Disputes stemming from Settlement Agreement and Consent Arbitral Award to be adjudicated under Arbitration and Conciliation Act, 1996
In a significant development, the Delhi High Court has appointed a new arbitrator to adjudicate disputes between M/s Jiangxi Construction Engineering Group Co Ltd. and M/s Varaha Infra Ltd. The disputes arise from a Settlement Agreement and a Consent Arbitral Award, which have been a point of contention between the two parties. Justice (Retired) Jayant Nath has been appointed as the Sole Arbitrator to oversee the arbitration process.
The judgment, delivered by Ms. Mini Pushkarna, J., highlights the complexities involved in the joint venture (JV) agreements between the two companies. Initially, these agreements were aimed at executing various construction projects for the National Highways Authority of India (NHAI) and state governments. However, disputes emerged during the execution of these projects, leading to multiple arbitration petitions.
The court has referred all disputes, including those related to the Mortgage Deed, Settlement Agreement, and Consent Arbitral Award, to arbitration. The decision emphasizes the impartial adjudication of issues, ensuring that both parties can raise their claims and counter-claims during the proceedings.
The court also addressed the issue of interim measures, directing that the petition under Section 9 of the Arbitration and Conciliation Act, 1996, be considered as an application under Section 17 by the appointed arbitrator. This is to secure the release of bank guarantees and prevent their invocation, a point of significant concern for the petitioners.
Further, the court clarified that repeated notices under Section 21 of the Arbitration Act are not required if prior notice has been issued, referencing previous judgments to support this view. The court also noted that the disputes concerning the Mortgage Deed are intrinsically linked to the larger settlement between the parties.
In conclusion, the Delhi High Court's decision underscores the importance of arbitration in resolving complex commercial disputes, providing a structured mechanism for parties to resolve their differences. The parties have been directed to approach the arbitrator within two weeks to initiate the process.
Bottom line:-
Arbitration and Conciliation Act, 1996 - Appointment of Arbitrator - Disputes arising out of Settlement Agreement and Consent Arbitral Award are to be referred to arbitration in terms of the Arbitration and Conciliation Act, 1996 - Court appoints a new Arbitrator considering objections raised by the respondent.
Statutory provision(s): Arbitration and Conciliation Act, 1996 Sections 9, 11, 12, 17, 21
