Full Judgment Text
Neutral Citation Number : 2022/DHC/005662
$~33 & 34
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of decision: 16 December 2022
+ ARB. A. (COMM.) 73/2022 & I.A. 17549/2022(Stay)
INDIAN RAILWAY CATERING AND TOURISM
CORPORATION LIMITED ..... Appellant
Through: Mr. Chetan Sharma, ASG with
Mr. Harshit Aggarwal, Mr.
Amit Gupta, Mr. Rishav Dubey,
Mr. Saurabh Tripathi and Mr.
Sahaj Garg, Advs. for IRCTC.
versus
SUJATA HOTEL PRIVATE LIMITED ..... Respondent
Through: Ms. Malvika Trivedi, Sr. Adv.
with Mr. Akshat Bajpai, Ms.
Ishanee Sharma, Mr. Sujal
Gupta and Mr. Shallendra
Slaria, Advs.
34
+ OMP (ENF.) (COMM.) 206/2022 & EX.APPL.(OS)
3585/2022(Direction)
M/S SUJATA HOTEL PVT LTD ..... Decree Holder
Through: Ms. Malvika Trivedi, Sr. Adv.
with Mr. Akshat Bajpai, Ms.
Ishanee Sharma, Mr. Sujal
Gupta and Mr. Shallendra
Slaria, Advs.
versus
INDIAN RAILWAY CATERING AND TOURISM
CORPORATION PVT LTD ..... Judgement Debtor
Through: Mr. Chetan Sharma, ASG with
Mr. Harshit Aggarwal, Mr.
Amit Gupta, Mr. Rishav Dubey,
Mr. Saurabh Tripathi and Mr.
Sahaj Garg, Advs. for IRCTC.
ARB. A. (COMM.) 73/2022 & OMP (ENF.) (COMM.) 206/2022 Page 1 of 17
Signature Not Verified
Digitally Signed
By:NEHA
Signing Date:20.12.2022
10:46:20
Neutral Citation Number : 2022/DHC/005662
CORAM:
HON'BLE MR. JUSTICE YASHWANT VARMA
YASHWANT VARMA, J. (ORAL)
1. These matters with the consent of parties were heard together
and are being disposed of by this common order.
2. ARB. A. (COMM.) 73/2022 is an appeal preferred by the
appellant Corporation under Section 37 (2) (b) of the Arbitration and
1
Conciliation Act, 1996 and assails the validity of the order dated 14
October 2022 passed by the Arbitral Tribunal. OMP (ENF.) (COMM.)
206/2022 is a petition preferred by the claimant seeking enforcement
of the aforesaid order passed by the Arbitral Tribunal. The order of 14
October 2022 has undisputedly been passed on an application made by
the claimant/respondent purporting to be under Section 17 of the Act.
That application was preferred by the claimant seeking the following
reliefs:-
“ i) Issue directions that the Respondent should
maintain a status quo with respect to the subject
matter of the instant arbitration between the two
parties and not issue a letter of award pursuant to the fresh tender
No. 2022/IRCTC/BNR/RANCHI floated for the BNR Ranchi
Hotel.
ii) Pass any other or further consequential order(s) as this
Hon‟ble Tribunal deems fit and proper in the facts and
circumstances of the aforesaid case in favour of the Applicant and
against the Respondent.”
3. As would be evident from a perusal of the reliefs which were
claimed, the respondent had sought the issuance of a direction
commanding the appellant Corporation to maintain status quo with
1
the Act
ARB. A. (COMM.) 73/2022 & OMP (ENF.) (COMM.) 206/2022 Page 2 of 17
Signature Not Verified
Digitally Signed
By:NEHA
Signing Date:20.12.2022
10:46:20
Neutral Citation Number : 2022/DHC/005662
respect to the subject matter of arbitration and to not issue a letter of
award pursuant to the fresh tender notice which had been published
2
for running and administering the BNR Hotel at Ranchi. The
claimant had also prayed for orders consequential to the above and as
may have been deemed fit and proper by the Arbitral Tribunal in the
facts of the case. In order to appreciate the challenge which stands
laid at the behest of the appellant Corporation, it would be pertinent to
notice the following undisputed facts.
4. By a letter of 27 December 2006, the appellant Corporation is
stated to have awarded a sub-license to the respondent for the
purposes of redeveloping, operating, maintaining and transferring the
Hotel. On 12 May 2007, a sub-license / concession agreement came
to be executed between the parties for and in connection with the
aforesaid purposes. The Hotel premises are stated to have been handed
over to the claimant on 14 May 2007. As per the concession, the sub-
license was granted for a period of fifteen years and was to thus expire
on 13 May 2022. The claimant is stated to have made a representation
on 10 June 2020 for extension of the period of contract on account of
the outbreak of the COVID-19 pandemic. It was asserted that the
pandemic had adversely impacted the business of the claimant and
caused huge losses and therefore the requirement of the term of the
sub-license being extended proportionately.
5. By a letter of 06 April 2022, the appellant Corporation granted
the claimant the benefit of the residual period of 163 days beyond the
2
the Hotel
ARB. A. (COMM.) 73/2022 & OMP (ENF.) (COMM.) 206/2022 Page 3 of 17
Signature Not Verified
Digitally Signed
By:NEHA
Signing Date:20.12.2022
10:46:20
Neutral Citation Number : 2022/DHC/005662
expiry date of the sub-license of 13 May 2022. The sub-license
agreement consequently stood extended up to 23 October 2022. The
claimant, however, questioned the computation of the residual period.
In the meanwhile, the appellant Corporation is stated to have floated a
fresh tender for operation and maintenance of the Hotel on expiry of
the concession period on 23 October 2022. It was, in the aforesaid
backdrop that disputes appear to have arisen between the parties and
led to the reference of the same to arbitration.
6. On constitution of the Arbitral Tribunal, the respondent
3
claimant submitted its Statement of Claim . The claims were
essentially placed under the following heads:-
“Claim 1: Extension of License Period by granting
Residual period for non/under-utilization of Hotel after
31.08.2020.
Claim 2: Extension of License Period to account for the
time spent in refurbishing/renovating the Hotel.
Claim 3: Refund of expenditure incurred in construction
of Boundary Wall.
Claim 4: Compensation for the revenue lost by the
Claimant when the Railways did not hand over the
Hoardings to the Claimant.
Claim 5: Compensation for the requisite land area
required for construction of land area in Block D of the
proposed building plan not being built as the boundary
wall could not be straightened at the rear of the Hotel.
Claim 6: Compensation for loss of earning from Banquet
Hall due to delays in its construction due to lack of
clarity regarding position of Boundary Wall.
Claim 7: Compensation for Loss of Revenue due to delay in
revision of Tariffs to be charged at the Hotel.”
3
SOC
ARB. A. (COMM.) 73/2022 & OMP (ENF.) (COMM.) 206/2022 Page 4 of 17
Signature Not Verified
Digitally Signed
By:NEHA
Signing Date:20.12.2022
10:46:20
Neutral Citation Number : 2022/DHC/005662
7. As per the summary of claims which was set out in the SOC,
the claimant had sought extension of the license period for the residual
period by 191 days. A further extension of license period was claimed
under the head of time spent in refurbishment and renovation of the
Hotel. That extension was claimed for a period of three years and
thirty days.
8. Admittedly, at the time when the application preferred under
Section 17 of the Act came to be filed and taken up for consideration,
the appellant Corporation was yet to submit a Statement of Defence.
As the impugned order itself records, the first hearing by the Arbitral
Tribunal took place on 10 August 2022. The impugned order further
records that the claimant had sought expeditious hearing of the prayers
as made in the application preferred under Section 17 of the Act and
which is stated to have been conceded to by the appellant Corporation.
The Tribunal appears to have heard and considered the aforenoted
application on 01 October 2022. Upon conclusion of hearing on the
aforesaid application, the following note of proceedings came to be
recorded:-
ORDER SHEET NO.-02
“
(Dated 01.10.2022)
Proceedings of the third arbitration hearing held on 01.10.2022 at
17:30 hrs held through video conference.
Arbitration between M/S Sujata Hotel Pvt. Ltd, Patna and IRCTC
in the matter of:
Redeveloping, Operating, Maintaining and transferring of BNR
Hotel at Ranchi as per agreement between IRCTC and Sujata Hotel
Private Limited Patna,
1. ATTENDED BY
ARB. A. (COMM.) 73/2022 & OMP (ENF.) (COMM.) 206/2022 Page 5 of 17
Signature Not Verified
Digitally Signed
By:NEHA
Signing Date:20.12.2022
10:46:20
Neutral Citation Number : 2022/DHC/005662
i) CLAIMANT SIDE Sh Akshat Bajpai- Counsel
for claimant
ii) RESPONDENT SIDE Sh. Jagdish Goyal- Law
officer/IRCTC
Sh. Harshit Agarwal-
Counsel for respondent
1.2 It was directed that as far as possible all should follow the
system of trailing mail while sending any mail. This will help in
better management of correspondence.
1.3 Both the Claimant as well as the Respondent have not correctly
followed the system of numbering of pages/documents submitted.
Though it was clearly mentioned in para 7 of Arbitration
notification no.1. It should be properly followed in future as
discussed in today's meeting.
1.4 As explained in today's meeting, Claimant shall resubmit (only
soft copy) of their already submitted documents to be clearly
marked at top as CD-1,CD-2 etc., in order of their submission.
Similarly Respondent shall also resubmit their documents (only
soft copy) marked as RD-1, RD-2 etc... Same markings in Hard
copies shall be done by all concerned at their respected end. No
resubmission of hard copy is required.
1.5 As directed vide para 5 of order sheet no 1. both the parties
have submitted their calculations /assessment for residual period.
Respondent have also replied to claimant's letter dated 13.09.2022
to CMD/IRCTC regarding extension of residual period.
1.6 Claimant submitted their arguments/plea for additional residual
period beyond 163 days already granted by IRCTC as reasons for
continuation of their present contract beyond present expiry date of
23.10.2022.
1.7. Respondent also submitted their arguments/reasons for no
justification for additional residual period beyond 163 days already
granted by IRCTC.
1.8 Claimant and Respondent, both agreed that they have no
further submissions/arguments to make. Accordingly AT
proceedings are concluded in respect of claimant's request for early
decision in respect of their application filed under section 17 of
Arbitration and Conciliation Act. Both Claimant and Respondent
shall submit a brief of their today's arguments for record.
ARB. A. (COMM.) 73/2022 & OMP (ENF.) (COMM.) 206/2022 Page 6 of 17
Signature Not Verified
Digitally Signed
By:NEHA
Signing Date:20.12.2022
10:46:20
Neutral Citation Number : 2022/DHC/005662
1.9 AT will now proceed to declare the award ONLY in respect of
Claimant's application under section 17 of Arbitration and
Conciliation Act seeking directions to the Respondent that a status
quo be maintained w.r.t. the subject matter of the present
arbitration and fresh letter of award should not be issued for the
new tender no. 2022/IRCTC/BNR/RANCHI floated for the subject
matter property that will open on 07.09.2022.
1.10 Claimant shall now submit their SOC, with item wise breakup
of each claim, in terms of Arbitral notification no.-1 dated
10.08.2022, without waiting for publication of interim award
(award in respect to their application filed under section 17 of A &
C Act).
(Naveen Chopra)
Sole Arbitrator
Address: Flat-28, Palm grove apartment, Plot No. F-5, Selor-50,
NOIDA-201304, (U.P.)
Mobile -9871460200 E-mail : nchopra.irse@gmail.com”
9. A reading of the note of proceedings as drawn by the Tribunal
and more particularly Para 1.9 thereof appears to suggest that the
Arbitral Tribunal had heard and concluded arguments on the
application preferred under Section 17 of the Act which had sought
directions for status quo being maintained with respect to the subject
matter of the arbitration and for reliefs in respect of the action of the
appellant Corporation relating to a fresh letter of award as a
consequence to the tender notice which had come to be issued.
10. While it was the said application under Section 17 of the Act
which was to be taken up for consideration and on which alone
submissions of respective parties had been heard, the Arbitral Tribunal
chose to describe and understand the scope of those proceedings by
observing “AT will now proceed to declare the award ONLY in
ARB. A. (COMM.) 73/2022 & OMP (ENF.) (COMM.) 206/2022 Page 7 of 17
Signature Not Verified
Digitally Signed
By:NEHA
Signing Date:20.12.2022
10:46:20
Neutral Citation Number : 2022/DHC/005662
respect of Claimant’s application under Section 17....”. The Arbitral
Tribunal also called upon the Claimant to file its SOC without
awaiting the pronouncement of “publication of interim award (award
in respect to their application filed under section 17 of A & C Act).”
11. As would be evident from a reading of the ultimate order which
was passed on that application, the Arbitral Tribunal rejected relief „i‟
as was claimed in the application preferred under Section 17. It,
however, proceeded to declare and direct that the concession period or
the contract shall stand extended by providing for an additional
residual period of 104 days beyond the present expiry date of 23
October 2022. The aforesaid direction came to be passed by the
Arbitral Tribunal based on its assessment of the relief liable to be
granted to the claimant on account of the impact of the pandemic
during the contract period. It is the aforesaid direction which has led
to the filing of the appeal under Section 37 of the Act.
12. Assailing the impugned order, Mr. Sharma, the learned ASG,
submitted that the Arbitral Tribunal has clearly transgressed the
jurisdiction conferred upon it by Section 17 of the Act. Mr. Sharma
pointed out that Section 17 envisages the grant of interim measures
that may be made by the Tribunal during the pendency of proceedings.
It was submitted that the aforesaid provision essentially enables the
Arbitral Tribunal to pass interim orders preserving and balancing the
rights of parties till such time an award is ultimately rendered.
However, learned ASG submitted that the Tribunal had clearly lost
sight of the extent of the proceedings contemplated under Section 17
and the orders that could possibly be made at the interim stage and has
ARB. A. (COMM.) 73/2022 & OMP (ENF.) (COMM.) 206/2022 Page 8 of 17
Signature Not Verified
Digitally Signed
By:NEHA
Signing Date:20.12.2022
10:46:20
Neutral Citation Number : 2022/DHC/005662
virtually allowed one of the principal claims which had been laid by
the respondent. In view of the aforesaid, learned ASG submitted that
the impugned order clearly suffers from a manifest and patent
illegality and merits being set aside by the Court.
13. Appearing for the respondent, Ms. Trivedi, learned Senior
Counsel, submitted that the order essentially amounts to an interim
award having been rendered by the Arbitral Tribunal with respect to
one of the claims which stood raised. It was submitted that the
Arbitral Tribunal stands statutorily empowered to render such an
interim award by virtue of the provisions contained in Section 31(6) of
the Act. Ms. Trivedi further submitted that since the order impugned
would amount to an interim award, the appeal preferred under Section
37 of the Act is clearly not maintainable. It was then contended that
although the application was filed as being one under Section 17, a
perusal of the proceedings drawn by the Arbitral Tribunal prior to the
aforesaid application being heard would clearly establish that parties
were agreed for arguments being heard and considered in respect of
the substantive claim that stood raised and embodied in the SOC. In
view of the aforesaid, Ms. Trivedi would urge that the order impugned
merits no interference and in any case the appeal itself is liable to be
dismissed on the ground of maintainability as was noticed above.
14. It was further submitted that on earlier occasions when the
instant appeal and petition had been called for hearing, the objection
on identical lines had been urged and in response to which the
appellant had, in fact, conceded and submitted that it may be treated as
being one falling under Section 34 of the Act. According to Ms.
ARB. A. (COMM.) 73/2022 & OMP (ENF.) (COMM.) 206/2022 Page 9 of 17
Signature Not Verified
Digitally Signed
By:NEHA
Signing Date:20.12.2022
10:46:20
Neutral Citation Number : 2022/DHC/005662
Trivedi, in light of the aforesaid concession also, the instant appeal is
liable to be dismissed. It was her submission that in any case and
once the concession had been made, the grounds of challenge as have
been urged before the Court today would not be available to be
canvassed.
15. The Court at the outset deems it apposite to record that the
concession which is alluded to by Ms. Trivedi, neither stands recorded
nor does it stand reflected in any of the earlier orders passed in these
proceedings. The initial orders passed also do not record any
concession having been made on behalf of the appellant in this
respect. In absence thereof, the Court finds itself unable to accept the
argument that the present petition must be held to be one which would
fall within the ambit of Section 34 of the Act. The true nature of the
petition would, in any case, have to be examined and understood by
the Court based upon its own evaluation of the nature of the challenge
which stands raised. It would in any case not be guided by any oral
submission or statement that may have been allegedly made before the
Court and of which no cognizance appears to have been taken.
16. In view of the aforesaid, the Court finds itself unable to
countenance the objection as taken on this score or to reject the appeal
based on an objection or a concession which is stated to have been
allegedly voiced by learned counsels appearing for respective parties
on earlier occasions.
17. Reverting then to the merits of the challenge, the Court deems it
apposite to note that a careful reading of the application which was
ARB. A. (COMM.) 73/2022 & OMP (ENF.) (COMM.) 206/2022 Page 10 of 17
Signature Not Verified
Digitally Signed
By:NEHA
Signing Date:20.12.2022
10:46:20
Neutral Citation Number : 2022/DHC/005662
moved under Section 17 would reveal that paragraphs 1 to 51 were
essentially a reiteration of the contents of the SOC. However, and as
would be evident from a reading of paragraph 52 onwards of the said
application, the claimant was clearly conscious of the scope of the
proceedings before the Arbitral Tribunal. This would be evident from
a reading of paragraphs 52 to 55 of the application preferred under
Section 17 of the Act which are extracted hereinbelow:-
“52. That Section 17 of the Arbitration and Conciliation Act, 1996
as amended in 2015 states that,
“...(1) A party may, during the arbitral proceedings 2, apply *
to the arbitral tribunal— (i) for the appointment of a guardian
for a minor or 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
authorizing 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 arbitral tribunal to be just and convenient, and
the arbitral tribunal shall have the same power for making
orders, as the court has for the purpose of, and in relation to,
any proceedings before it.) ...”
53. As such, the powers granted to an arbitrator are pari materia
with those granted to the relevant court under Section 9 of the
Act. In this context, the observations of the Hon‟ble Supreme
Court in Adhunik Steels Ltd. v. Orissa Manganese Mining (2007
AIR SC 2563) are pertinent:
“10. It is true that Section 9 of the Act speaks of the court by
way of an interim measure passing an order for protection, for
the preservation, interim custody or sale of any goods, which
ARB. A. (COMM.) 73/2022 & OMP (ENF.) (COMM.) 206/2022 Page 11 of 17
Signature Not Verified
Digitally Signed
By:NEHA
Signing Date:20.12.2022
10:46:20
Neutral Citation Number : 2022/DHC/005662
are the subject matter of the arbitration agreement and such
interim measure of protection as may appear to the court to be
just and convenient. The grant of an interim prohibitory
injunction or an interim mandatory injunction are governed by
well known rules and it is difficult to imagine that the
legislature while enacting Section 9 of the Act intended to
make a provision which was de hors the accepted principles
that governed the grant of an interim injunction. Same is the
position regarding the appointment of a receiver since the
Section itself brings in, the concept of 'just and convenient'
while speaking of passing any interim measure of protection.
The concluding words of the Section, "and the court shall have
the same power for making orders as it has for the purpose
and in relation to any proceedings before it" also suggest that
the normal rules that govern the court in the grant of interim
orders is not sought to be jettisoned by the provision.
Moreover, when a party is given a right to approach an
ordinary court of the country without providing a special
procedure or a special set of rules in that behalf, the ordinary
rules followed by that court would govern the exercise of
power conferred by the Act. On that basis also, it is not
possible to keep out the concept of balance of convenience,
prima facie case, irreparable injury and the concept of just
and convenient while passing interim measures under
Section 9 of the Act .”
54. It is submitted that a similar approach needs to be adopted in
considering any applications made under Section 17 of the Act.
55. The Claimant/Applicant satisfies the requirements of the three-
factor test for grant of interim relief. In Dorab Cawasji Warden
v. Coomi Sorab Warden, (1990) 2 SCC 117 , the Apex Court,
while holding that interlocutory mandatory injunction are
usually granted to preserve the last uncontested status quo
until the final hearing , in para held as under:
“16. The relief of interlocutory mandatory injunctions are
thus granted generally to preserve or restore the status quo of
the last non-contested status which preceded the pending
controversy until the final hearing when full relief may be
granted or to compel the undoing of those acts that have been
illegally done or the restoration of that which was wrongfully
taken from the party complaining. But since the granting of
such an injunction to a party who fails or would fail to establish
his right at the trial may cause great injustice or irreparable
harm to the party against whom it was granted or alternatively
not granting of it to a party who succeeds or would succeed may
ARB. A. (COMM.) 73/2022 & OMP (ENF.) (COMM.) 206/2022 Page 12 of 17
Signature Not Verified
Digitally Signed
By:NEHA
Signing Date:20.12.2022
10:46:20
Neutral Citation Number : 2022/DHC/005662
equally cause great injustice or irreparable harm, courts have
evolved certain guidelines. Generally stated these guidelines
are: (1) The Plaintiff has a strong case for trial. That is, it shall
be of a higher standard than a prima facie case that is normally
required for a prohibitory injunction. (2) It is necessary to
prevent irreparable or serious injury, which normally cannot be
compensated in terms of money. (3) The balance of convenience
is in favour of the one seeking
such relief.” ”
18. The claimant thereafter alludes to the factors which govern the
grant of an interim injunction by asserting that it had a good prima
facie case, the balance of convenience lay in its favour and that if an
order of status quo were to be refused, it would suffer irreparable
injury and harm. It was these factors which govern the grant of a
temporary injunction which were then elaborated upon by the
claimant itself. The fact that the claimant was essentially seeking
interim directions is also manifest from the prayers which were made
in the application preferred under Section 17 itself and which have
been extracted hereinabove. Those prayers were ex facie restricted to
the grant of an order of status quo in respect of the letter proposed to
be issued by the petitioner as a consequence to the fresh tender that
had been floated by them. The prayer for consequential orders cannot
also be construed as having expanded the nature of the relief which
the respondent had sought in the interim.
19. The Court further bears in mind that the application preferred
under Section 17 was itself being taken up for consideration at a time
when the appellant was yet to file or furnish a Statement of Defense.
In fact as the minutes of proceedings of 01 October 2022 drawn by the
Arbitral Tribunal would itself bear out, it had called upon the
ARB. A. (COMM.) 73/2022 & OMP (ENF.) (COMM.) 206/2022 Page 13 of 17
Signature Not Verified
Digitally Signed
By:NEHA
Signing Date:20.12.2022
10:46:20
Neutral Citation Number : 2022/DHC/005662
respondent to submit a revised SOC awaiting orders being passed
upon the application moved on its behalf. The order, which the
respondents choose to describe as an interim award, thus evidently
came to be made even before the principal pleadings of parties had
come to be placed on the record.
20. Section 17 of the Act confers powers on the Arbitral Tribunal to
pass interim orders during the course of the Arbitral proceedings.
That provision reads thus: -
“[ 17. Interim Measures ordered by arbitral tribunal —(1) A
party may, during the arbitral proceedings [ *], apply to the arbitral
tribunal—
( i ) for the appointment of a guardian for a minor or 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
arbitral tribunal to be just and convenient,
and the arbitral tribunal shall have the same power for making
orders, as the court has for the purpose of, and in relation to, any
proceedings before it.
ARB. A. (COMM.) 73/2022 & OMP (ENF.) (COMM.) 206/2022 Page 14 of 17
Signature Not Verified
Digitally Signed
By:NEHA
Signing Date:20.12.2022
10:46:20
Neutral Citation Number : 2022/DHC/005662
(2) Subject to any orders passed in an appeal under Section 37, any
order issued by the arbitral tribunal under this section shall be
deemed to be an order of the court for all purposes and shall be
enforceable under the Code of Civil Procedure, 1908 (5 of 1908),
in the same manner as if it were an order of the Court.]”
21. The aforesaid provision confers powers akin to those vested
upon the Court by virtue of Section 9 except that in case of the latter,
the Court stands vested with the authority to direct interim measures
being taken before, during or for that matter even after the Arbitral
proceedings have come to a close and culminated in the making of an
award. As would be evident from a reading of Section 17, the interim
measures are concerned with the preservation of goods which may
form the subject matter of arbitration, securing any amounts which
may be in dispute, the detention, preservation or inspection of
property, the appointment of a receiver and directing such other
interim measures of protection as may appear to the Arbitral Tribunal
to be just and convenient.
22. As would be evident from the decisions on which reliance was
placed by the claimant itself, the power conferred by Section 17 upon
the Arbitral Tribunal is essentially akin to the powers vesting in a
court to grant an interim prohibitory or mandatory injunction. Section
17 in any case cannot be construed as either conferring a power on the
Arbitral Tribunal to either render an interim award or to grant one of
the final reliefs which may be sought by a claimant. One of the
principal considerations which courts and tribunals weigh in mind
while considering the question of grant of interim protection, is to be
wary of passing orders which amount to the grant of final reliefs that
may be claimed by parties. However, and as would be manifest from
ARB. A. (COMM.) 73/2022 & OMP (ENF.) (COMM.) 206/2022 Page 15 of 17
Signature Not Verified
Digitally Signed
By:NEHA
Signing Date:20.12.2022
10:46:20
Neutral Citation Number : 2022/DHC/005662
the aforesaid recital of facts as well as the direction which was
ultimately framed by the Arbitral Tribunal in the present case, it is
exactly that basic and underlying principle governing the grant of
interim injunction which has been evidently ignored and violated by
the Arbitral Tribunal.
23. As this Court peruses the notes of proceedings as well as the
ultimate order which came to be passed by the Arbitral Tribunal, it is
of the firm opinion that it has clearly misdirected itself and manifestly
transgressed the jurisdiction which it was entitled to exercise while
considering an application under Section 17 of the Act. The Arbitral
Tribunal has essentially proceeded to render a final opinion with
respect to one of the major claims which was sought by the
respondent.
24. The Court further notes that Para 1.9 of the Minutes of
Proceeding dated 01 October 2022 would also not salvage the ultimate
order which came to be passed by the Arbitral Tribunal and stands
impugned in the present appeal. In fact a reading thereof would
clearly establish that the Arbitral Tribunal not only misconstrued the
scope and extent of proceedings that could have been taken under
Section 17, but it has clearly committed a gross illegality while
passing the orders impugned.
25. Before closing, the Court deems it necessary to observe that an
Arbitral Tribunal though not strictly bound by the rules of procedure
as prescribed under the Civil Procedure Code, 1908, it is yet obliged
to adhere to the fundamental principles of a fair and just adjudication
ARB. A. (COMM.) 73/2022 & OMP (ENF.) (COMM.) 206/2022 Page 16 of 17
Signature Not Verified
Digitally Signed
By:NEHA
Signing Date:20.12.2022
10:46:20
Neutral Citation Number : 2022/DHC/005662
as embodied in the Act. While the Court cannot possibly doubt the
authority of an arbitrator to make an interim award, the rendering of
such a decision must necessarily be preceded by adherence to a
procedure which can be countenanced in law. In the course of
proceedings which ensued before the arbitrator in the present case, it
appears to have clearly lost sight of the fact that it was called upon to
merely decide an interlocutory application. The petitioner while
responding to the contents of the application under Section 17 was
bound to traverse the various assertions which were made therein and
which, as was noted above, to a large extent pertained to and was an
iteration on the principal claims laid by the respondent. However, that
by itself could not have conferred jurisdiction or authority upon the
Arbitral Tribunal to render an interim award.
26. Accordingly, and for all the aforesaid reasons, ARB. A.
(COMM.) 73/2022 shall stand allowed. The order of 14 October 2022
of the Arbitral Tribunal shall stand set aside.
27. OMP (ENF.) (COMM.) 206/2022 shall, as a consequence to the
above, stand dismissed.
YASHWANT VARMA, J.
DECEMBER 16, 2022/ bh
ARB. A. (COMM.) 73/2022 & OMP (ENF.) (COMM.) 206/2022 Page 17 of 17
Signature Not Verified
Digitally Signed
By:NEHA
Signing Date:20.12.2022
10:46:20