Case Note & Summary
The case concerns two petitions filed under Section 34 of the Arbitration and Conciliation Act, 1996, challenging an arbitral award dated 14 February 2017 that allowed the claim for specific performance of a Development Agreement and Memorandum of Understanding both dated 19 April 1995, as modified by a draft Supplemental Agreement. The petitioners (Bhanumati Jaisukhbhai Bhuta and Vasantben Ramniklal Bhuta) were the original respondents in the arbitration, while the respondent No.1 (Ivory Properties & Hotels Private Limited) was the original claimant. The dispute originated from a joint development project for a property at Andheri, Mumbai, owned by the petitioners. The parties executed the Development Agreement and Memorandum of Understanding in April 1995, under which the respondent No.1 was to construct a building within 36 months at its own cost. The petitioners retained certain areas and were entitled to a share of sale proceeds and an interest-free deposit. The respondent No.1 failed to commence construction and, in February 2002, invoked the arbitration clause, though the arbitrator entered upon the reference only in January 2005. There were delays in filing the statement of claim, and the petitioners requested termination under Section 25(a) of the Arbitration Act. The respondent No.1 subsequently alleged encroachments on the property and breach of agreement, which the petitioners denied, attributing part of the land occupation to Mumbai Metro construction without their permission. The learned arbitrator passed the award allowing specific performance, which the petitioners challenged on various grounds including limitation and non-prosecution. The court heard both petitions together and reserved judgment on 15 October 2019, pronouncing it on 28 January 2020. The judgment analyzed the scope of interference under Section 34, the limitation period for filing claims, the effect of non-filing of the statement of claim, and the interpretation of contractual clauses. The court ultimately dismissed both petitions, upholding the arbitral award and confirming the order for specific performance of the development agreements.
Issue of Consideration
COMMERCIAL ARBITRATION PETITION NO. 350 OF 2017
Case Details
2020 LawText (BOM) (01) 37
Commercial Arbitration Petition No. 350 of 2017 and Commercial Arbitration Petition No. 812 of 2019
T.N. Subramanian, Rajesh Shah, Tanvi Gandhi, Chetan Yadav, Rubin Vakil, Nupur Desai, Shailesh Shah, Rohaan Cama, Aditya Udeshi, Sanjay Udeshi, Netaji Gawade, Rohit Kapadia, Yash Kapadia, Hemlata Jain, Samidha Ajgaonkar
Bhanumati Jaisukhbhai Bhuta, Vasantben Ramniklal Bhuta
Ivory Properties & Hotels Private Limited
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Nature of Litigation
Challenge under Section 34 of the Arbitration and Conciliation Act, 1996 to an arbitral award granting specific performance of development agreements.
Remedy Sought
The petitioners sought setting aside of the arbitral award dated 14 February 2017 that allowed the claim for specific performance of the Development Agreement and Memorandum of Understanding.
Filing Reason
The petitioners alleged that the arbitral award was erroneous and liable to be set aside on various grounds including limitation, non-filing of statement of claim, and perverse findings.
Previous Decisions
The arbitral award dated 14 February 2017 allowed the respondent no.1's claim for specific performance.
Judgment Excerpts
By these two petitions filed under Section 34 of the Arbitration and Conciliation Act, 1996 ... the petitioners have impugned the Arbitral Award dated 14th February, 2017 passed by the learned Arbitrator allowing the claim for specific performance of the Development Agreement and Memorandum of Understanding both dated 19th April, 1995 as modified by the draft Supplemental Agreement filed by the respondent no.1.
The respondent no.1 in both these petitions was original claimant in the arbitral proceedings.
Clause 33 of the said Agreement, recorded the Arbitration Agreement. It was agreed that all disputes or differences between the parties shall be referred to the arbitration of Shri Dilip Thakkar of Jayantilal Thakkar and Company, Charter Accountants.
The petitioner and the respondent no.2 through their advocate’s letter dated 4th April, 2006 addressed to the learned arbitrator requested the learned arbitrator to terminate the arbitration proceedings under Section 25(a) of the Arbitration Act.
Procedural History
The parties entered into a Development Agreement and Memorandum of Understanding on 19 April 1995 for development of property owned by the petitioners. The respondent no.1 invoked arbitration on 14 February 2002, but the arbitrator entered upon reference only on 10 January 2005. Directions were given for filing of claims and defences, but the respondent no.1 delayed filing its statement of claim. The petitioners sought termination under Section 25(a) of the Arbitration Act in April 2006. Disputes regarding encroachments and breach arose between 2006-2008. The arbitral award was passed on 14 February 2017 allowing specific performance. The petitioners filed these Section 34 petitions challenging the award. Both petitions were heard together and judgment was reserved on 15 October 2019 and pronounced on 28 January 2020.
Acts & Sections
- Arbitration and Conciliation Act, 1996: 34, 25(a)
