The Arbitrator's issuance of interim payment directions must not resemble a final resolution and should not exceed the scope of temporary measures permissible under Section 17 of the Arbitration Act.

JUDGMENT

Sanjeev Narula, J. (Oral)--The present appeal under Section 37 (2)(b) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as `the Act') has been filed impugning to a limited extent, the orders dated 9th August, 2021 and 18th August, 2021 passed by the learned Arbitrator, disposing of applications, filed by both the parties under Section 17 of the Act.

2. The Appellant is the Respondent in the arbitral proceedings and the Respondent is the Claimant therein. The reliefs granted by the learned Arbitrator, as noted in the operative portion of the order dated 9th August, 2021 read as follows:

"4. The operative part of the order is being passed as under:

a) The Claimant is to release an amount of Rs.8,59,73,470/- in favour of the Respondent against RA bill number 12, out of Rs.9,05,46,067, which was received in the JV Account on 15.7.2021, subject to the condition that the said funds shall be used only for the purposes of Andhra Project. The Respondent will file the details of funds utilization along with documents by way of affidavit within thirty days. The Respondent will file an undertaking within seven days that the Respondent will not receive payment in its own account directly from the Authority. The Respondent will only receive the payment either from the Gujarat JV account or new account of JV account Andhra which is opened (when it will start operating) after completing the remaining few formalities by the Claimant.

b) The Claimant is also to release an amount of Rs.15,15,39,073/- lying in the Gujarat JV Account towards its share as per JVA 6.12.2019. The Claimant has undertaken that if any order will be passed by this Arbitrator at any point of time in future, the claimant shall re-deposit/return the restitution of the said amount and shall abide any direction issued by the Arbitrator. The Claimant is agreed to file formal undertaking by way of affidavit within seven days. The statement of Claimant's counsel is accepted without prejudice to its right and contention to contest the arbitration proceedings which are pending before me."

3. The Appellant impugns the aforesaid order in respect of directions issued under para (b) above.

Factual background

4. Before dealing with the contentions of the parties, it would be apposite to briefly note the facts of the case:

4.1. The genesis of the dispute is that parties entered into a Joint Bidding Agreement dated 16th November, 2018 to constitute a Joint Venture (`JV') for the purpose of bidding for a National Highways Authority of India (`NHAI') Project in the State of Andhra Pradesh for "Six laning of existing 4-lane road from Gundugolanu (Design km 1023.280) to Kalaparru (Design km 1050.680) of NH-5 (New NH-16) (Design Length-27.400 km) in the State of Andhra Pradesh NHDP Phase-V under Bharatmala Pariyojana on EPC Model" (in short `Project').

4.2. The Appellant had provided bid security for the Project in form of a bank guarantee. The understanding between the parties was that the Appellant being a local contractor would lead the way by preparing the bid estimates, completing all requisite formalities for bid submissions, and act as the lead member post award of the work. In the event work was awarded to the JV, the bid security was to be released, and the Respondent was to furnish Performance Bank Guarantee and Mobilization Advance Bank Guarantees as may have been required as per the Engineering, Procurement and Construction Agreement (`EPC Agreement') to be executed with NHAI.

4.3. JV being the L-1 bidder, was awarded the Project. Post that, an EPC Agreement was executed between NH