Case Note & Summary
The case involves a dispute between United Spirits Limited (Petitioner) and Delta Distilleries Limited (Respondent No.1) arising from a bottling agreement. The dispute was referred to arbitration in 2002. During the arbitration proceedings, the Petitioner applied to the arbitral tribunal for directions to the Respondents to produce Sales Tax Returns and Assessment Orders for the years 1995-1996 to 2001-2002. The learned Arbitrator, Hon'ble Smt. Justice Sujata Manohar (Retd.), by order dated 27th March 2007, rejected the application for production of returns but allowed it with a direction to produce the Assessment Orders. The Respondents failed to comply with this direction. The Petitioner then filed the present petition under Section 27 of the Arbitration and Conciliation Act, 1996 seeking court assistance to enforce the arbitral order. The court framed the issue as whether it can exercise powers under Section 27 for implementation of orders passed by the arbitrators. The Petitioner argued that Section 27 should be interpreted broadly to include enforcement of arbitral directions. The Respondents contended that Section 27 is limited to taking of evidence and does not cover enforcement. The court analyzed the language of Section 27 and held that it is confined to court assistance in taking evidence, such as summoning witnesses or producing documents, and does not extend to implementing or enforcing interim orders of the tribunal. The court noted that the remedy for non-compliance of arbitral orders lies under Section 17 read with Section 17(2) or under Section 9 of the Act. The court dismissed the petition, holding that Section 27 cannot be used for the purpose sought by the Petitioner.
Headnote
A) Arbitration Law - Court's Power under Section 27 - Scope of Section 27 - Section 27 of the Arbitration and Conciliation Act, 1996 - The court examined whether it can enforce interim orders of the arbitral tribunal under Section 27. Held that Section 27 is limited to court assistance in taking evidence and does not extend to implementation or enforcement of arbitral directions. The remedy for non-compliance lies under Section 17 read with Section 17(2) or Section 9 of the Act. (Paras 1, 5-7) B) Arbitration Law - Interim Orders - Enforcement - Sections 17, 17(2), 9 of the Arbitration and Conciliation Act, 1996 - The court clarified that if a party fails to comply with an interim order of the arbitral tribunal, the aggrieved party may approach the court under Section 9 for interim measures or under Section 17(2) for enforcement of the tribunal's orders. Section 27 cannot be used as a substitute for these provisions. (Paras 5-7)
Issue of Consideration
Whether this Court can exercise its powers under Section 27 of the Arbitration and Conciliation Act, 1996 for implementation of the Orders passed by the learned Arbitrators, which are not being complied with by the parties.
Final Decision
The petition is dismissed. The court held that Section 27 of the Arbitration and Conciliation Act, 1996 is limited to court assistance in taking evidence and does not extend to implementation or enforcement of interim orders passed by the arbitral tribunal. The remedy for non-compliance lies under Section 17 read with Section 17(2) or under Section 9 of the Act.
Law Points
- Section 27 of the Arbitration and Conciliation Act
- 1996 is limited to court assistance in taking evidence and does not extend to enforcement or implementation of interim orders passed by the arbitral tribunal
- Court cannot use Section 27 to enforce compliance with arbitral directions
- Remedy for non-compliance of arbitral orders lies under Section 17 read with Section 17(2) of the Act or under Section 9 of the Act
