PG Practice Questions for CLAT 2020

PG Practice Questions for CLAT 2020

PASSAGE​​ 

[Excerpted from the judgment​​ Proddatur Cable TV DIGI Services v. SITI Cable Network Limited​​ 2020]

The issue that arises for consideration before this Court is the eligibility of the "Company" referred to in the Arbitration Clause between the parties, to unilaterally appoint a Sole Arbitrator to adjudicate the disputes between the parties. The principle contention of the petitioner is that in view of the recent judgment of the Supreme Court in the case of Perkins,​​ the „Company‟ as provided in the Arbitration Clause between the parties herein cannot unilaterally appoint an Arbitrator. This Court finds merit in the contention of the petitioner. Supreme court in the case of Perkins​​ was concerned with an Arbitration Clause wherein the CMD of the respondent was designated to appoint a Sole Arbitrator. Supreme Court after examining the said clause held that there could be two categories of cases, one where the Managing Director himself is made as an Arbitrator with an additional power to appoint any other person as an Arbitrator and the second where the Managing Director is not to act as an Arbitrator himself but is empowered to appoint any other person of his choice or discretion as an Arbitrator. Reliance was placed on the judgment of the Supreme Court in the case of TRF Limited in which case the Arbitration Clause fell in the first category. In the case of TRF Limited,​​ the Court had held that the Managing Director was incompetent because of the interest that he would have in the outcome of the dispute. The element of ineligibility was relatable to the interest that he had in the decision. The Supreme Court thus relying on the rationale of the decision in TRF Limited observed that if the test is the interest of the Appointing Authority in the outcome of the dispute then similar ineligibility would always arise even in the second category of cases. It was observed that if the interest that the authority has in the outcome of the dispute is taken to be the basis for possibility of bias, it will always be present irrespective of whether the matter stands under the first or the second category of cases. The Supreme Court also significantly noted that they were conscious that if such a deduction was drawn from the decision in TRF Limited in all cases with similar clauses, a party to the agreement would be disentitled to make a unilateral appointment.​​ Thus, following the ratio of the judgment in the case of Perkins it is clear that a unilateral appointment by an authority which is​​ interested in the outcome or decision of the dispute is impermissible in law. The Arbitration Clause in the present case empowers the company to appoint a Sole Arbitrator. It can hardly be disputed that the „Company​​ acting through its Board of Directors will have an interest in the outcome of the dispute. In the opinion of this Court, the clause is directly hit by the law laid down in the case of Perkins and the petition deserves to be allowed.

QUESTIONS

  • Duties of the Directors have been stipulated in​​ which​​ of the​​ following sections of the​​ Companies Act, 2013?

  • Section 172

  • Section 166

  • Section 165

  • Section 170

Ans. b

  • In the Perkins Case, the respondents submitted that the matter was not an international commercial arbitration. Which consequence would have logically followed if this submission had been upheld by the bench?​​ 

  • ​​ There would be no bar on the respondents unilaterally appointing the arbitrator in the case

  • The power of the Supreme Court would have been confined to examining the prima facie existence of an arbitration agreement​​ 

  • The Supreme Court would not have been able to deal with the application in the case under Section 11(6) of the A&CA​​ 

  • All of the above

Ans. c

  • The judgement of the case from which the excerpt has been given was delivered by which of the following judge?

  • JYOTI SINGH, J

  • R.V.RAVEENDRAN, J

  • RC Lahoti

  • Arijit Pasayat

Ans. a

  • Section 11(6) of the A&CA has been amended​​ by which of the following?​​ 

  • The Arbitration and Conciliation (Amendment) Act, 2019 (the “2019 Amendment”)​​ 

  • The Arbitration and Conciliation (Amendment) Act,​​ 2015 (the “2015 Amendment”)​​ 

  • All of the above​​ 

  • None of the above

Ans. a

  • It was held in which of the following cases that​​ unilateral appointment by an authority which is interested in the outcome or decision of the​​ dispute is impermissible in law

  • Afcons​​ Infrastructure​​ Ltd.V.​​ Cherian Varkey Construction Co.

  • Larsen and Toubro Limited​​ SCOMI Engineering BHD v. MMRDA

  • Booz-Allen and Hamilton Inc. v. SBI Home Finance Ltd. And Others

  • Perkins Eastman Architects Dpc vs Hscc (India)

Ans. d

  • The Arbitration Application in Perkins Eastman Architects DPC and Ors. v. HSCC (India) Ltd., 2019 (the “Perkins Case”) was made under Section 11(6) of the Arbitration and Conciliation Act, 1996 (the “A&CA”), which provides for appointment of arbitrators by the Supreme Court, or by the High Court, on an application made by a party to an arbitration agreement. Which of the following is NOT a ground for an application​​ under Section 11(6) of the A&CA?​​ 

  • One or more parties not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or were otherwise unable to present their case.​​ 

  • A party fails to act as required under the procedure agreed upon by the parties.​​ 

  • ​​ The parties, or the two appointed arbitrators, fail to reach an agreement expected of them under the procedure agreed upon by the parties.​​ 

  • A person, including an institution, fails to perform any function entrusted to it under the procedure agreed upon by the parties.

Ans. a

  • Section 12(5) of the Arbitration Act is a​​ 

  • Saving clause

  • Non Obstante clause

  • Interpretation Clause

  • None of the above

Ans. a

  • The given judgement in the passage has been pronounced by​​ 

  • A two-judge bench of the Supreme Court​​ 

  • ​​ A single judge of the High Court of Bombay​​ 

  • A single judge of the High Court of Delhi​​ 

  • A two-judge bench of the High Court of Karnataka

Ans. c

  • The Arbitration Amendment Act 2015 received presidential assent on

  • 23rd​​ October 2015

  • 31st​​ December ​​ 2015

  • 9th​​ August 2015

  • None of the above

Ans. b

  • THE ARBITRATION AND CONCILIATION (AMENDMENT)​​ ACT, 2015​​ was​​ enacted by Parliament in the​​ _____​​ Year of the Republic of India

  • 65th

  • 66th

  • 67th

  • 68th

Ans. b

 

 

 

 

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