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2021 Supreme(Del) 1957

IN THE HIGH COURT OF DELHI AT NEW DELHI
Rajiv Sahai Endlaw, Sanjeev Narula, JJ.
Rajiv K Luthra - Appellant
Versus
Mohit Saraf - Respondent
First Appeal From Order (Os) (Comm) No. 13 of 2021; Civil Miscellaneous No. 2329 of 2021, 2330 of 2021
Decided On : 22-01-2021

Advocates appeared:
Abhishek Manu Singhvi, Advocate, Neeraj Kishan Kaul, Advocate, A.S. Chandhiok, Advocate, Gopal Sankarnarayanan, Advocate, Haripriya Padmanabhan, Advocate, Pooja Dhar, Advocate, Zeeshan Diwan, Advocate, Shrutunjay Bhardwaj, Advocate, Parag P Tripathi, Advocate, Vikas Singh, Advocate, Arvind Nigam, Advocate, Promod Nair, Advocate, Apoorv Tripathi, Advocate, Srinivasan Ramaswamy, Advocate, Raghvendra Singh, Advocate, Deepeika Kalia, Advocate, Shailendera Singh, Advocate, Abhishek Gupta, Advocate

The main legal point established is that the interim arrangement devised by the Single Judge should continue during the appeal, with the possibility of the appellate court passing appropriate orders if the interim arrangement is found to be perverse.

Headnote:

Arbitration & Conciliation Act, 1996 - Interim Measures - Section 9

Fact of the Case:

The appeal challenges the judgment allowing OMP (I) (COMM) No.339/2020, under Section 9 of the Arbitration & Conciliation Act, 1996, filed by the respondent. The dispute involves advocates who were partners in a law firm and the respondent filed a petition under Section 9 claiming various interim measures.

Finding of the Court:

The court found that the interim arrangement devised by the Single Judge should continue during the appeal, with the possibility of the appellate court passing appropriate orders if the interim arrangement is found to be perverse. The court also directed specific restraints on both parties to preserve the status quo.

Issues: The issues involved the interim measures sought by the respondent, the impact of the interim arrangement on the law firm, and the potential for further disputes between the parties.

Ratio Decidendi: The court held that the jurisdiction under Section 9 of the Arbitration Act is to order interim measures preceding, during, or after the arbitral proceedings. It also emphasized the need for both parties to observe full civility and refrain from interfering with each other's functioning.

Final Decision: The court directed specific restraints on both parties to preserve the status quo and implored the parties to attempt to either revive the partnership or amicably part ways.

JUDGMENT

1. The appeal impugns the judgment dated 18th January, 2021 of the Single Judge, allowing OMP (I) (COMM) No.339/2020, under Section 9 of the Arbitration & Conciliation Act, 1996, filed by the respondent.

2. The appeal was filed and on urgent mentioning got listed yesterday and was received by us, post court commencement hours and was taken up for hearing at about 1600 hours. The senior counsels for the appellant sought stay of the operation of the impugned judgment dated 18th January, 2021. The senior counsels for the respondents appearing on advance notice opposed the grant of stay.

3. Considering that the disputes are amongst advocates of this Court, we started hearing of the appeal yesterday itself by limiting the time of arguments on behalf of the appellant as well as the respondent to two hours each. The senior counsels for the appellant were heard for about fifteen minutes yesterday and the further hearing adjourned to 29th January, 2021. The Single Judge, while allowing the Section 9 petition filed by the respondent, on request of the counsels for the appellant, had directed his judgment to remain in abeyance till today. We thus posted the hearing qua arrangement if any to be made during the pendency of this appeal, to today.

4. We have today heard the senior counsels for the appellant as well the senior counsels for the respondent. As aforesaid, we have already commenced hearing of the appeal and intend to conclude the hearing and pronounce orders, soon. We have thus considered, whether till then there should be stay of the impugned judgment or any other order, of course without prejudice to the final adjudication of the appeal.

5. The senior counsels for the appellant have contended that the state of affairs which has been ordered to be altered vide the impugned judgment has been prevalent since October, 2020, with the petition under Section 9 having been filed on 15th October, 2020 or thereabout. It is argued that before the Single Judge, there was no ad-interim order and now that the hearing of the appeal is underway, the said status which has been continuing for the last four months should be permitted to continue till the appeal is decided. It is urged that changing the status may lead to further acrimony and disputes between the parties.

6. We are however unable to agree with the aforesaid contention. The jurisdiction under Section 9 of the Arbitration Act, which was invoked by the respondent, is a jurisdiction to order interim measures preceding or during or after the arbitral proceedings. The disputes between the parties, else are to be decided by arbitration. When a Single Judge of this Court, after going through the pleadings and after hearing lengthy arguments, has devised an interim arrangement between the parties, the said interim arrangement ordinarily should continue during the hearing of the appeal and there should be no two stages i.e. of first hearing for ad-interim relief in the appeal and thereafter whether the interim arrangement made by the Single Judge requires any interference; of course, if the appellate court finds the interim arrangement so worked out to be perverse and capable of more mischief, the appellate court would be entitled to, at the stage of admission of the appeal itself, pass appropriate orders. The contention of the senior counsels for the respondent, that the scope of interference in an appeal under Section 37 is even otherwise limited, has merit. We have thus confined the hearing today to one hour only and express appreciation that the counsels abided by the time so limited. The discussion hereunder is thus in the aforesaid background.

7. The appellant and the respondent, being advocates, were / are partners of a law firm in the name and style of "L&L Partners, New Delhi". On disputes arising between them, the respondent filed the petition under Section 9, from which this appeal arises, claiming the following interim measures:

"a) Stay the notice issued by the Respondent No.

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