Delhi HC: Whether the court should direct deposit of Arbitration award amount U/S 9 of Arbitration Act?

Arbitration -Amount awarded -Deposit of -Sections 9 and36 of Arbitration and Conciliation Act, 1996 -Present petition filed under Section 9 of Arbitration Act seeking deposit of amount awarded to NHAI and restraining respondent from alienating assets -Whether respondent must secure and deposit awarded amount and disclose assets to safeguard enforcement of arbitral award -Held, Section 9 of Arbitration Act permits reliefs before, during, or post-arbitration -Post-award, execution under Section 36 of Arbitration Act is standard for enforcing awards -Courts rarely order deposits under Section 9of Arbitration Act, except in exceptional cases where it's vital to protect award holder -Merely winning award doesn't justify deposit orders -Courts require evidence of risks rendering award unenforceable -Grounds like financial instability or asset movement must be substantiated -NHAI's plea cites stakes involved and respondent's financial condition -It only speculates risks without proof of asset dissipation or unrealisable claims -Concession agreement remains active, and IRB pledged no fund appropriation from escrow until dues clear -Courts apply strict standards to post-award Section 9 of Arbitration Act relief -There must be realisable award and proof of risk making it illusory -Precarious financial conditions alone are insufficient -IRB's substantial investments and commitments negate grounds for immediate deposit -Courts must balance fairness while ensuring awards aren't rendered illusory -Current facts don't justify granting NHAI's requested deposit -Petition dismissed. Deposit under Section 9 of Arbitration Act needs proven risk of award becoming unenforceable, not mere existence of award.

IN THE HIGH COURT OF DELHI

OMP (I) (Comm.) 172/2024

Decided On: 18.10.2024

National Highways Authority of India Vs. IRB Ahmedabad Vadodara Super Express Tollways Pvt. Ltd.

Hon'ble Judges/Coram: C. Hari Shankar, J.

Citation:  MANU/DE/7333/2024, 2024:DHC:8034.

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Whether Occupier Of Flat is Entitled To Transit Rent For Period Of Dispossession During Redevelopment?

The fact remains that as respondent no. 3 is in possession of the tenement in question and would now be handing over possession of such tenement to the petitioner/society. Hence considering the consistent view taken by this Court in Heritage Lifestyles and Developers Pvt. Ltd. vs. Amar-Villa Co-Operative Housing Society and others MANU/MH/0380/2011 : 2011 (3) Mh.L.J. 865 and in Saikripa Co-operative Housing Society Ltd. V/s. Osho Developers & Ors.1, the party who is dispossessed, would be entitled to the transit rent as it is such party who is put to hardship.{Para 9}

 IN THE HIGH COURT OF BOMBAY

Commercial Arbitration Petition (L.) No. 4301 of 2022

Decided On: 16.03.2022

Maniar Associates LLP  Vs. Vijay Niwas Co-op. Hsg. Soc. Ltd. and Ors.

Hon'ble Judges/Coram:

G.S. Kulkarni, J.

Citation: MANU/MH/1454/2022

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Bombay HC: Undisputed Claims Can't Be Set-Off Against Unliquidated Damages That Are Not Ascertained

 Thus adverting to the above principles of law in their applicability to the facts of the present case, in my opinion, the petitioner has clearly made out a prima facie case for the relief, that the ONGC needs to deposit the undisputed invoice amounts in this Court pending the arbitral proceedings. There cannot be any justification for the ONGC to withhold such amount and more particularly on the premise that it has a claim of unliquidated damages against the petitioner on account of the incident which had taken place on 1 September 2019. The damages so claimed by the ONGC are certainly neither admitted nor ascertained in a manner known to law. {Para 27}

 IN THE HIGH COURT OF BOMBAY

Commercial Arbitration Petition No. 135 of 2022

Decided On: 06.06.2022

 Ocean Sparkle Limited  Vs. Oil and Natural Gas Corporation Ltd. and Ors.

Hon'ble Judges/Coram:

G.S. Kulkarni, J.

Citation: MANU/MH/1776/2022

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Can the court grant interim relief U/S 9 of the Arbitration Act relating to possession of property given on leave and license?

As held by the Full Bench in Central Warehousing Corporation, Mumbai (supra) in the arbitration agreement in such cases is held to be invalid and inoperative on the principle that it would be against public policy to allow the parties, by a contract to oust the exclusive jurisdiction of the Small Causes Court by virtue of Section 41 of the PSCC Act.

41. Thus, in my opinion, the respondents are correct in their

contention that this Court would not have jurisdiction to entertain the Section 9 petition considering the nature of the reliefs, which in fact pertain to or are incidental to the possession of the licenced premises as asserted by the petitioners, subject matter of the leave and licence agreements. Hence, as held by the Court in the decisions as discussed above, jurisdiction to entertain any such proceedings would lie with the Small Causes Court under the provisions of Section 41 of the PSCC Act.

In view of such conclusion, it may not be possible for the Court to pass any orders on the present petition permitting the respondent to deposit in this Court liquidated damages which Mr. Shah had agreed to deposit even in the present proceedings. In view of the fact that the present proceedings are held as not maintainable and having reached such conclusion, it may not be permissible for the Court to bifurcate causes of action, the principles of law in that regard being well settled. Needless

to observe that it would be open to the petitioner to seek prayers in that regard in appropriate proceedings in the event the claims are pure monetary disputes falling within the realm of arbitrability of such disputes. All contentions of the parties in that regard are expressly kept open.

42. Resultantly, these petitions filed under Section 9 of the Arbitration and Conciliation Act,1996, cannot be entertained. The petitions are accordingly dismissed. The petitioners are at liberty to take recourse to other appropriate proceedings as may be available to the petitioners in law including to assert pure monetary claims in arbitral proceedings as discussed in paragraph 37 of this judgment.

IN THE HIGH COURT OF JUDICATURE AT BOMBAY

ORDINARY ORIGINAL CIVIL JURISDICTION

ARBITRATION PETITION (L.) NO. 22526 OF 2022

BXIN Office Parks India Pvt. Ltd. Vs  Kailasa Urja Pvt. Ltd. 

CORAM : G.S. KULKARNI, J.

Pronounced on : AUGUST 20, 2022.

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Whether the court can grant interim relief U/S 9 of Arbitration Act if the contract is determinable?

 However, even in these circumstances, when a question arises before the Court, to consider granting of reliefs in the nature as prayed for by the petitioner, in my opinion, the basic consideration for the Court would be to examine as to what is the nature of the contract between the parties. Perusal of the contract and the general terms and conditions as appended thereto, more particularly, Clause (5) thereof, clearly indicate that the parties have provided that either of the parties can terminate the contract with a fifteen days notice to be served on the other party. Further such clause also provides for the validity of the contract up to 30 June 2022. It is thus clear that nature of the contract in question is determinable. If that be so, then Mr.Nankani would be correct in his contention that the provisions under sub-clause (d) of Section 14 of the Specific Relief Act which provides that a contract which is in its nature determinable,cannot be specifically enforced becomes applicable.

19. In the context of Section 14(d) of the Specific Relief Act, another

provision which would become relevant is Section 41 of the Specific

Relief Act, which provides as to when an injunction would be refused or when it cannot be granted. Section 41(e) provides that an

injunction cannot be granted by the Court to prevent the breach of a contract, the performance of which would not be specifically enforced. Thus once the nature of the contract itself is such, that it cannot be specifically enforced, Section 41 (e) of the Specific Relief Act would stare at the petitioner when the petitioner claims a relief of an injunction. Certainly the principles which are embodied in Section 14(d) read with Section 41(e) of the Specific Relief Act are applicable even when the Court considers an application under Section 9 of the Act for interim measures. It is a settled principle of law that although Section 9 is a remedy available to the parties having an arbitration agreement between them, however, when a relief for grant of an injunction is prayed for, certainly the Court would be guided by the principles as contained in the Specific Relief Act read with the provisions of Order 39 of the Code of Civil Procedure.

IN THE HIGH COURT OF JUDICATURE AT BOMBAY

ORDINARY ORIGINAL CIVIL JURISDICTION

ARBITRATION PETITION (L) NO. 1366 OF 2022

Chetan Iron LLP  V/s. RC Ltd. 

CORAM : G.S.KULKARNI, J.

PRONOUNCED ON: 24 January, 2022

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Whether court can direct interim relief of deposit of money while granting relief U/S 9 of arbitration Act?

 The second argument canvassed by Mr. Andhyarujina was that before any order of deposit is made, the principles underlying the provisions of Order 38 Rules 1, 2 & 5 must be complied with by the Petitioner. He submitted that in the facts of the present case, there is nothing on record to show that the Petitioner has complied with the aforesaid provisions and therefore the Petitioner is not entitled to an order of deposit. I do not think that this argument holds any substance. It is true that the broad principles of Order 38 ought to be kept in mind whilst passing an order under Section 9 for securing the amount in dispute in the proposed arbitration. As far as Section 9 of Indian Arbitration Act is concerned, whilst considering a relief thereunder, it cannot be said that the Court is strictly bound by the provisions of Order 38 Rules 1, 2 and/or 5. The scope of Section 9 of the Act is very broad and the Court has the discretion to grant thereunder a wide range of interim measures of protection as may appear to the Court to be just and convenient. Of course, the discretion to be exercised by the Court under Section 9 has to be judicious and not arbitrary. Though, for considering interim measures, the Court would be guided by the principles which the Civil Courts ordinarily employ for considering grant or refusal of interim relief, particularly Order 39 Rules 1 & 2 and Order 38 Rule 5, the Court, however, is not unduly bound by their texts. Whilst exercising its power under Section 9, the Court must have due regard to the underlying purpose of the conferment of the power in the Court which is to promote the efficacy of arbitration as a form of dispute resolution. In an appropriate case, where the Court is of the view that there is practically no defense to the payability of the amount and where it is in the interest of justice to secure the amount, which forms part of the subject matter of the proposed arbitration reference, even if no case strictly within the letter of Order 38 Rules 1 or 2 is made out, though there are serious allegations concerning such a case, it is certainly within the power of the Court to order a suitable interim measure of protection. There is no requirement that for a relief of deposit, an ironclad case under Order 38 Rule 5 must be made out. The provisions of Order 38 are guides to a Section 9 Court and not fetters upon its discretion. To my mind, the position in law, is that, when there is a clear and unequivocal admission of liability or there is no real dispute with reference to the amounts payable, then in such a case an order of deposit may not only be made, but in the interest of justice, ought to be made. Where the defense raised is prima facie untenable and the Petitioner has a good chance of success, an order of deposit to secure the claim can and indeed should be made under Section 9. {Para 21}

22. In the view that I take, I am supported by several decisions of this Court. A Division Bench of this Court, in the case of Jagdish Ahuja v. Cupino Limited [2020 SCC OnLine Bom 849] held as under:—

“6. As far as Section 9 of the Act is concerned, it cannot be said that this court, while considering a relief thereunder, is strictly bound by the provisions of Order 38 Rule 5. As held by our Courts, the scope of Section 9 of the Act is very broad; the court has a discretion to grant thereunder a wide range of interim measures of protection “as may appear to the court to be just and convenient”, though such discretion has to be exercised judiciously and not arbitrarily. The court is, no doubt, guided by the principles which civil courts ordinarily employ for considering interim relief, particularly, Order 39 Rules 1 and 2 and Order 38 Rule 5; the court, however, is not unduly bound by their texts.

 In the High Court of Bombay

(Before B.P. Colabawalla, J.)

Ultra Deep Subsea Pte Ltd. Vs Hindustan Oil Exploration Company Ltd.

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Whether Indian courts should grant interim relief U/ S 9 of arbitration Act in foreign seated arbitration governed by foreign law?

 For Section 9 to be excluded, there must be a specific agreement between the parties, ousting the jurisdiction of this Court under Section 9. Simply put, there must be something more than an Arbitration Agreement being governed by foreign law and with a foreign seat. The Agreement must indicate in clear and express terms that the parties intended to exclude the operation of Part I of the Indian Arbitration Act. Merely because an Arbitration Agreement is governed by foreign law or the seat of the arbitration is outside India, without anything more, cannot be construed to mean that the parties agreed to exclude the application of Section 9 of the Indian Arbitration Act and thereby close the gates to a party to approach this court thereunder. If I was to accept the submission of Mr. Andhyarujina, namely, that because the Arbitration Agreement is governed by foreign law and the seat of arbitration is outside India, the same would amount to an “agreement to the contrary” as contemplated under the proviso to Section 2(2) of the Indian Arbitration Act, it would effectively mean that in all foreign seated arbitrations, Part I of the Indian Arbitration Act would stand excluded. This would effectively mean that the proviso to Section 2(2) would be a dead letter. In fact, the interpretation of Mr. Andhyarujina would defeat the very purpose for which the proviso was brought on the statute book i.e. to permit parties to an arbitration to be held outside India to approach the Courts in India inter alia under Section 9 of the Indian Arbitration Act and seek interim relief, pending the said foreign seated arbitration. In fact, the reason why the aforesaid provision was brought on the statute book can be discerned from the discussion on this subject by the Law Commission in its 246th Report. The relevant portion of this Report reads as under:—

“While the decision in BALCO is a step in the right direction and would drastically reduce judicial intervention in foreign arbitrations, the Commission feels that there are still a few areas that are likely to be problematic.

(i) Where the assets of a party are located in India, and there is a likelihood that that party will dissipate its assets in the near future, the other party will lack an efficacious remedy if the seat of the arbitration is abroad. The latter party will have two possible remedies, but neither will be efficacious. First, the latter party can obtain an interim order from a foreign Court or the arbitral tribunal itself and file a civil suit to enforce the right created by the interim order. The interim order would not be enforceable directly by filing an execution petition as it would not qualify as a “judgment” or “decree” for the purposes of sections 13 and 44A of the Code of Civil Procedure (which provide a mechanism for enforcing foreign judgments). Secondly, in the event that the former party does not adhere to the terms of the foreign Order, the latter party can initiate proceedings for contempt in the foreign Court and enforce the judgment of the foreign Court under sections 13 and 44A of the Code of Civil Procedure. Neither of these remedies is likely to provide a practical remedy to the party seeking to enforce the interim relief obtained by it. That being the case, it is a distinct possibility that a foreign party would obtain an arbitral award in its favour only to realize that the entity against which it has to enforce the award has been stripped of its assets and has been converted into a shell company.

(ii) While the decision in BALCO was made prospective to ensure that hotly negotiated bargains are not overturned overnight, it results in a situation where Courts, despite knowing that the decision in Bhatia is no longer good law, are forced to apply it whenever they are faced with a case arising from an arbitration agreement executed pre-BALCO.”

(emphasis supplied)

17. It is for this very reason that I have opined that merely because an Arbitration Agreement is governed by foreign law and the seat of arbitration is outside India, without anything more, cannot amount to an “agreement to the contrary” as contemplated under the proviso to Section 2(2) of the Indian Arbitration Act.

 In the High Court of Bombay

(Before B.P. Colabawalla, J.)

Ultra Deep Subsea Pte Ltd. Vs Hindustan Oil Exploration Company Ltd.

Commercial Arbitration Petition (L) No. 22272 of 2021

Decided on December 13, 2021

Citation: 2021 SCC OnLine Bom 5481

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Whether Bar U/s 9(3) Arbitration Act is Applicable If Application Was Taken Up By Court Before Constitution Of Arbitration Tribunal?

The short question of law raised in this appeal is, whether the Court has the power to entertain an application under Section 9(1) of the Arbitration and Conciliation Act, 1996, hereinafter referred to as “the Arbitration Act”, once an Arbitral Tribunal has been constituted and if so, what is the true meaning and purport of the expression “entertain” in Section 9(3) of the Arbitration Act. The next question is, whether the Court is obliged to examine the efficacy of the remedy under Section 17, before passing an order under Section 9(1) of the Arbitration Act, once an Arbitral Tribunal is constituted.

107. It is reiterated that Section 9(1) enables the parties to an arbitration agreement to approach the appropriate Court for interim measures before the commencement of arbitral proceedings, during arbitral proceedings or at any time after the making of an arbitral award but before it is enforced and in accordance with Section 36 of the Arbitration Act. The bar of Section 9(3) operates where the application under Section 9(1) had not been entertained till the constitution of the Arbitral Tribunal. Of course it hardly need be mentioned that even if an application under Section 9 had been entertained before the constitution of the Tribunal, the Court always has the discretion to direct the parties to approach the Arbitral Tribunal, if necessary by passing a limited order of interim protection, particularly when there has been a long time gap between hearings and the application has for all practical purposes, to be heard afresh, or the hearing has just commenced and is likely to consume a lot of time. In this case, the High Court has rightly directed the Commercial Court to proceed to complete the adjudication.

In the Supreme Court of India

(Before Indira Banerjee and J.K. Maheshwari, JJ.)

Arcelor Mittal Nippon Steel India Ltd. Vs Essar Bulk Terminal Ltd

Civil Appeal No. 5700 of 2021 

Decided on September 14, 2021

Citation: 2021 SCC OnLine SC 718

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Whether Order Of Commercial Court U/Sec 9 Of Arbitration & Conciliation Act is Appealable?

Is an order passed under Section 9 of the Arbitration and

Conciliation Act, 1996 (hereinafter referred to as 'the Arbitration

Act') by a Commercial Court appealable under Section 13(1) of

the Commercial Courts Act, 2015 (hereinafter referred to as 'the

Commercial Courts Act')? This question essentially falls for

consideration in the instant case.

In

the instant case, the impugned order is an order of injunction. It

is appealable under Order XLIII of the Code of Civil Procedure,

1908. It is an order passed under Section 9 of the Arbitration

Act. It is also appealable under Section 37 of the Arbitration Act.

Section 37(1)(b) of the Arbitration Act states that an appeal shall

lie from an order granting or refusing to grant any measure

under Section 9 of the said Act. Right of appeal is the creature of

a statute. It is well settled that right of appeal is a substantive

right. Nothing contained in Section 13(1) or Section 13(2) of the

Commercial Courts Act curtails this right of appeal.

21. At this juncture, it is to be noted that the heading of

the unamended Section 13 of the Commercial Courts Act also

read as “Appeals from decrees of Commercial Courts and

Commercial Divisions”. There was a proviso to unamended

Section 13(1) of the Act which now stands as the proviso to

Section 13(1A) of the Act. This proviso restricts the right of

appeal from orders that are specifically enumerated under Order

XLIII of the Code of Civil Procedure and Section 37 of the

Arbitration Act. If the contention of the learned counsel for the

petitioners is accepted, the proviso to Section 13(1A) of the

Commercial Courts Act would be meaningless.

22. The scope of the proviso to the unamended Section

13(1) of the Commercial Courts Act, which now stands as the

proviso to Section 13(1A) of the Act, was considered by the

Supreme Court in Kandla Export Corporation v. M/s OCI

Corporation : (2018) 14 SCC 715 and it was held as follows:

“Section 13(1) of the Commercial Courts Act,

with which we are immediately concerned in

these appeals, is in two parts. The main provision

is, as has been correctly submitted by Shri Giri, a

provision which provides for appeals from

judgments, orders and decrees of the

Commercial Division of the High Court. To this

main provision, an exception is carved out by the

proviso. ..... The proviso goes on to state that an

appeal shall lie from such orders passed by the

Commercial Division of the High Court that are

specifically enumerated under Order XLIII of the

Code of Civil Procedure Code, 1908, and Section

37 of the Arbitration Act. It will at once be

noticed that orders that are not specifically

enumerated under Order XLIII of the CPC would,

therefore, not be appealable, and appeals that

are mentioned in Section 37 of the Arbitration

Act alone are appeals that can be made to the

Commercial Appellate Division of a High Court”.

23. Moreover, in order to find out whether an appeal

against an order passed under Section 9 of the Arbitration Act is

maintainable or not, the provisions of the said Act have to be

looked into. There is no independent right of appeal provided

under Section 13(1) of the Commercial Courts Act. It merely

provides the forum of filing appeals. Section 37(1) (b) of the

Arbitration Act creates the right to file an appeal against an order granting or refusing to grant any measure under Section 9 of the said Act. It is the parameters of Section 37(1) of the Arbitration Act alone which have to be looked at in order to determine whether an appeal against an order under Section 9 of the said Act is maintainable or not (See BGS SGS Soma JV v. NHPC  Limited : (2020) 4 SCC 234).

24. The question whether the proviso in Section 13 of the

Commercial Courts Act applies only to Section 13(1A) or whether

it applies to Section 13(1) also, does not arise for consideration

in the instant case. The reason is that, the order impugned in this

original petition, is an order passed under Section 9 of the

Arbitration Act and therefore, appealable under Section 37 of the

said Act, which is specifically mentioned in the proviso.

25. The discussion above leads to the conclusion that an

order under Section 9 of the Arbitration and Conciliation Act,

1996 passed by a Commercial Court below the level of a District

Judge is appealable under Section 13(1) of the Commercial

Courts Act.

 IN THE HIGH COURT OF KERALA AT ERNAKULAM

PRESENT

 OP(C).No.1467 OF 2020

 PRANATHMAKA AYURVEDICS PVT LTD. Vs COCOSATH HEALTH PRODUCTS

Coram: MR. JUSTICE R. NARAYANA PISHARADI

Dated this the 24th day of November, 2020

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Under which circumstances application U/S 9 of Arbitration Act is maintainable in foreign seated arbitration before the Indian court?

Analysis

32. In the light of the facts and submissions recorded above, the primary question which requires consideration is whether the appellants ought to be permitted to proceed with their request for interim measures of protection under Section 9 of the Act, after having failed in obtaining similar relief from the emergency arbitrator under the JCAA Rules, and even after the constitution of the arbitral tribunal.

33. Although Section 9(3) of the Act is, on its terms, expressly relatable to India-seated arbitrations, as evidenced by the reference to Section 17 of the Act, we are of the view that the principle thereof is equally applicable when interim measures are sought in the Indian courts in connection with a foreign-seated arbitration. Resolution of disputes by a tribunal of the parties' choice, and reduced interference by courts, are amongst the central features of arbitration. Section 9(3) of the Act reflects that understanding, and manifests a legislative preference that the grant of interim measures ought to be considered by the arbitral tribunal, once constituted, rather than by the courts. It is only when the remedy before the tribunal lacks efficacy, that a party can seek interim measures from the court under Section 9. In the LC Report also, the following justification is provided for the insertion of Section 9(3) into the Act:

"[NOTE: This amendment seeks to reduce the role of the Court in relation to grant of interim measures once the Arbitral Tribunal has been constituted. After all, once the Tribunal is seized of the matter it is most appropriate for the Tribunal to hear all interim applications. This also appears to be the spirit of the UNCITRAL Model Law as amended in 2006.

Accordingly, section 17 has been amended to provide the Arbitral Tribunal the same powers as a Court would have under section 9.]"

(Emphasis supplied.)

34. Mr. Singh submitted on behalf of the appellants that the aforesaid principle is not applicable to foreign-seated arbitrations, as interim measures granted by India-seated tribunals alone are automatically enforceable in India under Section 17(2) of the Act. It is for this reason, according to Mr. Singh, that Section 9(3) refers only to the availability of a remedy under Section 17, and not to remedies that may be available before a foreign-seated arbitral tribunal. Mr. Singh pointed to this very difference as the rationale for the insertion of the proviso to Section 2(2) of the Act, as contained in paragraph 41 of the LC Report, wherein the Law Commission referred to the decision of the Supreme Court in Bharat Aluminium and Co. vs. Kaiser Aluminium and Co., MANU/SC/0722/2012 : (2012) 9 SCC 552, and observed as follows:-

"41. While the decision in BALCO is a step in the right direction and would drastically reduce judicial intervention in foreign arbitrations, the Commission feels that there are still a few areas that are likely to be problematic.

(i) Where the assets of a party are located in India, and there is a likelihood that that party will dissipate its assets in the near future, the other party will lack an efficacious remedy if the seat of the arbitration is abroad. The latter party will have two possible remedies, but neither will be efficacious. First, the latter party can obtain an interim order from a foreign Court or the arbitral tribunal itself and file a civil suit to enforce the right created by the interim order. The interim order would not be enforceable directly by filing an execution petition as it would not qualify as a "judgment" or "decree " for the purposes of sections 13 and 44A of the Code of Civil Procedure (which provide a mechanism for enforcing foreign judgments). Secondly, in the event that the former party does not adhere to the terms of the foreign Order, the latter party can initiate proceedings for contempt in the foreign Court and enforce the judgment of the foreign Court under sections 13 and 44A of the Code of Civil Procedure. Neither of these remedies is likely to provide a practical remedy to the party seeking to enforce the interim relief obtained by it.

That being the case, it is a distinct possibility that a foreign party would obtain an arbitral award in its favour only to realize that the entity against which it has to enforce the award has been stripped of its assets and has been converted into a shell company.

(ii) While the decision in BALCO was made prospective to ensure that hotly negotiated bargains are not overturned overnight, it results in a situation where Courts, despite knowing that the decision in Bhatia is no longer good law, are forced to apply it whenever they are faced with a case arising from an arbitration agreement executed pre-BALCO."

35. We are unable to accept Mr. Singh's contention. The primary purpose of Part I of the Act (which inter alia includes Section 2, 9 and 17) is to govern India-seated arbitrations. The reference in Section 9(3) to Section 17 alone, cannot therefore be dispositive of the question as to whether the same principle applies where the arbitration is seated outside India. In our view, the absence of a specific reference to foreign-seated arbitrations in Section 9(3) ought not to be construed as a widening of the Section 9 power, to cover cases where the arbitral tribunal has been constituted, and is capable of granting efficacious relief. Such an interpretation would not just extend the scope of Section 9, but would amount to the provision being available in the Indian courts in connection with foreign-seated arbitrations, but not in connection with India-seated arbitrations. We therefore hold that, although an application under Section 9 is maintainable in connection with a foreign-seated arbitration, an application thereunder would not lie after the constitution of the arbitral tribunal, unless the applicant demonstrates that it does not have an efficacious remedy before the tribunal. (We are not required in the facts of the present case to decide whether the availability of a remedy before an emergency arbitrator, or the seat court, would also dissuade the Indian court from granting relief under Section 9.)

36. In considering the aforesaid question, the Court would certainly have regard to the question as to whether the remedy before the arbitral tribunal would be efficacious or not. This caveat is incorporated in Section 9(3) also, and would turn upon the facts and circumstances of each case, including the amplitude of the power conferred upon the arbitral tribunal. In making this assessment, the manner in which the applicant has framed the relief sought cannot be determinative; the more appropriate test is whether the tribunal is sufficiently empowered to grant effective interim measures of protection. 

IN THE HIGH COURT OF DELHI

FAO (OS) (COMM) 65/2020

Decided On: 07.07.2020

 Ashwani Minda   Vs.  U-shin Limited

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Delhi HC: Court may issue interim orders against the third parties to arbitration only in exceptional circumstances

 Undoubtedly, section 9 provides that the court shall have the same powers for making interim orders under section 9 as a civil court has for the purpose of, and in relation to, any proceedings before it, and the powers of a civil court in this regard are very wide. The civil courts as and when required, and deemed appropriate in the facts and circumstances of a particular case have been making interim orders in respect of third parties, such as: interim injunction restraining third party-banks from honouring bank guarantees; attaching defendant's monies/property in hands of third party trustee, debtor, agent etc; restraining third party-subsequent transferee/person claiming rights in suit property from disposing of the same, and the like. As a corollary, the power of the court to issue interim orders under section 9 cannot be confined only to the parties to arbitration agreement. However, a significant parameter inherent in section 9, for exercise of this power against a non-signatory to arbitration agreement, is that the purpose of section 9 is to aid arbitration between the parties thereto, and the interim orders there under have to be with regard to subject matter of arbitration/in connection with the arbitral proceedings. In this context, it is relevant to draw a distinction between orders granting interim relief against a party to the arbitration agreement which incidentally affects a third party, on one hand, and orders granting relief directed against a third party, on the other. While the former is ordinarily acceptable as being within the scope of section 9, the power with respect to the latter should be exercised sparingly. For instance, an order appointing a third party as a receiver or guardian of a minor/person of unsound mind is not an order against the third party, or detrimental to its rights as such. Rather, it is a relief granted to the petitioner in support of the arbitral proceedings and affects the party to the arbitration agreement. Similarly, when a subsequent transferee, or a person claiming title under a party to arbitration is ordered to maintain status quo, or not to dispose of property which is subject matter of arbitration, it is again ancillary to arbitral proceedings in as much, as, it is for protection of the subject matter of arbitration that the order is passed. An injunction, or order of attachment with respect to the properties belonging to/monies owed to a party to arbitration, but in hands of a third party for/on behalf of the said party, is effectively a relief against the said party, which incidentally affects the third party. Pertinently, it is expressly provided in the C.P.C., that attachment before judgment shall not affect the prior existing rights of third parties in the property of the defendant sought to be attached. Injunction against a third party bank from honouring a bank guarantee is consequential to interim relief of restraining a party from encashing the same against the petitioner. To sum up, the court may issue interim orders against the third parties to arbitration only in exceptional circumstances which are such that denial thereof might frustrate the petitioner's rights in arbitration; defeat the very object of arbitration between the parties thereto; render the arbitration proceedings infructuous; lead to gross injustice; and/or, leave the petitioner remediless, depending on facts of each case."

IN THE HIGH COURT OF DELHI

O.M.P. (I) (COMM) No. 35/2020 and I.A. 3251/2020

Decided On: 10.06.2020

Blue Coast Infrastructure Development Pvt. Ltd.  Vs.  Blue Coast Hotels Ltd. and Ors.

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What is distinction between power of court and arbitrator to grant interim relief to party to arbitration against third party?

Reading of Section 9 of the Act as well as the judgments in Value Advisory (supra) and Gatx India (supra) makes it clear that the scope of power of a Court under Section 9 of the Act is not limited to parties to an Arbitration Agreement and the Court can issue interim directions even against a third party. The distinction between the powers under Section 9 of the Act and Section 17 of the Act has a clear rationale. An Arbitrator is a creature of the contract between the parties and therefore cannot venture outside the contract to issue directions to parties who are non-parties to the Arbitration Agreement. This limitation is not applicable to a Court exercising power under Section 9 of the Act.

IN THE HIGH COURT OF DELHI

O.M.P. (I) (COMM) No. 35/2020 and I.A. 3251/2020

Decided On: 10.06.2020

Blue Coast Infrastructure Development Pvt. Ltd.  Vs.  Blue Coast Hotels Ltd. and Ors.

Hon'ble Judges/Coram:

Jyoti Singh, J.

Citation: MANU/DE/1259/2020

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Whether petition for interim measures U/S 9(3) of Arbitration Act is maintainable before the court if Arbitration tribunal is in existence from the same agreement?

 In our opinion, the words 'Arbitral Tribunal' in Section 9(3) of the Act have to take colour from all the said provisions and thus have to be interpreted as Arbitral Tribunal constituted to adjudicate the disputes which have arisen and been referred to arbitration and with respect whereto Arbitrators have been appointed and notified of their appointment. Much prior to the incorporation of Sub-Section (3) in Section 9, Supreme Court in Firm Ashok Traders Vs. Gurumukh Das Saluja MANU/SC/0026/2004 : (2004) 3 SCC 155 held, that under the 1996 Arbitration Act, unlike the predecessor Act of 1940, the Arbitral Tribunal is empowered by Section 17 of the Act to make orders amounting to interim measures; the need for Section 9 of the Act, inspite of Section 17 having been enacted, is that Section 17 of the Act would operate only during the existence of the Arbitral Tribunal and its being functional; during that period, the power conferred on the Arbitral Tribunal under Section 17 of the Act and the power conferred on the Court under Section 9 of the Court may overlap to some extent but so far as the period pre and post the arbitral proceedings is concerned, the party requiring an interim measure shall have to approach only the Court. Seen in this light, the Arbitral Tribunal constituted with reference to the disputes which had earlier arisen, even though from the same agreement, cannot be the Arbitral Tribunal within the meaning of Section 9(3) of the Act even if were to be of the same composition. Section 9(3) of the Act does away with the jurisdiction of the Court with respect to interim measures also, once the Arbitral Tribunal is constituted. However, if a separate Arbitral Tribunal even if of same composition is to be constituted for disputes arising out of successive causes of action, Arbitral Tribunal constituted for adjudication of disputes arisen from a earlier cause of action cannot be the Arbitral Tribunal constituted for the disputes arising from a subsequent cause of action and qua which interim measures are sought.
32. We are thus unable to agree with the view taken by the learned Single Judge, of the petition of Hero being barred by Section 9(3) of the Act.

IN THE HIGH COURT OF DELHI

FAO (OS) (COMM) 60/2020 and CM No. 10461/2020

Decided On: 07.07.2020

 Hero Wind Energy Private Ltd. Vs.   Inox Renewables Limited and Ors.

Hon'ble Judges/Coram:

Rajiv Sahai Endlaw and Asha Menon, JJ.

Author:  Rajiv Sahai Endlaw, J.

Citation: MANU/DE/1349/2020

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How doctrine of Election is applicable to interim relief in Arbitration?

After hearing the parties, the Emergency Arbitrator passed a very detailed and reasoned order on 02.04.2020, declining to grant relief to the Applicants. Respondents, in my view, are right in their contention that having invoked the mechanism of the Emergency Arbitrator and invited a detailed and reasoned order, it is not open for the Applicants to take a second bite at the cherry. There has been no change of circumstance after the said order as none has been pleaded or even argued. Having excluded the applicability of Part I of the Act and agreeing to be governed by different Rules and procedures, binding on the parties and having invoked the same, jurisdiction of this Court under Section 9 of the Act cannot be invoked and the petition is not maintainable.

56. Even on the anvil of Doctrine of Election, Applicants have to fail. Applicants had consciously chosen to tread on a path and cannot turn around only because they were unsuccessful. It also needs a mention that the pleadings in the petition are really in the nature of an appeal pointing out flaws and infirmities in the order of the Emergency Arbitrator. Respondents are right that this Court in a petition under Section 9 of the Act cannot sit as a Court of Appeal to examine the order of the Emergency Arbitrator.

IN THE HIGH COURT OF DELHI

OMP (I) (COMM.) 90/2020

Decided On: 12.05.2020

Ashwani Minda   Vs.  U-Shin Ltd. and Ors.

Hon'ble Judges/Coram:

Jyoti Singh, J.

Citation: MANU/DE/1043/2020

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Whether court can grant injunction U/S 9 of Arbitration Act contrary to provision of Specific relief Act?

The position that emerges from the above authorities is, therefore, that power to grant injunctive relief, under Section 9 of the 1996 Act, has to abide by the provisions of the Specific Relief Act. Injunction which cannot be granted under Section 41 of the Specific Relief Act, cannot be granted under Section 9 of the 1996 Act, either. Neither can relief be granted, under Section 9, as would amount to specific enforcement of a contract which, by nature, is determinable, in view of Section 41 of the Specific Relief Act. The power to grant injunctive relief, under Section 9 of the 1996 Act, is essentially intended to protect the subject matter of the contract, and to avoid frustration of arbitral proceedings which may be initiated with respect thereto. Such relief can be granted only if the three pre-requisites, governing grant of injunctive relief, i.e. existence of a prima facie case, balance of convenience being in favour of the claimant and possibility of irreparable loss that would ensue to the claimant were such relief not granted, stand fully satisfied. Even in cases where a contract is being sought to be terminated, in violation of the terms thereof, if it appears that the party who suffers as a result of such termination could be adequately compensated in terms of money at the stage of final adjudication of the dispute, no injunctive relief, under Section 9 of the 1996 Act, would be granted.

In the High Court of Delhi at New Delhi

(Before C. Hari Shankar, J.)

Parsoli Motors Works Private Limited  v. BMW India Private Litmited .

O.M.P. (I) (COMM.) 559/2017

Decided on January 15, 2018, 

Citation: 2018 SCC OnLine Del 6556

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Whether court can grant interim relief even if arbitration agreement is insufficiently stamped?

1st Question
“Whether a court, under the Arbitration and Conciliation Act,
1996, can entertain and grant any interim or ad-interim relief
in an application under Section 9 of the said Act when a
document containing arbitration clause is unstamped or
insufficiently stamped?”

2nd Question
“Whether, inter alia, in view of Section 11 (6A) of the
Arbitration and Conciliation Act, 1996, inserted by Arbitration
and Conciliation (Amendment) Act, 2016, it would be
necessary for the Court before considering and passing final
orders on an application under Section 11(6) of the Act to
await the adjudication by the stamp authorities, in a case
where the document objected to, is not adequately stamped?
Hence, the above two questions, firstly falling under
Section 9 of the ACA and secondly falling under Section 11 of
the ACA and having common features, namely, as to what is
the effect and consequence of the document being not
sufficiently stamped, when the court is called upon to exercise
jurisdiction under the provisions of Section 9 and Section 11 of
the ACA, are issues falling for consideration of this Bench.

Answer
Taking a overall view of the scheme of the ACA,
judgments delivered by the Supreme Court, we are of the view
that the party need not be put to a disadvantage merely
because an objection has been raised in respect of
insufficiency of the stamp on the agreement presented before
the court. Neither a contesting party could deprive legitimate
rights of a litigant in praying for timely intervention of the
court by praying for appointment of an arbitral tribunal nor for

interim reliefs in the fact situation of a case. That would be
rendering a party without any forum and in a given situation
the outcome would be, at times, catastrophic and disastrous
and the damage could be irreparable one. A balanced
approach, keeping in view the legislative intent and the view
adopted by the Supreme Court, needs to be adopted, so that
the purpose of enacting the provisions of Sections 11 and 9 of
the ACA as amended by the Amendment Act is not defeated.
119. If an application under Section 11 or under Section
9 is required to be postponed till the order of adjudication is
passed by the learned Collector of Stamps with such
uncertainty of the time it would take to decide and the
hierarchy of remedies after such order, as it would be subject
to an appeal or a revision, as the case may be and till such
time no order either under Section 11 of under Section 9
should be passed, then the Legislature would not have
provided for speedy disposal of the applications under Section
11 or under Section 9 of the Act by inserting sub-Section (13)
in Section 11 and sub-Section (2) in Section 9 of the Act.

(L) ANSWERS TO THE QUESTIONS FRAMED :
120. In view of the above deliberation, we answer the
questions as framed by us as follows :-
Sr. No.
Question Answer
1 Whether a court, under the
Arbitration and Conciliation Act,
1996, can entertain and grant any
interim or ad-interim relief in an
application under Section 9 of the
said Act when a document
containing arbitration clause is
unstamped or insufficiently
stamped
In the Affirmative
2 Whether, inter alia, in view of
Section 11 (6A) of the Arbitration
and Conciliation Act, 1996,
inserted by Arbitration and
Conciliation (Amendment) Act,
2016, it would be necessary for
the Court before considering and
passing final orders on an
application under Section 11(6) of
the Act to await the adjudication
by the stamp authorities, in a case
where the document objected to,
is not adequately stamped?
In the Negative
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
ARBITRATION PETITION NO.466 OF 2017

Gautam Landscapes Private Limited.  Vs. Shailesh S.Shah 

CORAM : NARESH H. PATIL, CJ.,
R. D. DHANUKA &
G. S. KULKARNI, JJ.

PRONOUNCED ON: APRIL 04, 2019.

JUDGMENT: (PER NARESH H. PATIL,CJ.)
This judgment is held not good law in view of Supreme court Judgment.Please see the link: https://www.lawweb.in/2019/04/sc-court-cant-appoint-arbitrator-when.html

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Whether court can grant interim relief as per S 9 of arbitration Act even after passing of arbitral award?

 The question, that arises for adjudication before us is, as to whether the proceedings initiated Under Section 9 of the Act, (whilst the arbitral proceedings were pending) survive, after the arbitral proceedings come to a closure. Insofar as the instant aspect of the matter is concerned, the answer thereto has to emanate from Section 9 of the Act. The above provision is extracted hereunder:

9. Interim measures, etc. by Court.--(1) A party may, before or during arbitral proceedings or at any time after the making of the arbitral award but before it is enforced in accordance with section 36, apply to a court--

(i) for the appointment of a guardian for a minor or a person of unsound mind for the purposes of arbitral proceedings; or

(ii) for an interim measure of protection in respect of any of the following matters, namely:--

(a) the preservation, interim custody or sale of any goods which are the subject-matter of the arbitration agreement;

(b) securing the amount in dispute in the arbitration;

(c) the detention, preservation or inspection of any property or thing which is the subject-matter of the dispute in arbitration, or as to which any question may arise therein and authorising for any of the aforesaid purposes any person to enter upon any land or building in the possession of any party, or authorising any samples to be taken or any observation to be made, or experiment to be tried, which may be necessary or expedient for the purpose of obtaining full information or evidence;

(d) interim injunction or the appointment of a receiver;

(e) such other interim measure of protection as may appear to the court to be just and convenient, and the Court shall have the same power for making orders as it has for the purpose of, and in relation to, any proceedings before it.

(2) Where, before the commencement of the arbitral proceedings, a Court passes an order for any interim measure of protection under Sub-section (1), the arbitral proceedings shall be commenced within a period of ninety days from the date of such order or within such further time as the Court may determine.

(3) Once the arbitral tribunal has been constituted, the Court shall not entertain an application under Sub-section (1), unless the Court finds/that circumstances exist which may not render the remedy provided Under Section 17 efficacious.

A perusal of the above provision reveals, that interim measures can be allowed in favour of a party (who moves an application Under Section 9 of the Act), either before the commencement of the arbitration proceedings, or during the pendency of the arbitral proceedings, and even after the making of the arbitral award "... but before it is enforced in accordance with section 36...". It is therefore apparent, that an interim arrangement, can be made Under Section 9 of the Act, not only before and during the pendency of the arbitral proceedings, but also after the arbitral award has been pronounced.

7. As to whether the orders passed by the different Courts, which culminated in the two orders, extracted hereinabove, dated 13.12.2013 and 14.03.2014, would continue even after the passing of the arbitral award, in our considered view, would depend on the nature of the prayer made by the Appellant, when the application Under Section 9 was filed, before the concerned Court. 

IN THE SUPREME COURT OF INDIA

C.A. No. 679 of 2017 

Decided On: 19.01.2017

Ultratech Cement Limited Vs.  Rajasthan Rajya Vidyut Utpadan Nigam Limited

Hon'ble Judges/Coram:

J.S. Khehar, C.J.I. and Dr. D.Y. Chandrachud, J.

Citation: (2018) 15 SCC 678

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Whether commercial court has jurisdiction to grant injunction as per S 9 of arbitration Act?

Admittedly, in the present case, the dispute pertains to arbitration matter. The Petitioner is seeking the relief of injunction not under any other law but under Section 9 of the Arbitration Act, the subject matter of the arbitration is admittedly not less than Rs. 1 crore and therefore, the subject matter of arbitration being a 'commercial dispute' of a 'specified value', it has to be held that, Commercial Court will alone have the jurisdiction to entertain this arbitration application.

17. If the submissions advanced by learned counsel for the Petitioner that this being an application simpliciter for injunction, Civil Court alone will have the jurisdiction to entertain it, is to be accepted, then the very object of enacting Section 10(3) and of establishing the Commercial Courts will be frustrated. As a matter of fact the ingenuity of the legal profession is such that any dispute can be brought under the wide umbrella of the injunction suit with the claim that the relief claimed is not susceptible to monetary value. However, the Court has to see the real nature of the relief, which is sought and decide the jurisdiction of the Court accordingly.

18. Here, in the case, the real nature of the dispute is the arbitration agreement, the subject matter of which is above Rs. 1 crore; it is a dispute of commercial nature. Hence, even if, the relief claimed is simpliciter for injunction, as the subject matter of dispute falls within the jurisdiction of Commercial Court, in view of provisions of Section 10(3) of the Commercial Courts Act, the learned Principal District Judge, Satara, has rightly transferred the arbitration application to the Commercial Court.

IN THE HIGH COURT OF BOMBAY

Writ Petition No. 3119 of 2018

Decided On: 05.04.2018

 D.M. Corporation Pvt. Ltd. Vs. The State of Maharashtra and Ors.

Hon'ble Judges/Coram:

Dr. Shalini Phansalkar Joshi, J.

Citation: 2018(4) MHLJ 457

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Whether courts in India can grant interim relief even if place of Arbitration is outside India?

This is an application filed by the petitioner invoking Section 9 of the Arbitration and Conciliation Act, 1996 (for short 'the Act') seeking an interim measure before commencement of the arbitral proceedings. Initially, the registry has noted a defect with respect to the request made by the petitioner before this Court to secure an interim measure under Section 9 of the Act, 1996, especially as per the agreement, the place of arbitration is designated in Singapore. The said question was considered by this Court and passed an order dated 20.2.2017, after hearing rival parties, whereby it is held that, as provided under sub section (2) of Section 2 of the Act it is evident that, subject to an agreement to the contrary the provisions contained in Section 9 shall apply to international commercial arbitration, even if the place of arbitration is outside India, if an arbitral award made/to be made in such place is enforceable and recognized under provisions of Part II of Act, 1996. It is also found that the agreement specifically provides, the agreement shall be construed and interpreted in accordance with the laws of India and shall be subject to the courts of Thiruvananthapuram, Kerala State and therefore, the application is maintainable before this Court under Section 9 of the Act, 1996, which has become final.

IN THE HIGH COURT OF KERALA AT ERNAKULAM

OP(ICA) No. 1 of 2017

Decided On: 07.07.2017

 Female Health Company UK Plc.Vs. Hll Lifecare Limited

Hon'ble Judges/Coram:

S.P. Chaly, J.

Citation:AIR 2017 Kerala 149

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