Case Note & Summary
The dispute arose between a Singapore-based company and an Indian company regarding an unpaid debt of USD 66,92,500. The Appellant filed a Section 9 Petition under the Arbitration and Conciliation Act, 1996, seeking interim protection before the constitution of an Arbitral Tribunal, which was dismissed by the Single Judge. The Appellant contended that the Respondent had admitted the debt but failed to pay, and sought either a bank guarantee or an injunction against the Respondent's property. The Respondent argued that the Appellant should seek relief from the Arbitral Tribunal constituted under FOSFA rules, claiming that the court's role in granting interim measures should diminish once the tribunal was formed. The Court analyzed the provisions of Section 9 and Section 38 of the English Arbitration Act, emphasizing that the Appellant's claim was distinct from the powers of the tribunal. The Court found that the Respondent's conduct indicated a likelihood of asset dissipation, warranting the Appellant's request for interim relief. Ultimately, the Court allowed the appeal, directing the Respondent to furnish a bank guarantee and restraining it from alienating the property until arbitration proceedings concluded.
Headnote
A) Arbitration Law - Interim Relief - Section 9 Application - Entitlement to interim relief under Section 9 of the Arbitration and Conciliation Act, 1996 - The Appellant was entitled to file a Section 9 Petition before the constitution of the Arbitral Tribunal to secure its admitted claim of USD 66,92,500, as the Respondent had failed to make payment despite admission of liability. The Court held that the delay in hearing the Petition should not disadvantage the Appellant, and interim relief was necessary to prevent the Respondent from dissipating assets (Paras 11-28).
Issue of Consideration
Whether the Appellant was entitled to interim relief under Section 9 of the Arbitration and Conciliation Act, 1996 after the constitution of the Arbitral Tribunal.
Final Decision
The Appeal was allowed, directing the Respondent to furnish a bank guarantee for USD 66,92,500 and restraining it from alienating the property until arbitration proceedings concluded.
Law Points
- Interim measures
- Section 9 Arbitration and Conciliation Act
- 1996
- Jurisdiction of courts
- Efficacy of remedies
- Admission of liability
