Skip to main content

Arbitration clause independent of MoU

The arbitration clause in an agreement can be separated from the main contract and each can be decided independently, the Supreme Court has stated in the judgment, Ashapura Mine-Chem Ltd vs Gujarat Mineral Development Corporation. The Supreme Court set aside the judgment of the Gujarat high court which took the wrong view, against precedents. In this case, the Corporation entered into a memorandum of understanding (MoU) under which Ashapura proposed to constitute a joint venture along with a Chinese company as well as the Gujarat Corporation for setting up an alumina plant in Kutch. When differences cropped up, the Corporation cancelled the MoU, which provoked Ashapura to approach the high court for appointment of an arbitrator. The request was rejected as the high court felt that the MoU having been cancelled, there was no question of arbitration. On appeal, the Supreme Court stated that though the joint venture failed to take off, the arbitration clause in the MoU would operate as a stand-alone agreement. The high court ought to have appointed an arbitrator. Since it was not done, the Supreme Court appointed Rekha Doshit, former chief justice of the Patna High Court as the sole arbitrator despite the opposition of the Gujarat corporation.

 Article referred: http://www.business-standard.com/article/opinion/customs-rule-on-handling-charges-illegal-115042600777_1.html

Comments

Post a Comment

Most viewed this month

The recovery of vehicles by the financier not an offence - SC

Special Leave Petition (Crl.) No. 8907  of 2009 Anup Sarmah (Petitioner) Vs Bhola Nath Sharma & Ors.(Respondents) The petitioner submitted that  respondents-financer had forcibly taken away the vehicle financed by them and  illegally deprived the petitioner from its lawful possession  and  thus,  committed  a crime. The complaint filed by the petitioner had been  entertained  by  the Judicial Magistrate (Ist Class), Gauhati (Assam) in Complaint Case  No.  608 of 2009, even directing the interim custody of the vehicle (Maruti  Zen)  be given to the petitioner vide order dated  17.3.2009.  The respondent on approaching the Guwahati High  Court against this order, the hon'ble court squashed the criminal  proceedings  pending   before  the  learned Magistrate. After hearing both sides, the Hon'ble Supreme Court decided on 30th...
7 comments
Read more

Court approached in the early stages of arbitration will prevail in all other subsequent proceedings

In National Highway Authority of India v. Hindustan Steelworks Construction Limited, the Hon'ble Delhi High Court opined that once the parties have approached a certain court for relief under Act at earlier stages of disputes then it is same court that, parties must return to for all other subsequent proceedings. Language of Section 42 of Act is categorical and brooks no exception. In fact, the language used has the effect of jurisdiction of all courts since it states that once an application has been made in Part I of the Act then ―that Court alone shall have jurisdiction over arbitral proceedings and all subsequent applications arising out of that agreement and arbitral proceedings shall be made in that Court and in no other Court. Court holds that NHAI in present case cannot take advantage of Section 14 of the Limitation Act, 1963 for explaining inordinate delay in filing present petition under Section 34 of this Act in this Court.
Post a Comment
Read more

Procedure to be followed on admissibility of additional evidence at appeal stage

In The Corporation of Madras vs M. Parthasarathy & Ors., the trial court had allowed the respondent company to file evidence in the form of photocopies and had dismissed all the four suits filed by the respondents with costs as the evidence were in the form of photocopies and were objected to by the respondents. On appeal the Additional District Judge allowed the respondents to file additional evidence in the form the original documents of the earlier admitted photocopies and based on the same allowed the appeal. In its turn the High Court also dismissed the appeal filed by the appellants who in turn approached the Supreme Court. The Supreme Court decided that the first Appellate Court committed two jurisdictional errors in allowing the appeals.  Referring to earlier judgements of the Supreme Court in Land Acquisition Officer, City Improvement Trust Board vs. H. Narayanaiah & Ors., , Shalimar Chemical Works Ltd. vs. Surendra Oil & Dal Mills (Refineri...
Post a Comment
Read more