{"id":550,"date":"2023-06-26T15:32:22","date_gmt":"2023-06-26T10:02:22","guid":{"rendered":"https:\/\/xpertslegal.com\/blog\/?p=550"},"modified":"2023-06-26T15:34:16","modified_gmt":"2023-06-26T10:04:16","slug":"section-34-of-the-arbitration-and-conciliation-act-1996","status":"publish","type":"post","link":"https:\/\/xpertslegal.com\/blog\/section-34-of-the-arbitration-and-conciliation-act-1996\/","title":{"rendered":"Delhi high court holds that once the disputes between parties were settled by way of a full and final settlement, the issues covered under the arbitration clause become non arbitrable."},"content":{"rendered":"

B.L. KASHYAP AND SONS LTD.<\/strong> (Petitioner) Vs. <\/strong>MIST AVENUE PRIVATE LTD. (<\/strong>Respondents)<\/h1>\n

(O.M.P.(COMM) 190\/2019)<\/p>\n

(Coram HON\u2019BLE MR. JUSTICE PRATEEK JALAN. Delivered by Justice Jalan<\/strong>)<\/p>\n

 <\/p>\n

Facts:<\/u><\/strong> The present petition has been filed under Section 34 of the Arbitration and Conciliation Act, 1996, whereby the petitioner seeks setting aside of an award, by a sole arbitrator in disputes raised by the petitioner under an undated Construction Contract entered into between the parties in 2014.<\/p>\n

Issue: <\/u><\/strong>Whether an arbitration clause survives a supervening agreement in form of MoU between the parties?<\/p>\n

Arguments on behalf of counsel for petitioner:<\/u><\/strong> Mr. Ashish Dholakia<\/p>\n

Learned Senior Counsel for the petitioner, submitted that the interpretation of the contracts in the impugned award is arbitrary and perverse, rendering the award manifestly illegal. Further, Clause 1 of the MoU states that the 2014 Contract will stand satisfied only upon fulfilment of the conditions enumerated thereunder, and the respondent had admittedly not made full payment of the sum of \u20b9132 lakhs, mentioned in sub-clause A thereof, and in such circumstances, the petitioner was entitled to claim all dues under the Contract, and to \u201cfile any legal measures\u201d for this purpose. Further, even after the execution of the MoU, the petitioner continued to raise running account bills under the 2014 Contract, which has been explained away by the learned arbitrator as being in anticipation of the new contract between the parties. Further, it was submitted that the learned arbitrator missed the conditional nature of cancellation of the 2014 Contract. Further, it was submitted that Clause 1(C) of the MoU only permits the petitioner to make claims due to it under the 2014 Contract, but does not revive the 2014 Contract or resurrect the arbitration clause.<\/p>\n

Arguments on behalf of counsel for respondents:<\/u><\/strong> Mr. Anil Kr. Airi<\/p>\n

Mr. Airi submitted that, upon a proper reading of MoU, it is clear that the parties arrived at a settlement by which the 2014 Contract was \u201ccancelled\u201d or \u201cclosed\u201d. Further, regarding the fulfilment of the conditions mentioned in Clause 1 of the MoU are concerned, he submitted that reciprocal conditions were placed upon both the parties and the respondent\u2019s failure to make full payment thereunder is due to the petitioner not having handed over the consumables mentioned in the annexure to the MoU. Relying upon the judgments in Nathani Steels Ltd. vs. Associated Construction<\/em><\/strong> and Damodar Valley Corporation vs. K.K.<\/em><\/strong> Kar<\/em><\/strong> to submit that in light of the settlement arrived at between the parties in the MoU, it was not open to the petitioner to invoke the arbitration clause and seek performance of the terms of the 2014 Contract.<\/p>\n

Held:<\/u><\/strong> The court dismissed the above petition, while observing that, \u201cThis Court, under Section 34 of the Act, is not required to accord its own interpretation to the contractual documents, but only to assess whether the provisions are capable of the interpretation placed upon them in the impugned award. The conclusion of the learned arbitrator that the MoU constituted a novation of the 2014 Contract is, unimpeachable within the limited jurisdiction of the Court under Section 34 of the Act. Therefore, I do not find any ground for interference with the impugned award under Section 34 of the Act.\u201d<\/em> The Court observed that the arbitrator had held as follows: \u201cOnce there was a full and final settlement in respect of all the disputes, in relation to a matter covered under the arbitration clause in the contract, such disputes or differences did not remain to be an arbitrable dispute, and the arbitration clause could not be invoked. Though the original contract was validly executed, the parties decided to put an end to it as if it never existed and substituted a new contract with it, solely governing their rights and liabilities. In such a situation, the original contract was extinguished by the substituted one, the arbitration clause of the original one perishes with it.\u201d<\/em><\/p>\n\n","protected":false},"excerpt":{"rendered":"

B.L. KASHYAP AND SONS LTD. (Petitioner) Vs. MIST AVENUE PRIVATE LTD. (Respondents) (O.M.P.(COMM) 190\/2019) (Coram HON\u2019BLE MR. JUSTICE PRATEEK JALAN. Delivered by Justice Jalan)   Facts: The present petition has been filed under Section 34 of the Arbitration and Conciliation Act, 1996, whereby the petitioner seeks setting aside of an award, by a sole arbitrator […]<\/p>\n","protected":false},"author":1,"featured_media":551,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[],"class_list":["post-550","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-judgement"],"_links":{"self":[{"href":"https:\/\/xpertslegal.com\/blog\/wp-json\/wp\/v2\/posts\/550","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/xpertslegal.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/xpertslegal.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/xpertslegal.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/xpertslegal.com\/blog\/wp-json\/wp\/v2\/comments?post=550"}],"version-history":[{"count":2,"href":"https:\/\/xpertslegal.com\/blog\/wp-json\/wp\/v2\/posts\/550\/revisions"}],"predecessor-version":[{"id":554,"href":"https:\/\/xpertslegal.com\/blog\/wp-json\/wp\/v2\/posts\/550\/revisions\/554"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/xpertslegal.com\/blog\/wp-json\/wp\/v2\/media\/551"}],"wp:attachment":[{"href":"https:\/\/xpertslegal.com\/blog\/wp-json\/wp\/v2\/media?parent=550"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/xpertslegal.com\/blog\/wp-json\/wp\/v2\/categories?post=550"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/xpertslegal.com\/blog\/wp-json\/wp\/v2\/tags?post=550"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}