Case Note & Summary
The petitioner, M/s. AFCONS Infrastructure Ltd., filed a petition under Section 9 of the Arbitration and Conciliation Act, 1996 seeking directions against the respondent, the Board of Trustees of the Port of Mumbai, to deposit an arbitral award amount of Rs. 141,12,44,247 in court and to permit the petitioner to withdraw the same upon furnishing a bank guarantee. The petitioner contended that the challenge to the award by the respondent under Section 34 of the Act was frivolous and that the award was highly unlikely to be unsettled. The court examined the applicability and ambit of Section 9, which allows a party to apply for interim measures before or during arbitral proceedings or at any time after the making of the arbitral award but before it is enforced under Section 36. The court noted that Section 9 specifically lists the types of interim measures that can be granted, including preservation, interim custody or sale of goods, securing the amount in dispute, detention, preservation or inspection of property, interim injunction, appointment of a receiver, or such other interim measure of protection as may appear just and convenient. The court held that the section does not mandate or even allow deposit of the award amount pending its challenge under Section 34. The relief sought by the petitioner, i.e., deposit of the award amount and permission to withdraw it, does not fall within the scope of Section 9, which is limited to interim measures of protection in respect of the subject matter of the arbitration agreement and property which is the subject matter of the arbitration agreement. Consequently, the court dismissed the petition, holding that the petitioner was not entitled to the reliefs claimed under Section 9.
Headnote
A) Arbitration - Interim Measures - Section 9 of the Arbitration and Conciliation Act, 1996 - Deposit of Award Amount - The court held that Section 9 does not mandate or allow deposit of the award amount pending its challenge under Section 34. The section only allows interim measures of protection in respect of the subject matter of the arbitration agreement and property which is the subject matter of the arbitration agreement, not the award amount itself. (Paras 2-3) B) Arbitration - Interim Measures - Section 9 of the Arbitration and Conciliation Act, 1996 - Scope - The court interpreted Section 9 to permit only interim measures of protection such as preservation, interim custody or sale of goods, securing the amount in dispute, detention, preservation or inspection of property, interim injunction, appointment of receiver, or such other interim measure of protection as may appear just and convenient. The award amount is not covered under these provisions. (Para 2)
Issue of Consideration
Whether the court can order the respondent to deposit the arbitral award amount in court and permit the petitioner to withdraw it upon furnishing a bank guarantee, pending the hearing of a petition under Section 34 of the Arbitration and Conciliation Act, 1996 challenging the award.
Final Decision
The court dismissed the petition, holding that Section 9 of the Arbitration and Conciliation Act, 1996 does not mandate or allow deposit of the award amount pending its challenge under Section 34. The section only allows interim measures of protection in respect of the subject matter of the arbitration agreement and property which is the subject matter of the arbitration agreement, not the award amount itself.
Law Points
- Section 9 of the Arbitration and Conciliation Act
- 1996 does not provide for deposit of the award amount pending challenge under Section 34
- Section 9 only allows interim measures of protection in respect of the subject matter of the arbitration agreement
- The court cannot order deposit of the award amount under Section 9 as it is not an interim measure of protection under the section
