Delhi HC Sets Aside Arbitral Award for palpable perversity & inherent contradictions

Morgan Securities & Credits Pvt Ltd. Vs Samtel Display Systems Ltd (Delhi High Court)

The Delhi High Court recently adjudicated a significant dispute between Morgan Securities & Credits Pvt Ltd and Samtel Display Systems Ltd, challenging an arbitral award dated December 6, 2011. The case revolved around the complexities of arbitration under the Arbitration and Conciliation Act, 1996, and highlighted critical aspects of contract interpretation, the role of an arbitrator, and the evidence required to substantiate claims in arbitration proceedings.

Factual Background:

The dispute emerged from an Inter-Corporate Deposit (ICD) facility worth Rs. 170 crore, availed by Samtel Colors Limited from Morgan Securities & Credits Pvt Ltd on February 12, 2007. The arrangement required Samtel Display Systems Ltd to pledge 11 lakh shares as security for the repayment. However, upon repayment of the ICD on November 19, 2007, a contention arose regarding the return of the pledged shares and the subsequent claims for damages due to the alleged depreciation in share value.

Claims and Arbitration Proceedings:

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