Appointment Of Arbitrator By GM Of Metro Rail In Dispute Between Railways & Contractor Is Barred U/S 12(5) Of Arbitration Act: Calcutta HC

The Calcutta High Court bench of Justice Shampa Sarkar has held that the appointment of an arbitrator by the General Manager of Metro Railways in a dispute between Metro Railways and the contractor is barred by Section 12(5) of the Arbitration and Conciliation Act, 1996 (Arbitration Act). Therefore, the General Manager cannot be permitted to appoint the arbitrator. Brief Facts: M/S Krishna Constructon (Petitioner) was awarded a contract for cleaning and maintenance of sub-stations, ...

Proceedings U/S 37 A Of FEMA Can't Be Continued During Moratorium U/S 33(5) Of IBC: Calcutta High Court

The Calcutta High Court bench of Justice Jay Sengupta has held that once a liquidation order against the Corporate Debtor is passed, all proceedings including those pending at the time of such order under the Foreign Exchange Management Act, 1999 (FEMA) cannot be continued, nor can any new proceedings be initiated, in view of the bar under Section 33(5) of the Insolvency and Bankruptcy Code, 2016 (Code). This is further reinforced by the non obstante clause under Section 238 of the Code,...

Whether IRCTC's Revised Menu Alters Original Contract With Arbitration Clause Is For Arbitrator To Decide, Falls Outside Court's Jurisdiction: Calcutta HC

The Calcutta High Court bench of Justice Shampa Sarkar has held that whether the subsequent revision of the original menu by IRCTC form part of the original contract containing an arbitration clause is a matter to be decided by the Arbitrator. Such an issue falls outside the limited scope of the Court's jurisdiction under Section 11(6) of the Arbitration and Conciliation Act, 1996 (Arbitration Act). Brief Facts: The present petition has been filed under section 11(6) of the...

Although Injunction Against Invocation Of Guarantee Cannot Be Granted, Court Can Grant Interim Protection If Prima Facie Case Is Established: Calcutta HC

The Calcutta High Court bench of Justice Shampa Sarkar has held that although an injunction against the invocation of a bank guarantee cannot normally be granted, if the petitioner establishes a prima facie case, the court should not hesitate to grant interim protection under Section 9 of the Arbitration and Conciliation Act, 1996 (Arbitration Act). Brief Facts: Gallant Equipment Pvt Ltd (Petitioner) and Rashmi Metaliks Ltd (Respondent) entered into a “Goods & Service Order”...

While Disputes U/S 31 Of Specific Relief Act Are Arbitrable, Arbitral Awards Are Not Binding On Third Parties: Calcutta HC

The Calcutta High Court bench of Justice Gaurang Kanth has held that although disputes relating to the cancellation of written instruments under Section 31 of the Specific Relief Act, 1963 are arbitrable, the resulting awards are binding only on the parties involved and not on third parties who were not part of the arbitral proceedings. Brief Facts: The present petition has been filed by Jagat Singh Manot (petitioner) to challenge the letter dated 22.04.2024 issued by Kolkata ...

Arbitration Clause Cannot Be Considered Binding If Mandatory Arbitration Reference Is Missing: Calcutta High Court

The Calcutta High Court bench of Justice Shampa Sakar has held that if a clause in an agreement gives the parties discretion to refer the matter to arbitration after disputes have arisen, it cannot be construed as a binding arbitration agreement. Such invocation of the arbitration clause requires fresh consent of the other party before the matter can be referred to arbitration. Brief Facts: The lease deed was executed between Jiten Mondal, the respondent's predecessor (husband), and ...

Substitution Of Arbitrator Can't Be Allowed When Petitioner Voluntarily Withdraws From Arbitral Proceedings: Calcutta High Court

The Calcutta High Court bench of Justice Shampa Sarkar has held that an application under Section 15 of the Arbitration and Conciliation Act, 1996 (Arbitration Act), seeking substitution of the arbitrator, cannot be allowed when the petitioner had voluntarily withdrawn from the arbitral proceedings and failed to participate despite being given ample opportunities, especially after a long lapse of time Brief Facts: Disputes arose under a work order containing an arbitration clause...

Scheme Governing Auction Disputes Applies In All Auction Cases Unless Contrary Scheme Without Arbitration Clause Is Shown: Calcutta High Court

The Calcutta High Court bench Justice Shampa Sarkar has held that when a scheme generally applicable to all auction related disputes contains an arbitration clause, that clause will govern disputes arising between the parties, unless a contrary scheme without such a clause is shown. Brief Facts: Satya Narayan Shaw (petitioner) has filed this petition under section 11(6) of the Arbitration and Conciliation Act, 1996 (Arbitration Act) seeking appointment of an arbitrator under Clause...

Successor To Merger Transaction Can Invoke Arbitration Clause When All Rights And Liabilities Are Transferred: Calcutta High Court

The Calcutta High Court bench of Justice Shampa Sarkar has held that once all liabilities, rights, and obligations are transferred to an entity through a merger approved by the competent forum, the arbitration clause contained in a loan agreement executed between the parties prior to the merger can be invoked by a third party that has acquired all such rights and liabilities post-merger. Brief Facts: This application has been filed under section 11(6) of the Arbitration and ...

MSME Council Cannot Reject Arbitrable Claims Without Providing Any Reasons When Meditation U/S 18 Of MSME Act Has Failed: Calcutta HC

The Calcutta High Court bench of Justice Shampa Sarkar has held that the Micro, Small and Medium Enterprises (MSME) Facilitation Council cannot reject the arbitrable claims of the supplier without providing an opportunity to present evidence in support of the same, especially when mediation, as required under Section 18 of the Micro, Small and Medium Enterprises Development Act, 2006 (MSME Act) has failed. As per law, the Council is then mandated to either adjudicate the arbitrable matter...

Clause Empowering Contract Signatories To Resolve Disputes Does Not Constitute A Valid Arbitration Agreement Due To Lack Of Impartiality: Calcutta HC

The Calcutta High Court bench of Justice Shampa Sarkar has held that merely because a dispute resolution mechanism is provided in a clause empowering the signatories to the contract to resolve the dispute, it cannot be inferred that the parties intended to refer the dispute to arbitration. Such a clause amounts to an in-house mechanism and not a reference to an impartial arbitral tribunal, especially when impartiality is clearly lacking as the very individuals who signed the contract are...

Arbitration Clause Contained In Incomplete Memorandum Of Understanding Cannot Form Basis For Arbitration Proceedings: Calcutta HC

The Calcutta High Court bench of Justice Shampa Sarkar has held that an arbitration clause in a memorandum of understanding that was not finalized, as indicated by the correspondences between the parties, cannot serve as the basis for initiating arbitration proceedings. Brief Facts: In October 2020, the Respondent approached the petitioner and they reached an oral agreement with respect to sale and takeover of assets, plants and machinery for Rs. 21 crores. It was further agreed that...