If several annexures/attachments of contract are prepared at different points of time, the latter in point of time would normally prevail over the earlier

 Another parallel principle that is equally relevant is that where the contract has several annexures/attachments, prepared at different points of time, unless a contrary intention is apparent, the latter in point of time would normally prevail over the earlier in point of time."{Para 32}

 IN THE HIGH COURT OF BOMBAY

Arbitration Application No. 250 of 2021

Decided On: 14.09.2023

Parekh Plastichem Distributors LLP Vs. Simplex Infrastructure Limited

Hon'ble Judges/Coram:

Firdosh P. Pooniwalla, J.

Citation:  MANU/MH/3701/2023,2023/BHC-OS/9920.

Read full Judgment here: Click here.

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Written, stamped or typed additions in the contract when inconsistent with the printed terms, would normally prevail over the printed terms"

  That leaves me to consider one more argument advanced by the Applicant. It is the case of the Applicant that the purchase orders contained an Annexure, in which against the title "Other Terms", it is stated that jurisdiction would be subject to Mumbai High Court. It is the submission of the Applicant that, because of this Clause, this Court would have jurisdiction under Section 11 of the Act to appoint an Arbitrator. In the context of this submission, the Applicant has referred to a judgment of the Hon'ble Supreme Court in the case of M. K. Abraham & Co. (Supra) and in particular to Paragraph No. 10 thereof, which reads as under:-

"10. If a contract consists of a printed form with cyclostyled amendments, typed additions and deletions and handwritten corrections, an endeavour shall be made to give effect to all the provisions. However, in the event of apparent or irreconcilable inconsistency, the following rules of construction will normally apply :

(i) The cyclostyled amendments will prevail over the printed terms;

(ii) The type-written additions will prevail over the printed terms and cyclostyled amendments;

(iii) Hand written corrections will prevail over the printed terms, cyclostyled amendments and typed written additions.

The above rules have evolved from the well known maxim of construction that "written, stamped or typed additions, when inconsistent with the printed terms, would normally prevail over the printed terms" and proceeds on the assumption that the printed form contained the original terms, and changes thereto were incorporated by the cyclostyled amendments, followed by changes by type-written additions and lastly the hand written additions. The logical explanation for such assumption is this: The printed form contains standardized terms to suit all contracts and situations. It is not drafted with reference to the special features of a specific contract. When such a standard form is used with reference to a specific contract, it becomes necessary to modify the standard/general terms by making additions/alterations/deletions, to provide for the special features of that contract. This is done either by way of an attachment of an annexure to the standard printed form, incorporating the changes, or by carrying out the required additions/alterations/deletions in the standard form itself. Such additions/alterations/deletions are done by typing/stamping/hand. We may refer to the following oft-quoted enunciation of the legal position by Lord Ellenborough in Robertson v. French MANU/ENRP/0600/1803 : [1803-13] All ER Rep.350 with reference to printed form of contract with hand- written additions :

....... that the words super added in writing are entitled, nevertheless, if there should be any reasonable doubt on the sense and meaning of the whole, to have a greater effect attributed to them than to the printed words, inasmuch as the written words are the immediate language and terms selected by the parties themselves for the expression of their meaning and the printed words are a general formula adapted equally to their case and that of all other contracting parties on similar occasions and subjects".

Another parallel principle that is equally relevant is that where the contract has several annexures/attachments, prepared at different points of time, unless a contrary intention is apparent, the latter in point of time would normally prevail over the earlier in point of time."{Para 32}

 IN THE HIGH COURT OF BOMBAY

Arbitration Application No. 250 of 2021

Decided On: 14.09.2023

Parekh Plastichem Distributors LLP Vs. Simplex Infrastructure Limited

Hon'ble Judges/Coram:

Firdosh P. Pooniwalla, J.

Citation:  MANU/MH/3701/2023,2023/BHC-OS/9920.

Read full Judgment here: Click here.

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Can the court refer the dispute to arbitration even after the novation of the contract, which contained an arbitration clause?

The allegation of forgery is something that would be gone into at the stage of trial before the Sole Arbitrator. I am not persuaded by the contention of respondent no. 1 that there has been a novation which has rendered the above Arbitration Application incompetent. The contention that the arbitration clause being a component of the contract, superseded by another by a novation as contemplated in Young Achievers (supra) would not apply to

the present case since the signature of respondent no. 1 appears on the Retirement Deed of 4th September, 2006 which signature has not been denied. Therefore I am of the view that the decision of Young Achievers (supra) is of no assistance to respondent no.1. {Para 21}

22. It is also pertinent that I make reference to the admissions in the affidavit in reply of respondent no. 1 which in paragraph 25 admits that he has “left the firm” long back and that he was not aware of the working of the firm and hence could not comment on the same. This was obviously an incorrect statement since it is respondent no. 1 who was handling bank account at the material time. He also goes on to incorrectly deny that he has been paid any amount more than his dues since it is his own case that Summary Suit has been filed against Mahaveer Corporation in which the applicant is also a partner. The respondent no. 1 reiterates in paragraph 25 of his affidavit that his account in respect of profit and loss of the firm after taking into consideration all current and future benefits were made up and

settled in 2007 and then “ I retired me from J. P. Enterprises” * Although there is a denial of having overdrawn a sum of Rs.5.53 crores, the fact remains that this is an aspect that needs to be gone into in the arbitration. All other aspects in the affidavit in reply pertain to the merits of the case and which are not relevant at this stage of appointment of an Arbitrator. *(sic)

23. Prima facie I am satisfied that there is an Arbitration Agreement and the dispute will have to be referred to arbitration.

 IN THE HIGH COURT OF JUDICATURE AT BOMBAY

ORDINARY ORIGINAL CIVIL JURISDICTION

COMMERCIAL ARBITRATION APPLICATION NO.483 OF 2019

Praful A. Mehta Vs Nainesh M. Gandhi and 3 Ors.

CORAM : A. K. MENON, J.

DATED : 21st FEBRUARY, 2022

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Whether Tax invoices containing reference to Arbitration constitute an Arbitration Agreement?

 It is on the basis of the tax invoices, the applicant is before the

Court to contend that there is an arbitration agreement between the parties. Such a contention as urged on behalf of the applicant cannot be accepted as issuance of tax invoice is certainly required to be held to be an unilateral act on the part of the applicant. The contract between the parties is actually born under the purchase orders. The purchase orders do not contain or make any reference to an arbitration agreement between the parties. {Para 3}

4. To accept the applicant’s case that there is an arbitration

agreement between the parties in my opinion, would be in the teeth of Section 7 of the Act which provides as to what would constitute an arbitration agreement. In the present context, it can be clearly held that there is no conscious agreement between the parties to refer the disputes for adjudication in arbitration. Merely because the tax invoices which are in response to the purchase orders provide for an arbitration, certainly such invoices do not bring about an arbitration agreement as contemplated under Section 7 of the Act.

IN THE HIGH COURT OF JUDICATURE AT BOMBAY

ORDINARY ORIGINAL CIVIL JURISDICTION

ARBITRATION APPLICATION (L.) NO.23207 OF 2021

Concrete Additives and Chemicals Pvt. Ltd Vs. S N Engineering Services Pvt. Ltd.

CORAM : G.S. KULKARNI, J.

DATE : JANUARY 17, 2022.

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When will a clause in an agreement not amount to an arbitration clause?

 Clause 11 of the Master Service Agreement dated 29th July 2021 between the parties reads as under:-

“11.Jurisdiction, Arbitration & Dispute Resolution

This Agreement and any dispute or claim relating to it, its enforceability or its termination shall be governed and interpreted according to the laws of India Subject to this Clause 11, the Courts at Delhi, shall have exclusive jurisdiction over any

disputes under this Agreement”. {Para 3}

 18. In the light of the aforesaid decisions relied upon by the parties, it appears to me that clause 11 contained in the work order dated 10.12.2013 does not tantamount to an arbitration agreement. The said clause merely uses “arbitration” in the heading of clause 11. However, the main body of the said clause completely contra-indicates the existence of any arbitration agreement since it provides that disputes, if any, arising out of the agreement “shall be subject to the exclusive jurisdiction of the courts in city of Delhi”

21. In Jagdish Chander (supra), the Supreme Court has observed that mere use of the word, “arbitration” or “arbitrator” in a clause will not make it an arbitration agreement, if it requires or contemplates a further or fresh consent of the parties for reference to arbitration. Pertinently, in the present case, the main body of the clause does not even contemplate that the parties may agree to arbitration in future”.

6. In view of the decisions referred above, it is clear that mere use of the word ‘Arbitration’ in the heading in the Clause 11 of the Agreement between the parties in the present proceedings would not lead to the inference that there exists an agreement between the parties seeking resolution of disputes through arbitration.

IN THE HIGH COURT OF DELHI AT NEW DELHI

ARB.P. 325/2022;

FOOMILL PVT. LTD. Vs AFFLE (INDIA) LTD.

CORAM: HON'BLE MS. JUSTICE MUKTA GUPTA

Dated:  March 25, 2022

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Can the arbitrator adjudicate any dispute about the lease agreement between the parties not contemplated by the arbitration clause?

 In the instant case, the Respondent invoked the Arbitration Clause under the Dealership Agreement and approached the Director (Marketing) of the Appellant who appointed Mr. B.L. Parihar as the sole Arbitrator. The Arbitrator, Mr. B.L. Parihar, nominated by the Director (Marketing) of the Appellant had no authority and/or jurisdiction to adjudicate any dispute pertaining to the lease agreement.

34. The Arbitral Award is liable to be set aside in so far as the same deals with disputes with regard to the Lease Agreement which are not contemplated by the Arbitration Clause in the dealership agreement and/or in other words, do not fall within the terms of the submission to Arbitration. The Arbitral award is thus liable to be set aside under Section 34(2)(a)(iv) of the 1996 Act. The decision enhancing the lease rent is patently beyond the scope of the submission to arbitration. {Para 33}

 REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS. 837-838 OF 2022

Indian Oil Corporation Ltd. Vs M/s Shree Ganesh Petroleum Rajgurunagar

Author: Indira Banerjee, J.

Dated: FEBRUARY 01, 2022

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Whether non-voluntary transfer of ownership from defaulting borrower to the Bank under SARFAESI proceedings will result in assigning contractual rights under the Maintenance Agreement?

Cannes has argued that since the Sale Deed between TDI and Surya makes a reference to the Maintenance Agreement, combined with the fact that the Bank has admittedly stepped into the shoes of Surya, leads to the conclusion that such rights of the previous owner stands assigned to the new one. The Court is however unable to accept such an argument.

10. Replacing the owner of the property does not ipso facto lead to the conclusion that the Bank would also be bound by the Maintenance Agreement, which is a separate and a distinct agreement, executed between Surya and Cannes for availing CAM services for one unit in TDI Mall. Unarguably, the obligations and rights flowing from this agreement were distinct from those flowing from the Sale Deed, and cannot be jumbled together for the purpose of reading a privity of contract where there is none.

11. A party cannot be subjected to obligations of a contract to which it is not a party. A stranger or a third party cannot be bound if there no is assignment of contractual rights and liabilities. Certainly, the non-voluntary transfer of ownership from Surya to the Bank under SARFAESI proceedings does not result in assignment of contractual rights under the Maintenance Agreement. The burden of the liability acquired by Surya under a separate Maintenance Agreement, cannot be foisted on the Bank just because it has become the owner of the property. Surya’s liability under the Maintenance Agreement is not attached to the immovable property, even if it was in relation thereto. A mere general reference in the erstwhile Sale Deed to the Maintenance Agreement is insufficient to bind the Bank to the arbitration agreement contained in the Maintenance Agreement.

12. The Maintenance Agreement in its recital, does provide that it shall also bind the parties’ nominees, administrators, legal representatives and the assignee. Thus, the pertinent question is whether the Bank is an assignee under the Maintenance Agreement or not? There is no document on record to show that Surya had specifically assigned its rights and obligations, either in rem or specifically under the Maintenance Agreement, in favour of the Bank. In fact, Cannes also does not deny this fact. No averment has been made to any other document to urge that it would constitute as assignment of Surya’s rights to the Bank under the Maintenance Agreement. The court is thus unable to assume the existence of any assignment of rights. In order to be bound by the terms of the agreement, including the arbitration clause, the assignment of such rights has to be necessarily shown, by way of make a binding agreement between the parties. This is a pre-requisite to bind the Bank to arbitration.

 IN THE HIGH COURT OF DELHI AT NEW DELHI

 Date of Decision: 07th October, 2021 

ARB.P. 591/2020

 CANNES PROPERTY MANAGEMENT SERVICES PRIVATE LIMITED Vs ALLAHABAD BANK 

 CORAM: HON'BLE MR. JUSTICE SANJEEV NARULA

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Whether jurisdiction of high court Article 226 of the Constitution is ousted if there is arbitration clause?

Therefore, while exercising its jurisdiction under Article 226, the Court is entitled to enquire into whether the action of the State or its instrumentalities is arbitrary or unfair and in consequence, in violation of Article 14. The jurisdiction under Article 226 is a valuable constitutional safeguard against an arbitrary exercise of state power or a misuse of authority. In determining as to whether the jurisdiction should be exercised in a contractual dispute, the Court must, undoubtedly eschew, disputed questions of fact which would depend upon an evidentiary determination requiring a trial. But equally, it is well-settled that the jurisdiction under Article 226 cannot be ousted only on the basis that the dispute pertains to the contractual arena. This is for the simple reason that the State and its instrumentalities are not exempt from the duty to act fairly merely because in their business dealings they have entered into the realm of contract. Similarly, the presence of an arbitration clause does oust the jurisdiction under Article 226 in all cases though, it still needs to be decided from case to case as to whether recourse to a public law remedy can justifiably be invoked. The jurisdiction under Article 226 was rightly invoked by the Single Judge and the Division Bench of the Andhra Pradesh in this case, when the foundational representation of the contract has failed. TSIIC, a state instrumentality, has not just reneged on its contractual obligation, but hoarded the refund of the principal and interest on the consideration that was paid by Unitech over a decade ago. It does not dispute the entitlement of Unitech to the refund of its principal.

 In the Supreme Court of India

(Before Dhananjaya Y. Chandrachud and M.R. Shah, JJ.)

Civil Appeal No. 317 of 2021

Unitech Limited and Others  Vs  Telangana State Industrial Infrastructure Corporation (TSIIC) and Others 

Decided on February 17, 2021

The Judgment of the Court was delivered by

Dhananjaya Y. Chandrachud, J.:—

Citation: 2021 SCC OnLine SC 99

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Whether the court can refer a dispute to arbitration in the absence of an arbitration clause in construction agreement relying on Government policy?

A full Bench of the Kerala High Court in Southern Structurals Ltd. Vs. Kerala State Electricity Board declared that a decision of the Division Bench in Koshy Varghese V. Hindustan Paper Corporation Ltd. MANU/KE/0510/2000 : 2000(2) KLT 329 wherein the Division Bench held that a Court sitting under Article 226 of the Constitution can direct the parties to go for arbitration under the ACA even in the absence of an arbitration agreement between the parties, did not lay down the correct law. It was held that the Court cannot compel a party to agree for arbitration.

58. The parties cannot be forced to arbitrate by issuance of a writ of this Court as this also would not only be contrary to the entire concept of what is conceived as an arbitration agreement as defined under Section 7 of the ACA but also as noted above it would be in the teeth of Section 10 of the Indian Contract Act which requires free consent of the parties to have a legal and valid contract. It cannot be overlooked that lack of valid arbitration agreement is one of the basic grounds available to the parties for setting aside an arbitral award. Thus to foist an arbitration agreement on a party is nothing short of imposing an illegality.

59. Even otherwise, as to whether a public law remedy, would be available to the petitioners when the nature of the contract between the MSRDC and the petitioners is non statutory, the position in law is no more res integra. In Bareli Development Authority vs. Ajay Pal Singh, the Supreme Court has recognized as a settled position in law that when a contract entered into between the State and the persons aggrieved is non-statutory and purely contractual and the rights are governed only by the terms of the contract, no writ or order can be issued under Article 226 of the Constitution of India.A full Bench of the Kerala High Court in Southern Structurals Ltd. Vs. Kerala State Electricity Board declared that a decision of the Division Bench in Koshy Varghese V. Hindustan Paper Corporation Ltd. MANU/KE/0510/2000 : 2000(2) KLT 329 wherein the Division Bench held that a Court sitting under Article 226 of the Constitution can direct the parties to go for arbitration under the ACA even in the absence of an arbitration agreement between the parties, did not lay down the correct law. It was held that the Court cannot compel a party to agree for arbitration.

 IN THE HIGH COURT OF BOMBAY

Writ Petition Nos. 1699 and 2337 of 2019

Decided On: 06.11.2020

MEP RGSL Toll Bridge Pvt. Ltd. and Ors. Vs. Maharashtra State Road Development Corporation Ltd. and Ors.

Hon'ble Judges/Coram:

Dipankar Datta, C.J. and G.S. Kulkarni, J.

Author: G.S. Kulkarni, J.

Citation: MANU/MH/1871/2020

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Whether court can treat exclusive jurisdiction clause conferring jurisdiction upon the court of a particular place as the seat of arbitration?

 Now, coming to the primary bone of contention between the parties, i.e., whether this Court has the territorial jurisdiction to entertain the present petition. The parties are ad idem that although the cause of action arose at Aurangabad, Maharashtra, this Court would have jurisdiction to entertain the present petition if it is found that Delhi was designated as the seat of arbitration by the parties. On this aspect, the petitioner contends that the Delhi was indeed designated as the seat of arbitration as the parties had specifically agreed to confer exclusive jurisdiction upon the courts at Delhi in all arbitration proceedings. On the other hand, it is the respondent's stand that the parties never agreed upon a seat of arbitration in the Work Order and that, therefore, only the Court, within whose jurisdiction the cause of action arose, would be a 'Court' within the meaning of Section 2(1)(e) read with Sections 16-20 of the Act, thereby rendering it competent to decide the present petition.

11. Having carefully examined the arbitration clause, I find that the sentence 'The courts of law at Delhi alone shall have the jurisdiction.' ensconced therein contains the key to the riddle, insofar as it is a clear expression of the parties' intent to confer exclusive jurisdiction in all arbitrations arising out of the Work Order, upon the courts at Delhi. The respondent's interpretation of the arbitration clause and opposition to vesting of jurisdiction in Delhi courts arises from its contention that the arbitration clause never provided for a seat of arbitration. In my view, the absence of the term 'seat' while referring to the courts at Delhi, does not alter the significant fact that the courts of law at Delhi alone have been vested with the jurisdiction upon arbitration proceedings arising out of the subject Work Order. In fact, on this ground alone, if the respondent's plea were to be accepted and this Court were to disregard the entire phrase "The courts of law at Delhi alone shall have the jurisdiction" within the arbitration clause, it would render a vital portion of the clause meaningless and futile.

12. Ultimately, the law does not prohibit parties from agreeing to confer exclusive jurisdiction in respect of arbitration proceedings, on mutually preferred, neutral seats. Therefore, notwithstanding the fact that no part of the cause of action arose in Delhi, the clear expression of intent within the arbitration clause to confer jurisdiction on the courts at Delhi helps cull out the fact that the parties chose Delhi as a neutral seat of arbitration. 

IN THE HIGH COURT OF DELHI

ARB. P. 218/2020

Decided On: 21.07.2020

Hamdard Laboratories (India)  Vs.  Sterling Electro Enterprises

Hon'ble Judges/Coram:

Rekha Palli, J.

Citation: MANU/DE/1403/2020

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How order 2 R 2 of CPC applies to arbitration proceeding?

Supreme Court, in Dolphin Drilling Ltd. Vs. Oil & Natural Gas Corporation Ltd. MANU/SC/0120/2010 : (2010) 3 SCC 267 held that the words "all disputes" in arbitration clause can only mean "all disputes that may be in existence when the arbitration clause is invoked and one of the parties to the agreement gives the arbitration notice to the other"; it cannot be held that once the arbitration clause is invoked, the remedy of arbitration is no longer available in regard to other disputes that might arise in future. We may add, that depending on nature of the agreement or obligations to be performed thereunder, it is not necessary that all disputes between parties arise at one point of time. This Court in National Highways Authority of India Vs. ITD Cementation India Ltd. MANU/DE/6011/2012 : 197 (2013) DLT 650 held that in large scale projects, it is not unheard that different facets of the project constitute subject matter of separate references and in the context of large scale works contracts, there cannot be any rigid application of the principles of Order II Rule 2 of the CPC unless it is demonstrated that prejudice has been caused to either party as a result of such non-adherence. We may further add that even if commencement of arbitration with respect to disputes which have arisen, can await culmination of full performance of the agreement, to commence arbitration at one time only, also with respect to other dispute which may arise, the claim earliest arising may by then become barred by time. Order II Rule 2 of the CPC also envisages successive causes of action.

IN THE HIGH COURT OF DELHI

FAO (OS) (COMM) 60/2020 and CM No. 10461/2020

Decided On: 07.07.2020

 Hero Wind Energy Private Ltd. Vs.   Inox Renewables Limited and Ors.

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Supreme Court lays down tests to determine the arbitrability of dispute if one party alleges fraud

 In a recent judgment reported as Rashid Raza (supra), this Court

referred to Sikri, J.’s judgment in Ayyasamy (supra) and then held:

“4. The principles of law laid down in this appeal make a

distinction between serious allegations of forgery/fabrication

in support of the plea of fraud as opposed to “simple

allegations”. Two working tests laid down in para 25 are: (1)

does this plea permeate the entire contract and above all,

the agreement of arbitration, rendering it void, or (2) whether

the allegations of fraud touch upon the internal affairs of the

parties inter se having no implication in the public domain.”

After these judgments, it is clear that “serious allegations of fraud” arise

only if either of the two tests laid down are satisfied, and not otherwise.

The first test is satisfied only when it can be said that the arbitration

clause or agreement itself cannot be said to exist in a clear case in

which the court finds that the party against whom breach is alleged

cannot be said to have entered into the agreement relating to arbitration

at all. The second test can be said to have been met in cases in which

allegations are made against the State or its instrumentalities of

arbitrary, fraudulent, or malafide conduct, thus necessitating the hearing

of the case by a writ court in which questions are raised which are not

predominantly questions arising from the contract itself or breach

thereof, but questions arising in the public law domain.

15. At this stage, it is necessary to deal with the broad statement of

the law in Afcons (supra) and Booz Allen (supra). When Afcons

(supra) refers in paragraph 27(iv) to “cases involving serious and specific allegations of fraud, fabrication of documents,  forgery, impersonation, coercion, etc.”, this must now be understood in the sense laid down in

Ayyasamy (supra) and Rashid Raza (supra). When it comes to

paragraph 27(vi) in Afcons (supra), and paragraph 36(i) in Booz Allen (supra), namely, cases involving prosecution for criminal offences, it is also important to remember that the same set of facts may have civil as well as criminal consequences.

REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 5145 OF 2016

AVITEL POST STUDIOZ LIMITED Vs  HSBC PI HOLDINGS (MAURITIUS) LIMITED 

Dated:August 19, 2020.

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Whether a legal representative of the deceased partner of a partnership firm can seek reference of the dispute to arbitration?

While right to sue for rendition of accounts of partnership firm survives on the legal representative of a deceased partner, he is also entitled to invoke the arbitration clause contained in the partnership deed. In the instant case, the appellant being the only son of his deceased mother, undisputedly a partner in the partnership firm with the respondents especially where the dispute concerning the partnership affairs had arisen already during her life time. The view taken in the impugned order with the appellant has no presently establishable binding arbitration agreement with the respondent is erroneous in law and facts. The impugned order is also bad in law in the teeth of the law laid down by this Court in Smt. Premlata and Anr. v. Ishwar Dass Chamanlal and Ors. AIR 1955 SC 714. This apart, the appointment of arbitrator could not be rejected on the ground of non-production of the will executed by the mother when no family member is disputing the will and the appellant's claim vis-a-vis the partnership firm, even otherwise also the appellant is the legal heir of the deceased partner being her only son. In our view, non-probate of will is not a germane factor to be considered at the time of appointment of arbitrator under Section 11 of the Arbitration Act. In our opinion, the partnership deed clearly recites that all the disputes touching the affairs of the partnership firm were referable to arbitrator and it cannot be gainsaid that the dispute regarding accounts of the partnership firm is a dispute touching the affairs of the firm. As already stated, it was not legally essential to specifically make a mention that the partners included their legal heirs, representatives, assigns or legatees etc. and the arbitration clause could be invoked by the appellant as the legatee as well as the legal heir/legal representative of the deceased Dulari Devi particularly where the dispute had arisen during her life time. The appellant's claim in the instant case is based on the will as well as being a legal heir of the deceased Dulari Devi. The appellant, in our opinion, possessed a legal and enforceable right to invoke arbitration clause and moved application under Section 11 of the Arbitration Act before the High Court for appointment of arbitrator. The word "party" as used in the partnership deed does not exclude inclusion of legal heirs, legal representatives etc. as being canvassed by the respondents. Thus, in our opinion, in view of the provisions of Sections 40 and 46 of the Partnership Act read with Section 40 of the Arbitration Act, the appellant has a legal right to commence arbitration by moving an application under Section 11 of the Arbitration Act in the High Court as in our view, the right to sue survives on him as legal representatives of the deceased Dulari Devi and he is entitled to invoke Clause 13 of the partnership deed. Moreover, the dispute referable to arbitration had already arisen during the life time of Dulari Devi which is also well settled that where a dispute is referable to arbitration, the parties cannot be compelled to take recourse to in the civil courts.

IN THE SUPREME COURT OF INDIA

Civil Appeal No. 1526 of 2007

Decided On: 21.03.2007

Ravi Prakash Goel  Vs.   Chandra Prakash Goel and Ors.

Hon'ble Judges/Coram:

A.R. Lakshmanan and Altamas Kabir, JJ.

Citation: (2008) 13 SCC 667,MANU/SC/7232/2007

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Whether the dispute between licensor and licensee will be arbitrable even if the defendant has not filed application U/S 8 of Arbitration Act?

Objection of learned counsel for the plaintiffs that since no application under Section 8 of the Act has been filed by the defendant, hence the plea for rejection of the plaint cannot be accepted, deserves to be rejected in view of the decision of this Court dated 15th January, 2018 in CS (SO) No. 125/2017 Parasramka Holdings Pvt. Ltd. vs. Ambience Pvt. Ltd. and another, wherein this Court held that party invoking the arbitration clause does not have to file a formal application seeking a specific prayer for reference of the dispute to arbitration as long as it raises an objection in the written statement that the present suit is not maintainable in view of the arbitration clause in the agreement.

33. Keeping in view the aforesaid judgments as well as the judgment in Eastern Medikt (supra) and judgments of the learned Single Judge and Division Bench of this Court in Sharad P. Jagtiani (supra), this Court is of the view that the party invoking the arbitration clause does not have to file a formal application seeking a specific prayer for reference of the dispute to arbitration as long as it raises an objection in the written statement that the present suit is not maintainable in view of the arbitration clause in the agreement.

57. In the present case the defendant on the first day of the appearance itself even before filing of the written statement has raised the objection under Section 8 of the Arbitration and Conciliation Act and hence this objection cannot be summarily rejected on the ground that no application has been filed by the defendant under Section 8 of the Act.

In view of the discussion above, prima facie the plaintiffs have a right in their favour and interest in land which is more than that of a lessee or at least that of an irrevocable licensee. In MANU/SC/0359/1999 : (1999) 5 SCC 651 Olympus Superstructures vs. Meena Vijay, Supreme Court held that the relief of specific performance of an agreement can be awarded by an arbitrator. Thus if the arbitrator can direct creation of an interest in a property, the arbitrator can also award declaration of the interest of the parties in the property. Further, as held in Booz Allen in paragraph 46, an agreement to sell or an agreement to mortgage does not involved any transfer of right in rem but creates a personal obligation and, therefore, the claim for specific performance will be arbitrable contrary to a mortgage which is a transfer of a right in rem. Moreover, as noted in Vidya Drolia, there is nothing in the Transfer of Property Act or the Specific Relief Act which forbids the rights of the parties being decided by arbitration. The rights of the plaintiffs herein at best governed by the Transfer of Property Act or the Specific Relief Act, or that of an irrevocable licensee under the Easements Act can still be decided in arbitration. Consequently the present suits are not maintainable and the parties may avail the remedy of arbitration.

IN THE HIGH COURT OF DELHI

CS (COMM) 184/2020, 

Decided On: 21.07.2020

 Dharamvir Khosla  Vs. Asian Hotels (North) Ltd.

Hon'ble Judges/Coram:

Mukta Gupta, J.

Citation: MANU/DE/1394/2020

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Whether the court can infer an arbitration agreement from invoices/bills, which contained an Arbitration clause?

In Shakti Bhog Food Limited v. Kola Shipping Limited (Supra), it was observed by Supreme Court;

We would want to reiterate that as far as the provision of Section 7 of the Act is concerned, an arbitration agreement may be in the form of an arbitration clause in a contract or in the form of a separate agreement and furthermore an arbitration is considered to be in writing if it is contained in a document signed by the parties or in a exchange of letters, telex, telegrams or other means of telecommunication which provide a record of the agreement or an exchange of statement of claim and defence in which the existence of an agreement is alleged by one party and not denied by the other. So from the provisions of Section 7, it is clear that a charter party agreement need not be in writing signed by both parties and this could as well be made out from the acts of the parties to the agreement by way of their exchange of letters and information through fax, e-mails, etc.

23. In the case in hand, admittedly there had been business transactions between the parties. Respondents have not placed any document with regard to these transactions, On the other hand, appellant has placed various invoices/bills before the Arbitrator, which contained the clause with regard to the arbitration.

24. Clause 5 mentioned on various invoices/bills is an arbitration agreement between the parties. As respondents have themselves admitted in their cross-objections that they had the business dealing with the appellant and have made various payments to the appellant by demand draft after purchasing the goods in question on credit basis. Since respondents admits the purchase of goods in question, it was their duty to have placed on record the invoices/bill through which they had purchased the goods from the appellant. In the absence of any document being placed by the respondents before the Arbitrator, it is apparently clear that respondents received the goods only through the invoices/bills which were filed by the appellant before the Arbitrator. Thus, there was an arbitration agreement between the parties as per Clause 5 of the invoice.

IN THE HIGH COURT OF DELHI

FAO. No. 59/2002

Decided On: 17.11.2009

 Kailash Nath Agarwal  Vs.  Aaren Exports and Ors.

Hon'ble Judges/Coram:

Vidya Bhushan Gupta, J.

Citation: MANU/DE/2916/2009

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Supreme Court set aside Arbitration award on ground that arbitrator has represented one of party in another case

If the above provision is kept in view, though technically as on 27.02.2004 when the storage receipt was drawn out and the Arbitration Clause came into existence there was no circumstance for disclosure of the present nature, it is seen that he has immediately thereafter, on 29.03.2004 filed the vakalat for one of the parties. Thus, as on 03.06.2006 when the claim was lodged before the learned Arbitrator both the events of, he being appointed as an Arbitrator and also as a counsel in another case had existed, which was well within the knowledge of Sri. S.T. Madnani and in that circumstance, it was the appropriate stage when he ought to have disclosed the same and refrained from entertaining the claim. If in that background, the decision in the case of V.K. Dewan and Co. v. Delhi Jal Board and Ors. (2010) 15 SCC 717 relied upon by the Appellants is kept in view, it was in the fairness of things that Sri S.T. Madnani should not have acted as an Arbitrator.

9. In the ultimate analysis since we are not adverting to the merits of the claim and in that regard since, we have not adverted to the finding recorded by the learned Arbitrator on the merits of claim we would not venture to examine with regard to the ultimate conclusion on the claim as to whether it is justified or not. However, in the above background, what is to be seen is that there has been a reasonable basis for the Appellants to make a claim that in the present circumstance the learned Arbitrator would not be fair to them even if not biased. It could no doubt be only a perception of the Appellants herein. Be it so, no room should be given for even such a feeling more particularly when in the matter of arbitration the very basis is that the parties get the opportunity of nominating a judge of their choice in whom they have trust and faith unlike in a normal course of litigation where they do not have such choice.

10. That apart when one is required to judge the case of another, justice should not only be done, but it should also seem to be done is the bottom line. Hence in that background, if the present circumstance is taken not, there was reasonable basis for the Appellants to put forth such contention which resulted in the situation wherein they had not participated in the arbitration proceedings. If nothing else, atleast propriety demanded that the learned Arbitrator should have recused in the present facts; but he has failed to do so. In that view, such an award passed by the learned Arbitrator was not sustainable and the learned District Judge was justified in entertaining the petition Under Section 34 of the Act, 1996 to set aside the award. In that view, we are of the opinion that the learned Judge of the High Court of Judicature at Bombay was not justified in allowing the appeal filed Under Section 37(1)(b) of the Act, 1996.

IN THE SUPREME COURT OF INDIA

Civil Appeal No. 6960 of 2011

Decided On: 24.07.2019

Vinod Bhaiyalal Jain Vs.  Wadhwani Parmeshwari Cold Storage Pvt. Ltd. and Ors.

Hon'ble Judges/Coram:

R. Banumathi and A.S. Bopanna, JJ.

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Supreme Court Judgment on impartiality and independence of Arbitrator

The scheme of Sections 12, 13, and 14, therefore, is that where
an arbitrator makes a disclosure in writing which is likely to give
justifiable doubts as to his independence or impartiality, the
appointment of such arbitrator may be challenged under Sections
12(1) to 12(4) read with Section 13. However, where such person
becomes “ineligible” to be appointed as an arbitrator, there is no
question of challenge to such arbitrator, before such arbitrator. In such
a case, i.e., a case which falls under Section 12(5), Section 14(1)(a) of
the Act gets attracted inasmuch as the arbitrator becomes, as a matter
of law (i.e., de jure), unable to perform his functions under Section
12(5), being ineligible to be appointed as an arbitrator. This being so,
his mandate automatically terminates, and he shall then be substituted
by another arbitrator under Section 14(1) itself. It is only if a
controversy occurs concerning whether he has become de jure unable
to perform his functions as such, that a party has to apply to the Court
to decide on the termination of the mandate, unless otherwise agreed
by the parties. Thus, in all Section 12(5) cases, there is no challenge
procedure to be availed of. If an arbitrator continues as such, being de
jure unable to perform his functions, as he falls within any of the

categories mentioned in Section 12(5), read with the Seventh
Schedule, a party may apply to the Court, which will then decide on
whether his mandate has terminated. Questions which may typically
arise under Section 14 may be as to whether such person falls within
any of the categories mentioned in the Seventh Schedule, or whether
there is a waiver as provided in the proviso to Section 12(5) of the Act.
As a matter of law, it is important to note that the proviso to Section
12(5) must be contrasted with Section 4 of the Act. Section 4 deals
with cases of deemed waiver by conduct; whereas the proviso to
Section 12(5) deals with waiver by express agreement in writing
between the parties only if made subsequent to disputes having arisen
between them.
18. On the facts of the present case, it is clear that the Managing
Director of the appellant could not have acted as an arbitrator himself,
being rendered ineligible to act as arbitrator under Item 5 of the
Seventh Schedule, which reads as under:
“Arbitrator’s relationship with the parties or counsel
xxx xxx xxx
5. The arbitrator is a manager, director or part of the
management, or has a similar controlling influence, in an
affiliate of one of the parties if the affiliate is directly
involved in the matters in dispute in the arbitration”

Whether such ineligible person could himself appoint another arbitrator
was only made clear by this Court’s judgment in TRF Ltd. (supra) on
03.07.2017, this Court holding that an appointment made by an
ineligible person is itself void ab initio. Thus, it was only on 03.07.2017,
that it became clear beyond doubt that the appointment of Shri Khan
would be void ab initio. Since such appointment goes to “eligibility”,
i.e., to the root of the matter, it is obvious that Shri Khan’s appointment
would be void. There is no doubt in this case that disputes arose only
after the introduction of Section 12(5) into the statute book, and Shri
Khan was appointed long after 23.10.2015. The judgment in TRF Ltd.
(supra) nowhere states that it will apply only prospectively, i.e., the
appointments that have been made of persons such as Shri Khan
would be valid if made before the date of the judgment. Section 26 of
the Amendment Act, 2015 makes it clear that the Amendment Act,
2015 shall apply in relation to arbitral proceedings commenced on or
after 23.10.2015. Indeed, the judgment itself set aside the order
appointing the arbitrator, which was an order dated 27.01.2016, by
which the Managing Director of the respondent nominated a former
Judge of this Court as sole arbitrator in terms of clause 33(d) of the
Purchase Order dated 10.05.2014. It will be noticed that the facts in
the present case are somewhat similar. The APO itself is of the year

2014, whereas the appointment by the Managing Director is after the
Amendment Act, 2015, just as in the case of TRF Ltd. (supra).
Considering that the appointment in the case of TRF Ltd. (supra) of a
retired Judge of this Court was set aside as being non-est in law, the
appointment of Shri Khan in the present case must follow suit.

REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 3972 OF 2019


Bharat Broadband Network Limited  Vs United Telecoms Limited 

Dated:April 16, 2019.
R.F. NARIMAN, J.

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SC : Court Can't Appoint Arbitrator When The Contract Containing Arbitration Clause Is Insufficiently Stamped

One reasonable way of harmonising the provisions contained in
Sections 33 and 34 of the Maharashtra Stamp Act, which is a general
statute insofar as it relates to safeguarding revenue, and Section
11(13) of the 1996 Act, which applies specifically to speedy resolution
of disputes by appointment of an arbitrator expeditiously, is by

declaring that while proceeding with the 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. This will also ensure that once a
Section 11 application is allowed and an arbitrator is appointed, the
arbitrator can then proceed to decide the dispute within the time frame
provided by Section 29A of the 1996 Act.

REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 3631 OF 2019

GARWARE WALL ROPES LTD. Vs COASTAL MARINE CONSTRUCTIONS & ENGINEERING LTD.

R.F. NARIMAN, J.
Dated:April 10, 2019.

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Supreme court uphold principles of incorporating arbitration clause by reference

 This Court in Inox Wind Ltd. v. Thermocables
Ltd.10
while adopting the ‘single contract case’ and
‘twocontract
case’ principle laid down by Habas
(supra), held that a general reference to a consensual
standard form is sufficient for incorporation of an
arbitration clause. In other words, general reference to
a standard form contract of one party, would be
sufficient for incorporation of the arbitration clause. In
10 (2018) 2 SCC 519

this case, the Court expanded the application of this
doctrine by holding that even a general reference to a
standard form contract of one party, along with those
of trade associations, and professional bodies would
be sufficient to incorporate the arbitration clause.
5. In the instant case, the learned Single Judge in the
impugned Order has erroneously taken the view that an
arbitration clause would not stand incorporated in the
individual sale orders entered into by the Respondent No.
2 – Coal Company and the Appellant. The individual sale
orders emanate out of the 2007 Scheme. The sale orders
specifically state that they would be governed by the
guidelines, circulars, office orders, notices, instructions,
relevant law etc. issued from time to time by Coal India
Limited or Bharat Coking Coal Limited etc. As a
consequence, the arbitration clause (i.e. Clause 11.12) in
the 2007 Scheme would stand incorporated in the sale
orders issued thereunder.
Clause 7 in the sale orders falls under the ‘single
contract case’ where the arbitration clause is contained
in a standard form document i.e. the 2007 Scheme, to

which there is a reference in the individual sale orders
issued by Respondent No. 2 – the Coal Company.

REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 1695 OF 2019
(Arising out of SLP (Civil) No. 28693 of 2018)

Giriraj Garg  Vs  Coal India Ltd. 

Dated: February 15, 2019.
INDU MALHOTRA, J.

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Whether court refer dispute of interconnected agreements to arbitration if arbitration clause is in principal agreement?

A non-signatory or third party could be subjected to arbitration without their prior consent, but this would only be in exceptional cases. The court will examine these exceptions from the touchstone of direct relationship to the party signatory to the arbitration agreement, direct commonality of the subject-matter and the agreement between the parties being a composite transaction. The transaction should be of a composite nature where performance of the mother agreement may not be feasible without aid, execution and performance of the supplementary or ancillary agreements, for achieving the common object and collectively having bearing on the dispute. Besides all this, the court would have to examine whether a composite reference of such parties would serve the ends of justice. Once this exercise is completed and the court answers the same in the affirmative, the reference of even non-signatory parties would fall within the exception afore-discussed.

21. In a case like the present one, though there are different agreements involving several parties, as discussed above, it is a single commercial project namely operating a 2 MWp Photovoltaic Solar Plant at Dongri, Raksa, District Jhansi, Uttar Pradesh. Commissioning of the Solar Plant, which is the commercial understanding between the parties and it has been effected through several agreements. The agreement-Equipment Lease Agreement (14.03.2012) for commissioning of the Solar Plant is the principal/main agreement. The two agreements of Rishabh with Juwi India:(i) Equipment and Material Supply Contract (01.02.2012); and (ii) Engineering, Installation and Commissioning Contract (01.02.2012) and the Rishabh's Sale and Purchase Agreement with Astonfield (05.03.2012) are ancillary agreements which led to the main purpose of commissioning the Photovoltaic Solar Plant at Dongri, Raksa, District Jhansi, Uttar Pradesh by Dante Energy (Lessee). Even though, the Sale and Purchase Agreement (05.03.2012) between Rishabh and Astonfield does not contain arbitration clause, it is integrally connected with the commissioning of the Solar Plant at Dongri, Raksa, District Jhansi, U.P. by Dante Energy. Juwi India, even though, not a party to the suit and even though, Astonfield and Appellant No. 1-Ameet Lalchand Shah are not signatories to the main agreement viz. Equipment Lease Agreement (14.03.2012), it is a commercial transaction integrally connected with commissioning of Photovoltaic Solar Plant at Dongri, Raksa, District Jhansi, U.P. Be it noted, as per clause(v) of Article 4, parties have agreed that the entire risk, cost of the delivery and installation shall be at the cost of the Rishabh (Lessor). Here again, we may recapitulate that engineering and installation is to be done by Juwi India. What is evident from the facts and intention of the parties is to facilitate procurement of equipments, sale and purchase of equipments, installation and leasing out the equipments to Dante Energy. The dispute between the parties to various agreements could be resolved only by referring all the four agreements and the parties thereon to arbitration.

22. Parties to the agreements namely Rishabh and Juwi India:(i) Equipment and Material Supply Agreement; and (ii) Engineering, Installation and Commissioning Contract and the parties to Sale and Purchase Agreement between Rishabh and Astonfield are one and the same as that of the parties in the main agreement namely Equipment Lease Agreement (14.03.2012). All the four agreements are interconnected. This is a case where several parties are involved in a single commercial project (Solar Plant at Dongri) executed through several agreements/contracts. In such a case, all the parties can be covered by the arbitration Clause in the main agreement i.e. Equipment Lease Agreement (14.03.2012).

IN THE SUPREME COURT OF INDIA

Civil Appeal No. 4690 of 2018 (Arising out of SLP (C) No. 16789 of 2017)

Decided On: 03.05.2018

 Ameet Lalchand Shah Vs. Rishabh Enterprises

Hon'ble Judges/Coram:

Ranjan Gogoi and R. Banumathi, JJ.

Citation: (2018) 15 SCC 678

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