Important Point: Court Receiver, High Court, Bombay, to be appointed, and thereby subjected to the control and supervision of an arbitral tribunal, would cause considerable difficulty in the functioning of the Office of the Court Receiver. Arbitration Tribunal cannot appoint a Court Receiver as Receiver

1. The above Court Receiver’s Report dated 28th December, 2016 (“Report”) is filed by the Court Receiver, High Court, Bombay, seeking directions on “Whether the Registry should accept the matters wherein the Arbitral Tribunal appoints the Court Receiver, High Court, Bombay, as a Receiver for execution of orders passed by it etc.” . The need to file the present Report arose since the Arbitral Tribunal in the dispute between M/s. Shakti International Pvt. Ltd. (“the Claimant”) and M/s. Excel Processors Pvt. Ltd. (“the Respondent”), on an Application of the Claimant under Section 17 of the Arbitration and Conciliation Act, 1996, as amended on 23rd October, 2015 (hereinafter “the Amended Act”) passed an Order dated 27th December, 2016, appointing the Court Receiver, High Court, Bombay, as Receiver of certain goods, and communicated the same to the Court Receiver, High Court, Bombay.

2. The Report raises the legal issue as to whether an arbitral tribunal has the power to appoint the Court Receiver, High Court, Bombay as a Receiver under Section 17 of the Amended Act.

3. Given the nature of the issue involved, the Court Receiver engaged Counsel to make submissions on its behalf. Further, the parties to the arbitration were also heard on this issue. Since the issue is of wider significance than this particular matter, a Notice was issued on 7th January, 2017, so that any person interested could make submissions on the question involved.

SUBMISSIONS

4. Mr. Jagtiani, on behalf of the Court Receiver, High Court, Bombay (“ the Court Receiver”), submitted that an arbitral tribunal has no power to appoint the Court Receiver as a Receiver when passing an interim order under Section 17 of the Amended Act. His submission is based upon the unique position of the Court Receiver as an employee of the High Court of Judicature at Bombay and, therefore, subject to the supervision only of the Chief Justice of this Court (or a Judge as designated by the Chief Justice). He therefore submits that no arbitral tribunal can exercise any power of appointment, which amounts to supervision and control, over the Court Receiver.

5. In support of this submission Mr. Jagtiani relies upon the following decisions:

(i) I.C.I.C.I Ltd. v. Patheja Brothers Forgings and Stampings Ltd. And others, 2000 (3) Mh. L.J. 212 ;

(ii) Bank of Tokyo-Mitsubishi Ltd. v. M/s. Chembra Estates and others, 2001 (2) Mh. L.J. 206 ;

(iii) The Bank of Tokyo-Mitsubishi Ltd. v. M/s. Chembra Estates and others, 2001 Vol. 103 (2) Bom. L.R. 501; and

(iv) Girish M. Joshi v. Jagat Manubhai Parikh and others, Unreported decision dated 11th September, 2009 in Writ Petition. No. 2527 of 2009

6. Mr. Jagtiani then referred to the provisions of Chapter XXX of the Bombay High Court (Original Side) Rules, which deal with the appointment of the Court Receiver and connected provisions relating, inter alia, to filing of accounts, fees/charges to be paid and discharge of the Court Receiver. He submitted that even under the said High Court Rules, the Bombay High Court has the power to appoint any other person to act as a Receiver in a matter.

7. Mr. Jagtiani then submitted that the power of an arbitral tribunal under Section 17 of the Amended Act is to appoint any person to act as a private receiver, but that cannot include any appointment of a Court Receiver. He then submitted that on a correct interpretation of the provisions of the Amended Act, and in particular Section 17 and Section 9 thereof, whilst the powers of an arbitrator are undoubtedly wider than they previously were, an arbitral tribunal is still not a “Court”—or, in the case of an arbitral tribunal having its seat in Mumbai—the High Court, Bombay. Therefore, Section 17 of the Amended Act does not entitle an arbitral tribunal to appoint an employee or Officer of the High Court, Bombay to act as a Receiver in a matter. He relied upon the following Judgments to show how the powers of an arbitral tribunal were understood at different times under the