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ARBITRATION AND CONCILIATION ACT, 1996

August, 2021

Whether choosing a foreign law to govern an arbitration would exclude the application of Section 9 of the Arbitration and Conciliation Act, 1996 or not?
Recently, Hon’ble Calcutta High Court decided an issue on applicability of Section 9 of the Arbitration and Conciliation Act, 1996 to a foreign award made under the Rules of International Chamber of Commerce in arbitration proceedings governed by British Law with the seat of arbitration in London. The Ld. Bench noted that choosing a foreign law to govern an arbitration would not itself exclude the application of Section 9 of the Act unless parties specifically exclude its application in the arbitration agreement.The Court further observed that that an 'agreement to the contrary' as mentioned under Section 2(2) of the Act must be express and not implied. This implies that, unless an arbitration agreement expressly excludes the application of Section 9 of the Act, the provision would apply to foreign seated arbitration as well.

Accordingly, the application for interim protection, in respect of the Award of the London-seated arbitration, was maintainable and the Petitioner was entitled to seek interim measures against the Respondent Award Debtor. Read More...

Whether Emergency award passed by the Arbitrator shall be considered as an award as per section 17 of the Act or not?
Recently, the Hon’ble Supreme Court of India in the case titled ‘Amazon.com NV Investment Holdings LLC v. Future Retails Ltd.’ disposed an appeal filed by Amazon.com NV Investment Holdings LLC, wherein Amazon initiated arbitration proceedings and filed an application seeking emergency interim relief under the Singapore International Arbitration Centre Rules, which was granted by Mr. V.K. Rajah, who was appointed as the Emergency Arbitrator.

Amazon, thereafter, filed a petition before the High Court of Delhi under Section 17(2) of the Arbitration Act seeking to enforce the award/order of an Emergency Arbitrator. The single bench of the High Court held that an Emergency Arbitrator's award is an order under Section 17(1) of the Arbitration Act. Later, the Division bench stayed this order of Single Bench and this stay order was assailed before the Apex Court. The Division bench Comprising of Justice R.F. Nariman and B.R. Gavaialso held that an appeal against an order under Section 17(2) of the Arbitration Act would be maintainable under the provisions of the Code of Civil Procedure.

The division bench while interpreting the term “arbitration” when read with Section 2(6) and 2(8), clarified that even interim orders that are passed by Emergency Arbitrators under the rules of a permanent arbitral institutional would, be included in the ambit of Section 17(1) of the Arbitration and Conciliation Act, 1996. Furthermore, the Ld. Bench also observed that no appeal lies under Section 37 of the Arbitration Act against an order of enforcement of an Emergency Arbitrator’s order made under Section 17(2) of the Act. Read More...

Whether the Ground of Patent Illegality Will be Applicable to International Commercial Awards or not?
Recently, the Hon’ble Apex Court comprising of Justice R.F. Nariman and B.R. Gavai held that the ground of “patent illegality” is only available to set aside domestic arbitration awards made under Part 1 of the Arbitration and Conciliation Act, 1996 and will not apply to International Commercial Awards, in the Appeal before the Supreme Court preferred against the order passed by the division bench of the Bombay High Court judgment overruling the order passed by the Ld. Single bench wherein the Ld. Bench observed that the agreement and the arbitration clause cannot be enforced against persons who are non-signatories, even though such non-signatories may participate in the arbitration, as no estoppel can apply to issues relatable to jurisdiction. Thus, the award was not enforceable against Gemini Bay Transcription Pvt. Ltd. and one Arun Dev Upadhyaya since they were not parties/ signatories to the arbitration agreement. Read More...

INSOLVENCY AND BANKRUPTCY CODE, 2016

Circumstances in which an application seeking initiation of CIRP process be filed after expiry of 3 years can be entertained/ allowed by the Adjudicating Authority.
Recently, the Hon’ble Apex Court in its decision in Dena Bank v. C. Shivakumar Reddy and Anr has held that any acknowledgment of a present and subsisting liability by the opposite party, will have the effect of commencing a fresh period of limitation from the date on which the acknowledgment of liability is signed and if made before the relevant period of limitation has expired. Also the judgment and/or decree for money passed by the DRT, or any other Tribunal or Court, or the issuance of a Certificate of Recovery would give rise to fresh cause of CIRP, within 3 years from the date of the judgment and/or decree if the dues of the Company under the decree/judgment remain unpaid. The Hon’ble Apex Court also held that the Code does not bar the amendment of pleadings in an application under Section 7 of the Code, or the filing of additional documents. However, depending on the facts and circumstances of the case, when there in inordinate delay, the NCLT might, at its discretion decline the filing of additional documents and/or pleadings. Read More...

Supreme Court Holds that Application for Initiating CIRP Has to be Rejected if a Dispute Truly Exists in Fact And is Not Spurious or Hypothetical
Recently, the Division Bench of the Hon’ble Apex Court of India comprising of Justice R.F Nariman and B.R. Gavai allowed the appeal against the National Company Law Appellate Tribunal and observed that once the Operational Creditor has filed an application which is otherwise complete, the Adjudicating Authority has to adjudicate the application and can only reject the application under Section 9(5)(ii)(d) of the Code, if a notice of dispute has been received by the Operational Creditor or there is a record of dispute in the information utility. Hence, the main ingredient is that the notice by the Corporate Debtor must bring to the notice of the Operational Creditor the existence of a dispute or the fact that a suit or arbitration proceedings relating to a dispute is pending between the parties. Read More...

Properties of Personal Guarantor cannot be included or realised by sale/ transfer in the CIRP of the Corporate Debtor.
Recently, in the matter of Nitin Chandrakant Naik v. Sanidhya Industries LLP, the Hon’ble NCLAT, overruled the order passed by the LD. NCLT, wherein Ld. NCLT has approved the Resolution Plan which contained provision to transfer personal properties of the Promoter and Suspended Directors of the Corporate Debtor who had given their personal properties as security in favour of the Corporate Debtor,from whom Corporate Debtor took loan. It was observed by the Hon’ble NCLAT that as part III of the Insolvency and Bankruptcy Code, 2016 has been notified, any action against the Personal guarantor his property shall be dealt in accordance with part III of the Code, and the property of the Personal Guarantor or the erstwhile directors cannot be realised by sale/ transfer in the CIRP process. Read More...

Whether as per Regulation 32 of the Liquidation process, the liquidator is authorised to sell the Corporate Debtor as a going concern?
Recently, the Hon’ble NCLAT has set aside the order of AA and held that CIRP Regulation 39C read with Liquidation Regulations 32, 32A and 45(3, it is clear that under Regulation 39C, the CoC may recommend that the Liquidator may first explore sale of the Corporate Debtor as a going concern under Clause (e) of Regulation 32 or Sale of the business of the Corporate Debtor under Clause (f) of Regulation 32. 32A provides that if the Liquidator is of the opinion that sale under Clause (e) or (f) of Regulation 32 shall maximize the value of the Corporate Debtor, he shall endeavor to sell under the said Clauses 32-(A)-2 provides that for the purpose of sale under Sub-Regulation (1) the group of assets and liabilities of the Corporate Debtor, as identified by the CoC under Sub-Regulation (2) of Regulation 32C of the CIRP Regulations, shall be sold as a going concern. The Code does not prevent the closure of Liquidation Process in the instance the Corporate Debtor is sold as a going concern pursuant to Regulation 32(e) following a closure report filed under Liquidation Process Regulation 45(3)(a) it would be contradictory to observe that closure of Liquidation Proceedings cannot be done and only dissolution is provided for under the Code. This would demolish the very spirit and objective of the Code. It can be safely construed that before the completion of 270 days, if no decision under Regulation 39C is taken by the CoC, only Regulation 32A is to be followed.

The Code of Criminal Procedure, 1973

Hon’ble Supreme Court Reiterates the Principles under Section 319 of CrPC
The Hon’ble Supreme Court entertained an appeal arising out of a murder case against Trial Court’s dismissal of the Application under Section 319 CrPC and refusing to issue summons for facing the trial in exercising powers under Section 319 CrPC. The Hon’ble Bench enlisted a few principles to explain the scope of Section 319 CrPC. To name a few:Section 319 CrPC is exercised to not allow the real perpetrator of an offence to get away unpunished; It allows the Court to proceed against any person who is not an accused in a case before it, thereby making it an enabling provision;Such provision can be exercised at any stage after the charge-sheet is filed and before the pronouncement of judgment except during the stage of Section 207/208 CrPC, committal, etc among others. Read More...

Condition Precedent to Deposit Fine Amount Cannot be Imposed for Entertaining Criminal Revision Petition
Recently, the Hon’ble Apex Court held that High Court could not have made deposit of fine amount, a condition precedent for purpose of hearing a revision petition. The Bench further observed that as to what order is to be passed ultimately in revision petition is a matter entirely different and that would depend on examination of matter in terms of requirements of revisional jurisdiction but, in any case, depositing of fine amount cannot have been made condition precedent for purpose of hearing of revision petition so filed by Appellant. Accordingly, in such circumstances, the order of high Court was set aside. Read More...

OTHER RELEVANT JUDGMENTS PASSED BY VARIOUS COURTS UNDER VARIOUS LAWS

The Hon’ble Supreme Court Held That Rent Act Would Not Come to Aid of “Tenant-in-Sufferance” Against SARFAESI proceedings
Recently, the Hon’ble Apex Court held that plea of the Appellant that he is protected under provision of Maharashtra Rent Control Act,1999 as paying rent regularly to landlord, cannot be evicted from secured asset without due process of law is bad in law.The Ld. Division Bench comprising of Justice S. Abdul Nazeer and Krishna Murari observed that Rent Act would not come to aid of a “tenant-in-sufferance” vis-à-vis SARFAESI Act due to operation of Section 13(2) read with Section 13(13) of SARFAESI Act. Read More...

The Bombay High Court Stayed the Investigation in Sony Pictures’ Defamation Case Against ‘SCAM 1992’
The Bombay High Court has stayed the Pune police investigation against owner of SonyLIV app, Sony Pictures Network India Pvt Ltd, in a case registered against them. An FIR was filed by Karad Urban Co-operative Bank (KUCB) stating trademark infringement in the Scam 1992 web show. The main contention of KUCB was that one of the episodes displayed a logo in the background that resembled the bank's trademark logo. KUCB claimed that since the logo resembled the one which was on a calendar behind one of the characters, it caused serious damage to the 'financial, commercial and social reputation' of the bank.

Conversely, Sony contended that 'Bank of Karaj' along with the contentious logo appears on a calendar in the background for a few seconds and it was used to show 'Bank of Karad,' considering their widely known involvement in the scam. The bank was placed under liquidation and later merged with the Bank of India in 1994.

The Stay on the probe was sought on three grounds under the Trademarks Act-

Investigation cannot be carried out by an officer below the rank of a Deputy Superintendent of Police;
defamation is a non-cognisable offence;
Trademarks Act is not applicable in the present case. Reliance was placed on the High Court's order in Prateek Goyal vs State of Maharashtra.