Tag: Arbitration and Conciliation Act

Supreme Court Rules: Consent Decree Based on Arbitration Must Be Honored, Estoppel Applies
18Sep By The Legal ChamberNo Comments
Supreme Court

Supreme Court Rules: Consent Decree Based on Arbitration Must Be Honored, Estoppel Applies

The Supreme Court held that a party cannot raise a plea of estoppel against law after its own conduct induced the other party to alter its position to its detriment. The doctrine of election and estoppel by conduct precludes a party from approbating and reprobating, thereby preventing it from challenging the validity of a compromise decree it had previously accepted. Facts Of The Case: The respondents, claiming the appellants had been removed as trustees, filed a suit for a perpetual injunction to restrain them from entering a school run by Guru Tegh Bahadur Charitable Trust. The Trial Court rejected the plaint under Order VII Rule 11 CPC, holding the suit was barred by Section 92 CPC. During the pendency of the respondents' appeal against this order, the parties mutually appointed a sol...
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Supreme Court Ruling: Courts Must Appoint Arbitrator Even If Serious Fraud is Alleged
5Sep By The Legal ChamberNo Comments
Supreme Court

Supreme Court Ruling: Courts Must Appoint Arbitrator Even If Serious Fraud is Alleged

The Supreme Court reaffirmed that under Section 11(6A) of the Arbitration Act, a court's role is prima facie confined to examining the existence of an arbitration agreement. All other contentious issues, including allegations of serious fraud and non-arbitrability, are jurisdictional matters that must be decided by the arbitral tribunal under Section 16. Facts Of The Case: The appellant, Bihar State Food and Civil Supplies Corporation, entered into agreements with various rice millers for the custom milling of paddy procured from farmers. The agreements contained an arbitration clause. When the millers allegedly failed to deliver the stipulated quantity of rice, the Corporation initiated recovery proceedings under the Bihar and Orissa Public Demands Recovery Act, 1914. The millers challe...
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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...
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Supreme Court Upholds MSMED Act’s Supremacy, Rejects Bengaluru Arbitration Clause : “MSMED Act Overrides Arbitration Agreements”
19May By The Legal ChamberNo Comments
Supreme Court

Supreme Court Upholds MSMED Act’s Supremacy, Rejects Bengaluru Arbitration Clause : “MSMED Act Overrides Arbitration Agreements”

The Supreme Court ruled that the Micro, Small and Medium Enterprises (MSMED) Act, 2006 overrides arbitration agreements under the Arbitration and Conciliation Act, 1996, affirming its special law status. It held that the supplier’s location determines arbitration jurisdiction, disregarding contractual seat clauses. The judgment reinforces statutory protection for MSMEs, ensuring disputes proceed before designated Facilitation Councils as per Section 18(4). Facts Of The Case: The dispute arose from a construction contract between M/s Harcharan Dass Gupta (Appellant), an MSME-registered supplier, and ISRO (Respondent), following a 2017 tender for staff quarters in Delhi. The agreement included an arbitration clause designating Bengaluru as the seat. When conflicts emerged, the supplier app...
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“Courts Can’t Decide Arbitrability” Supreme Court Clarifies Arbitrator Appointment Scope Under Section 11 Arbitration Act
17May By The Legal ChamberNo Comments
Supreme Court

“Courts Can’t Decide Arbitrability” Supreme Court Clarifies Arbitrator Appointment Scope Under Section 11 Arbitration Act

The Supreme Court ruled that under Section 11(6A) of the Arbitration Act, courts must limit their examination to the existence of an arbitration agreement and cannot decide arbitrability or exclude claims as "excepted matters" at the appointment stage. Citing the 7-judge bench in In Re: Interplay and 3-judge bench in SBI General Insurance, it held that arbitral tribunals—not courts—must determine whether claims fall under non-arbitrable categories. The judgment clarifies that courts cannot bifurcate claims into arbitrable/non-arbitrable during arbitrator appointments, ensuring minimal judicial interference at the referral stage. Facts Of The Case: The dispute arose from a contractual agreement between Office for Alternative Architecture (Appellant) and IRCON Infrastructure (Respondent), ...
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