power under Section 36 of the Arbitration Act
since the said order is not being under the Code of Civil Procedure. Only those orders are
appealable, which are described under Section 37 and not other orders.

 Bombay High Court in the case of Prabhat Steel Traders Pvt. Ltd. Vs. Excel Metal
Processors Pvt. Ltd. 2018 SCCOnline Bom 2347 after interpreting the amended Section
17 of the Arbitration Act has held that an aggrieved third party who is not a party to
95
arbitration agreement can file an appeal under Section 37 of the Arbitration Act arising out
of interim measures granted by the learned arbitrator after obtaining leave from the Court.

Section 38 provides for fixing the amount of deposit or

supplementary deposit, as an advance for the costs which it expects
will be incurred in respect of the claim fix separate amount of
deposit for the claim and counter- claim. Both the parties are
required to make such deposit an equal share. If one party failed
to pay his share of deposit, the other party may pay that share. If
other party does not pay share in respect of opponent or in respect
of his claim, the Arbitral Tribunal may suspend or terminate the
arbitral proceedings in respect of such claim or counter claim as
the case may be.

Under Section 39, the Arbitral Tribunal has lien on the arbitral
award for any unpaid costs on the arbitration. The Court may
make an order as it thinks fit respecting the costs of the arbitration
where any question arises respecting such costs and the arbitral
award contains no sufficient provision concerning them.

Under Section 40, arbitration agreement is not discharged by death of

any party thereto, but shall be enforceable by or against the legal
representative of the deceased. The mandate of an arbitrator shall not
be terminated by the death of any party by whom he was appointed.

Section 41 makes the provision for insolvency and for continuation

of the arbitral proceedings by the receiver as well as the official
assignee.

Section 42 provides that where with respect to an arbitration

agreement any application under Part-I has been made in a Court,
that Court alone shall have jurisdiction over the arbitral proceedings
and all subsequent applications arising out of that agreement and the
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arbitral proceedings shall be made in that Court and in no other
Court.

Section 42A and 42B are inserted by virtue of The Arbitration and
Conciliation (Amendment) Act 2019 to maintain confidentiality of all
arbitral proceedings except where its disclosure is necessary for the
purpose of implementation and enforcement of the award
notwithstanding anything contained in any other law for the time being in
force. No suit or other legal proceedings can be filed against the
arbitrator for anything which is done in good faith or intended to be done
in good faith under the Arbitration Act or the rules or regulations made
thereunder. Sections 2, 3 and 10 of the Arbitration and Conciliation
(Amendment) Act, 2019 are not brought into effect till date though
Central Government has already issued a notification dated 30 th
August, 2019 appointing 30th August, 2019 as the date on which the
other provisions of the Amendment Act 2019 such as Sections 1, 4 to
9, 11 to 13 and 15 are brought into force.

By 2019 Amendment, after Section 42, Section 42-A is inserted

which provides that “Notwithstanding anything contained in any
other law for the time being in force, the arbitrator, the arbitral
institution and the parties to the arbitration agreement shall
maintain confidentiality of all arbitral proceedings except award
where its disclosure is necessary for the purpose of implementation
and enforcement of award.”

By 2019 Amendment, Section 42-B is inserted which provides that

“No suit or other legal proceedings shall lie against the arbitrator
for anything which is in good faith done or intended to be done
under the Arbitration Act or the rules or regulations made
thereunder.”

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 Supreme Court in General Manager East Coast Railway Rail Sadan & Anr. vs. Hindustan
Construction Co. Ltd. 2022 SCC OnLine SC 907 set aside the order of the High Court
appointing sole arbitrator. In the said case, the respondent before filing an application under
Section 11(6) of the Arbitration Act in High Court of Orissa at Cuttack, filed an application
before the Court at Visakhapatnam under Section 9 of the Arbitration Act. The Hon’ble
Supreme Court therefore held that “in that view of the matter considering Section 42 of the
Arbitration Act, the High Court of Andhra Pradesh at Hyderabad alone would have
jurisdiction to decide the subsequent applications arising out of the Contract Agreement
and the further arbitral proceedings shall have to be made in the High court of Andhra
Pradesh at Hyderabad (wrongly mentioned Amaravati) alone and in no other court. In that
view of the matter the High Court of Orissa at Cuttack has committed a serious error in
entertaining the application under Section 11(6) of the Act before it and appointing the sole
arbitrator.”

 Supreme Court in Ravi Rajan Developers vs. Aditya Kumar Chatterjee 2022 SCC OnLine
SC 568 has held that when the Respondent approached the Court at Muzaffar for interim
relief under Section 9 of the Arbitration Act, the Courts at Calcutta lack jurisdiction to
entertain application under Section 11(6) of the Arbitration Act. Accordingly, the Supreme
Court set aside the order of the Calcutta High Court appointing the arbitrator under Section
11(6) by rejecting the Appellants objection challenging the jurisdiction of Calcutta High
Court.

Section 43 provides that the Limitation Act, 1963 shall apply to

arbitrations as it applies to proceedings in Court. An arbitration
shall be deemed to have commenced on the date referred to in section
21. If an arbitral award is set aside, the period between the
commencement of the arbitration and date of order of the Court
shall be excluded in computing the time prescribed by the Limitation
Act, 1963 for commencement of proceedings including arbitration
with respect to the dispute so submitted.

 Supreme Court in New Delhi Municipal Council vs. Minosha India Limited, (2022) 8 SCC
384 held that under the Insolvency and Bankruptcy Code, by virtue of the order admitting
98
 the application, be it under Sections 7, 9 or 10 and by imposing moratorium, proceedings as
are contemplated in Section 14 of the IBC would be tabooed, but this does not include an
application under Section 11(6) of the Arbitration Act by the corporate debtor or for that
matter, any other proceedings by the corporate debtor against another party. By the order of
moratorium under Section 14 of the IBC, the entire period of the moratorium is liable to be
excluded in computing the period of limitation even in a suit or an application by a
corporate debtor, including one under Section 11(6) of the Arbitration Act.

 Supreme Court in Secunderabad Cantonment Board vs. B.Ramachandraiah & Sons

(2021) 5 SCC 705 has held that limitation period for filing an application under Section 11
of the Arbitration Act commences on the expiry of the period specified in the notice
invoking arbitration i.e. period of limitation will begin to run from the date when there is
failure to appoint the arbitrator within period specified in the notice invoking arbitration.
Mere exchange of letters or mere settlement discussions may not extend the limitation
period. The rejection of arbitration proceedings by the other side at a subsequent time i.e.
post expiry of such limitation period or writing of reminder letters to the other side shall not
extend the limitation period.

 Supreme Court in Bharat Sanchar Nigam Limited & Anr. vs. Nortel Networks India
Private Limited (2021) 5 SCC 738 has held that limitation period for filing an application
for appointment of arbitrator under Section 11 is governed by Article 137 of the Limitation
Act i.e. application for appointment of arbitrator under Section 11(6) to be filed within 3
years from date on which “right to apply” under Section 11(6) accrues. The Court further
clarified that the period of limitation for filing a petition seeking appointment of an
arbitrator(s) cannot be confused or conflated with the period of limitation applicable to the
substantive claims made in the underlying contract.

By 2019 Amendment, Part I-A is inserted i.e. Sections 43A to 43M

which provides for Establishment and incorporation of Arbitration
Council of India, Composition of Council, Duties and functions of
Council etc. Sections 43A to 43M are not notified by the Central
Government till date.

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 On 4th November 2020, Ministry of Law and Justice issued an
Ordinance i.e. The Arbitration and Conciliation (Amendment)
Ordinance 2020 by which Section 43J of the Arbitration Act is
substituted by the words “The qualifications, experience and norms
for accreditation of arbitrators shall be such as may be specified by the
regulations."

Prior to this amendment, the qualifications, experience and norms

for accreditation of arbitrators was to be specified in Eighth
Schedule.

ARTICLE 227 OF THE CONSTITUTION OF INDIA

 Supreme Court in Bhaven Constructions vs. Executive Engineer, Sardar Sarovar

Narmada Nigam Limited & Anr. 2021 SCC OnLine SC 8 has held that ruling of arbitral
tribunal under Section 16 of the Arbitration Act upon the challenge to the jurisdiction of the
Arbitral Tribunal is not to be interfered by proceedings under Article 226 and 227 except in
exceptionally rare circumstances. This power needs to be exercised in exceptional rarity,
wherein one party is left remediless under the statute or a clear “bad faith” shown by one of
the parties. In usual course, 1996 Act provides a mechanism to challenge the said order
under Section 16 under Section 34 of the Arbitration Act.

 Supreme Court in case of Sterling Industries v/s. Jayprakash Associates Ltd. and Others,
2019 SCCOnline SC 1154 after adverting to the judgment in case of SBP and Co. v/s. Patel
Engineering Ltd., (2005) 8 SCC 618 has set aside the judgment of High Court entertaining
a writ petition under Article 227 of Constitution of India against an order of the learned
District Judge passed under Section 20 of the Arbitration Act, 1940 read with Section 19 of
Micro, Small and Medium Enterprises Development Act, 2006 on the ground that the
application made to the District Judge by the respondent against a partial award made under
Section 16 itself was not tenable vide Section 16(6) of the Arbitration Act.

 Bombay High Court in M/s.MES RGSL Toll Bridge Private Limited vs. MSRTC 2020 SCC
OnLine Bom 2315 held that remedy under Article 226 and 227 cannot be invoked to force
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 contracting parties to consent/agree to arbitration.

SCHEDULE IV

 Supreme Court in Oil and Natural Gas Corporation Limited vs. Afcons Gunanusa JV
2022 SCC OnLine SC 1122 has held that arbitrators do not have power to unilaterally issue
binding and enforceable orders determining their own fees. The term ‘sum in dispute’ in the
Fourth Schedule of the Arbitration Act refers to the sum in dispute in claim and counter-
claim separately, and not cumulatively. The ceiling of Rs.30,00,000/- in the entry at Serial
No.6 of the Fourth Schedule is applicable to the sum of the base amount (of Rs.19,87,500)
and the variable amount over and above it. Consequently, the highest fees payable shall be
Rs.30,00,000/-. The ceiling is applicable to each arbitrator and not the arbitral tribunal as a
whole, where it consists of three or more arbitrators.

GENERAL

 The Supreme Court in Delhi Airport Metro Express Private Limited vs. Delhi Metro Rail
Corporation (2022) 9 SCC 286 held that the phrase “unless otherwise agreed by the
parties” used in various sections viz.17, 21, 23(3), 24(1), 25, 26, 29, 31, 85(2)(a) etc. of the
1996 Act indicates that it is open to the parties to agree otherwise than what the statutory
provision in question provides for. So if there is such an agreement between the parties on
any aspect so permitted by 1996 Act, the arbitrator shall be bound by the same.

 The Supreme Court in Gujarat State Civil Supplies Corporation Ltd. vs. Mahakali Foods
Pvt. Ltd. & Anr. With other connected matters 2022 SCC OnLine SC 1492 has held that (I)
Chapter V of the MSMED Act, 2006 would override the provisions of the Arbitration Act,
1996. (II) No party to a dispute with regard to any amount due under Section 17 of the
MSMED Act, 2006 would be precluded from making a reference to the Micro and Small
Enterprises Facilitation Council, though an independent arbitration agreement exist between
the parties. (III) The Facilitation Council, which had initiated Conciliation proceedings
under Section 18(2) of the MSMED Act, 2006 would be entitled to act as an arbitrator
despite the bar contained in Section 80 of the Arbitration Act. (IV) The proceedings before
the Facilitation Council/institute/centre acting as an arbitrator/arbitration tribunal under

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 Section 18(3) of MSMED Act, 2006 would be governed by the Arbitration Act, 1996. (V)
The Facilitation Council/institute/centre acting as an arbitral tribunal by virtue of Section
18(3) of the MSMED Act, 2006 would be competent to rule on its own jurisdiction as also
the other issues in view of Section 16 of the Arbitration Act, 1996.

 The Bombay High Court in JMC Metals Pvt. Ltd. vs. Kunvarji Commodities Brokers Pvt.
Ltd. 2021 SCC OnLine Bom 2588 has held that Arbitration and Conciliation Act will
continue to govern procedural parts of arbitration proceedings before arbitral tribunal
constituted under Multu-commodity Exchange bye-laws.

 The Bombay High Court in Choudhari Food Industries, Sangamner vs. Ahmednagar
District Goad Rearing and Processing Co-operative Federation Ltd. 2021 SCC OnLine
Bom 1542 has inter alia held that bar under Section 69 of Indian Partnership Act would
apply to the suit and not to initiation of the arbitration proceedings.

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