Skip to main content

Hearing for interim relief heard by court even after constitution of Arbitral Tribunal

Cause Title : Jaya Industries Vs. Mother Dairy Calcutta & Anr., AP 85 of 2023, Calcutta High Court

Date of Judgment/Order : 20.07.2023

Corum : Hon’ble Justice Moushumi Bhattacharya

Citied: Arcelor Mittal Nippon Steel India Limited vs. Essar Bulk Terminal Limited; (2022) 1 SCC 712

Background

After filing of the application on 10th February, 2023, a Co-ordinate Bench passed an order on 15th March, 2023 directing the respondents to show-cause as to why the respondents should not be directed to deposit a sum of Rs. 5,95,40,498.60/-. Affidavits were exchanged between the parties and recorded in the orders passed by the Court on 10th April, 2023, 1st May, 2023 and 14th June, 2023. 

The petitioner has filed the present application for interim relief under section 9 of The Arbitration and Conciliation Act, 1996.

Counsel appearing for the petitioner wants this Court to continue to hear the petition for interim relief while counsel appearing for the respondents relies on section 9(3) of the Act to put emphasis on the bar on the Court from entertaining an application under section 9(1) of the Act subject to the efficacy of the remedy under section 17 before the arbitral tribunal.

Judgment

The High Court observed that Section 9(1) permits a party before or during arbitral proceedings or at any time after making of the arbitral award but before enforcement of the award to apply to a Court for interim measures while Section 9(3) puts certain conditionality to the relief under Section 9(1) and states that the Court shall not entertain an application under sub-section (1) once the arbitral tribunal has been constituted, unless the Court finds that circumstances exist which may not render the remedy provided under section 17 efficacious.

The Supreme Court in Arcelor Mittal (supra) considered the expression “entertain” and held that if the Court had already applied its mind to the issues raised, then the Court can proceed to adjudicate the application under section 9(1) notwithstanding the bar of section 9(3).

In light of the dictum in Arcelor Mittal, the Court has to determine whether the present application can continue to be entertained despite the arbitral tribunal being constituted on 17th May, 2023. This would depend on whether the Court has applied its mind to the present application which is required to circumvent the mandate of section 9(3) of the Act.

Section 9(3) aims to prevent multiple levels of hearing for the same relief. The section envisages a clockwise motion of considerations of the matter after an arbitral tribunal has been constituted. The hands of the clock however stop to tick where the Court has already gone into the matter. Permitting the parties to re-agitate the matter in such cases before the arbitral tribunal would in effect rewind the clock which is not what section 9(3) intends.

This Court is of the view that the Court has already entertained the matter and thought it fit to direct affidavits to consider the dispute further. This, hence, is certainly a case where the Court has applied its mind to the matter and consequently “entertained” the application filed by the petitioner. The process of consideration has indeed commenced and the subsequent constitution of the Arbitral Tribunal will not act as a fetter on the Court to continue hearing the application.

Comments

Post a Comment

Most viewed this month

Appellate authorities under Special Statutes cannot be asked to condone delay

Madras High Court in R.Gowrishankar vs. The Commissioner of Service Tax has held that Appellate authorities cannot be asked to condone the delay, beyond the extended period of limitation A Division Bench comprising of Justices S. Manikumar and D. Krishnakumar, made this observation while considering an appeal filed against Single Bench order declining to set aside the order made in the condone delay petition filed by the petitioner to condone 223 days in filing the appeal before the Commissioner of Service Tax (Appeals). Article referred: http://www.livelaw.in/appellate-authorities-special-statutes-cannot-asked-condone-delay-beyond-extended-period-limitation-madras-hc/
Post a Comment
Read more

'Seize assets to pay damages to accident victim'

Her story might be an inspiration for the physically challenged but justice has remained elusive for her. In 2008, a bus accident left research engineer S Thenmozhi, 30, paraplegic. In April 2013, the motor accident claims tribunal directed the Tamil Nadu State Transport Corporation (TNSTC) to provide her a compensation of 57.9 lakh. However, TNSTC refused to budge and on Tuesday a city court ordered attaching of movable assets of the transport corporation. Thenmozhi was employed in C-DOT, a telecom technology development centre in Bangalore. On July 21, 2008, she was coming to Chennai in a private bus. Around 2am, the bus had a flat tyre and the driver parked it on the left side of the road near Pallikonda in Vellore district on the Bangalore-Chennai highway. While the tyre was being changed, a TNSTC bus of Dharmapuri division hit the stationary bus. The rear part of the bus was smashed and passengers were injured. Thenmozhi who had a seat at the back of the bus suffered...
Post a Comment
Read more

Mumbai ITAT rules income of offshore discretionary trust is subject to tax in India

The Mumbai Income Tax Appellate Tribunal (ITAT) has recently determined the following issue in the affirmative in the case of Manoj Dhupelia: Should the income of an offshore discretionary trust be subject to tax in India, if no distributions have been made to beneficiaries in India? The question arose from appeals filed by individual beneficiaries in relation to a Lichtenstein-based trust, the Ambrunova Trust and Merlyn Management SA (the Trust) with the ITAT. It is important to note that the individuals in this case were amongst those first identified by the Government of India (GOI) as holding undeclared bank accounts in Lichtenstein. The ITAT ruling raises the following issues: Taxation of Trust Corpus: ITAT classified the corpus of the trust as "undisclosed income" and declared it taxable in the hands of the beneficiaries. Taxation of Undistributed Income: ITAT refused to draw a distinction between the corpus and undistributed income from the trust and declared i...
Post a Comment
Read more