Case Note & Summary
The Arbitration Petition under Section 37 of the Arbitration and Conciliation Act, 1996 was filed challenging the Arbitral Tribunal's interim order dated 31-05-2018 passed under Section 17. The Tribunal had directed the petitioner to furnish an undertaking not to alienate, encumber, or part with possession of the subject property or any other unencumbered personal property to the extent of Rs.25 crores until the arbitration concluded. The petitioner, a 95-year-old individual, had executed a Development Agreement dated 23-06-2006 with two developer companies for the development of his leasehold properties at Pali Hill, Mumbai. Under the agreement, the developers were to receive a share of the developed area and pay a consideration of Rs.10 crores. Disputes arose due to alleged non-performance, and the claimant (one of the developers) had previously sought interim injunctions under Section 9, which were dismissed by the Bombay High Court and affirmed by the Supreme Court. A Section 11 petition was withdrawn, a Commercial Suit was filed, and the Supreme Court eventually knocked out the claim for specific performance, directed a payment of Rs.20 crores to the claimant, and referred the question of damages to arbitration. In the present petition, the High Court noted inconsistencies in the impugned order and was initially inclined to remand, but both sides urged the court to decide the matter on merits. The judgment text is incomplete, and the final decision of the court is not available.
Issue of Consideration
Whether the Arbitral Tribunal's order dated 31-05-2018, directing the petitioner to furnish an undertaking not to alienate, encumber, or part with possession of property worth Rs.25 crores, was justified under Section 17 of the Arbitration and Conciliation Act, 1996.
Case Details
2019 LawText (BOM) (03) 205
Arbitration Petition No. 1012 of 2018
Rajeev Kumar, Chirag Shah, J.J.Shah, Aspi Chinoy, Zal Andhyarujina, Avrup Dasgupta, Rakesh Reddy, Shrey Shah, Jhangiani Narula & Associates, Rahul Chitnis, Akshay Shah
Prajita Developers Pvt. Ltd., Gold Beam Construction Private Limited
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Nature of Litigation
Arbitration Petition under Section 37 of the Arbitration and Conciliation Act, 1996 challenging the interim order of the Arbitral Tribunal passed under Section 17 of the Act.
Remedy Sought
Petitioner sought to set aside the Arbitral Tribunal's order dated 31-05-2018 directing him to furnish an undertaking not to alienate, encumber or part with possession of property to the extent of Rs.25 crores.
Filing Reason
Petitioner contended that the Arbitral Tribunal's order was unjustified and suffered from inconsistencies.
Previous Decisions
Claimant's Section 9 petition (No. 829 of 2015) was dismissed by the Bombay High Court on 14-01-2016, affirmed by the Supreme Court; Section 11 petition was withdrawn; Commercial Suit filed; Supreme Court by order dated 30-08-2017 knocked out specific performance, directed payment of Rs.20 crores, and referred damages question to arbitration.
Issues
Whether the impugned order dated 31-05-2018 passed by the Arbitral Tribunal under Section 17 of the Arbitration and Conciliation Act, 1996, directing the petitioner to furnish an undertaking, is justified.
Submissions/Arguments
Both senior counsel for the parties opposed remand and requested the court to decide the petition on merits.
Judgment Excerpts
At the outset, when I went through the impugned order, I found that there are several inconsistencies therein. I was therefore inclined to set aside the impugned order and remand it back to the Arbitral Tribunal for a fresh decision.
both the learned Senior Counsel appearing in the matter ... stated before me that they do not seek a remand and would rather have me decide whether the order passed by the Tribunal is justified or otherwise.
Procedural History
Development Agreement dated 23-06-2006 executed; Assignment dated 20-04-2010; Claimant filed Arbitration Petition No. 829 of 2015 under Section 9 of the Arbitration and Conciliation Act, 1996, which was dismissed by Bombay High Court on 14-01-2016; Appeal dismissed by Supreme Court on 16-03-2016; Section 11 petition filed on 12-09-2015, withdrawn on 25-07-2016/05-08-2016; Commercial Suit No.295 of 2016 filed; Supreme Court order dated 30-08-2017 in SLP; Clarification order dated 21-09-2017; Arbitral Tribunal passed order dated 31-05-2018 under Section 17; Present Section 37 petition filed in 2018; Hearing on 05-03-2019; Judgment reserved on 05-03-2019; Pronounced on 25-03-2019.
Acts & Sections
- Arbitration and Conciliation Act, 1996: Section 9, Section 11, Section 17, Section 37
