ELP Arbitration Weekly Update

This week, we have analysed two significant judgments from the Supreme Court (“SC”) and Delhi High Court (“Delhi HC”) under the Arbitration and Conciliation Act, 1996 (“the Act”).

In The State of Bihar & Ors. v. Bihar Rajya Bhumi Vikas Bank Samiti, the issue which arose for the SC’s consideration was whether issuing prior notice under Section 34(5) of the Act before filing a challenge under Section 34 was a mandatory requirement or a directory provision. Giving considerable weightage to the fact that the Act provided no consequence for breach of Section 34(5), the SC held that the provision was directory in nature.

In Surajmal Yadav v. Delhi State Industrial Infrastructure Development Corporation Ltd., the Delhi HC was faced with a scenario where though the arbitral award was in favour of the Petitioner, it remained silent on part of his claim relating to interest under two heads. The Delhi HC rejected the contention that silence on an issue implied that the arbitrator had rejected that claim, on the basis that Section 31(3) of the Act required for a reasoned award even in case a claim was to be rejected.

We hope you will find this an interesting and informative read. For any queries or comments on this update, please feel free to contact us at Insight@elp-in.com.