Point of Law: Arbitration - Interim measures - Once Arbitral Tribunal directed return of entire Bank Guarantee, and Bank has also written to appellant, intimating that Bank Guarantee stood discharged in full in favour of respondent, this Court can hardly stand between such discharge and crediting of amount to account of respondent.

ORDER :

1. The appellant claims to be aggrieved by orders dated 24th March, 2021 and 17th April, 2021, whereby the learned Arbitral Tribunal disposed of the appellant’s application under Section 23(3), and the respondent’s application under Section 17, of the Arbitration & Conciliation Act, 1996 (“the 1996 Act”).

2. Mr. Arvind Minocha, learned Counsel for the respondent in the present appeal has drawn my attention to a communication dated 28th June, 2021, addressed by the Union Bank of India to the appellant, following which, in my opinion, nothing survives for adjudication in the present appeal.

3. As such, a very brief recital of facts may suffice.

4. As per the covenants of the contract between them, the respondent furnished performance security to the appellant by way of Bank Guarantee for Rs. 13,06,06,000/-.

5. The respondent moved an application, before the learned Arbitral Tribunal, under Section 17 of the Arbitration and Conciliation Act, 1996 (“the 1996 Act”), for release of the aforesaid Bank Guarantee. By order dated 6th November, 2020, the learned Arbitral Tribunal allowed the application and directed release of the aforesaid Bank Guarantee of Rs.13,06,06,000/- to the respondent. The respondent, nonetheless, granted time to the appellant to finalize the final bill of the respondent.

6. Upon finalization of the final bill of the respondent, the appellant submits that it became aware that, in fact, it was entitled to recover Rs. 6.26 crores from the respondent. The appellant, accordingly, moved an application before the learned Arbitral Tribunal under Section 17 of the 1996 Act, seeking review of the order dated 6th November, 2020. The said application was dismissed by the learned Arbitral Tribunal on the ground that no power, to review its decision, lay with it. The appellant challenged the said order before this Court by way of Arb A (Comm) 10/2021, which was disposed of, by this Court, vide order dated 26th February, 2021. In view of the claim of Rs. 6.26 Crores, which, according to the appellant, it was entitled to recover from the respondent, this Court modified the order dated 6th November, 2020, of the learned Arbitral Tribunal, by directing release, to the respondent, of the Bank Guarantee of Rs.13,06,06,000/- less Rs. 6.26 crores. The Bank was also directed to treat the Bank Guarantee as restricted to Rs. 6.26 Crores.

7. In view thereof, this Court restored the Section 17 application of the respondent to the learned Arbitral Tribunal, to consider whether, despite the claim of the appellant, the respondent was, nonetheless, entitled to release of the surviving Bank Guarantee of Rs. 6.26 crores.

8. The appellant, in the interregnum, filed a counter claim before the learned Arbitral Tribunal, against the respondent, for the aforesaid amount of Rs. 6.26 crores. The application for permission to file the counter claim was allowed by the learned Arbitral Tribunal, vide, order dated 24th March, 2021 subject to costs which, according to Mr. Minocha, learned Counsel for the respondent, was to the tune of Rs. 50,000/-. Ms. Arora, learned CGSC frankly acknowledges that the said amount has not been paid by the appellant. As such, as on date, there is, stricto sensu, no counter claim of the respondent on the record of the learned Arbitral Tribunal or, even if the counter claim is on record, it cannot be adjudicated in the absence of compliance with the order directing payment of costs.

9. It is a matter of record that despite being entitled, as it contended, to recover Rs. 6.26 Crores from the respondent, the appellant did not move any application under Section 17 of the 1996 Act, before the learned Arbitral Tribunal, to secure the said amount. Instead, the appellant merely filed an amended reply to the Section 17 application of the respondent, bringing this fact to the notice of the learned Arbitral Tribunal.

10. The learned Arbitral Tribunal has passed two orders on 24th March, 2021 and 17th April, 2021 by which the appellant cl