The court upheld the validity of interim relief under Section 9 of the Arbitration Act, emphasizing that strict adherence to procedural rules is not mandatory if a prima facie case exists.

JUDGMENT :

(Per A. S. Chandurkar, J.

1.Admit. Both the Commercial Arbitration Appeals are taken up for final disposal.

2. The challenge raised in these appeals filed under Section 37 of the Arbitration and Conciliation Act, 1996 , (for short, ‘the Act of 1996’) is to the judgment dated 08.10.2024 passed by the learned Single Judge in exercise of jurisdiction under Section 9 of the Act of 1996. By the said judgment, the Commercial Arbitration Petition preferred by the respondent nos. 1 and 2 has been allowed and interim relief in terms of prayer clauses (b), (e) and (f) have been granted. As a result, the appellants have been directed to furnish an irrevocable bank guarantee of nationalized bank or any such other security in favour of the Prothonary, Bombay High Court, for a sum of Rs.145 crores being 80 percent of the Enhanced Call Price redeemable by the respondent nos. 1 to 3. The appellants have also been injuncted from dealing and/or encumbering and/or disposing off and/or creating third party rights and/or alienating any of the movable or immovable properties or assets owned by them. The appellants have also been directed to disclose all their assets on oath including providing fresh and better particulars along with all necessary details of such movable and immovable properties.

3. The facts that are relevant for considering the appeals are that on 12.05.2017, the appellants and the respondent nos. 1 to 5 entered into a Share Holders Agreement (SHA). On account of alleged breaches of the SHA being stated to be committed by the appellants, disputes arose as a result of which the same were referred to arbitration. The said proceedings were conducted in accordance with Singapore International Arbitration Chamber (SIAC). On 01.06.2023, the Arbitral Tribunal passed its Partial Award upholding the termination of the SHA and the obligation of the appellants to purchase the shares of the respondent nos. 1 and 2. The Arbitral Tribunal however rejected the valuation report that was submitted by Deloitte on the ground that it lacked independence. Fresh valuation was accordingly directed to be undertaken. The Arbitral Tribunal by its Order dated 01.09.2023, awarded an amount of Rs.9 Crores as costs in favour of the respondent nos. 1 and 2. The said respondents therefore filed petitions under Section 49 of the Act of 1996 before the Delhi High Court seeking enforcement of the Partial Award and the Cost Award. The respondent no. 1 on 30.11.2023 appointed Price Waterhouse and Company LLP (PwC) as the eligible valuer for determining the Enhanced Call Price. PwC submitted its valuation report on 02.01.2024 and determined the enhanced call price at the rate of Rs.181 crores. The respondent nos. 1 and 2 called upon the appellants to make payment of the aforesaid amount. The same was however refused by the appellants. On 19.01.2024, the Delhi High Court passed an order of status quo as regards the assets of the appellants in the proceedings for enforcement filed by respondent nos. 1 and 2. As the appellants failed to make payment at the Enhanced Call Price, the appellants initiated arbitration under Clause 20 of the SHA under the SIAC Rules. They also applied for emergency interim relief under Schedule-I of the SIAC Rules. Thereafter, on 13.03.2024 the Delhi High Court allowed the petitions filed by the respondent nos. 1 and 2 under Section 49 of the Act of 1996 for enforcement of the Partial Award and the Cost Award. These orders not having been challenged by the appellants, they have attained finality.

4. On 14.03.2024, the Emergency Arbitrator passed an Emergency Interim Award under Article 20.1 of the SHA and directed the appellants to furnish an irrevocable bank guarantee from an internationally recognised financial or other institution in Singapore or India for the sum of Rs.145 crores within a period of fourteen days. The respondent nos. 1 and 2 sought compliance of the aforesaid decision. However, according to the appellants, they were u