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IN THE HIGH COURT OF DELHI
Chandra Dhari Singh, J.
GMR Pochanpalli Expressways Limited - Appellant
Versus
National Highways Authority of India - Respondent
O.M.P.(I) (COMM.) 396 of 2020
Decided On : 10-01-2023




A court cannot grant permanent relief under Section 9 of the Arbitration and Conciliation Act, as its provisions are limited to interim measures to support arbitration, not for final outcomes.

Headnote:(A) Arbitration and Conciliation Act, 1996 - Section 9 - Commercial Courts Act, 2015 - Petition seeking mandatory injunction for reimbursement of deductions made under Concession Agreement in breach of Arbitral Award - Court held it cannot grant permanent relief in the nature of injunction under Section 9, as the petitioner seeks enforceable relief post-arbitral proceedings. (Para 37)

(B) The Court noted the limitations under Section 9, observing that interim relief should not convert into permanent relief and highlighted that the relief sought must be in aid of the continuation of arbitral proceedings rather than as a final outcome. (Paras 30-34)

Facts of the case:
The petition was filed by a Special Purpose Vehicle under a Concession Agreement concerning project operations on a national highway, after a deduction of Rs. 12,56,72,430/- was made by the respondent, which the petitioner claimed was unauthorized post-arbitral award. (Paras 2-10)

Findings of Court:
The petition seeking a mandatory injunction to release amounts deducted was dismissed, emphasizing that the relief sought was not maintainable under Section 9 due to its nature of being permanent rather than interim. (Para 38)

Issues: The key issue was whether the relief sought by the petitioner under Section 9 was maintainable as interim relief or sought as a final relief post-arbitral proceedings. (Para 23)

Ratio Decidendi: The court concluded that Section 9 is intended for interim measures, and permanent reliefs cannot be conferred under this section without going beyond its legislative scope. (Para 36)

Result: Petition dismissed.

Table of Content
1. facts of the concession agreement and disputes. (Para 2 , 3 , 4 , 5)
2. details on amount deductions and disputes arising. (Para 6 , 7 , 8)
3. petitioner's arguments against the deductions made. (Para 9 , 10 , 11 , 12 , 13 , 14 , 15)
4. respondent's counterarguments and objections. (Para 16 , 17 , 18 , 19 , 20)
5. court's observations on interim measures under section 9. (Para 21 , 22 , 23 , 24 , 25 , 26 , 27 , 28 , 29 , 30 , 31 , 32 , 33 , 34 , 35)
6. conclusion on the maintainability of the petition. (Para 36)
7. final dismissal of the petition. (Para 38 , 39)

ORDER

Chandra Dhari Singh, J. (Oral)--The instant petition under Section 9 of the Arbitration and Conciliation Act, 1996 (hereinafter "Arbitration Act") read with Section 2(1) of the Commercial Courts Act, 2015 has been filed on behalf of the petitioner seeking the following reliefs:

    "i. Pass an order of mandatory injunction directing the Respondent to reimburse/release the amount of Rs. 12,56,72,430/- which has been deducted illegally and arbitrarily by the Respondent in breach of the Arbitral Award from the 22nd Annuity paid to the Petitioner under the Concession Agreement dated 31.03.2006 along with interest @5% over SBI PLR from the due date of payment till the actual date of payment;

    ii. Pass any such other or further orders as may be deemed fit by this Hon'ble Court in the facts and circumstances of the present case."

FACTUAL MATRIX

2. The parties had entered into a Concession Agreement on 31st March 2006, for the design, construction, development, finance, operations and maintenance of K.M. 367.00 (Adloor Yellareddy) to K.M. 447.000 (Kalkallu) covering 85,745 km and improvement, operation and maintenance of K.M. 447.000 (Kalkallu) - 464.000 (Gundla-Pochanpalli) covering 17,000 km on NH-7 in the State of Andhra Pradesh (hereinafter "the Project").

3. The petitioner, being a Special Purpose Vehicle incorporated and registered under the Companies Act, 1956, by the consortium of GMR Infrastructure Ltd. and GMR Energy Limited, is involved in construction, operation and maintenance of the Project arising out of the Concession Agreement between the parties. The respondent is the National Highways Authority of India responsible for maintenance, management and development of National Highways or stretch of the National Highways vested in or entrusted to it by the Central Government.

4. As per the Concession Agreement, the petitioner achieved the Provisional Commercial Operation Date within 30 months, i.e., on 26th March 2009, whereafter, the petitioner has been operating and maintaining the Project. The final Completion Certificate was also obtained by the petitioner on 25th July 2009.

5. Thereafter, disputes arose between parties regarding requirement to do renewal work every five years. After several attempts of resolution of such disputes, with the intervention of this Court in OMP (I)(COMM) No. 421/2018, an Arbitral Tribunal was constituted by the Indian Council of Arbitration and ultimately, the Award dated 14th January 2020 was passed. The following reliefs were given in the said Award:

    "a. The Petitioner is not entitled to the claim amount of Rs.104,47,80,462/- on account of reimbursement of costs incurred for relaying the pavement at the end at the end of the fifth year and extra costs incurred due to the decision not to allow recycling of milled material.

    b. Petitioner is entitled to the claim amount of Rs.10,78,61,8641- on account of deductions made by the Respondent towards damages. The Respondent is required to pay the aforesaid amount to the Petitioner along with interest @ 12% p.a. from the date of deduction, i.e., 27.03.2018, till the date of payment.

    c. Petitioner is entitled to the litigation costs of Rs.30 lacs, which is required to be paid by the Respondent to the Petitioner. In addition to this amount, whatever amount the Petitioner has deposited with the ICA towards the share of the fees payable by the Respondent, Rs.57,65,250/-,

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