IMPORTANT POINT
The actions taken by the petitioner pursuant to the termination of the contract can be determined subject to the final outcome of the arbitral proceedings.

JUDGMENT (Oral)

I.A. 23641/2023 (Exemption)

1. Allowed, subject to all just exceptions.

2. The application is disposed of.

ARB.A. (COMM.) 50/2023

3. The present Petition under Section 37 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as "A & C Act, 1996") has been filed on behalf of the petitioner to set aside the impugned Order dated 17.09.2023 passed by the Arbitral Tribunal in I.A. No. 2/2023 under Section 17 of A & C, 1996 filed by the respondent.

4. Mr. Saurav Agarwal, learned counsel for the respondent, is present on advance notice.

5. Ms. Aishwarya Bhati, learned Additional Solicitor General of India, on behalf of the petitioner submits that the petitioner is aggrieved by the impugned Order dated 17.09.2023, only to the extent it makes an assertion that "termination of contract of the Claimant-Contractor and any consequential action taken thereof by the respondent shall be subject to the final outcome of the present arbitral proceedings".

6. Ms. Aishwarya Bhati, learned Additional Solicitor General of India, on behalf of the petitioner argues that whether there is a valid termination of the Contract making the respondent entitled to either specific performance of the Contract or consequential benefits, cannot be left open till the final conclusion of the arbitral proceedings. Therefore, she requests that the term "consequential action" may be substituted by the word "consequential damages".

7. Submissions heard in detail.

8. Essentially, the Tender was issued by the petitioner and the same was awarded to the respondent and, therefore, the Contract No. DGV/0113/OHMW/01 dated 19.12.2017 was entered into between the petitioner and the respondent for Outer Harbour Works at Rambilli (56 Kms. South-West of Visakhapatnam) for "Project Varsha". Vide Termination Notice dated 06.07.2022, the said Contract was terminated by the petitioner due to failure of the respondent to proceed with the works with due expedition and without delays and several other breaches of the Contract. Consequently, the disputes arose between the parties and the Arbitral Tribunal has been constituted to determine the Claims and Counter-Claims of both the parties.

9. It is submitted that in arbitral proceedings, the respondent filed I.A. No. 2/2023 and application on behalf of the claimant along with additional affidavit dated 14.09.2023 for supplementary reliefs in the said application filed under Section 17 of the Arbitration and Conciliation Act, 1996 with the following prayers:

"In view of the foregoing, it is humbly prayed that in addition to the prayers made in I.A. No. 2/2023 (without prejudice to the reliefs already sought in I.A. No. 2/2023), this Hon'ble Tribunal may be pleased to:

e. Restrain the Respondent from issuing a Letter of Award or executing any contract with a third party for the balance works of Project Varsha - Outer Harbour, till the final decision in the interim Applications i.e., I.A. No. 1/2023 and I.A. No. 2/2023;

f. Direct the Respondent to ensure that the third parties that are bidding, or succeeded in the bid for balance works of Project Varsha - Outer Harbour, are made aware about the pending arbitration proceedings and the claims of the Claimant and that they would not seek any equity or rights;

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10. While, considering the said application, the Arbitral Tribunal passed the following impugned Order dated 17.09.2023:

".....

6. We have heard Mr. Saurav Agrawal, Ld. Counsel for the Claimant-Applicant, and Ms. Aishwarya Bhati, Ld. Additional Solicitor General and Senior Advocate appearing for the Respondent-Employer. Having heard Ld. Counsel for the parties, it is directed that the termination of contract of the Claimant-Contractor and any consequential action taken thereof by the Respondent shall be subject to the final outcome of the present arbitral proceedings.

7. The Claimant, as undertaken by Mr. Agrawal, Ld. Counsel for the Claimant, shall remove the machinery and equipment from the Project site without prejudic