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IN THE HIGH COURT OF JUDICATURE AT MADRAS
ABDUL QUDDHOSE, J.
Priya Blue Industries Pvt. Ltd., Bhavnagar - Applicant
Versus
M/s. Goseago Multimodal Corporation, Chennai. and two others – Respondents
A.No.843 of 2025 and O.A.Nos.109 and 110 of 2025
Decided On : 03-03-2025
ORDER :
(ABDUL QUDDHOSE, J.)
O.A.Nos.109 and 110 of 2025 have been filed under Section 9 of the Arbitration and Conciliation Act, 1996 (in short “the Act”) seeking for an order of interim injunction to restrain the respondent from moving/removing/handling the materials from Neyveli Lignite Corporation (NLC), which are the subject matter of the agreements dated 26.03.2024 and 06.07.2024; and to restrain the respondent from acting prejudicial to the interest of the applicants by violating the agreements dated 26.03.2024 and 06.07.2024, pending disposal or the resolution of the dispute by the Arbitral Tribunal.
2. A.No.843 of 2025 has been filed seeking to vacate the interim injunction granted by this Court vide its order dated 13.02.2025 passed in O.A.Nos.109 and 110 of 2025.
3. For the sake of convenience and clarity, the parties will be referred to as arrayed in O.A.Nos.109 and 110 of 2025.
4. The applicants claim that the respondent has committed breach of the Composite Agreement for Exclusive Sale and Financial Assistance dated 26.03.2024 (in short “Composite Agreement dated 26.03.2024”). According to the applicants, only on the investment made by them with the respondent amounting to Rs.13 crores, the respondent became the successful bidder for dismantling and removal of scrap from NLC. The applicants claim that they were always ready and willing to perform the terms and conditions of the Composite Agreement dated 26.03.2024. According to the applicants, contrary to the terms and conditions of the Composite Agreement dated 26.03.2024, the respondent has dismantled and removed the scrap from the premises of NLC and without the concurrence of the applicants, the respondent is attempting to sell the scrap items. Under those circumstances, by relying upon certain clauses in the Composite Agreement dated 26.03.2024, the applicants have filed O.A.Nos.109 and 110 of 2025 seeking for interim injunction as prayed for in those applications.
5. This Court, by its order dated 13.02.2025, granted an order of interim injunction as prayed for. However, to protect the interest of NLC, where the scrap items are presently lying, in the event of them suffering any loss on account of the retention of the scrap items, which is the subject matter of the dispute in those applications, an undertaking was recorded from the applicants that they shall indemnify/compensate NLC for any loss suffered by them on account of the same.
6. The respondent has now filed an application in A.No.843 of 2025 seeking to vacate the interim injunction granted by this Court vide its order dated 13.02.2025 passed in O.A.Nos.109 and 110 of 2025 and questions the jurisdiction of this Court to entertain those applications on the ground that the seat of the arbitration is at Bhavnagar, Gujarat. Therefore, according to them, O.A.Nos.109 and 110 of 2025 filed by the applicants are not maintainable before this Court, as this Court does not have jurisdiction to decide those applications, and only Bhavnagar Courts have got jurisdiction. In support of their stand, they relied upon the Agreement for Business Arrangement dated 06.07.2024 (in short “subsequent Agreement dated 06.07.2024”) as well as First Addendum and Second Addendum to the subsequent Agreement dated 06.07.2024. According to them, the agreement relied upon by the applicants is only a Memorandum of Understanding (MoU), that was entered into prior to the respondent becoming the successful bidder in the auction conducted by NLC. According to them, the subsequent Agreement dated 06.07.2024 and two Addendum Agreements dated 06.07.2024 superseded the earlier Composite Agreement dated 26.03.2024. Therefore, by relying upon the jurisdiction clause in the subsequent Agreement dated 06.07.2024, which stipulates that the seat of arbitration is at Bhavnagar, they claim that the applications filed in O.A.Nos.109 and 110 of 2025 are not maintainable before this Court as this Court lacks jurisdiction.
7. Insofar as the merit of the appli
The court ruled that the subsequent agreement supersedes the initial agreement, establishing jurisdiction at Bhavnagar, and the applicants failed to meet the criteria for an interim injunction.
The absence of a concluded contract precludes the invocation of arbitration under the Arbitration and Conciliation Act, affirming the need for absolute acceptance in contract formation.
The court may exercise jurisdiction under Section 9 of the Arbitration and Conciliation Act if the remedy under Section 17 is found to be inefficacious.
The court may exercise jurisdiction under Section 9 of the Arbitration and Conciliation Act if the remedy under Section 17 is found to be inefficacious, particularly regarding third parties not party....
An Arbitral Tribunal under the Arbitration and Conciliation Act cannot grant interim orders that effectively render final decisions on substantive claims, as this exceeds its jurisdiction.
A settlement agreement that explicitly supersedes an original contract and lacks an arbitration clause is not subject to arbitration, reinforcing the principle of separability.
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