Dispute Resolution

In the recent case of Garg Builders v Bharat Heavy Electricals Limited [Civil Appeal No. 6261 of 2021], a two-judge bench of the Supreme Court of India (Supreme Court) held that an arbitrator cannot grant pendente lite interest when the contracting parties have freely and expressly opted out of receiving interest under the contract. 

In a recent decision of Municipal Corporation of Greater Mumbai v Ankita Sinha & Others, a three judge bench of Supreme Court of India held that the National Green Tribunal (NGT) has power to take suo motu cognizance of environmental issues, even though the National Green Tribunal Act, 2010 (NGT Act) does not expressly provide the NGT with power to take suo motu cognizance. The judgment was rendered in a batch of connected matters with the same issue – whether the NGT has the power to exercise suo motu jurisdiction in discharge of its functions under the NGT Act.

Aggrieved by the order of the National Company Law Appellate Tribunal (NCLAT) refusing to condone a delay of 44 (forty-four) days in filing an appeal against the order passed by the National Company Law Tribunal (NCLT), the Appellant (i.e., National Spot Exchange Limited) preferred an appeal before the Hon’ble Supreme Court of India.

Over the past few years, Indian courts have actively taken a pro-arbitration stance and emphasised on minimum judicial interference in arbitral processes or awards. Recently, the Supreme Court of India in Arcelor Mittal Nippon Steel India Ltd v Essar Bulk Terminal Ltd, has further clarified the scope of the courts’ power to “entertain” and adjudicate applications for interim relief, when the arbitral tribunal has been constituted during the pendency of parties’ applications for interim relief before the court.

On 13 September 2021, the Supreme Court (SC), has delivered a judgment (SC Judgment) in the batch matter of Ebix Singapore Pvt. Ltd. v. Committee of Creditors of Educomp Solutions Ltd. and Anr., Civil Appeal No. 3224 of 2020, providing long overdue clarity on the status of a resolution plan under the Insolvency and Bankruptcy Code 2016 (Code) once it has been approved by the Committee of Creditors (COC) but is still pending approval of the National Company Law Tribunal (Adjudicating Authority/ NCLT).

The Supreme Court in its recent decision in Dena Bank (now Bank of Baroda) v C. Shivakumar Reddy and Anr, (Civil Appeal 1650 of 2020) has inter alia held that a final judgement, decree and/or a recovery certificate passed/ issued by a court or tribunal would give rise to a fresh cause of action for a financial creditor to initiate proceedings under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC).

The Supreme Court of India (SC) in Orator Marketing Private Limited v Samtex Desinz Private Limited, Civil Appeal No. 2231 of 2021, judgment dated 26th July 2021 has held that an interest free term loan constitutes a financial debt under the Insolvency and Bankruptcy Code, 2016 (IBC).

Larsen & Toubro Limited (L&T) filed a writ petition against Punjab National Bank (PNB), the Indian Banks Association (IBA) and the Reserve Bank of India (RBI) before the Delhi High Court challenging PNB’s and IBA’s interpretation of the third exception to Section 28 of the Indian Contract Act, 1872 (ICA). The issue arose because L&T in its ordinary course of business, routinely submitted performance bank guarantees/ advance bank guarantees while bidding for government contracts and also submitted bid bonds/ bid security in the form of bank guarantees (BGs).