Top News Headlines 15th Feb 2022: Arbitration Matters Can Be Remanded Back For Fresh Decision

Arbitration Matters Can Be Remanded Back For Fresh Decision Upon Due Consent Of The Parties: Supreme Court

• The Hon’ble Supreme Court (SC), in the case of Mutha Construction v Strategic Brand Solutions (I) Pvt Ltd, has held that the Court has jurisdiction to remand back the matter to the Arbitrator for a fresh reconsideration if both the parties have consented to set aside the award and remit the matter for a fresh reasoned award.
• The parties were in arbitration before a Sole Arbitrator (Arbitrator) in relation to a dispute. Aggrieved by the award, the Petitioner preferred a Commercial Arbitration Petition under Section 34 of the Arbitration and Conciliation Act, 1996 (Act).
• In an order passed by the learned Single Judge, the award was set aside by consent of the parties and the matter was remanded back to the same Arbitrator for fresh consideration thereby disposing the petition under Section 34 of the Act (Order 1).
• Later on, an application seeking modification of Order 1 on the limited ground that consent has not been accorded for remanding the matter back to the same Arbitrator was dismissed (Order 2).
• Aggrieved by the said Orders, the Petitioner filed a review petition which was rejected on an observation being made that Order 1 was passed by consent. Being aggrieved by the aforesaid Orders and the rejection of the review petition, a petition to division Bench of the High Court (HC) was passed.
• In its order, the HC refused to restore the appeal specifically observing that Order 1 was a consent order and remarked that even if the appeal was restored no useful purpose would be served since the Court was not inclined to allow the appeal on merits.
• Aggrieved, the applicant preferred an appeal with the SC by way of SLP.
• The Petitioner, relying on the ratio laid down in Kinnari Mullick and Anr. v Ghanshyam Das Damani,Dyna Technologies Pvt Ltd v Crompton Greaves Ltd, and IPay Clearing Services Private Limited v ICICI Bank Limited contended that the Appellate Court, while exercising its powers under Section 34 of the Act cannot set aside an award on the ground that no reasons have been assigned and cannot remand back the matter to the same Arbitrator.
• The SC remarked that the decisions relied upon by the Petitioner shall not be applicable in the instant case as the single judge passed a consent order wherein both the parties agreed to set aside the award and remand the matter back for a fresh reasoned award.
• Dismissing the appeal, the Court held that principle of law laid down in the cases relied upon by the Petitioner will be applicable where the application under Section 34 is decided on merits. However, in the instant case, since it was a consent order, it was not open for the Petitioner to contend that the matter must not be remanded back to the same sole arbitrator."
• The Court further held that even in a case where the award is set aside under Section 34 of the Act on whatever the grounds which may be available under Section 34 of the Act, the parties can still agree for a fresh arbitration by the same Arbitrator.

Ban on Online Gaming With Stakes is Ultra Vires The Constitution, Must Be Struck Down: Karnataka HC

• The Hon’ble High Court (HC) of Karnataka, issuing a writ of Mandamus in the case of All India Gaming Federation v State of Karnataka (WP 18703 of 2021), struck down the provisions of the Karnataka Police (Amendment) Bill, 2021(“Amendment”) which prohibited and criminalised online games of skill with stakes, as unconstitutional.
• The two judge Bench made it clear that the judgment will not interfere with any new legislation to be brought in consonance with the Constitution, against betting and gambling.
• A detailed copy of the judgment is yet to be uploaded.
• The State introduced provisions to amend gambling-related provisions under the erstwhile Karnataka (Police) Act, 1963 (“Karnataka Act”) in October 2021.As per the Amendment, wagering and betting in connection with a game of chance, betting on a game of skill and wagering and betting while playing online games was prohibited. The Amendment also banned virtual currency and any electronic fund transfer in connection with any game of chance.
• Following this the Amendment, several aggrieved operators challenged its constitutionality before the Hon’ble HC. They contended that the Amendment insofar as its sought to ban skill games was violative of Articles 14, 19(1)(g), 21 and 301 of the Constitution and hence, unconstitutional. The Petitioners also cited a recent order of the Madras HC in Junglee Games India PvtLtd &Anr v The State of Tamil Nadu &Orswhere the HC struck down a similar amendment which sought to prohibit online game of skill.
• In its defence, the State, citing a plethora of criminal cases registered in relation to online betting and gambling, submitted that the Amendment is a social legislation with an object to prohibit activities that are injurious to public health and order.
• In this regard, it is also worthwhile to note that recently, the Kerala HC struck down a similar law in the State which banned online rummy.
• In another case, another gaming company has filed a writ petition before the Odisha High challenging the Odisha Prevention of Gambling Act, 1955 insofar as the Act seeks to ban online games of skill with stakes, as unconstitutional.

SC Update: Notice Issued On Special Leave Petition Filed By State Of Gujarat Against Order Of State HC Which Protects Inter-Faith Marriages From Anti-Conversion Law

• The Hon’ble Supreme Court, in the case of State of Gujarat v Jamia Ulama-E-Hind Gujarat and others [SLP(C) No. 019945 - 019946 /2021], has issued a notice on the Special Leave Petition (SLP) filed against the order of the Hon’ble High Court of Gujarat (HC) which observed that anti-conversion law shall not apply to consenting inter-faith marriages between two adults.
• In its order dated 19 August 2021, a division bench of the HC made an observation that the provisions of the Gujarat Freedom of Religion (Amendment) Act, 2021(Amendment Act) infringes the rights laid down under Article 21 of the Constitution by interfering with the intricacies of marriage including an individual’s right to choose.
• The Bench also made an observation that under the Amendment Act “marriage inter-faith followed by conversion would amount to an offence under the 2003 Act. Marriage itself and a consequential conversion is deemed as an unlawful conversion attracting penal provisions.”
• The Bench further noted that since Section 6A of the Gujarat Freedom of Religion (Amendment) Act, 2021 (Original Act) put the burden of proof on the parties to the marriage to prove that the marriage was not solemnised using any fraud, coercion or allurement, this again put inter-faith couples under great jeopardy.
• The HC also held that the State’s interpretation that the Act deals only with such conversions pursuant to inter-faith marriage which are by way of allurement, force or by fraudulent means "may not be understood by the common man". The HC further remarked that a common man may perceive every conversion on account of an inter-faith marriage as prohibited.
• The order of the HC was passed pursuant to a writ petition filed by Jamiat Ulama-E-Hind and Muhahid Nafeeschallenging the provisions of the Original Act. Later, the Government of Gujarat filed an application seeking rectification of the order to the effect that permission of District Magistrate under Section 5 should be mandatory for conversion owing to inter-faith marriages.
• The HC rejected the rectification application filed by the State and affirmed its earlier position that permission of the District Magistrate was not required where conversion took place owing to marriage.
• Challenging the impugned order of the Gujarat HC, the State Government approached the SC to decide the matter.
• A Bench comprising Justices S Abdul Nazeer and Krishna Murari considered the matter on Monday (14 Feb) and issued notice to Jamia Ulama-E-Hind Gujarat and other private respondents who have challenged the law before the HC. Meanwhile, the Solicitor General appearing on behalf of the State submitted that it is not the right time to hear the matter.