Case Note & Summary
The appellant, Board of Control for Cricket in India (BCCI), entered into a franchise agreement with the respondent, Deccan Chronicle Holdings Limited, on 10 April 2008, granting the respondent the right to own and operate a team in a league. On 14 September 2012, BCCI terminated the franchise agreement. The respondent filed Arbitration Petition (L) No. 1238 of 2012 under Section 9 of the Arbitration and Conciliation Act, 1996, seeking interim measures. On 1 October 2012, the High Court passed a conditional order staying the termination, subject to the respondent furnishing a bank guarantee of Rs. 100 Crores by 9 October 2012, later extended to 12 October 2012. On 12 October 2012, the respondent applied for further extension, which was declined by the High Court. The arbitral tribunal convened a meeting at 5:00 p.m. on the same day, and the respondent filed an application under Section 17 of the Act seeking continuation of the status quo. The tribunal passed an order continuing the status quo until the next hearing on 17 October 2012, over the appellant's objection. The appellant appealed under Section 37 of the Act, arguing that the termination had already taken effect and that the tribunal's order amounted to granting mandatory relief. The High Court dismissed the appeal, holding that the tribunal's order was merely an interim measure to maintain the status quo pending hearing of the Section 17 application and did not finally determine the rights of the parties. The court noted that the tribunal had not granted any substantive relief but had only continued the existing status quo for a short period to allow the appellant to file a response. The appeal was dismissed with no order as to costs.
Headnote
A) Arbitration Law - Interim Measures - Section 17 of Arbitration and Conciliation Act, 1996 - Continuation of Status Quo - The arbitral tribunal continued the status quo order granted by the High Court under Section 9 of the Act, pending hearing of the respondent's application under Section 17. The appellant objected, arguing that termination had already taken effect and that granting status quo would amount to mandatory relief. The tribunal held that it was in the interest of justice to continue the status quo for a short period to allow the appellant to file a response. The High Court dismissed the appeal, holding that the tribunal's order was not a final determination but an interim measure to maintain the status quo until the next hearing. (Paras 1-5)
Issue of Consideration
Whether the arbitral tribunal could continue the status quo order granted by the High Court under Section 9 of the Arbitration and Conciliation Act, 1996, pending hearing of the respondent's application under Section 17 of the Act.
Final Decision
The High Court dismissed the appeal, holding that the arbitral tribunal's order continuing the status quo was an interim measure to maintain the status quo until the next hearing and did not finally determine the rights of the parties. The court found no error in the tribunal's exercise of jurisdiction. No order as to costs.
Law Points
- Arbitral tribunal has jurisdiction to continue status quo order passed by court under Section 9 pending hearing of Section 17 application
- Section 17 of Arbitration and Conciliation Act
- 1996
- Section 37 of Arbitration and Conciliation Act
Case Details
2012 LawText (BOM) (10) 66
Arbitration Appeal No. 46 of 2012
Mr. T.N. Subramanian, Sr. Counsel along with Mr. P.R. Raman, Mrs. Viraj Maniar, Mrs. Akhila Premkumar, Mrs. Misab Daba, Mr. Nikhil Karnawat i/by M/s. Maniar Srivastava Associates for the applicant/appellant; Mr. S.U. Kamdar, Sr. counsel along with Mr. Zal Andhyarujina along with Mr. Arcot Chandrashekar i/by M/s. Dave & Girish & Co. for respondent.
Board of Control for Cricket in India
Deccan Chronicle Holdings Limited
Subscribe to unlock Case Details (Citation, Judge, Date & more)
Subscribe Now
Nature of Litigation
Appeal under Section 37 of the Arbitration and Conciliation Act, 1996 against an order of the arbitral tribunal continuing status quo pending hearing of an application under Section 17 of the Act.
Remedy Sought
The appellant sought to set aside the arbitral tribunal's order continuing the status quo granted by the High Court under Section 9 of the Act.
Filing Reason
The appellant challenged the arbitral tribunal's order continuing the status quo, arguing that the termination of the franchise agreement had already taken effect and that the order amounted to granting mandatory relief.
Previous Decisions
The High Court had passed a conditional order on 1 October 2012 under Section 9 of the Act, staying the termination subject to the respondent furnishing a bank guarantee of Rs. 100 Crores. The time to furnish the guarantee was extended to 12 October 2012, but further extension was declined. The arbitral tribunal then continued the status quo on 12 October 2012.
Issues
Whether the arbitral tribunal had jurisdiction to continue the status quo order passed by the High Court under Section 9 of the Arbitration and Conciliation Act, 1996, pending hearing of the respondent's application under Section 17 of the Act.
Submissions/Arguments
Appellant argued that the termination of the contract had already taken effect and that granting status quo would virtually amount to granting mandatory relief, which the tribunal should not do without hearing the merits.
Respondent argued that the status quo was necessary to maintain the position pending the hearing of its Section 17 application and that the tribunal's order was only an interim measure.
Ratio Decidendi
An arbitral tribunal has the power under Section 17 of the Arbitration and Conciliation Act, 1996 to continue a status quo order granted by a court under Section 9 of the Act, pending the hearing of an application for interim measures. Such an order is an interim measure to maintain the status quo and does not amount to a final determination of rights.
Judgment Excerpts
From the perusal of the order passed by the arbitral tribunal, it is clear that the prayer for continuation of status quo order prayed for by the respondent was strongly objected by the appellant.
The arbitral tribunal however took a view that when the status quo had been granted by this court and was operative till 5.00 p.m. of 12th October, 2012, it would be in the interest of justice if it was directed to be continued for some time by giving an opportunity to the BCCI to file its response to the application.
Procedural History
The respondent filed Arbitration Petition (L) No. 1238 of 2012 under Section 9 of the Arbitration and Conciliation Act, 1996, seeking interim measures. On 1 October 2012, the High Court passed a conditional order staying termination subject to furnishing a bank guarantee. Time was extended to 12 October 2012, but further extension was declined. On 12 October 2012, the respondent filed an application under Section 17 before the arbitral tribunal, which continued the status quo. The appellant appealed under Section 37 of the Act. The High Court dismissed the appeal on 18 October 2012.
Acts & Sections
- Arbitration and Conciliation Act, 1996: Section 17, Section 37, Section 9
