The Supreme Court has ruled that a criminal case against one of the contracting parties cannot stall arbitration. "The balance of convenience is more in favour of permitting arbitration proceedings to continue rather than to bring it to a grinding halt," the court stated in its judgment, Swiss Timings Ltd vs Organising Committee, CWG. The court clarified that the award could be challenged later if there was conviction after trial of the accused persons.
In this case, the foreign company which provided the time, score and result systems for the Commonwealth Games 2010 invoked the arbitration clause when there were disputes over payment. The CWG committee resisted arbitration on the ground that the company had received undue favours and the matter was probed by the CBI and criminal proceedings are going on in the trial court. Its judgment and the arbitral award might be contradictory leading to confusion, which should be avoided by the apex court. These arguments were rejected and the Supreme Court appointed a three-member tribunal.
Article referred: http://www.business-standard.com/article/opinion/criminal-case-no-bar-to-arbitration-114060800648_1.html
In this case, the foreign company which provided the time, score and result systems for the Commonwealth Games 2010 invoked the arbitration clause when there were disputes over payment. The CWG committee resisted arbitration on the ground that the company had received undue favours and the matter was probed by the CBI and criminal proceedings are going on in the trial court. Its judgment and the arbitral award might be contradictory leading to confusion, which should be avoided by the apex court. These arguments were rejected and the Supreme Court appointed a three-member tribunal.
Article referred: http://www.business-standard.com/article/opinion/criminal-case-no-bar-to-arbitration-114060800648_1.html
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