Tag: Commercial Dispute

Supreme Court: Subsequent Contracts Don’t Override Original Arbitration Agreement
9Feb By The Legal ChamberNo Comments
Supreme Court

Supreme Court: Subsequent Contracts Don’t Override Original Arbitration Agreement

The Supreme Court held that Part I of the Arbitration & Conciliation Act, 1996, including Section 11, does not apply to a foreign-seated international commercial arbitration. The arbitration clause in the principal "mother agreement" governs, and subsequent ancillary contracts with different parties cannot novate it or confer jurisdiction on Indian courts. Facts Of The Case: The petitioner, Balaji Steel Trade, entered into a Buyer and Seller Agreement (BSA) dated 06.06.2019 with respondent no. 1, Fludor Benin S.A., for the supply of cottonseed cake, containing an arbitration clause specifying arbitration in Benin. An Addendum was later executed. Subsequently, respondent no. 1 assigned its supply obligations. The petitioner then entered into separate Sales Contracts with r...
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Arbitrator’s Power on Interest Rates: Supreme Court Explains Key Legal Limits
6Feb By The Legal ChamberNo Comments
Supreme Court

Arbitrator’s Power on Interest Rates: Supreme Court Explains Key Legal Limits

This Supreme Court judgment clarifies the limited scope of judicial interference with arbitral awards under the Arbitration and Conciliation Act, 1996. The Supreme Court held that an arbitrator's discretion to award a contractual interest rate of 24% is not per se usurious or against public policy. It reaffirmed that courts cannot reappreciate evidence and may only set aside an award on the narrow, specified grounds under Section 34 of the Act, which were not met in this case. Facts Of The Case: The appellants, M/s Sri Lakshmi Hotels Pvt. Limited and its Managing Director, availed two loans totaling ₹1.57 Crore from the respondent Non-Banking Financial Company (NBFC) in 2006. The loan agreements stipulated an interest rate of 24% per annum. After making partial repayments until April 200...
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Supreme Court Landmark Ruling: Order Rejecting Plaint Under Order VII Rule 11 is Appealable as a Decree
29Jan By The Legal ChamberNo Comments
Supreme Court

Supreme Court Landmark Ruling: Order Rejecting Plaint Under Order VII Rule 11 is Appealable as a Decree

The Supreme Court held that an order rejecting a plaint under Order VII Rule 11 of the CPC is a decree under Section 2(2). Consequently, such an order is appealable under Section 13(1A) of the Commercial Courts Act, 2015, as it constitutes a final adjudication, not merely an interlocutory order restricted by the proviso. Facts Of The Case: The appellant, MITC Rolling Mills Private Limited, filed a commercial suit before the Commercial Court. The respondents, M/s. Renuka Realtors and others, filed an application under Order VII Rule 11 of the Code of Civil Procedure, 1908, seeking rejection of the plaint. Their ground was that the appellant had not undertaken the mandatory Pre-Institution Mediation and Settlement (PIMS) as required under Section 12A of the Commercial Courts Act, 2015. The...
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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...
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Landmark Ruling Protects IP Owners: Supreme Court Says Continuous Infringement Creates Inherent Urgency
4Jan By The Legal ChamberNo Comments
Supreme Court

Landmark Ruling Protects IP Owners: Supreme Court Says Continuous Infringement Creates Inherent Urgency

This Supreme Court judgment clarifies that under Section 12A of the Commercial Courts Act, a suit alleging continuing infringement of intellectual property rights inherently contemplates urgent interim relief. The Court held that mere delay in filing the suit does not negate urgency, as each ongoing act of infringement causes immediate and irreparable harm, and public interest in preventing market deception also factors into the assessment. Facts Of The Case: The appellant, a Danish company named Novenco Building and Industry A/S, held patents and design registrations in India for its industrial fans sold under the brand ‘Novenco ZerAx’. It had entered into a dealership agreement with respondent No. 1, Xero Energy Engineering Solutions Pvt. Ltd., in 2017. The appellant later discov...
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Supreme Court Dismisses Arbitration Petition Due to Limitation Issues
29Dec By The Legal ChamberNo Comments
Supreme Court

Supreme Court Dismisses Arbitration Petition Due to Limitation Issues

The Supreme Court dismissed the petition for appointment of an arbitrator under Section 11(5) of the Arbitration and Conciliation Act, 1996. The Court held that the underlying claim for recovery of money was hopelessly barred by limitation, rendering the appointment of an arbitrator untenable in law. Facts Of The Case: The case involves a dispute arising from a partnership deed containing an arbitration clause. The petitioner, residing in the UK, entered into a partnership with the respondent on 20.09.2014, succeeding an earlier partnership involving the petitioner’s sister. The petitioner alleged that he paid substantial sums amounting to Rs. 2.31 crores, relying on a clause entitling him to 75% of profits from a property purchased on 04.05.2016, but received nothing. The partnership wa...
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Supreme Court: Right to Cross-Examine Survives Even If Written Statement Is Not Filed
24Dec By The Legal ChamberNo Comments
Supreme Court

Supreme Court: Right to Cross-Examine Survives Even If Written Statement Is Not Filed

The Supreme Court held that the mandatory 120-day period for filing a written statement in a commercial suit was extended by its COVID-19 limitation orders. Crucially, it ruled that even if a written statement is not filed, the defendant’s fundamental right to cross-examine the plaintiff’s witnesses is not forfeited, as procedural rules must serve substantive justice. Facts Of The Case: In 2019, M/s Anvita Auto Tech Works Pvt. Ltd. appointed M/s Aroush Motors as a dealer for CFMOTO motorcycles. The plaintiff invested significant sums in security deposits, showroom setup, and initial stock. The business was disrupted when a government ban on BS-IV vehicles took effect in April 2020, and the defendant failed to supply promised upgrade kits. Consequently, the plaintiff terminated the dealer...
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How a Defective Arbitration Clause & the Pandemic Shaped a Landmark Supreme Court Ruling on Limitation
1Dec By The Legal ChamberNo Comments
Supreme Court

How a Defective Arbitration Clause & the Pandemic Shaped a Landmark Supreme Court Ruling on Limitation

The Supreme Court held that an arbitration clause is not rendered invalid merely because the named arbitrator becomes statutorily ineligible; courts retain authority under Section 11(6) of the Arbitration Act to appoint a neutral arbitrator. Additionally, the limitation period for filing the application was extended by excluding the COVID-19 period from 15 March 2020 to 28 February 2022. Facts Of The Case: The appellant, Offshore Infrastructures Limited, was awarded a contract by the respondent, Bharat Petroleum Corporation Limited (formerly Bharat Oman Refineries Limited), for composite works at the Bina Refinery. The work, accepted on 31 December 2016, was to be completed by 30 May 2017 but was ultimately finished on 31 January 2018. The appellant raised its final bill on 20 Ma...
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Simplifying the Supreme Court’s Order 37 Judgment: Why “Leave to Defend” is Mandatory
19Nov By The Legal ChamberNo Comments
Supreme Court

Simplifying the Supreme Court’s Order 37 Judgment: Why “Leave to Defend” is Mandatory

The Supreme Court held that in a summary suit under Order XXXVII CPC, a defendant cannot file a defence without first obtaining "leave to defend" from the court. Permitting a reply to a summons for judgment bypasses this mandatory procedure, which effaces the fundamental distinction between a summary suit and an ordinary suit. The Court set aside the impugned order for this procedural deviation. Facts Of The Case: The case originated from a commercial summary suit filed by the appellant, Executive Trading Company, to recover a sum of over Rs. 2.38 crore from the respondent, Grow Well Mercantile. The suit was instituted under the special fast-track procedure of Order XXXVII of the Civil Procedure Code (CPC). After the defendant entered appearance, the plaintiff served a "summons for judgm...
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Clarity on Post-Award Interest: Supreme Court Explains When Hyder Consulting Judgment Applies
15Nov By The Legal ChamberNo Comments
Supreme Court

Clarity on Post-Award Interest: Supreme Court Explains When Hyder Consulting Judgment Applies

This Supreme Court judgment clarifies that an arbitral award granting a composite interest rate from the cause of action until the date of repayment, based on a contract between the parties, excludes the default application of separate post-award interest under Section 31(7)(b) of the Arbitration and Conciliation Act, 1996. Party autonomy governs, and a decree-holder cannot claim compound interest at the execution stage if it was not stipulated in the contract or awarded by the tribunal, as this would amount to impermissibly modifying the award. Facts Of The Case: The dispute originated from a Memorandum of Understanding (MoU) dated 09.04.2014 between HLV Limited and PBSAMP Projects Pvt. Ltd. for the sale of land in Hyderabad. PBSAMP paid an advance of Rs. 15.5 crores to HLV. After...
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