The court emphasized that interim relief under Section 9 of the Arbitration Act must aid arbitration without causing undue prejudice, and is not warranted when the petitioner is not adversely affected.

JUDGMENT

[Hearing held through video conferencing]

Vibhu Bakhru, J. (Oral)--The petitioner has filed the present petition under Section 9 of the Arbitration and Conciliation Act, 1996 (hereafter `the A&C Act'), inter alia, praying as under:

"i) grant an interim injunction restraining the Respondents from taking any coercive measures based on the Final Rejection Memo bearing No. Mech/M&P/2300/11 dated 26.08.2021 issued by Respondent No.2;

ii) pass an ex-parte ad interim order in terms of prayer (I) above;

iii) award costs of this Petition to the Petitioner;"

2. Respondent no.1 (hereafter `COFMOW') had invited a Global Bid Invitation Notice to tender for the supply of `Cut to Length Line machine on turnkey basis' (hereafter `the CTL Machine'). The said Notice Inviting Tender was published on 30.04.2010. On 01.07.2010, the petitioner (a French company) submitted its bids through its Indian agent. The bids were opened on 02.07.2010 and the petitioner was found to be the Lowest Bidder (L-1). It is stated that between September, 2010 to August, 2011, COFMOW sought certain clarifications and the same were provided. Thereafter, on 02.09.2011, COFMOW issued a Letter of Acceptance. Thereafter, on 13.10.2011, the parties entered into a contract (hereafter `the Contract'), whereby the petitioner agreed to supply the CTL Machine. The petitioner claims that on 20.07.2012, the Deputy Railway Advisor, Embassy of India, Paris inspected the CTL Machine and certified that the same conformed to the contractual specifications.

3. On 02.08.2012, the petitioner raised a commercial invoice for EUR 1,575,901.50 (for supply on FOB basis). It received 80% of the said invoice payment being EUR 1,260,721.20 on 30.08.2012 but, has not received the balance payment as yet.

4. The petitioner states that on 08.10.2012, the CTL Machine was delivered to the Rail Coach Factory, Kapurthala (respondent no. 2). Thereafter, it was installed at the site. The petitioner acknowledges that its Indian Agent received a sum of Rs.13,97,833/- from COFMOW. The petitioner states that initially the `Prove Out' of the CTL Machine could not be successfully conducted due to various reasons attributable to the respondents including the poor quality of Input Coil. However, the petitioner claims that `Prove Out' of the CTL Machine was successfully conducted from 19.11.2014 to 20.11.2014.

5. The petitioner states that respondent no. 2 was required to issue a Proving Test Certificate (PTC), which was a pre-condition for the petitioner to be paid the balance amount of 20%. The petitioner claims that its Indian Agent sent several letters to COFMOW during the period 2015 to 2018 regarding the issuance of PTC, however, respondent no. 2 failed to issue the same. The petitioner claims that the delay was on account of certain internal issues inter se the respondents with regard to the unilateral change in the parameters of `Levelling Accuracy' by respondent no.2.

6. The petitioner alleges that in the meanwhile respondent no. 2 did not maintain the CTL Machine and failed and neglected to take measures for protecting it from rain and weather. COFMOW was required to bear the cost of comprehensive maintenance even during the warranty period, but it had failed to take any steps in this regard. The respondents also did not enter into an Annual Maintenance Contract with the petitioner

7. It is also averred in the petition that meetings were held between the parties for re-commissioning of the CTL Machine in question, but no effective steps were taken.

8. On 24.06.2021, respondent no.2 sent a letter calling upon the petitioner to rectify the CTL Machine immediately, failing which, it threatened to reject the CTL Machine and would take steps to recover the amounts from the petitioner. Thereafter, respondent no. 2 issued a notice dated 09.07.2021 once again calling upon the petitioner to rectify the CTL Machine, failing which it would take action under Clause 2102 of the General Conditi