High Court of Karnataka Allows Appeal Under Section 37(1)(b) of Arbitration Act Against Rejection of Interim Injunction in Hotel Management Dispute. The court set aside the trial court's order and remanded for fresh consideration, holding that the appellant had made out a prima facie case for interim relief.

High Court: Karnataka High Court Bench: BENGALURU

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2026-05-18 19:10:05

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Case Note & Summary

The appellant, Royal Orchid Associated Hotels Private Limited, filed a Miscellaneous First Appeal under Section 37(1)(b) of the Arbitration and Conciliation Act, 1996, challenging an order dated 01.10.2024 passed by the IX Additional City Civil and Sessions Judge, Bengaluru, in AA No.4/2024. The trial court had dismissed IA Nos.5 to 7 filed by the appellant under Order 39 Rules 1 and 2 read with Section 151 CPC and Section 9 of the Arbitration Rules (Proceedings before the Court) 2001, seeking interim injunction against the respondents. The appellant had entered into a Hotel Management Agreement with the respondents, who are partners of M/s. Hotel Grand Centre Point, Srinagar. Disputes arose, and the appellant invoked arbitration. Pending arbitration, the appellant sought interim relief to restrain the respondents from interfering with its management of the hotel. The trial court dismissed the applications without properly considering the principles for grant of temporary injunction. The High Court heard the appeal and found that the trial court's order was cryptic and did not adequately address the existence of a prima facie case, balance of convenience, and irreparable injury. The High Court set aside the impugned order and remanded the matter to the trial court for fresh consideration of the applications, directing that the applications be considered on their merits in accordance with law. The court also directed the trial court to dispose of the applications within a period of four weeks from the date of receipt of the order.

Headnote

A) Arbitration - Interim Relief - Section 9 of the Arbitration and Conciliation Act, 1996 - Prima Facie Case - The appellant sought interim injunction to restrain respondents from interfering with its management of the hotel under a Hotel Management Agreement. The trial court dismissed the applications. On appeal, the High Court held that the appellant had made out a prima facie case, balance of convenience was in its favor, and irreparable injury would be caused if injunction was not granted. The impugned order was set aside and the trial court was directed to consider the applications afresh. (Paras 1-5)

B) Civil Procedure - Interim Injunction - Order 39 Rules 1 and 2 CPC - The court reiterated the principles for grant of temporary injunction: existence of prima facie case, balance of convenience, and irreparable injury. The trial court's order was found to be cryptic and not in accordance with these principles. (Paras 3-5)

Issue of Consideration

Whether the trial court erred in dismissing the appellant's applications for interim injunction under Section 9 of the Arbitration and Conciliation Act, 1996, read with Order 39 Rules 1 and 2 CPC, pending arbitration.

Final Decision

The High Court allowed the appeal, set aside the impugned order dated 01.10.2024, and remanded the matter to the trial court for fresh consideration of IA Nos.5 to 7. The trial court was directed to dispose of the applications within four weeks from the date of receipt of the order.

Law Points

Arbitration and Conciliation Act
1996
Section 9
Section 37(1)(b)
Order 39 Rules 1 and 2 CPC
Prima Facie Case
Balance of Convenience
Irreparable Injury
Interim Injunction
Hotel Management Agreement

Case Details

NC: 2024:KHC:46323

MFA No. 7168 of 2024 (AA)

2024-11-14

H.P. Sandesh

NC: 2024:KHC:46323

Sri. Arun Kumar, Senior Counsel for Sri Pradhyuman Singh, Advocate for M/s. Crestlaw Partners (for appellant); Smt. Sheethal Soni, Advocate C/R2 (for respondent No.2)

Royal Orchid Associated Hotels Private Limited

M/s. Hotel Grand Centre Point and Others

Nature of Litigation

Appeal under Section 37(1)(b) of the Arbitration and Conciliation Act, 1996 against dismissal of applications for interim injunction under Section 9 of the Act.

Remedy Sought

The appellant sought interim injunction to restrain the respondents from interfering with its management of the hotel pending arbitration.

Filing Reason

The trial court dismissed the appellant's applications for interim injunction, and the appellant challenged that order.

Previous Decisions

The trial court dismissed IA Nos.5 to 7 in AA No.4/2024 on 01.10.2024.

Issues

Whether the trial court erred in dismissing the applications for interim injunction under Section 9 of the Arbitration and Conciliation Act, 1996. Whether the appellant made out a prima facie case, balance of convenience, and irreparable injury for grant of interim injunction.

Submissions/Arguments

The appellant argued that the trial court's order was cryptic and did not consider the principles for grant of temporary injunction. The respondents opposed the appeal, but the High Court found merit in the appellant's submissions.

Ratio Decidendi

The trial court's order dismissing the applications for interim injunction was cryptic and did not properly apply the principles of prima facie case, balance of convenience, and irreparable injury. The appellant had made out a case for interim relief, and the matter required fresh consideration.

Judgment Excerpts

Heard the learned counsel for the appellant and the learned counsel for the caveator/respondent No.2. This miscellaneous first appeal is filed under Section 37(1)(b) of the Arbitration and Conciliation Act 1996, against the order dated 01.10.2024 passed on IA.Nos.5 to 7 in AA.No.4/2024 on the file of the IX Additional City Civil and Sessions Judge, Bengaluru, dismissing the IA.No.V to VII filed under Order 39 Rule 1 and 2 r/w Section 151 of CPC and Section 9 of the Arbitration Rules (Proceedings before the Court) 2001.

Procedural History

The appellant filed AA No.4/2024 under Section 9 of the Arbitration and Conciliation Act, 1996, before the IX Additional City Civil and Sessions Judge, Bengaluru, seeking interim injunction. The appellant also filed IA Nos.5 to 7 under Order 39 Rules 1 and 2 CPC and Section 9 of the Arbitration Rules. The trial court dismissed these applications on 01.10.2024. The appellant then filed the present appeal under Section 37(1)(b) of the Act before the High Court of Karnataka.