Case Note & Summary
The appellant, M/s Hindustan Petroleum Corporation Ltd., filed an appeal under Section 37(1)(c) of the Arbitration and Conciliation Act, 1996 against the judgment dated 19th June 2017 passed by the Principal District Judge, Nagpur in Civil M.A.No.1111 of 2016. The District Judge had dismissed the appellant's application under Section 34 of the Act challenging an arbitral award. The dispute arose from a dealer agreement dated 5th April 2006 between the appellant (Company) and the respondent (Dealer) for running a retail outlet. The Company issued a show cause notice on 19th February 2012 after samples of Motor Spirit and High Speed Diesel drawn on 13th and 14th December 2012 failed testing, and subsequently issued an order dated 21st December 2012 which the Dealer challenged before the Arbitrator. During the arbitration proceedings, the Arbitrator passed an interim order on 27th January 2016 permitting the Company to run the petrol pump. The Company then filed an application under Section 9 of the Act before the District Judge for continuation of that interim order, and during the pendency of that application, the parties agreed that the respondent would not press for execution of the arbitral award if the matter was decided finally. The District Judge dismissed the Section 34 application, leading to the present appeal. The High Court noted that the impugned judgment did not consider the merits of the case and that the parties had agreed to maintain the status quo. The court allowed the appeal, set aside the impugned judgment, and remitted the matter to the District Judge for fresh consideration, directing that the interim arrangement regarding the running of the petrol pump continue until the disposal of the Section 34 application.
Headnote
A) Arbitration Law - Appeal under Section 37(1)(c) - Challenge to dismissal of Section 34 application - The appellant challenged the dismissal of its application under Section 34 of the Arbitration and Conciliation Act, 1996 against an arbitral award. The court considered the interim arrangement where the appellant was permitted to run the petrol pump and the respondent agreed not to press execution pending final decision. Held that the appeal is allowed and the impugned judgment is set aside, with the matter remitted to the District Judge for fresh consideration (Paras 1-4).
Issue of Consideration
Whether the impugned judgment dismissing the appellant's challenge under Section 34 of the Arbitration and Conciliation Act, 1996 against the arbitral award is sustainable.
Final Decision
The appeal is allowed. The impugned judgment dated 19th June 2017 passed by the Principal District Judge, Nagpur in Civil M.A.No.1111 of 2016 is set aside. The matter is remitted to the District Judge for fresh consideration. The interim arrangement regarding running of the petrol pump by the appellant shall continue till disposal of the Section 34 application.
Law Points
- Section 37(1)(c) of Arbitration and Conciliation Act
- 1996
- Section 34 of Arbitration and Conciliation Act
- Section 9 of Arbitration and Conciliation Act
- Interim relief pending appeal
- Agreement between parties not to press execution
Case Details
2017 LawText (BOM) (11) 156
Arbitration Appeal No.17 of 2017
Shri V.V. Bhangde for appellant, Shri S.W. Sambre for respondent
M/s Hindustan Petroleum Corporation Ltd.
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Nature of Litigation
Appeal under Section 37(1)(c) of the Arbitration and Conciliation Act, 1996 against dismissal of Section 34 application challenging an arbitral award.
Remedy Sought
Appellant sought setting aside of the impugned judgment dated 19th June 2017 dismissing its Section 34 application and continuation of interim order allowing it to run the petrol pump.
Filing Reason
The appellant challenged the dismissal of its application under Section 34 of the Arbitration and Conciliation Act, 1996 against an arbitral award passed in favor of the respondent dealer.
Previous Decisions
The Arbitrator passed an award in favor of the respondent; the appellant's Section 34 application was dismissed by the Principal District Judge, Nagpur on 19th June 2017.
Issues
Whether the impugned judgment dismissing the Section 34 application is sustainable.
Submissions/Arguments
Appellant submitted that during pendency of arbitration proceedings, by order dated 27th January 2016, it was permitted to run the petrol pump, and during the Section 9 application, parties agreed that respondent would not press execution of award if matter is decided finally.
Ratio Decidendi
The impugned judgment did not consider the merits of the case and the parties had agreed to maintain status quo; therefore, the matter requires fresh consideration by the District Judge.
Judgment Excerpts
This appeal is filed under Section 37(1)(c) of the Arbitration and Conciliation Act, 1996 against the impugned judgment dated 19th June, 2017 passed by the Principal District Judge, Nagpur in Civil M.A.No.1111 of 2016 vide which appeal preferred by appellant herein under Section 34 of the Act of 1996 challenging award passed by the Arbitrator came to be dismissed.
Learned counsel for the appellant has submitted that during pendency of proceedings before the learned Arbitrator, by order dated 27th January, 2016 passed on Exh.10, appellant is permitted to run petrol pump/retail outlet which was run by respondent and during pendency of Miscellaneous Application before the learned District Judge, appellant had filed application under Section 9 of the Act of 1996, praying for continuation of interim order dated 27th January, 2016 and pending said application it was agreed between the parties that respondent would not press for execution of award passed by the Arbitrator, if matter is decided finally, accordingly as on today appellant is running the petrol pump.
Procedural History
The respondent dealer filed a claim before the Arbitrator challenging the Company's order dated 21st December 2012. The Arbitrator passed an award in favor of the respondent. The appellant filed an application under Section 34 of the Arbitration and Conciliation Act, 1996 before the Principal District Judge, Nagpur, which was dismissed on 19th June 2017. The appellant then filed the present appeal under Section 37(1)(c) of the Act.
Acts & Sections
- Arbitration and Conciliation Act, 1996: Section 37(1)(c), Section 34, Section 9
