Arbitration: India
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Court judgements
Arbitration pact binds non-signatories too
Dec 7, 2023: The Times of India
‘Group Of Companies’ Doctrine Applicable: SC
TIMES NEWS NETWORK
New Delhi : The SC ruled that the ‘Group of Companies’ doctrine is applicable to arbitration proceedings in India and the definition of parties under Section 2(1)(h) read with Section 7 of the Arbitration Act includes both signatory as well as non-signatory parties.
‘Group of Companies’ doctrine provides that an arbitration agreement which is entered into by a company within a group of companies may bind non-signatory affiliates, if the circumstances are such as to demonstrate the mutual intention of the parties to bind both signatories and non-signatories.
A five-judge Constitution bench of Chief Justice D Y Chandrachud and Justices Hrishikesh Roy, P S Narasimha, J B Pardiwala, and Manoj Misra held that conduct of the non-signatory parties could be an indicator of their consent to be bound by the arbitration agreement and the requirement of a written arbitration agreement under Section 7 does not exclude the possibility of binding nonsignatoryparties.
It said the ‘group of companies’ doctrine should be retained in Indian arbitration jurisprudence considering its utility in determining the intention of the parties in the context of complex transactions involving multiple parties and multiple agreements. “At the referral stage, the referral court should leave it for the arbitral tribunal to decide whether the non-signatory is bound by the arbitration agreement,” the benchsaid.
“The underlying basis for the application of the group of companies doctrine rests on maintaining the corporate separateness of the group companies while determining the common intention of the parties to bind the non signatory party to the arbitration agreement,” it said
Unstamped arbitration agreements are enforceable: SC
Dec 14, 2023: The Times of India
A seven-judge Constitution bench of the Supreme Court overruled the verdict of a five-judge bench and held that arbitration clauses in unstamped or inadequately stamped agreements are enforceable. A bench of CJI DY Chandrachud and Justices Sanjay Kishan Kaul, BR Gavai, Surya Kant, JB Pardiwala, Manoj Misra and Sanjiv Khanna ruled that non-stamping or insufficient stamping of an agreement has nothing to do with the validity of the document as it is a curable defect. It said an arbitration agreement or its certified copy are not rendered void or unenforceable because it is unstamped or insufficiently stamped.
NEW DELHI: A seven-judge Constitution bench of the Supreme Court on Wednesday overruled the verdict of a five-judge bench and held that arbitration clauses in unstamped or inadequately stamped agreements are enforceable.
A bench of CJI DY Chandrachud and Justices Sanjay Kishan Kaul, BR Gavai, Surya Kant, JB Pardiwala, Manoj Misra and Sanjiv Khanna ruled that non-stamping or insufficient stamping of an agreement has nothing to do with the validity of the document as it is a curable defect.
It said an arbitration agreement or its certified copy are not rendered void or unenforceable because it is unstamped or insufficiently stamped. “Agreements which are not stamped or are inadequately stamped are inadmissible in evidence under Section 35 of the Stamp Act. Such agreements are not rendered void or void ab initio or unenforceable. Non-stamping or inadequate stamping is a curable defect,” the bench said.“An objection as to stamping does not fall for determination under Sections 8 or 11 of the Arbitration Act. The court concerned must examine whether the arbitration agreement prima facie exists. Any objections in relation to the stamping of the agreement fall within the ambit of the arbitral tribunal,” the bench said.
The powers of the courts
Courts can’t modify arbitral awards: SC
July 22, 2021: The Times of India
The Supreme Court has said that a judge, while interpreting a law, should try to understand the intent of legislative bodies and quashed the Madras HC verdict which had held that the court’s powers to “set aside” an arbitral award under the arbitration law would also include the power to modify.
“Quite obviously if one were to include the power to modify an award in section 34 (Arbitration Act), one would be crossing the Lakshman Rekha... In interpreting a statutory provision, a judge must put himself in the shoes of the Parliament and then ask whether Parliament intended this result. Parliament very clearly intended that no power of modification of an award exists in section 34 of the Arbitration Act,” a bench of Justices R F Nariman and B R Gavai said.
The bench said it is only for the Parliament to amend the provision in the light of the experience of courts in the working of the Arbitration Act, 1996, and bring it in line with other legislations the world over.
The court passed the order on an appeal filed by the Centre against the HC order. Solicitor General Tushar Mehta said the Arbitration Act, 1996, being based on the UN Commission on International Trade Law’s Model Law on International Commercial Arbitration, 1985, has specifically restricted the grounds of challenge and the consequent remedy, which is only to set aside or remit in limited circumstances.
The case pertains to the litigation on land acquisition for national highways 45 and 220. The bench, however, dismissed the appeal on facts. “Givenhat in several similar cases, NHAI has allowed similarly situated persons to receive compensation at a higher rate than awarded, and given the law laid down in Nagpur Improvement Trust, we decline to exercise our jurisdiction under Article 136 in favour of appellants on the facts of these cases,” the bench said.
