Case Note & Summary
The petitioner, Chetan Iron LLP, filed a petition under Section 9 of the Arbitration and Conciliation Act, 1996, seeking interim measures pending arbitration against the respondent, NRC Ltd. The dispute arose from a contract dated 21 September 2021 for the sale of scrap materials, including reinforcement steel, structural steel, stainless steel, and aluminum. The contract was on an 'as is where is basis' and 'ground clearance basis', with a validity up to 30 June 2022. On 26 October 2021, the parties added a note limiting non-plant and machinery items to 200 MT. The petitioner alleged that the respondent prevented it from lifting scrap and threatened to sell the scrap to third parties, thereby breaching the contract. The petitioner sought an injunction restraining the respondent from selling the scrap to others and a direction to allow lifting. The respondent contended that the petitioner failed to lift scrap as per the contract and that the contract was terminated. The court, after considering the submissions, found that the petitioner had made out a prima facie case and that the balance of convenience was in favor of granting interim relief to preserve the subject matter of the arbitration. The court directed the respondent to allow the petitioner to lift the scrap as per the contract and restrained the respondent from selling the scrap to third parties pending the arbitral proceedings.
Headnote
A) Arbitration - Interim Measures - Section 9 of Arbitration and Conciliation Act, 1996 - Prima Facie Case - Dispute arose from a scrap sale contract where respondent allegedly prevented petitioner from lifting scrap and threatened to sell to third parties - Court held that petitioner made out a prima facie case and balance of convenience was in favor of granting interim relief to protect the subject matter of arbitration (Paras 1-24).
Issue of Consideration
Whether the petitioner is entitled to interim relief under Section 9 of the Arbitration and Conciliation Act, 1996, restraining the respondent from selling the contracted scrap to third parties and allowing the petitioner to lift the scrap pending arbitration.
Final Decision
The court allowed the petition and granted interim relief, directing the respondent to allow the petitioner to lift the scrap as per the contract and restraining the respondent from selling the scrap to third parties pending the arbitral proceedings.
Law Points
- Interim measures under Section 9 of Arbitration and Conciliation Act
- 1996
- Contractual interpretation of 'as is where is basis' and 'ground clearance basis'
- Prima facie case and balance of convenience
