The court clarified the purpose of Section 9 of the Arbitration and Conciliation Act, emphasizing that it is intended to provide interim measures to protect the subject-matter of the arbitral proceedings. The court also highlighted that a party whose claim has been rejected in the arbitral proceedings cannot seek enforcement of the award under Section 36.

Dr. Chandrachud, J.

These appeals arise from an order of a learned Single Judge dated 30 April 2012 on a petition under Section 9 of the Arbitration and Conciliation Act, 1996.

2. An agreement was entered into on 4 October 2000 between Maharashtra State Electricity Board (MSEB) and Dirk India Private Limited (DIPL). The agreement envisaged that Pulverized Fly Ash (PFA) that is generated from MSEB's Thermal Power Station at Nasik would be transported to four hoppers which were to be constructed by DIPL at site. DIPL was to utilise PFA in its PFA handling plant for the manufacture of POZZOCRETE concrete. This was to protect the environment against the degrading impact of PFA. An arbitration agreement was contained in the contract between the parties. Disputes and differences arose between the parties. These were referred to a three-member arbitral tribunal consisting of Mr. Justice B.N. Srikrishna, former Judge of the Supreme Court, Mr. Justice V.G. Palshikar and Mrs. Justice K.K. Baam, former Judges of this Court. The arbitral tribunal rendered its award on 31 March 2011 by which it dismissed the claim of DIPL as well as the counter claim of Maharashtra State Electricity Generation Company Limited (MSEGCL), the successor-in-interest of the erstwhile State Electricity Board.

3. In order to understand the finding of the arbitral tribunal, a brief reference to the salient obligations assumed by and between the parties under the contract would be in order:

(i) Under clause 2.1, DIPL was required to construct at its own expense a PFA handling plant, including inter alia the construction of Silo(s), the common fabrication of connecting spool between the hoppers at the site within a period of 12 months;

(ii) Under clause 3.1, DIPL was required to erect at its cost four hoppers for collection of PFA within the precincts of the Thermal Power Station;

(iii)MSEB was required to provide PFA from the Electrostatic Precipitators and deliver it to DIPL by depositing it in the hoppers to be constructed by DIPL under clause 3.1;

(iv) DIPL agreed to off-take a minimum quantity of 1,000 metric tons per day of PFA for a maximum period of 12 months from the commissioning after which it was required within a period of 48 months from the effective date to off-take a minimum quantity of 3,000 metric tons per day of PFA during the remaining term of the agreement; and

(v) DIPL was under clause 3.5 required to transfer the PFA from the hoppers to its PFA plant at its own cost and responsibility.

4. The arbitral tribunal by its Award came to the conclusion that though under the contract, DIPL was to erect at its cost silos or hoppers, it failed to discharge its contractual obligation of doing so and to ensure that the agreed quantity of PFA so stored could be transported to its PFA plant. The arbitral tribunal held that right from the inception, DIPL in breach of its obligation to erect four hoppers constructed only one hopper. The tribunal rejected the defence of DIPL that it did not erect the remaining hoppers because the MSEB failed to deliver PFA in the required quantity. The tribunal entered a finding of fact that though DIPL agreed to lift 3,000 metric tons of PFA per day after a stipulated period, yet even after three years it had not been able to lift more than 600 metric tons of PFA per day. The finding of fact which was recorded by the arbitral tribunal was as follows:-

“27. The Company had voluntarily agreed to make effective system for such transportation of PFA. Inaction on the part of the Company to do anything this regard shows that it wanted to act under the Contract as it suits its purpose and not fulfilment of the entire contract. From the Contract it will be seen that the Company was to erect at its cost enough Silos as would contain at least 3000 MTS of PFA per day so that the agreed quantity of PFA so stored could be transported to the Company site. It had agreed to fabricate common connecting spool for transportation of