Even though there was a pending criminal proceeding, it would cause no prejudice to the parties if the matter were referred to arbitration.

[Case Brief] Swiss Timing Limited v/s Organising Committee, Commonwealth Games

Case name Swiss Timing Limited v/s Organising Committee, Commonwealth Games
Case number Arbitration Petitions 34 of 2013
Court Supreme Court of India
Bench Justice Surinder Singh Najjar
Decided on  May 28, 2014
Relevant Act/Sections  Arbitration and Conciliation Act, 1996- Section 11 and Section 16
Author of the case brief  Lavanya Gupta ([email protected])

Brief Facts and Procedural History:

The Petitioner had entered into an agreement with the Respondent on March 11, 2010 for providing timing, score and result systems to conduct the Commonwealth Games. Subsequently, the Respondent defaulted in making payments as stipulated in the agreement, without any justifications. The Respondent then issued a press release stating that the part payments to nine foreign vendors had been withheld for “non-performance of contract”. The Petitioners, after various attempts to recover their dues, initiated action to invoke arbitration as per the agreement and appointed an arbitrator. The Petitioner sent a communication of the same to the Respondent however, no reply was received and the present petition was filed before the Apex Court.

Issues before the Court of Law:

1) Whether or not a reference could be made to arbitration in view of the fact that there was a pending criminal litigation against the Respondent’s directors?

Ratio of the Court:

Yes. The Arbitration and Conciliation Act, 1996 (“Act”) provides under Section 16 that an arbitration clause which forms a part of an agreement shall be treated as an independent arbitration agreement. Thus, there existed a valid arbitration agreement in the present matter. Even though there was a pending criminal proceeding, it would cause no prejudice to the parties if the matter were referred to arbitration. The Court must act cautiously and must decline reference to arbitration only if the Court finds that the contract is void. In the present case, all the above conditions and pre-conditions were in place thus, the matter could be referred to arbitration.

Decision Held:

The Supreme Court nominated an arbitrator for the matter and allowed the same to be adjudicated upon. The single Judge held that N. Radhakrishnan case per incuriam however, the same was not overruled.

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