| Newsletter |  |
 |
|
| ARBITRATION AND CONCILIATION ACT, 1996 | SEPTEMBER, 2022 |
| WHETHER ARBITRATION CLAUSE CAN BE GIVEN EFFECT EVEN IF IT DOES NOT EXPRESSLY STATE THAT DECISION OF ARBITRATOR IS FINAL & BINDING ON PARTIES? Recently, the hon’ble Supreme Court in ‘Babanrao Rajaram Pund vs. M/s. Samarth Builders & Developers & Anr. (Civil Appeal No. 6272 of 2022)’ held that Section 7 of the Arbitration and Conciliation Act, 1996 does not mandate any particular form for the arbitration clause. The Supreme Court in this case observed that even if the words ‘final and binding’ were missing from the arbitration clause in the agreement, it does not mean that the clause is invalid. On a wholesome reading of the clause, the Hon’ble Supreme court observed, ‘It can be gleaned from other parts of the arbitration agreement that the intention of the parties was surely to refer the disputes to arbitration.’ Thereafter, the Hon’ble Supreme Court placed reliance on the Judgment titled ‘Enercon (India) Ltd. and Ors. v. Enercon Gmbh and Anr.’, a 3-judge bench Judgment wherein it was held that, ‘a common sense approach has to be adopted to give effect to the intention of the parties to arbitrate.’ The court also placed reliance on The UNCITRAL Model Law on International Commercial Arbitration, 1985 which envisages minimal supervisory role by courts. Additionally, while relying on the Judgment titled ‘KK Modi v KN Modi (1998)3 SCC 573’, the Hon’ble Supreme Court reiterated four essential elements of arbitration agreement mentioned which are provided hereunder
|
| WHETHER THE COURT WHILE EXERCISING ITS POWER UNDER SECTION 9 OF THE ARBITRATION AND CONCILIATION ACT, 1996 STRICTLY BOUND BY CPC? The Supreme Court recently in the case of Essar House Private Limited vs Arcellor Mittal Nippon Steel India Limited (Civil Appeal No. 6574 & 6575 of 2022)held that the power under Section 9 of the Arbitration and Conciliation Act, 1996 should not ordinarily be exercised ignoring the basic principles of procedural law as laid down in the CPC, but the technicalities of CPC cannot prevent the Court from securing the ends of justice. The bench further observed that Section 9 of the Arbitration and Conciliation Act, 1996 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. If a strong prima facie case is made out and the balance of convenience is in favour of interim relief being granted, the Court exercising power under Section 9 of the Arbitration and Conciliation Act, 1996 should not withhold relief on the mere technicality of absence of averments, incorporating the grounds for attachment before judgment under Order 38 Rule 5 of the CPC. Proof of actual attempts to deal with, remove or dispose of the property with a view to defeat or delay the realisation of an impending Arbitral Award is not imperative for grant of relief under Section 9 of the Arbitration and Conciliation Act, 1996. The apex court while reiterating judgement of multiple high courts namely Ajay Singh & Ors. v. Kal Airways Private Limited and Ors. [(2017) SCC Online Del 8934]; Jagdish Ahuja & Anr. v. Cupino Limited [2020 SCC Online Bom 849]; Valentine Maritime Ltd. v. Kreuz Subsea Pte. Ltd. & Anr [2021 SCC Online Bom 75] & Srei Infrastructure Finance Limited v. M/s. Ravi Udyog Pvt. Ltd & Anr [A.P. No. 522 of 2008] held that the powers of a Court under Section 9 of the Arbitration and Conciliation Act, 1996 are wider than the powers under the provisions of the CPC Read More... |
| WHETHER NON-AVAILABILITY OF ORIGINAL AGREEMENT IS MATERIAL OR NOT WHEN PARTIES DO NOT DISPUTE THE EXISTENCE OF THE AGREEMENT? The Allahabad High Court recently in the case titled ‘Noorul Huda English Medium School Lucknow Road Fatehpur And Ors vs Sohel Ahmad Siddiqui And Ors (Matters Under Article 227 No. 5252 of 2022)’ held that Section 8 read with Section 7(4)(c) of the Arbitration and Conciliation Act, 1996 leads to the conclusion that the requirement under these sections including filing an application under Section 8(1) of the Arbitration and Conciliation Act, 1996 along with the original arbitration agreement or its duly certified copy is not mandatory and the judicial authority shall decide the application if the existence of the arbitration agreement in the plaint is alleged by the plaintiff and not denied by the defendants. The Hon’ble Court observed that such requirement of producing the original agreement containing the arbitration clause to be on record is only to expedite the proceedings and to enable the court to reach a prima facie conclusion regarding the existence of an arbitration agreement with reference to the dispute brought before the judicial authority. The power to finally decide on the existence or the validity of the arbitration agreement vests with the Arbitral Tribunal itself, under Section 16(1) of the Arbitration and Conciliation Act, 1996. Referring to Supreme Court Judgements of Ameet Lalchand Shah & Ors. vs. Rishabh Enterprises & Anr. [2018 (15) SCC 678] and Emaar MGF Land Limited vs. Aftab Singh [2019 (12) SCC 751], the Hon’ble Court observed that the nature of examination by the judicial authority regarding the existence of a valid arbitration agreement is only on a prima facie basis. Read More... |
| WHETHER PARTIES CAN DEVIATE FROM TERMS OF JURISDICTION UNDER THE ARBITRATION CLAUSE? Recently, the Madras High Court, while deciding the case titled ‘Andal Dorairaj & Ors. vs. M/s. Rithwik Infor Park Pvt. Ltd., & Ors. [C.R.P. (PD) Nos.1641, 1647 & 1648 of 2022 and C.M.P.Nos.8183, 8220 & 8208 of 2022]’ held that under Section 42 of the Arbitration and Conciliation Act, 1996 if parties have chosen to file an application before a particular court, then they cannot go on to file proceedings in other Courts and cause confusion in jurisdiction, irrespective of the fact that they had reserved a particular jurisdiction by contract. The parties have got the liberty to only once deviate from the terms on jurisdiction. The Court also observed that the proceedings initiated under Section 34 of the Arbitration and Conciliation Act, 1996 is an 'Application' and the proceedings initiated under Section 37 of this Act is an ‘Appeal’. The difference between an application filed under Section 34 & Section 37 of Arbitration and Conciliation Act, 1996 is that an application under Section 34 is filed after receiving the final award, whereas an Appeal under Section 37 of the Arbitration and Conciliation Act, 1996 would accommodate only those orders which are appealable in nature and over which appeals are filed. Read More... |
| INTELLECTUAL PROPERTY RIGHTS |
| WHETHER CO-EXISTENCE OF TWO REGISTERED TRADEMARKS IN SEPARATE JURISDICTIONS WOULD ACT AS AN ESTOPPEL AGAINST ONE PARTY FROM SEEKING TO PROTECT THEIR TRADEMARKS? The Delhi High Court in the case of Star Television Production Limited & Anr. vs. Eurosport & Ors. [CS(COMM) 359/2020] while grating interim injunction in favour of Star TV observed that the trademark of Eurosport is infringing the trademark of Star TV despite the fact that both are registered trademarks. The Court further held that where there are two registered trademarks, while both proprietors could use their respective trademarks exclusively against third party, but not against each other, the registration of the Trade Mark registered later may be refused or cancelled on the grounds that:
|
| INSOLVENCY & BANKRUPTCY CODE, 2016 |
| WHETHER CIRP CAN BE INITIATED AGAINST CORPORATE GUARANTOR WITHOUT PROCEEDING AGAINST PRINCIPAL BORROWER? Recently, the division bench of the Hon’ble Supreme court comprising of Hon’ble Justice Indira Banerjee and Hon’ble Justice JK Maheshwari in the case titled ‘K Paramasivam vs Karur Vysya Bank Ltd’ held that Corporate Insolvency Resolution Process (“CIRP”) can be initiated against a Corporate Guarantor without proceeding against the principal borrower. Additionally, the Hon’ble Court also held that CIRP can be initiated against a corporate guarantor that has given guarantee for dues of non-corporate entity. Pertinently, the Hon’ble Supreme Court in ‘Laxmi Pat Surana vs Union Bank of India (2021) 8 SCC 481’ has already settled that CIRP under Section 7 of the Insolvency and Bankruptcy Code, 2016 can be initiated against a Corporate person along with the principal borrower for furnishing a corporate guarantee. Pursuant to referring to the above-stated judgment, the Hon’ble Supreme Court in the present case held that Section 7 of the Insolvency and Bankruptcy Code, 2016 provides for CIRP to be initiated even against a Corporate entity that has given guarantee for dues of non-corporate entity since the corporate person accrues the financial debt in account of the guarantee. Consequently, in the present case, the guarantor accrues liability in tandem with the principal borrower and on default of debts by the borrower, the guarantor becomes the Corporate debtor. Read More... |
| WHETHER A RESOLUTION PLAN NOT GIVING DUE CONSIDERATION TO THE STATUTORY DUES PAYABLE TO STATE GOVERNMENT/LEGAL AUTHORITY COULD BE REJECTED? Recently, the Hon’ble Supreme Court in the case titled ‘State Tax Officer(1) vs Rainbow Papers Limited’, has laid down that the Ld. Adjudicating Authority, National Company Law Tribunal will reject a resolution plan if it ignores the Statutory debts due to any State Government or legal authority. The Hon’ble Court further observed that when a company defaults on its debts, which shall include statutory dues to government, and no resolution plan can be finalized for paying off the debts in a uniform and phased manner, the company would certainly be put for liquidation with its assets sold in accordance with Section 53 of the Insolvency and Bankruptcy Code, 2016 (“IB Code, 2016”). The Hon’ble Supreme Court has taken such view in the interest of equity and fairness. The objective is to prevent the committee of creditors, that might comprise of financial institutions and other financial creditors, to only secure their interests in recovering the dues at the expense of Statutory dues payable to any Government or Government Authority. Read More... |
| WHETHER LIMITATION IS TO BE COMPUTED FROM THE DATE OFPREPARATION OF CERTIFIED COPY, OR DELIVERY? Recently, the Hon’ble National company Law Appellate Tribunal in the Judgment titled ‘Wadhwa Rubber v. Bandex Packaging Pvt. Ltd.’ affirmed Section 61 of Insolvency Bankruptcy Code, 2016 wherein an appeal is barred by limitation after a period of 30 days and an additional 15 days can only be granted on the discretion of the Appellate Authority on being satisfied that there is sufficient cause for delay. The Principal Bench of Hon’ble National Company Law Appellant Tribunal comprising of Justice Rakesh Kumar Jain and Technical Member Alok Srivastava observed in the present case that limitation would be computed from the date of preparation of certified copy instead of date of delivery of certified copy. Read More... |
| WHETHER THE ISSUE OF CIRP COST FALLS WITHIN THE DOMAIN OF THE COMMITTEE OF CREDITORS OR THE ADJUDICATING AUTHORITY? Recently the Hon’ble National Company Law Appellant Tribunal (NCLAT) in the case titled ‘Bharat Hotels Ltd. v Tapan Chakraborty’ held that determining the CIRP cost as well as its approval is the prerogative of the Committee of creditors. The Court held that the Committee of creditors has full authority to modify the amount or even put it aside. This implies that CIRP cost clearly falls within the domain of the Committee of Creditors and the Ld. Adjudicating Authority, National Company Law Tribunal cannot decide such matters. The bench therefore, rejected the plea of a Financial creditor to disclose cost of item wise insolvency resolution. Read More... |
| MISCELLANEOUS |
| WHETHER COURTS CAN GRANT THE DECREE OF DIVORCE WITHOUT DISPOSING MAINTENANCE PENDENTE LITE APPLICATION? Recently, the Bombay High Court in the case titled, “Chanda v. Prakashsingh” held that a decree of Divorce cannot be granted without first disposing the application Pendente Lite for maintenance. The court while dealing with an appeal challenging the decree for divorce by the Family Court held that as the wife already had an application for maintenance pendente lite, the Family court could not have decided the case for divorce without first disposing of this application. The Court further observed that the Family court had not assigned any reason for not deciding the interim application for maintenance and also failed to provide an opportunity of being heard to the wife. Hence, the Hon’ble Court was of the view that the application for maintenance pendente lite shall be decided by the family court first in accordance with Section 24 of Hindu Marriage within 60 days before pronouncing a decree for divorce. Read More... |
| WHETHER OFFENCE UNDER SECTION 377 OF THE INDIAN PENAL CODE, 1860 CAN BE COMPROMISED AND FIR BE QUASHED IF THE MATTER IS SETTLED? Recently the Delhi High Court in the case titled, “Aneesh Gupta & Ors. v. State of NCT of Delhi & Anr.”, observed that in matrimonial cases where the parties have amicably settled their dispute themselves, even offences under Section 377 of the Indian Penal Code may be quashed. The court relied on the judgement titled ‘Rifakat Ali & Ors v. State & Anr.’ passed by the Hon’ble Supreme Court to hold that it can exercise its powers under Section 482 CrPC to quash offence under Section 377 Indian Penal Code arising out of a matrimonial dispute, which is settled between themselves. The court reasoned that quashing of offences is necessary to put an end to unnecessary bickering between parties thereby allowing them to move on with their lives. The court also held that offences under Section 406, 498A, 354, and 34 of the Indian Penal Code can also be quashed on the same reasoning. Read More... |
| WHETHER LODGING JUVENILES IN ADULT PRISON AMOUNTS TO DEPRIVATION OF THEIR PERSONAL LIBERTY? Recently, the Hon’ble Supreme Court in the case of “Vinod Katara vs State of Uttar Pradesh” deliberated on the issue of Juveniles languishing in adult prisons. A division bench of Supreme Court comprising of Hon’ble Justice Dinesh Maheshwari and Justice J.B. Pardiwala observed that child rights should be held at a higher pedestal and even a huge delay in raising the plea of Juvenility in a case is not a bar for its subsequent examination. The plea of juvenility could be raised in any court, at any stage even when the Special leave Petition is disposed off. When there is delay in raising plea of juvenility, medical tests are to be resorted to for determination of age in absence of documentation. |
| WHETHER A DISBURSAL OF AD INTERIM COMPENSATION TO VICTIM BY THE ACCUSED CAN BE A GROUND FOR GRANT OF BAIL? Recently, the Hon’ble Supreme Court in the case titled “State of Jharkhand vs Salauddin Khan” set aside the order of Jharkhand High Court which granted bail to an accused arrested under Sections 341, 342 and 376(D) of the Indian Penal Code, 1860 and under Sections 4 and 8 of the Protection of Children from Sexual Offences Act, 2012 and Section 3(4)(w)(i) of the SC/ST Act. The Jharkhand high court had released the accused only on the ground that a co-accused was released on bail by a co-ordinate bench and on willingness of accused to furnish ad interim compensation to the amount of Rs. 1,00,000/- in favour of the victim. While quashing the order of bail, the Hon’ble Supreme Court held that the provisions of Section 439 of CrPC shall necessarily be observed while granting regular bail. Thus, an offer to pay ad interim compensation to the victim cannot be a ground for release of accused on bail. Accordingly, the bench directed the Jharkhand High Court to hear the application for bail on merits within 3 months. Read More... |
| NEW DELHI X -3, Green Park Main, New Delhi, 110016, Telephones: +91 11 2652 0041-42 |
For further / specific information, please contact us at: info@tandonandco.com |
| Disclaimer: The contents of this newsletter are intended for information purposes only, and parts of this newsletter are based on news reports and have not been independently verified. The newsletter is not in the nature of a legal opinion or advice. They may not encompass all possible regulations and circumstances applicable to the subject matter and readers are encouraged to seek legal counsel prior to acting upon any of the information provided therein. Tandon & Co. neither assumes nor accepts any responsibility for any loss arising to any person acting or refraining from acting as a result of any material contained in this newsletter. This newsletter is the exclusive copyright of Tandon & Co. and may not be circulated, reproduced or otherwise used by the intended recipient without the prior permission of its originator. |