Point of Law: Expression “entertain” means to consider by application of mind to the issues raised. The Court entertains a case when it takes a matter up for consideration. The process of consideration could continue till the pronouncement of judgment as argued by Khambata.

JUDGMENT :

J.B. PARDIWALA, J.

1. “Victorious warriors win first and then go to war, while defeated warriors go to war first and then seek to win.”

The above quote from the “Art of War” authored by Sun Tzu is not superlative in the context of Section 9 of the Arbitration and Conciliation Act, 1996, which confers power to the Courts to grant interim measures of protection. Section 9 is one of the most crucial and widely invoked provisions under the Act. Such measures become necessary to prevent damage to or loss of, the subject matter of the dispute in the interim period, i.e. before the final adjudication of the dispute by an Arbitral Tribunal.

2. This appeal under Section 37 of the Arbitration and Conciliation Act, 1996 (for short, “the Act, 1996”) read with Section 13 of the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015 (for short, “the Act, 2015”) is directed against the order passed by a learned Single Judge of this Court dated 27th November 2020 in the Civil Application No.4 of 2020 filed in the Commercial Arbitration Petition No.9 of 2020; by which the appellant came to be restrained from proceeding further with the suit instituted by it before the Supreme Court of the State of New York against the respondent No.1 herein namely Indian Overseas Bank.

3. The facts giving rise to this appeal may be summarized as under:

4. The respondent No.2 herein – Shital Ispat Private Limited and the respondent No.3 namely Red Snapper Maritime Limited entered into a Vessel Purchase Contract (VPC) dated 30th October 2019. It appears from the Memorandum of Agreement dated 30th October 2019 that the respondent No.3 – Red Snapper agreed to sell two vessels named AMIL 19 and AMIL 50 respectively (subject vessels). The respondent No.2 – Shital Ispat agreed to purchase the two vessels in accordance with the terms and conditions of the Memorandum of Agreement for a lumpsum price of USD 1,238,238.00.

5. The record further reveals that the respondent No.1 – Indian Overseas Bank (IOB), upon request made by the respondent No.2 – Shital Ispat, issued an irrevocable Letter of Credit in the amount of USD 1,238,288 with the documentary credit No.016960119000032 (subject LC). The subject LC is governed by the Uniform Customs and Practice for Documentary Credits, 2017 Revision, ICC Publication No.600 (UCP 600). The beneficiary of the subject LC is the respondent No.3 – Red Snapper. The subject LC was advised by the Red Snapper’s Bank namely Noor Bank, Dubai, UAE (Noor Bank). The Noor Bank acted as the Presenting Bank. It appears that the appellant Bank was merely acting as the negotiating bank between the Noor Bank and IOB for the subject LC.

6. The record further reveals that on 8th January 2020, the IOB confirmed with the appellant Bank that Shital Ispat had taken the physical delivery of the subject vessels and further, the subject LC had become operative. The IOB authorized the appellant Bank to encash the LC documents. It is not in dispute that the appellant Bank complied with its obligations and transferred the bill amount to the tune of USD 1,238,288 in the account of Noor Bank for the benefit of the Red Snapper. However, the IOB refused reimbursement alleging that the LC documents were discrepant on account of the alleged forgery. The appellant Bank disputed such stance of the IOB.

7. It appears that in view of the aforesaid, the Shital Ispat filed a petition in this Court being the Commercial Arbitration Petition No.9 of 2020 on 27th January 2020 under Section 9 of the Act, 1996. Such petition under Section 9 came to be filed against the Red Snapper and IOB respectively. It appears that on 27th January 2020, a learned Single Judge of this Court restrained the IOB from making any payment under the subject LC. Indisputably, the appellant Bank, by that time, had already transferred the money on 14th January 2020.

8. The order passed by the learned Single Judge dated 27th January 2020 reads thus:

“Notice return