M.S. Oil India Ltd. Vs. M.S. Badri Rai and Company Arb.P. No. 46 of 2023
Arbitration, as an alternative dispute resolution mechanism, serves as a cornerstone in resolving conflicts outside traditional court proceedings. The recent case of M.S. Oil India Ltd. v. M.S. Badri Rai and Company, deliberated upon by the Gauhati High Court, provides profound insights into the intricate nuances of arbitration proceedings under the purview of the Arbitration and Conciliation Act, 1996.
The case emanated from a dispute between M.S. Oil India Ltd. (the petitioner) and M.S. Badri Rai and Company (the respondent), originating from a contractual agreement dated 10.01.2019. The petitioner invoked Section 11(6) of the Arbitration and Conciliation Act, 1996, seeking the appointment of an Arbitral Tribunal to adjudicate upon the disputes arising from the aforementioned contract.
The petitioner contended that the arbitration proceedings had commenced upon receiving a notice from the respondent on 27.09.2022, referring the matter to arbitration. However, the respondent’s subsequent actions, including changing the nominee arbitrator and issuing a declaration under Section 12 of the Act, were challenged by the petitioner.
The Honorable Court, presided over by Justice Sanjay Kumar Medhi, meticulously analyzed the provisions of the Arbitration and Conciliation Act, 1996, and the contractual clauses governing the arbitration process. It scrutinized the petitioner’s argument regarding the commencement of arbitral proceedings vis-à-vis the constitution of the Arbitral Tribunal.
The Court elucidated that the mere receipt of a notice initiating arbitration does not tantamount to the commencement of arbitral proceedings, particularly in cases where the constitution of the Arbitral Tribunal is contingent upon the claim amount exceeding a specified threshold, as delineated in the contract.
Moreover, the Court dismissed the petitioner’s challenge under Section 11(6) of the Act, emphasizing the necessity of adhering to the appropriate legal recourse for challenging arbitration proceedings. It underscored the importance of procedural compliance and jurisdictional propriety in arbitration disputes.
The judgment underscores the significance of contractual clauses governing arbitration, procedural adherence, and judicial scrutiny in upholding the integrity and efficacy of arbitration proceedings. It reaffirms the judiciary’s commitment to ensuring fairness and equity in dispute resolution through arbitration, thereby fostering confidence in alternative dispute resolution mechanisms.
In conclusion, the case of M.S. Oil India Ltd. v. M.S. Badri Rai and Company delineates a seminal jurisprudential understanding of arbitration proceedings, underscoring the need for meticulous adherence to legal frameworks and procedural rectitude in resolving commercial disputes through arbitration.

Author of this article:
Adv. Ravish Bhatt,
Partner, R&D Law Chambers,
Dual Qualified Lawyer Solicitor | International Tax Affiliate

Connect with Mr. Bhatt on Linkedin: https://www.linkedin.com/in/adit-ravishbhatt/

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