Case Note & Summary
The Bombay High Court was hearing an arbitration petition under Section 9 of the Arbitration and Conciliation Act, 1996, filed by the Mumbai Metropolitan Region Development Authority (MMRDA) against Reliance Energy Limited, Veolia Transport S.A., and Mumbai Metro One Private Limited. The dispute arose from a concession agreement for the Versova-Andheri-Ghatkopar metro corridor, where MMRDA was the project implementation agency. The Government of Maharashtra had notified initial fares on 03/09/2013. However, on 29/05/2014, the board of respondent No.3 (Mumbai Metro One Pvt. Ltd.) passed a resolution revising the fares upward. MMRDA sought a stay on the implementation of that resolution and an injunction restraining the respondents from charging fares higher than the initially agreed and notified fares. The court examined the terms of the concession agreement and found that fare fixation was subject to government notification. The court held that MMRDA had made out a prima facie case, the balance of convenience was in favor of granting interim relief to protect public interest, and irreparable injury would be caused if the fare revision was allowed pending arbitration. The court accordingly stayed the board resolution and restrained the respondents from revising or charging fares higher than those notified on 03/09/2013.
Headnote
A) Arbitration - Interim Measures - Section 9 of the Arbitration and Conciliation Act, 1996 - Stay of Board Resolution - Petitioner sought stay of board resolution dated 29/05/2014 revising fares - Court held that a prima facie case exists in favor of petitioner as the concession agreement provided for fare fixation by government - Balance of convenience lies in maintaining status quo to protect public interest and prevent irreparable injury - Held that interim relief granted restraining respondents from charging higher fares (Paras 1-38).
Issue of Consideration
Whether the court should grant interim relief under Section 9 of the Arbitration and Conciliation Act, 1996, staying the implementation of a board resolution revising fares pending arbitration.
Final Decision
The court allowed the petition and granted interim relief. The effect, implementation and/or operation of the board resolution dated 29/05/2014 passed by respondent No.3 was stayed. The respondents were restrained from revising/charging the amount higher than the initial fares agreed as per terms of the concession agreement and notified by the Government of Maharashtra vide notification dated 03/09/2013.
Law Points
- Section 9 of the Arbitration and Conciliation Act
- 1996
- Interim measures
- Prima facie case
- Balance of convenience
- Irreparable injury
- Concession agreement
- Fare fixation
- Public interest
Case Details
2014 LawText (BOM) (06) 48
Arbitration Petition (L) No.890 of 2014
E. P. Bharucha, Dr Birendra Saraf, Firoze Bharucha, Amitabh Sharma, Raj Panchmalia, Peshwan Jehangir, Shiranshu Thplyal, Ms Anushka Sarda, Shreya Rastogi for Petitioner; Iqbal Chagla, Ms Anjali Chandurkar, D.J. Kakalia, Ms Bhavna Singh, Paresh Patkar for Respondent No.1; Janak Dwarkadas for Respondent No.2; J.J. Bhatt for Respondent No.3
Mumbai Metropolitan Region Development Authority
Reliance Energy Limited, Veolia Transport S.A., Mumbai Metro One Private Limited
Subscribe to unlock Case Details (Citation, Judge, Date & more)
Subscribe Now
Nature of Litigation
Arbitration petition under Section 9 of the Arbitration and Conciliation Act, 1996 seeking interim relief pending arbitration.
Remedy Sought
Petitioner sought stay of board resolution dated 29/05/2014 and injunction restraining respondents from revising/charging fares higher than initial agreed fares.
Filing Reason
Respondent No.3 passed a board resolution revising fares upward, contrary to the concession agreement which provided for fare fixation by government notification.
Previous Decisions
Government of Maharashtra notified initial fares on 03/09/2013.
Issues
Whether the court should grant interim relief under Section 9 of the Arbitration and Conciliation Act, 1996, staying the implementation of a board resolution revising fares pending arbitration.
Submissions/Arguments
Petitioner argued that the concession agreement required fare fixation by government notification and the board resolution was in breach.
Respondents contended that the agreement permitted fare revision and the board acted within its rights.
Ratio Decidendi
Under Section 9 of the Arbitration and Conciliation Act, 1996, the court may grant interim measures if the petitioner establishes a prima facie case, balance of convenience in its favor, and likelihood of irreparable injury. Here, the concession agreement indicated that fare fixation was subject to government notification, and the board resolution unilaterally revising fares prima facie breached the agreement. Public interest also favored maintaining the notified fares pending arbitration.
Judgment Excerpts
By this petition filed under section 9 of the Arbitration and Conciliation Act, 1996, the petitioner seeks that the effect, implementation and/or operation of the board resolution dated 29/05/2014 passed by the respondent No.3 (Mumbai Metro One Pvt. Ltd.) be stayed and injunction restraining the respondents from revising/charging the amount higher than the initial fares agreed by the respondents as per terms of the concession agreement and notified by the Government of Maharashtra vide notification dated 03/09/2013.
Procedural History
The petition was filed under Section 9 of the Arbitration and Conciliation Act, 1996. Judgment was reserved on June 19, 2014, and delivered on June 24, 2014.
Acts & Sections
- Arbitration and Conciliation Act, 1996: Section 9
- Indian Tramways Act, 1886:
- Mumbai Metropolitan Region Development Authority Act, 1974:
- Companies Act, 1956:
