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2000 Supreme(Del) 345

High Court Of Delhi
KHANJI EXPORTS PRIVATE LIMITED - Appellant
Versus
SHIPTRADE INC - Respondent
Interim Application 2395 of 2000
Decided On : 03/31/2000

Advocates Appeared:
P.CHIDAMBARAM, Saurab Kirpal

Headnote:Arbitration Act, 1940 - Section 2 — Territorial jurisdiction — Interim injunction issued by the High Court of Delhi restraining the Arbitral Tribunal from acting further in the matter — Refusal by Arbitral Tribunal to act on the orders of the Court — The Arbitral Tribunal restrained from making any award — The respondent also restrained from taking any steps or proceedings to enforce the award.

Vikramajit Sen

( 1 ) IN a petition filed under Sections 30, 31 (3), 32 and 33 of the Arbitration Act, 1940, following relief have been prayed for: (a) declare that the award/orders dated 21-5-1999, 29-12-1999 and 3-2-2000 are not valid in law and that the same are not enforceable. (b) Direct the arbitral tribunal to hear both the claim and the counter claim together. (c) Restrain the tribunal from proceedings with the hearing on 28-2-2000 or any other date only of the Claim filed by the respondent till the disposal of the present application. (d) Pass ad interim orders in terms of prayer. (c) above. (e) Award costs of the application. (f) Pass such further orders as the court may deem fit and necessary in the facts and circumstances of the case.

( 2 ) THE petition is accompanied by an application under Section 41 (b) and Schedule II of the Arbitration Act, 1940, read with Section 151 of the Code of Civil Procedure. It contains the following prayers: (a) Restrain the tribunal from proceeding with the hearing on 28-2-2000 or any other date only of the Claim filed by the respondent till the disposal of the present application. (b) Pass exparte ad interim orders in terms of prayer (a) above. (c) Pass such further orders as the court may deem fit and necessary in the facts and circumstances of the case. The following orders were passed on the first hearing;

"21. 2. 2000 Present: Mr. P. Chadambram, Sr. Advocate with Mr. Saurabh Kirpal for the Petitioner. "omp No. 45/2000 and I. A 1656/2000 "this is a petition under Arbitration Act, 1940. 1 have perused the petition as well as the documents filed along with it. Mr. Chidambram, learned Sr. Advocate who appears for petitioner submits that it is unjust and incorrect for the Arbitrator to insist that the petitioner should furnish security for cost without the same condition being imposed on the respondent. He further submits that there has not been any agreement between the parties on the applicable rules. Had the condition of providing security for costs been imposed on both the parties, the petitioner would not have remonstrated. against it. The petitioner had not made grievance of its Counter claim being stayed, but, has submitted there was no justification for not imposing the same condition on the respondent. . Issue notice to the respondent returnable on 19th May, 2000. I am satisfied that till the next date of hearing the ex-parte ad interim injunction prayed for should be granted. This is all the more imperative since, as slated in the petition the share capital of the respondent is only a meagre $ 250. 1 see no justification for the arbitrator to impose different standards on the parties before him. I, therefore, restrain the Tribunal from proceedings with the hearing on 28th February, 2000 or on any other date unless so permitted by the Court". Renotify on l9th May, 2000. Dasti.

( 3 ) THEREAFTER the Plaintiff has filed a fresh interim application, I. A. 2395/2000, bringing to the notice of this Court that the Arbitrators had made the following statement in terms of the letter dated 25. 2. 2000,

"on behalf of the Tribunal I refer to Ince s fax of 23rd February enclosing a copy of the Order made by the High Court in Delhi and the subsequent exchanges. We have also now received from Inces the documents which were filed with the New Delhi Court. We understand that proceedings are taking place in the High Court in London today. But for delay resulting in the fact that the members of the Tribunal were unable to discuss the matter promptly, we would have sent a message on receipt of Ince s fax of 23rd February sending us the Order in which we would have commented that we could see no basis on which the Indian Courts were entitled to involve themselves in this matter. . Since the High Court in London retains a supervisory jurisdiction over London arbitrations, we would have thought that the appropriate forum for any application to restrain the arbitrators from proceeding further would be











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