Arbitration Court Reckoner : January 2021

By way of the present column, an attempt is made to briefly review the salutary judgments pronounced by the Courts in the month of January 2021 under the Arbitration & Conciliation Act, 1996. Merely because the Section 9 proceedings entails disputed facts does not lead to dismissal of a Section 9 application/petition In Luxe Passion Private Limited v Freedom Roost, High Court of Delhi held that mere fact that S. 9 proceedings entail disputed facts would be no ground to reject the S. 9 petition as in the Section 9 proceedings, there are bound to be disputed facts which are to be adjudicated in arbitration, by the Arbitral Tribunal agreed upon by the parties. On merits, the Court firstly held that in law there can be no termination of a partner of a partnership firm but only expulsion and that too in good faith of powers stipulated in the partnership deed and prima facie held the termination of the petitioner from partnership firm was firstly not an expulsion/there was no power of expulsion in the deed and secondly not in good faith and thus stayed the email terminating the petitioner from the partnership till the conclusion of the prospective arbitration proceedings a party not intending to refer the dispute to arbitration and opposing appointment of arbitrator u/s 11 would not be entitled to grant of interim relief under Section 9 of the Act In Innovative Facility Solutions Private Limited v AEC Digitial Studio Private Limited and Ors., High Court of Punjab & Haryana held that it can no longer be disputed that a party invoking the jurisdiction of the Court under Section 9 of the Act must have the immediate intention of referring the dispute to arbitration as only then, the interim protection granted would remain proximate to the arbitral proceedings. Section 32 Objection as to arbitrability is jurisdictional issue and not a subject matter of S. 32 In Medisprouts India Pvt Limited v M/S Silver Maple Healthcare, High Court of Delhi held that the question whether the disputes are arbitrable or not is a matter effecting the jurisdiction of the Arbitral Tribunal and the same is not a subject matter of Section 32 of the Act and further held that an order dismissing an objection with regards to arbitrability/ non-arbitrability of dispute, though styled as a S. 32 application, cannot be assailed by filing a petition u/s 14 of the Act. Article 226 Power under Article 226/227 needs to be exercised in exceptional rarity to interfere with arbitral proceedings case only in 2 cases, wherein one party is left remediless under the statute or a clear 'bad faith' shown by one of the parties In Bhaven Construction Through Authorised Signatory Premjibhai K. Shah V Executive Engineer Sardar Sarovar Narmada Nigam Ltd.& Anr., the Supreme Court held that while a legislative enactment cannot curtail a Constitutional right and thus remedy under Article 226 & 227 would still be available despite the mandate of S. 5 of the Act but held that it is prudent for a Judge to not exercise discretion to allow judicial interference beyond the procedure established under the enactment.