alternative dispute resolution

Mere Use of Word “Arbitration” Doesn’t Bind Parties: Key Business Contract Lesson from Supreme Court

20Jan

By The Legal ChamberNo Comments

Supreme Court

Mere Use of Word “Arbitration” Doesn’t Bind Parties: Key Business Contract Lesson from Supreme Court

The Supreme Court held that Clause 8.28 did not constitute a valid arbitration agreement under Section 7 of the Arbitration and Conciliation Act, 1996. The clause lacked essential attributes, such as finality and a binding decision by a neutral tribunal, as it ultimately permitted parties to seek remedies in civil courts if unresolved. Facts Of The Case: The appellant, M/s Alchemist Hospitals Ltd., entered into a Software Implementation Agreement with the respondent, M/s ICT Health Technology Services India Pvt. Ltd., on 1st November 2018 for upgrading its hospital-information software. Following implementation, the appellant alleged persistent technical failures and operational issues with the respondent's "HINAI Web Software," leading to the system being rolled back i...

Arbitrator’s Inaction for 4 Years Leads to Award Being Quashed: Supreme Court Ruling

16Jan

By The Legal ChamberNo Comments

Supreme Court

Arbitrator’s Inaction for 4 Years Leads to Award Being Quashed: Supreme Court Ruling

In appeals arising from a delayed and unworkable arbitral award, the Supreme Court held that inordinate and unexplained delay in pronouncement can vitiate an award if it explicitly and adversely impacts its findings, rendering it contrary to public policy or patently illegal under Section 34 of the Arbitration Act. The Court further clarified that such an unworkable award, which fails to resolve disputes and irreversibly alters parties' positions, is liable to be set aside, and in exceptional circumstances, the Court may exercise its jurisdiction under Article 142 of the Constitution to do complete justice. Facts Of The Case: The case originated from a Joint Development Agreement (JDA) dated 17.12.2004 between respondent landowners and a developer (later amalgamated into the ...

Supreme Court Ruling : Businesses Take Note ,Email Exchanges Can Create a Binding Arbitration Agreement

29Sep

By The Legal ChamberNo Comments

Supreme Court

Supreme Court Ruling : Businesses Take Note ,Email Exchanges Can Create a Binding Arbitration Agreement

This Supreme Court judgment reaffirms that a valid arbitration agreement can be constituted through conduct and correspondence, without a signed contract. The Supreme Court held that if parties have demonstrably acted upon the terms of an unsigned agreement, they are bound by its arbitration clause, and a referral court need only conduct a prima facie review of the agreement's existence. Facts Of The Case: The dispute arose from a proposed contract for the sale of 6,000 metric tons of zinc metal between Glencore International AG (Appellant) and Shree Ganesh Metals (Respondent No.1). The terms were negotiated via email, and Glencore sent a formal contract (No. 061-16-12115-S) incorporating an arbitration clause, which it signed. The Respondent, however, never signed this document. Despite...

Clarifying Jurisdiction: Supreme Court Reaffirms Exclusive Power of MP Arbitration Tribunal for Public Works

28Aug

By The Legal ChamberNo Comments

Supreme Court

Clarifying Jurisdiction: Supreme Court Reaffirms Exclusive Power of MP Arbitration Tribunal for Public Works

The Supreme Court upheld the exclusive jurisdiction of the Madhya Pradesh Arbitration Tribunal over disputes arising from state works contracts, as per the MP Madhyastham Adhikaran Adhiniyam, 1983. It ruled that a private arbitration clause in a concession agreement cannot override this statutory mandate, rendering such arbitration non-est in law. Facts Of The Case: The dispute arose from a Concession Agreement dated 05.01.2012 between Umri Pooph Pratappur Tollways Pvt. Ltd. (Appellant) and the Madhya Pradesh Road Development Corporation (Respondent) for the development of a state highway on a BOT (Toll + Annuity) basis. Following alleged breaches and delays attributed to the Respondent, the Appellant first initiated proceedings in 2018 before the Madhya Pradesh Arbitration Tribunal, a s...

Supreme Court: Criminal Cases Against In-Laws Can Be Dropped After Amicable Settlement

28Aug

By The Legal ChamberNo Comments

Supreme Court

Supreme Court: Criminal Cases Against In-Laws Can Be Dropped After Amicable Settlement

This Supreme Court, invoking Article 142 of the Constitution, quashed all criminal proceedings arising from matrimonial discord, including charges under Section 494 and 498A IPC. Relying on precedents, it held that continuing prosecution after a full and final settlement and divorce constitutes an abuse of the legal process and serves no legitimate purpose. Facts Of The Case: The marriage between the respondent-wife and the appellant's brother was solemnized in 2001. The couple moved to the USA, but their relationship soured, leading to a mutual divorce decree from a California court in 2007. After returning to India, the wife initiated multiple legal proceedings against her husband and his family (the appellants). These included a complaint case alleging cruelty, a case under the Domest...

Supreme Court Clarifies: Limitation Act Applies to MSMED Arbitration But Not Conciliation

13Aug

By The Legal ChamberNo Comments

Supreme Court

Supreme Court Clarifies: Limitation Act Applies to MSMED Arbitration But Not Conciliation

The Supreme Court ruled on the applicability of the Limitation Act, 1963, to conciliation and arbitration proceedings under Section 18 of the MSMED Act, 2006. It held that the Limitation Act does not apply to conciliation proceedings, allowing time-barred claims to be referred for settlement. However, the Act applies to arbitration proceedings under Section 18(3), as Section 43 of the Arbitration and Conciliation Act, 1996, incorporates the Limitation Act into such arbitrations. The Court emphasized that the MSMED Act’s provisions override general laws, ensuring a balanced approach to dispute resolution while protecting suppliers' rights. The disclosure of unpaid amounts in financial statements under Section 22 may extend limitation periods, subject to case-specific scrutiny. Facts Of The...

“Can Courts Reject a Plaint for Skipping Mediation? :Supreme Court’s Strict Rule for Commercial Cases”

22May

By The Legal ChamberNo Comments

Supreme Court

“Can Courts Reject a Plaint for Skipping Mediation? :Supreme Court’s Strict Rule for Commercial Cases”

The Supreme Court upheld the mandatory nature of Section 12A of the Commercial Courts Act, 2015, requiring pre-institution mediation for commercial suits unless urgent interim relief is sought. However, it clarified that non-compliance before August 20, 2022 (the date of its earlier ruling in Patil Automation) does not warrant plaint rejection—instead, courts may refer parties to mediation while keeping suits in abeyance. The judgment harmonizes procedural rigor with practical enforcement, ensuring mediation’s role in reducing litigation backlog without unduly penalizing past filings. Facts Of The Case: The case arose from a money suit filed by the Union of India against M/s Dhanbad Fuels Pvt. Ltd. in the Commercial Court, Alipore, seeking recovery of ₹8.73 crores as differential freight...