Skip to main content

No Interim Relief Under Section 9 Of Arbitration Act Against Terminable Contract

Cause Title : M/s Suryapushpa Distributors vs Rail Land Development Authority, Delhi High Court, O.M.P.(I) (COMM.) 213/2022 and I.A. No. 14394/2022

Date of Judgment/Order : 13.01.2023

Corum : Hon’ble Mr. Justice Chandra Dhari Singh

Citied: M/S Inter Ads Exhibition Pvt Ltd vs. Busworld International Cooperatieve Vennotschap Met Beperkte Anasprakelijkheid, 2020 SCC Online Del 2485

Background

An application under Section 9 of the Arbitration and Conciliation Act, 1996 was filed by the Petitioner in view of threats issued by respondent vide letter dated 1st July 2022 to terminate the Letter of Acceptance (“LoA”) dated 9th February 2022 executed by Petitioner and the Respondent. 

The Petitioner alleged that the instant matter was listed on 11th July 2022 where the counsel for the respondent sought time to file a reply to the petition but in utter malice instead of filing the said reply the respondent terminated the LoA vide communication dated 19th July 2022.

Consequently, through this Interim application, the Petitioner sought to amend the prayer and  pray for  Interim relief of status-quo ante qua the termination LOA dated 09.02.2022 and land admeasuring 35,127 sq. mtr., which is subject matter of LOA, be directed to be maintained till disposal of the Section 9 Petition.

The Respondent opposed the amendment and submitted that the instant relief sought by way of amendment is not maintainable under Section 9 of the Arbitration Act.

Judgment

The High Court observed that at this stage it is crucial to examine that the termination already made final by the respondent cannot be challenged by the petitioners by way of a Section 9 petition.

The High Court held that where the LoA was in fact terminated, no relief lies in favour of the petitioners/applicants for challenging the order of termination on merits. The court referred to the judgment in M/s Suryapushpa Distributors (supra) where it has been held that since the contract in the present case was terminable and as the issue of the legality of the action of termination has yet to be determined and further, since wrongful termination can be restituted by awarding of damages, in the event the appellant is able to establish that the said termination was illegal and invalid, the learned Single Judge has rightly declined the reliefs prayed for by the appellant in the Section 9 petition.

The High Court decided that this Court, exercising its powers under Section 9 of the Arbitration Act, cannot go into the merits of the termination order and adjudicate upon a challenge to the same.

Comments

Post a Comment

Most viewed this month

Deposit Of Minimum 20% Fine/Compensation U/s 148 NI Act Mandatory

In OP(Crl.).No.348 OF 2019, T.K.SAJEEVAN vs FRANCIS T.CHACKO, the appeal was filed against the order of the lower court to deposit 25% of the fine before filling of appeal. The appellant argued that the deposit introduced through the Section 148 of the NI Act after amendment was directory in nature as it used the term 'may' while mentioning the issue of deposit. The Kerala High Court however disagreeing held that in view of the object of the Legislature while incorporating Section 148 into N.I. Act, the word 'may' will have to be read as 'shall'. The imposition of payment contemplated under Section 148 N.I. Act cannot be restricted to some prosecutions and evaded in other prosecutions. Since the amount directed to be deposited being compensation, undoubtedly, it is liable to be ordered to be deposited irrespective of the nature of the prosecution. Therefore, the word 'may' can only be taken to have the colour and meaning of 'shall' and there
Post a Comment
Read more

NCLT - Mere admission of receipt of money does not qualify as a financial debt

Cause Title : Meghna Devang Juthani Vs Ambe Securities Private Limited, National Company Law Tribunal, Mumbai, CP (IB) No. 974/MB-VI/2020 Date of Judgment/Order : 18.12.2023 Corum : Hon’ble Shri K. R. Saji Kumar, Member (Judicial) Hon’ble Shri Sanjiv Dutt, Member (Technical) Citied:  Carnoustie Management India Pvt. Ltd. Vs. CBS International Projects Private Limited, NCLT Swiss Ribbons Pvt. Ltd. & Anr vs. Union of India & Ors. (2019) Sanjay Kewalramani vs Sunil Parmanand Kewalramani & Ors. (2018) Pawan Kumar vs. Utsav Securities Pvt Ltd 2021 Background Application was filed under section 7 of the Insolvency and Bankruptcy Code, 2016 alleging loan of Rs, 1.70 cr is due. The Applicate identified herself as the widow and heir of the lender but could not produce any documents proving financial contract between her Late husband and the CD but claimed that the CD has accepted that money was received from her husband. The applicant subsequently filed rejoinder claiming the debt t
Post a Comment
Read more

Vanishing promoters and languishing shareholders

Over Rs 60,000 crore of shareholders’ wealth is stuck in 1,450 companies suspended by the stock exchanges. More importantly, near 100 per cent pledging of promoter holding appears to be common in many of these companies. This, almost rules out any chance of the companies bouncing back. The suspension is for non-compliance of the listing norms. Vanishing Companies - Definition As per the definition stipulated by SEBI, any listed company, which raised moneythrough initial public offer and, thereafter, stopped operations, did not file returnseither with the RoC or SEBI and did not exist on the registered premises wastermed as vanishing.There are provisions under Companies Act under which companies are termedvanishing companies on satisfying certain conditions. it is provided a companywould be deemed to be a vanishing company, if it satisfies all the conditions given below : a) Failed to file returns with Registrar of Companies (ROC) for a period of two years; b) Failed to fil
3 comments
Read more