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The Bi-Monthly Newsletter of the Nani Palkhivala Arbitration Centre Volume 14 IssueIssue 25 April October 2021 2018 Message to the Readers As is well established and often repeated, the Arbitration and Conciliation Act, 1996 is a complete code in itself. It follows that the remedies contemplated by invocation of Article 226 of the Indian Constitution would only have a limited application in this area. However, as we all know, in law there is hardly a rule without an exception. Following cases are some interesting exceptions to the above-mentioned rule: GOVERNING COUNCIL In Sanjana M. Wig vs. Hindustan Petroleum Corporation Limited Justice M.N.Venkatachaliah Former Chief Justice of India (2005) 8 SCC 242, a two judge Bench of the Supreme Court, speaking Soli J. Sorabjee through Justice Mr. SB Sinha, observed: Former Attorney General of India K.K.Venugopal Attorney General of India, Senior Advocate, Supreme Court of India “12. The principal question which arises for consideration isas to Justice AP Shah, whether a discretionary jurisdiction would be refused tobe exercised Former Chairman, Law Commission of India and Former Chief Justice of the High Courts of Madras and New Delhi solely on the ground of existence of an alternative remedy which is B.S. Raghavan, I.A.S. (Retd.), more efficacious... Former Advisor to the United Nations (FAO) Iqbal Chagla Senior Advocate, Bombay High Court 13. However, access to justice by way of public law remedy would not T.S. Krishnamurthy Former Chief Election Commissioner of India be denied when a lis involves public law character and when the BOARD OF DIRECTORS forum chosen by the parties would not be in a position to grant S. Mahalingam Former Chief Financial Officer, appropriate relief.[...] Tata Consultancy Services Arvind P. Datar Senior Advocate, Madras High Court and 18. It may be true that in a given case when an action of the party is Supreme Court of India. V.S. Jayakumar dehors the terms and conditions contained in an agreement as also Advocate, Madras High Court beyond the scope and ambit of the domestic forum created therefor, N.L. Rajah Senior Advocate, Madras High Court the writ petition may be held to be maintainable; but indisputably R. Anand Chartered Accountant therefore such a case has to be made out. It may also be true, as has R. Murari been held by this Court in Amritsar Gas Service [(1991) 1 SCC 533] Senior Advocate, Madras High Court M.S. Krishnan and E.Venkatakrishna [(2000) 7 SCC 764] that the arbitrator may Senior Advocate, Madras High Court not have the requisite jurisdiction to direct restoration of Gaurav Pachnanda Senior Advocate, Supreme Court of India distributorship having regard to the provisions contained in Section K.Balaji 14 of the Specific Relief Act, 1963; Former Director, Kasturi & Sons Ltd. Payal Chawla Advocate, Founder, JusContractus Editorial Board: N.L. Rajah, Senior Advocate, K. Balaji, Former Aditya Ghosh Director, Kasturi and Sons Ltd, Dr. J. Durgalakshmi, Registrar, CEO, OYO Hotels and Homes, South Asia NPAC, Aishwarya Mahesh, Advocate 2 DISPUTE RESOLUTIONS but while entertaining a writ petition even in such a case, the court may not lose sight of the fact that if a serious disputed question off act is involved arising out of a contract qua contract, ordinarily a writ petition would not be entertained. A writ petition, however, will be entertained when it involves a public law character or involves a question arising out of public law functions on the part of the respondent.” In HarbanslalSahnia and another vs. Indian Oil Ltd. and others A.I.R. 2003 S.C. 2120, the Court held that: “7. So far as the view taken by the High Court that the remedy by way of recourse to arbitration clause was available to the appellants and therefore the writ petition filed by the appellants was liable to be dismissed, suffice it to observe that the rule of exclusion of writ jurisdiction by availability of an alternative remedy is a rule of discretion and not one of compulsion. In an appropriate case in spite of availability of the alternative remedy, the High Court may still exercise its writ jurisdiction in at least three contingencies: (i) where the writ petition seeks enforcement of any of the Fundamental Rights; (ii) where there is failure of principles of natural justice or, (iii) where the orders or proceedings are wholly without jurisdiction or the vires of an Act and is challenged [Whirlpool Corporation v. Registrar of Trade Marks, Mumbai and Ors.,AIR1999SC22] . The present case attracts applicability of first two contingencies. Moreover, as noted, the petitioners' dealership, which is their bread and butter came to be terminated for an irrelevant and non-existent cause. In such circumstances, we feel that the appellants should have been allowed relief by the High Court itself instead of driving them to the need of initiating arbitration proceedings.” The Supreme Court, recently in Rapid MetroRail Gurgaon Limited vs. Haryana Mass Rapid Transport CorporationLL 2021 SC 194 observed that ordinarily a High Court in its jurisdiction under Article 226 of the Constitution has to decline to entertain a dispute which is arbitrable, unless there is a fundamental issue of public interest. The bench comprising Justices DY Chandrachud, MR Shah and Sanjiv Khanna observed that, while considering appeals filed by Rapid Metrorail Gurgaon Limited (“RMGL”) against the order passed by the Punjab and Haryana High Court in writ petitions filed by Haryana Mass Rapid Transport Corporation (challenging termination notices issued by RMGL), though there was an arbitration clause, the High Court had entertained the writ petition. In appeal, the apex Court noted that the High Court was concerned over a fundamental issue of public interest, which was the hardship that would be caused to commuters who use the rapid metro as a vehicle for mass transport in Gurgaon, if there were to be abrupt termination of the contract with the Haryana Mass Rapid Transport Corporation. In this context, the bench observed: “As such, the High Court's exercise of its writ jurisdiction under Article 226 in the present case was justified since non-interference, which would have inevitably led to the disruption of rapid metro lines for Gurgaon, would have had disastrous consequences for the general public. However, as a measure of abundant caution, we clarify that ordinarily the High Court in its jurisdiction under Article 226 would decline to entertaina dispute which is arbitrable. Moreover, remedies are available under the Arbitration and Conciliation Act, 1996 for seeking interim directions either under Section 9 before the Court vested with jurisdiction or under Section 17 before the Arbitral Tribunal itself." DISPUTE RESOLUTIONS 3 In Deep Industries Limited vs. Oil and Natural Gas Corporation Limited and Ors(2020) 15 SCC 706 the Court observed: “13. This being the case, there is no doubt whatsoever that if petitions were to be filed Under Articles 226/227 of the Constitution against orders passed in appeals Under Section 37, the entire arbitral process would be derailed and would not come to fruition for many years. At the same time, we cannot forget that Article 227 is a constitutional provision which remains untouched by the non-obstante Clause of Section 5 of the Act. In these circumstances, what is important to note is that though petitions can be filed Under Article 227 against judgments allowing or dismissing first appeals Under Section 37 of the Act, yet the High Court would be extremely circumspect in interfering with the same, taking into account the statutory policy as adumbrated by us herein above so that interference is restricted to orders that are passed which are patently lacking in inherent jurisdiction.” The Supreme Court in Navayuga Engineering Company vs. Bangalore Metro Rail Corporation Limited [CA 1098-1099 OF 2021] held that: “Despite this Court repeatedly referring to Section 5 of the Arbitration Act in particular and the Arbitration Act in general and despite this Court having laid down in Deep Industries Ltd. Vs. ONGC &Anr. (2020) 15 SCC 706 that the High Court under Article 226 and 227 should be extremely circumspect in interfering with orders passed under the Arbitration Act, such interference being only in cases of exceptional rarity or cases which are stated to be patently lacking in inherent jurisdiction, we find that High Courts are interfering with depositorders that have been made. This is not a case of exceptional rarity or of any patent lack of inherent jurisdiction.” These cases give us some idea of instances where notwithstanding the existence of an arbitration clause courts have intervened in exercise of powers under Article 226 of the Indian Constitution. N.L. Rajah Senior Advocate, Madras High Court Director, NPAC 4 DISPUTE RESOLUTIONS LEGAL UPDATES Indian parties can choose a foreign seat for arbitration: Supreme Court In the recent case of PASL Wind Solutions Private Limited vs. GE Power Conversion India Private Limited, a three-judge bench of the Supreme Court comprising of Justice Rohinton Fali Nariman, Justice BR Gavai and JusticeHrishikesh Roy confirmed that “Nothing stands in the way of party autonomy in designating a seat of arbitration outside India even when both parties happen to be Indian nationals”. The judgment analyzed relevant provisions ofthe Arbitration and Conciliation Act, 1996, various precedents and observed that Part I and Part II of the Arbitration Act are mutually exclusive and that “nothing stands in the way of party autonomy in designating

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