1. Hon’ble Delhi High Court | Clauses indicate that when correspondence between the parties shows no reasonable possibility of reconciliation, it would be counterproductive to send them back to that process. Instead, the interest of justice demands that the dispute be referred to arbitration.
Case Details: M/s Garg Enterprises vs Union of India, ARB.P. 66/2024, decided on 12.09.2024
Hon’ble Court must avoid an excessively technical approach and should adopt a pragmatic perspective to facilitate the prompt resolution of the dispute, which is the fundamental purpose of the arbitral process. Hon’ble Supreme Court, in its rulings in Demerara Distilleries Pvt Ltd v. Demerara Distillers Ltd. and Visa International Ltd v. Continental Resources USA Ltd, has espoused a liberal interpretation of these clauses. It has determined that when the correspondence between the parties indicates a lack of reasonable prospects for rapprochement or reconciliation, it would be futile to require the parties to pursue that avenue. In the interests of justice, the dispute should be referred to arbitration, provided that a Section 21 of the Arbitration & Conciliation Act, 1996 (“A&C Act”) notice has been duly issued in accordance with the law.
2. Hon’ble Supreme Court of India has provided clarification that it is permissible to issue clarifications on awards even after the arbitral tribunal has become functus officio.
Case: North Delhi Municipal Corporation vs. M/S. S.A. Builders Ltd., Civil Appeal No. 1878 of 2024, decided On 17.12.2024
The central issue presented before Hon’ble Supreme Court was whether the arbitrator possessed the authority to issue clarifications after having become “functus officio,” signifying the completion of the arbitral function. The judgment delivered by Hon’ble Supreme Court of India determined that the arbitral tribunal maintains a limited jurisdiction to rectify errors or provide clarifications concerning an award, even subsequent to its designation as functus officio following the issuance of the award.
3. Hon’ble Delhi High Court | The sufficiency of justifications, rather than the mere passage of time, is of paramount importance when evaluating a plea for condonation of delay under Section 37 of the A&C Act.
Case: M/s Satyadhara Communications Pvt Ltd vs. M/s Indiasign Pvt Ltd., FAO (OS) (COMM) 66/2023, Decided On 16.12.2024
The appellant failed to present any credible justifications for the delay in filing the present appeal. Additionally, there were no exceptional circumstances that prevented the appellant from submitting the appeal within the designated statutory period. This distinction is critical, as the material consideration in assessing a request for condonation of delay is not solely the duration of the delay, but rather the adequacy of the reasons provided for it. Consequently, the court dismissed the appeal along with the associated applications. The justifications offered by the appellant for requesting condonation of delays—specifically, a delay of 670 days in filing the appeal and a delay of 591 days in re-filing—did not meet the thresholds of ‘sufficient cause’ or ‘exceptional circumstances.’
4. Hon’ble Delhi High Court | If a remedy associated with a cause of action falls within the parameters of the arbitration agreement, the counterparty cannot be compelled to defend against it in a legal action.
Case: M/s Grandslam Developers Pvt Ltd vs. Akshay Gandhi Proprietor of Praxis Design Solutions, FAO (COMM) 236/2024, decided on 10.12.2024
The Hon’ble Delhi High Court has noted that the Ld. Commercial Court referenced a decision by a Ld. Single Judge of this Court in Maruti Udyog Ltd. v. Mahalaxmi Motors Ltd. & Anr.: 95 (2002) DLT 290. In that decision, the Ld. Single Judge observed that an application under Section 8(1) of the A&C Act is not permissible due to the arbitration clause not being applicable to an admitted liability. Hon’ble High Court found this interpretation to be erroneous, particularly in light of the limited scope of examination under Section 8 of the A&C Act, as articulated by the Hon’ble Supreme Court in various rulings, including the recent case of SBI General Insurance Co. Ltd. v. Krish Spinning (supra). Accordingly, the earlier decision has been overruled.
5. Hon’ble Supreme Court of India | Section 14 of the Limitation Act applicable to proceedings under the Arbitration & Conciliation Act
Case: Kirpal Singh vs. Government of India, Civil Appeal No. 12849-12856/2024, decided on 21.11.2024
Upon consideration of Section 14 of the Limitation Act, Hon’ble Supreme Court of India determined that there exists sufficient justification for the exclusion of the period when the objection petition was filed in the wrong forum. With this period excluded, the appellant is entitled to the statutory remedy provided under Section 34 of the Act. Consequently, Hon’ble Supreme Court of India granted the appeals and annulled the judgment and order rendered by the High Court. Furthermore, Hon’ble Supreme Court of India invalidated the order issued by the District Judge, Jalandhar, on May 16, 2012, and restored the Section 34 petition in Arbitration No. 3435/2012 to its original numbering. Hon’ble Supreme Court of India also instructed the District Judge, Jalandhar, to issue notices to all involved parties, conduct hearings, and resolve the petition in accordance with the law.
