Case Note & Summary
The petitioner, Mitsui O.S.K. Lines Limited, a shipping line, filed a Chamber Summons seeking a declaration that it is not required to renew a bank guarantee dated 10th December, 2002, and that the bank guarantee stands discharged. The bank guarantee was furnished pursuant to an interim order under Section 9 of the Arbitration and Conciliation Act, 1996, in Arbitration Petition No. 156 of 2002, which the petitioner had filed against the respondent, Orient Ship Agency Pvt. Ltd., its agent. The dispute arose from an agreement dated 1st April, 1964, under which the respondent imported containers into India between 28th November, 1999 and 26th November, 2001, availing of customs duty exemption under a notification dated 16th March, 1994, read with a public notice dated 4th October, 2005, by executing bonds to re-export the containers within six months. The petitioner initially obtained an interim order under Section 9 requiring the respondent to furnish a bank guarantee. Subsequently, the arbitral tribunal made an award on 2nd February, 2009. The petitioner then filed the Chamber Summons for modification or cancellation of the interim order, arguing that the award had been made and that the bank guarantee should be discharged. The Single Judge (S.J. Vazifdar, J.) initially dismissed the Chamber Summons on 14th July, 2010, holding that there were no change in circumstances and that the previous orders were binding. The petitioner appealed, and the Division Bench, by order dated 8th November, 2011, set aside the dismissal and remanded the matter for de novo consideration, holding that the effect of the arbitral award and the pendency of proceedings under Section 48 for enforcement of the foreign award ought to have been considered. The Single Judge then heard the matter de novo. The court noted that the petitioner sought a declaration that it is not required to renew the bank guarantee and that it stands discharged. The judgment sets out the previous orders and the background of the case, including the bonds executed by the respondent for duty-free import of containers. The court's analysis focused on whether the bank guarantee should be discharged in light of the arbitral award and the enforcement proceedings. The decision is not fully provided in the extracted text, but the court was considering the effect of the award and the Section 48 proceedings on the interim order.
Headnote
A) Arbitration Law - Interim Measures - Section 9 of the Arbitration and Conciliation Act, 1996 - Modification of Interim Order - The court considered whether a bank guarantee furnished under an interim order under Section 9 must be renewed after the arbitral award has been passed. The Division Bench had remanded the matter for de novo consideration, holding that the effect of the award and the pendency of enforcement proceedings under Section 48 must be taken into account. (Paras 1-3) B) Arbitration Law - Bank Guarantee - Discharge - Section 9 of the Arbitration and Conciliation Act, 1996 - The petitioner sought a declaration that it is not required to renew the bank guarantee and that it stands discharged. The court examined the previous orders and the arbitral award dated 2nd February, 2009. (Paras 1, 4-5)
Issue of Consideration
Whether the petitioner is required to renew a bank guarantee furnished pursuant to an interim order under Section 9 of the Arbitration and Conciliation Act, 1996, after the arbitral award has been made and the award is being enforced under Section 48 of the Act.
Final Decision
Not mentioned in the extracted text. The judgment appears to be ongoing or the decision is not fully provided.
Law Points
- Arbitration and Conciliation Act
- 1996
- Section 9
- Section 34
- Section 48
- Bank Guarantee
- Interim Order
- Modification
- Discharge
- Change in Circumstances
- Arbitral Award
