Case Note & Summary
The Court Receiver, High Court, Bombay filed a Report seeking directions on whether the Registry should accept matters where an Arbitral Tribunal appoints the Court Receiver as a Receiver for execution of its orders. This arose from an order dated 27th December 2016 passed by the Sole Arbitrator, Hon'ble Justice Dr. S. Radhakrishnan (Former Judge, Bombay High Court), in a dispute between M/s. Shakti International Private Limited (Claimant) and M/s. Excel Metal Processors Private Limited (Respondent). The Arbitral Tribunal, on an application under Section 17 of the Arbitration and Conciliation Act, 1996 (as amended in 2015), appointed the Court Receiver as Receiver of certain goods. The Court Receiver engaged counsel and the parties were heard. The Court held that the Court Receiver is an officer of the High Court subject to the supervision of the Chief Justice only, and an arbitral tribunal cannot appoint the Court Receiver. The power under Section 17 does not include such appointment. The Court further clarified that an order under Section 17(1) is not enforceable by contempt but must be enforced by applying to the court under Section 17(2). The Court directed that the Registry shall not accept any communication from an Arbitral Tribunal appointing the Court Receiver, and the Court Receiver shall not act on such appointment unless the order is passed by a competent court.
Headnote
A) Arbitration Law - Interim Measures - Section 17 of Arbitration and Conciliation Act, 1996 - Power of Arbitral Tribunal to Appoint Court Receiver - The issue was whether an arbitral tribunal can appoint the Court Receiver, High Court, Bombay as a Receiver under Section 17 of the Amended Act. The Court held that the Court Receiver is an officer of the High Court subject to the supervision of the Chief Justice only, and an arbitral tribunal cannot exercise any power of appointment over the Court Receiver. The arbitral tribunal's power under Section 17 does not include the power to appoint a Court Receiver. (Paras 1-10) B) Arbitration Law - Enforcement of Interim Orders - Section 17(2) of Arbitration and Conciliation Act, 1996 - Enforcement Mechanism - The Court clarified that an order passed under Section 17(1) by an arbitral tribunal is not enforceable by contempt proceedings but must be enforced by applying to the court under Section 17(2) of the Act. The arbitral tribunal cannot directly appoint a Court Receiver; instead, the party must approach the court for such relief. (Paras 11-15)
Issue of Consideration
Whether an arbitral tribunal has the power to appoint the Court Receiver, High Court, Bombay as a Receiver under Section 17 of the Arbitration and Conciliation Act, 1996 (as amended in 2015).
Final Decision
The Court held that an arbitral tribunal does not have the power to appoint the Court Receiver, High Court, Bombay as a Receiver under Section 17 of the Arbitration and Conciliation Act, 1996. The Court directed that the Registry shall not accept any communication from an Arbitral Tribunal appointing the Court Receiver, and the Court Receiver shall not act on such appointment unless the order is passed by a competent court. The Court also clarified that an order under Section 17(1) is not enforceable by contempt but must be enforced by applying to the court under Section 17(2).
Law Points
- Arbitral tribunal's power under Section 17 of Arbitration and Conciliation Act
- 1996 does not extend to appointing Court Receiver
- High Court
- Bombay as Receiver
- Court Receiver is an officer of the High Court subject to supervision of Chief Justice only
- Section 17 order cannot be enforced by contempt but through Section 27 or Section 9 application to court
