Judgments and Awards

2002(3) RAJ 310 (Del)

Management Committee of Montfort Sr Sec School Vs Vijay Kumar

The issue that came up for consideration was whether the Delhi School Tribunal set up under section 8(3) of the Delhi School Education Act was a 'judicial authority' within the meaning of section 8(1).

It was held that as such, when an authority other than a court in the ordinary sense, is in discharge of the duties which are expected to be acted out fairly and honestly or the authority exercises some of the powers akin to the powers of a civil court, it may not be a court in its strictest sense but it would essentially fall within the definition of a judicial authority. It is bound by law to act on the facts and circumstances as determined upon the enquiry in which a person who is to be affected is given full opportunity to place his case.

1998(2) RAJ 141 (Cal)

ITC Classic Finance Ltd Vs. Grapco Mining & Co.

The issue came up as the present application had annexed with it, Xerox copies of the lease agreement which also formed part of the plaint filed in the suit. The said lease agreements were relied upon by both the parties and it was not disputed that the said Xerox copies were indeed true copies of the original documents. It was held that the Xerox copies of the said lease agreement containing the arbitration clause were in sufficient compliance with Section 8(2) of the Act.

2000(3) RAJ 511 (P&H)

Punjab State Cooperative Supply and Marketing Federation Ltd Vs. Shiv Rice and General Mills

The question that arose before the court was about the permissibility of reference of disputes to an arbitrator during the pendency of a suit in the Civil Court.

It was held that the courts cannot restrain the arbitrator from proceeding in arbitration or restrain the defendants from proceeding with arbitration before the arbitrator.

The plea regarding jurisdiction of the arbitrator could be raised before the arbitrator and if the arbitrator did not agree to the plea and an award was passed against the plaintiff, then the plaintiff was competent to challenge the same u/s 34 of the 1996 Act and the Court was competent to set aside the award if it dealt with a dispute not contemplated by or not falling within the terms of the arbitration clause.

Section 8(3) contemplates a situation where the matter may be pending before the Court and still the arbitration may be commenced or continued and an arbitral award made. The aggrieved party may challenge the award u/s 34 of the 1996 Act.

2005 (1) RAJ 225 (Raj)

Air Conditioning Corporation Ltd, Calcutta Vs. Rajasthan Agriculture University, Bikaner

According to the facts, a dispute arose between the parties which was referred to arbitration in 1999. While the proceedings were going on, the petitioner filed an application u/s 17 for interim measures which was allowed by the arbitrator in 2002. The Respondent appealed before the District Judge Bikaner u/s 37 and the order was set aside. Aggrieved by this decision, the petitioner filed the revision petition which was allowed.

The petitioner, in 2004, had filed another application u/s 151 CPC stating that since the arbitrator had passed the final award in 2003, which was published in 2004, the respondent should be directed to pay according to the terms of the award.

It was held that there is no dispute that if any final order is passed in the proceedings before any forum, the life of the interim order comes to an end with the passing of the final order in that proceeding. In the present case, the arbitrator had passed an interim award in 2002, which was set aside by the District Judge. However, with the passing of the award in 2003, the life of the interim order dt. 2002 passed away and therefore, this revision petition has become infructuous.

It was further held that this Court cannot given any directions for execution of terms of the final award because it will be the domain of the Executing Court before whom the execution petition for executing the award is filed.

AIR 1999 (SC) 565

Sundaram Finance Ltd Vs NEPC India Ltd

This case discussed the similarity between Section 9 of the 1996 Act and Article 9 of UNCITRAL Model Law which states that "It is not incompatible with an arbitration agreement for a party to request, before or during arbitral proceedings, from a court an interim measure of protection and for a court to grant such measure"

Article 9 seeks to clarify that merely because a party to an arbitration agreement requests the court for an interim measure "before or during arbitration proceedings", such recourse would not be regarded as being incompatible with an arbitration agreement. Arbitration may commence and continue notwithstanding a party having approached the court for interim protection.

The expression "before or during arbitration proceedings" used in Section 9 seems to have been inserted with a view to give it the same meaning as those words in Article 9 of UNCITRAL Model Law.

2001(3) RAJ 433 (Del)

Bharti Televentures Ltd Vs DSS Enterprises

In the instant case, DSS filed an injunction suit restraining CGL from selling or transferring its shares in Skycell.

It was held that although the provisions of Section 9 cannot be resorted to for interim measures where the parties have chosen a foreign forum for arbitration, the fact remains that such a step cannot constitute a waiver or abandonment of the arbitration clause.

In Sundaram Finance Ltd Vs NEPC Ltd [1999(1) RAJ 365], it has been held that when a party applies u/s 9, it is implicit that it accepts that there is a final and binding arbitration agreement in existence. When such an application is filled before the commencement of arbitration proceedings, there has to be manifest intention on the part of the applicant to take recourse to arbitral proceedings. Thus, the mere filing of application u/s 9 by any of the parties does not operate waiver or estoppel from invoking the arbitral proceedings.

Similarly, the suit filed by DSS does not operate as a waiver as it was a suit for injunction restraining CGL from transferring or selling its shares in Skycell and was not covered by Section 62 of the Indian Contract Act not was it a suit with regard to the provisions of the Joint Venture Agreement. It relates to the Articles of Association of the company.

2003(4) RAJ 661 (All)

Payal Enterprises Vs Union Of India

An application u/s 11 for appointment of arbitrator was pending before the Chief Justice. The question that arose was whether application u/s 9 was to be filed before the Chief Justice in view of Section 42 of the Act.

Held, it is true that Section 42, which defines jurisdiction, says that where with respect to an arbitration agreement, any application under this part has been made in a court, that court alone shall have jurisdiction over the arbitral proceedings and all subsequent applications arising out of that agreement and the arbitral proceedings shall be made in that court only. The word 'court' as defined in Section 2 (1)(e) means the principal civil court of original jurisdiction or the High Court exercising original civil jurisdiction.

It is settled view that the Chief Justice acting u/s 11 of the Act does not act judicially and therefore is not a court as defined in Section 2(1)(e). Therefore the application u/s 9 is not maintainable before the Chief Justice and it will lie before the Court as defined in Section 2(1)(e)., ie. The principal civil court of original jurisdiction ie. The District Judge

2000(4) RAJ 512 (Del)

Naval Gent Maritime Ltd Vs Shivnath Rai Harnarain

According to the facts, the Respondent is an Indian company whose assets are entirely located in India. The proceedings were initiated in England. The issue was whether interim injunction could be granted in India.

It was held that so long as the territorial jurisdiction of the court is present, relief should not be declined on technicalities which are not representative of any equities in favour of the Respondents. Since the Respondent's properties are located in India, the umbilical cord of territoriality is clearly visible.

In the case 'The Channel Tunnel Group Vs Balfour Beatty Construction Ltd & Ors [1993(1) All ER 64], it was held that the English courts possessed inherent powers to grant interim relief even where the seat of arbitration was not in England. This view has now obtained statutory sanction in terms of the English Arbitration Act. This is the ubiquitous view internationally. There is no reason to adopt a pedantic approach, thereby rendering the legal regime in India dissimilar to that prevailing in other parts of the world.

The globe is now becoming a village and persons will have increasing power to choose between several available courts, so long as the choice is not capricious, relief should not be denied.

2001(1) RAJ 93 (Del)

Marriott International Inc Vs Ansal Hotels Ltd

The parties had agreed to have their disputes referred to the arbitration of the Kuala Lumpur Regional Centre for Arbitration (KLRCA) in accordance with their rules. Under Rule 1, the disputes were to be settled in accordance with the UNCITRAL Arbitration rules subject to modification as set forth in the KLRCA Rules. However, the KLRCA Rules made a departure from the UNCITRAL Model Laws and had made no provisions like our Article 9 in Part II of the Act.

The counsel for one of the parties argued that in case the provisions of the India Act did not apply, the Court had inherent powers u/s 151 CPC to pass an interim order.

The Court agreeing on otherwise, held that in case this Court, in view of S.2(2), does not have any jurisdiction to pass an interim order contemplated by S.9, then the Court cannot exercise inherent powers and thereby confer upon itself a jurisdiction not conferred by law. To exercise any inherent power, the Court must have jurisdiction over the proceedings over it.

However, a party is not left remedyless n as much as it can approach the Arbitral Tribunal for passing appropriate orders to take interim measures as it may deem necessary in respect of the subject matter of the dispute. The Tribunal may pass such interim measure in the form of an interim award, which may be enforced as an arbitral award.

2004(1) Arb. LR 396 (SC) ; 2004(1) Arb.L.R. 141(SC)

National Aluminum Co Ltd Vs. Gerald Metals SA ; Ashok Traders and Anr.. Vs. Gurumukh Das Saluja and Ors

2004(1) Arb. LR 396 (SC)
National Aluminum Co Ltd

A pending dispute between the parties was being settled through arbitration, during which Gerald Metals SA (Gerald) moved the trial court under section 9(d) of the 1996 Act and obtained an interim order from the trial court in face of opposition by National Aluminum Company Limited (NALCO)

Appeal was filed by NALCO against the above order. The Court rejected the appeal but made some modifications to the order of the trial court. NALCO appealed to Supreme Court (SC) and SC preferred not to go into questions of fact and law raised in the appeal and decided the matter on grounds of equity and balance of convenience because the matter was yet to be decided by the arbitrators. It was observed that if Gerald is not permitted to lift the goods in question it is likely to be put to great hardship and on the other hand if NALCO is not permitted to collect the fair price of its goods it will be deprived of the monetary value of the goods. SC also declared that the order was not any opinion on the legal arguments raised nor on the factual issues except to the extent of the interim arrangement made.


2004(1) Arb.L.R. 141(SC)
Ashok Traders and Anr.. Vs. Gurumukh Das Saluja and Ors

The issue before the Supreme Court was whether the right conferred by Section 9 of the 1996 Act arose from contract. In brief, there was a dispute among a partnership engaged in liquor trade. When one of the partners filed a suit it was held not maintainable under Section 69(3) of Indian Partnership Act, 1963 as his name did not appear in the register of firms as a partner. There was an arbitration clause in the partnership deed and an application was filed under section 9 of the 1996 Act which was contested on various grounds, the plea of non-maintainability prevailed with the Additional District Judge. However the High Court held that applicability of section 69(3) of Indian Partnership Act, 1963 is not attracted to an application under section 9 of 1996 Act.

When the matter finally came up before Supreme Court it was held that under 1996 Act the arbitration clause is independent and separable from the partnership deed. The only qualification is that a person invoking section 9 should be a 'party' to an arbitration agreement, as the relief being sought under section 9 of 1996 Act is neither in a suit nor a right arising from the contract. The court under section 9 is only formulating interim measures so as to protect the right, under adjudication before the Arbitral Tribunal, from being frustrated. It was held that section 69 of the Partnership Act has no bearing on the right of a party to an arbitration clause to file an application under Section 9 of the 1996 Act.

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