Case Note & Summary
The case involves cross appeals under Section 37 of the Arbitration and Conciliation Act, 1996 arising from a common order dated 1 July 2019 passed by the learned District Judge-1, Pune on a Section 9 application filed by Hindustan Antibiotics Ltd. (HAL) against Centrient Pharmaceuticals India Pvt. Ltd. (formerly DSM Sinochem Pharmaceuticals India Pvt. Ltd.). The short question was whether interim measures under Section 9 are available to an award creditor during the pendency of Section 34 proceedings. The District Judge had partly allowed HAL's application, directing DSM to deposit 50% of the award amount. Both parties appealed: DSM aggrieved by the direction to deposit, and HAL aggrieved that the full amount was not directed. The High Court examined the scope of Section 9 and held that an award creditor can seek interim measures even after the award is passed and during Section 34 proceedings, as the award becomes enforceable and the court can grant protective relief to secure the award amount. The court noted that the power under Section 9 is not confined to pre-award stages but extends to post-award situations to ensure the efficacy of the arbitral process. The appeals were disposed of with directions to the District Judge to decide the Section 9 application afresh considering the principles laid down.
Headnote
A) Arbitration Law - Interim Measures - Section 9 of the Arbitration and Conciliation Act, 1996 - Availability to Award Creditor - The court considered whether an award creditor can seek interim measures under Section 9 during the pendency of Section 34 proceedings. The court held that Section 9 is available to an award creditor even after the award is passed and during Section 34 proceedings, as the award becomes enforceable and the court can grant protective relief to secure the award amount. (Paras 1-4)
Issue of Consideration
Whether prayers for interim measures under Section 9 of the Arbitration and Conciliation Act, 1996 are available to an award creditor during the pendency of Section 34 proceedings and when the award has become enforceable.
Final Decision
The High Court disposed of the appeals, setting aside the impugned order and remanding the matter to the District Judge to decide the Section 9 application afresh in light of the legal position that Section 9 is available to an award creditor during Section 34 proceedings.
Law Points
- Section 9 of the Arbitration and Conciliation Act
- 1996
- interim measures
- award creditor
- Section 34 proceedings
- enforceability of award
Case Details
2019 LawText (BOM) (07) 84
Arbitration Appeal (St.) No. 19737 of 2019 with Arbitration Appeal No. 20 of 2019 with Civil Application No. 24 of 2019
Mr. Sanjiv Puri, Senior Advocate with Mr. Dinesh Pednekar, Mr. Ashish Prasad, Mr. Alok Jain, Mr. Avinash Tripathi, Mr. Chanakya Keshwani i/b. Economic Laws Practice for Appellant in ARAP (St.) 19737/19; Mr. Ray Choudhari, Senior Advocate i/b. Mr. D.G. Dhanure for Respondents in ARAP (St.) 19737/19 and for Appellant in ARAP 20/19 with Civil Application No. 24/19
Centrient Pharmaceuticals India Pvt. Ltd. (formerly DSM Sinochem Pharmaceuticals India Pvt. Ltd.) in ARAP (St.) 19737/2019; Hindustan Antibiotics Ltd. in ARAP 20/2019
Hindustan Antibiotics Ltd. in ARAP (St.) 19737/2019; DSM Sinochem Pharmaceuticals India Pvt. Ltd. (formerly DSM Antiinfectives (India) Ltd.) in ARAP 20/2019
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Nature of Litigation
Cross appeals under Section 37 of the Arbitration and Conciliation Act, 1996 challenging an order on a Section 9 application for interim measures.
Remedy Sought
DSM sought setting aside of the direction to deposit 50% of the award amount; HAL sought direction to deposit the full award amount.
Filing Reason
The District Judge partly allowed HAL's Section 9 application, directing DSM to deposit 50% of the award amount, which both parties challenged.
Previous Decisions
The learned District Judge-1, Pune passed an order dated 1 July 2019 on Civil Miscellaneous Application No. 746 of 2015 filed by HAL under Section 9 of the Act, directing DSM to deposit 50% of the majority award amount within 30 days.
Issues
Whether interim measures under Section 9 of the Arbitration and Conciliation Act, 1996 are available to an award creditor during the pendency of Section 34 proceedings and when the award has become enforceable.
Submissions/Arguments
DSM argued that Section 9 is not available post-award and that the direction to deposit 50% was unjustified.
HAL argued that the full award amount should have been directed to be deposited to secure the award.
Ratio Decidendi
Section 9 of the Arbitration and Conciliation Act, 1996 is available to an award creditor even after the award is passed and during the pendency of Section 34 proceedings, as the award becomes enforceable and the court can grant interim measures to secure the award amount.
Judgment Excerpts
A short question which arises for consideration in these proceedings is as to whether prayers for interim measures under Section 9 of the Arbitration and Conciliation Act, 1996 are available to an award creditor, during the pendency of the Section 34 proceedings and in a situation that the award has become enforceable.
Procedural History
HAL filed Civil Miscellaneous Application No. 746 of 2015 under Section 9 of the Act before the District Judge-1, Pune. The District Judge partly allowed the application on 1 July 2019, directing DSM to deposit 50% of the award amount. Both parties filed cross appeals under Section 37 of the Act before the Bombay High Court, which were heard and disposed of on 31 July 2019.
Acts & Sections
- Arbitration and Conciliation Act, 1996: Section 9, Section 34, Section 37
