The interpretation of 'constitution of the tribunal' under Section 9 of the Arbitration and Conciliation Act, 1996, and the court's power to direct disputed property to be deposited in the escrow account.

JUDGMENT :

I.P. Mukerji, J.

1. This is an appeal under Section 37 of the Arbitration and Conciliation Act, 1996. It is from a judgment and order dated 21st January, 2021 made by a learned single judge of this court dismissing the application of the appellant under Section 9 of the said Act.

2. The first point involved in this appeal is about its maintainability. It is raised by Mr. Utpal Bose, learned senior advocate appearing for the respondents.

3. This point cannot be appreciated unless the facts are told in some detail. South Delhi Municipal Corporation, and a consortium comprising of the respondents and another entity, on 2nd December, 2016, entered into an agreement called the Concession Agreement which involved collection and transportation of waste materials after undergoing a waste management procedure.

4. On 28th April, 2017 a sub contract to get done part of the project was made by the respondents with the appellant through a Master Service Agreement. On 4th October, 2017 another agreement called the Escrow agreement was entered into by the parties and some other entities including Axis Bank limited. Under this agreement all money received by the respondent no. 2 under the Concession Agreement would be deposited in an Escrow account with Axis Bank acting as the Escrow agent.

5. The Master Service agreement between the parties contained an arbitration Clause (17.2). It is set down below:

"17.2 Arbitration and Jurisdiction

(i) All disputes, differences, claims and demands arising under or pursuant to or concerning this Agreement shall be referred to Arbitration in accordance with the provisions of the Arbitration and Conciliation Act, 1996 or any statutory amendment or re amendment or re-enactment thereof, subject to following rules:

(a) The Arbitration tribunal shall comprise of three arbitrators as follows:

i. one will be appointed by the Client and the Confirming Party;

ii. one will be appointed by QUIPPO; and

iii. the third arbitrator shall be appointed as per provision mentioned under Schedule V and VII of the aforesaid Arbitration Act.

(b) The language of the arbitration proceedings shall be English and the venue of arbitration shall be Kolkata, India.

(c) The respective costs of arbitration shall be borne equally by the parties in the first instance; however, the successful party shall be entitled to the costs of arbitration including legal and recovery costs.

(d) The arbitrator to be appointed hereunder shall either be a retired judge having held a position not lower than that of Additional District Judge or an advocate recognised by the Bar Council of India, having an experience of not less than 10 (ten) years in practice.

(e) The decision of arbitrators shall be final and binding on the Parties.

(ii) The laws of India shall govern this Agreement. Subject to provisions of Article 17.2(i), the courts in Kolkata shall have exclusive jurisdiction in respect of any matter, claim or dispute arising out of or in any way, relating to this Agreement."

6. On 14th September, 2020, the appellant filed the Section 9 application. It was moved before this court on 29th September, 2020. Thereafter, in it affidavits were exchanged by the parties.

7. During the pendency of this application the parties entered into a written agreement appointing Mr. Jayanta Kumar Mitra, a senior advocate of this court as the arbitrator to adjudicate upon the disputes that had arisen between them while performing the agreement. It was filed in court on 14th January, 2021.

8. On 21st January, 2021 the Section 9 application was dismissed.

9. Now, Section 9 of the said Act comes into play. The most important is subsection 3 thereof introduced by amendment with effect from 23rd October, 2015. Section 9 is set out below:

"9. Interim measures, etc. by Court.--(1) A party may, before or during arbitral proceedings or at any time after the making of the arbitral award but before it is enforced in accordance with section 36, apply to a court--

(i) for the appointment of a gu