Highlights And Developments In Arbitration For 2022

The year 2022 witnessed some significant development in arbitration after receiving a boost from the Government of India policies.

Here is a look at the hits and misses of 2022 in the Arbitration landscape of India.

(i)  International Arbitration Centre at GIFT City – After the Union Budget 2022, efforts are underway to establish an International Arbitration Centre at GIFT City, Gujarat. GIFT -IFSC is a one-of-a-kind internal financial services centre in India which will entice foreign market participants to invest and run their business in India. An international arbitration centre which reflect the best international practices will be particularly comforting for investors. 

(ii)  International Arbitration and Mediation Centre (IAMC) in Hyderabad – Erstwhile Chief Justice N. V Ramana laid foundations for the construction of India’s first International Arbitration and Mediation Centre (IAMC) which is pegged to be a critical step towards promoting institutional arbitrations in India.

On the judicial front, arbitration saw some important developments. While most were aimed at making India arbitration-friendly, some did not.

(i) The Delhi High Court set aside USD 562.5 million award in favour of Devas Multimedia – the decade long dispute between Antrix and Devas Multimedia is nearing its end. After the Supreme Court judgment approving dissolution of Devas Multimedia, the setting aside of the award in favour of Devas Multimedia by Delhi High Court predominantly on the ground of fraud and corruption comes as no surprise. While the judgment is specific to the unique nature of dispute between Antrix and Devas, it is likely to open flood gates of arguments on corruption and fraud with parties looking for stay on awards without being required to make a deposit.

(ii)  A three-judge bench of the Supreme Court has now referred to ruling on group of companies’ doctrine in Chloro Controls to a larger bench for better clarity. Since the Chloro Control, the courts have applied the principle of group of companies doctrine to initiate arbitrations and even enforce award against non-signatories to the arbitration agreements. [Cox & Kings Ltd. v. SAP India (P) Ltd., (2022) 8 SCC 1]

(iii)   After noting the long pendency of applications for appointment of arbitrators under Section 11 of the Arbitration Act, the Supreme Court directed the High Courts to decide and dispose of the applications under Sections 11(5) and 11(6) of the Arbitration Act and/or any other like application at the earliest and preferably within a period of six months from the date of filing of the applications. 

(iv)  In a recent development, the Supreme Court has ruled that a court cannot modify an arbitral award under Section 34 and 37 of the Arbitration Act. Going forward, if the grounds under Section 34 of the Arbitration Act are established, courts will have to set aside the award or remand it to the arbitrators to assign reasons. [NHAI v. P. Nagaraju (2022 SCC OnLine SC 864)]

(v)  In an interesting case, the Delhi High Court has taken a divergent view on a well established concept of seat. The Delhi High Court held that an exclusive jurisdiction clause conferring jurisdiction on a specific court will override the designation of seat clause in the same agreement. [Hunch Circle Pvt. Ltd. v. Future Technology Pvt. Ltd. (2022 SCC OnLine Del 361)]