Case Note & Summary
This is an appeal against an order of a learned single Judge of the Bombay High Court admitting the Appellant's petition under Section 30 of the Arbitration Act, 1940, and setting aside an interim award of the learned sole Arbitrator. The Appellant, Manganese Ore (India) Limited, a company registered under the Companies Act, 1956, had entered into an arbitration agreement with the Respondent, Ram Bahadur Thakur Limited, also a company registered under the Companies Act, 1956. During the arbitration proceedings, the Arbitrator passed an interim award granting certain relief. The Respondent challenged this interim award before the single Judge, who set it aside on the ground that the Arbitrator had no jurisdiction to grant interim relief. The Appellant appealed against this order. The Division Bench, consisting of Dr. S. Radhakrishnan and S.J. Vazifdar, JJ., heard the appeal. The court examined the provisions of the Arbitration Act, 1940, particularly Section 41(b), which empowers the court to grant interim relief in arbitration proceedings. The court held that the Arbitrator had the power to grant interim relief under Section 41(b) of the Act, as the said provision applies to arbitration proceedings as if they were proceedings in a suit. The court found that the interim award was valid and the single Judge erred in setting it aside. The appeal was allowed, the order of the single Judge was set aside, and the interim award was restored. The court directed that the arbitration proceedings continue and the final award be made expeditiously.
Headnote
A) Arbitration Law - Interim Award - Power of Arbitrator to Grant Interim Relief - Section 41(b) of the Arbitration Act, 1940 - The court held that an arbitrator has the power to grant interim relief under Section 41(b) of the Act, which applies to arbitration proceedings as if they were proceedings in a suit. The interim award was set aside by the single Judge on the ground that the arbitrator had no jurisdiction to grant such relief. The Division Bench reversed this, holding that the arbitrator's power to grant interim relief is well-established and the award was valid. (Paras 1-5) B) Arbitration Law - Setting Aside Award - Section 30 of the Arbitration Act, 1940 - The court considered whether the interim award was liable to be set aside under Section 30. The single Judge had set aside the award, but the Division Bench found that the arbitrator acted within his jurisdiction and the award did not suffer from any error apparent on the face of the record. The appeal was allowed and the order of the single Judge was set aside. (Paras 1-5)
Issue of Consideration
Whether the learned single Judge erred in setting aside the interim award of the sole Arbitrator under Section 30 of the Arbitration Act, 1940, and whether the Arbitrator had the power to grant interim relief under Section 41(b) of the Act.
Final Decision
The appeal is allowed. The order of the learned single Judge dated 2nd May, 2006 is set aside. The interim award of the learned sole Arbitrator is restored. The arbitration proceedings shall continue and the final award shall be made expeditiously.
Law Points
- Arbitrator's power to grant interim relief
- Section 41(b) of Arbitration Act
- 1940
- Section 30 of Arbitration Act
- Interim award
- Appeal against order setting aside award
