Arbitration—Interim Relief—Compensation as per award can be released before final disposal of objections subject to furnishing of bank gurantee of equivalent amount

Mr. Amit Rawal, J. (Oral) - The appellant is aggrieved of the impugned order dated 13.07.2016, whereby its sought indulgence of the Principal Court by invoking the provisions of Section 9 (ii) (b) and (e) of the Arbitration and Conciliation Act, 1996 (hereinafter called ‘the 1996 Act’) for issuance of the direction to the respondent to deposit the awarded amount of compensation along with interest or release of the same subject to furnishing of the security/bank guarantee to the satisfaction of the Court below while releasing the amount of awarded compensation.

2. Mr. Karan Bharioke, learned counsel appearing on behalf of the appellant submits that in the month of December 2002, the respondent- Company invited the bid for civil works (Lot TL-1), Division Works, Barrage and Spillways, Intake, Penstocks, surface Power House, Tail Channel, Plant Head Yard and other associated civil works at Teesta Low Dam H.R. (Project, Stage-III) 132 mw (4x33mw), West Bengal, India. The appellant along with other bidders participated in the tender and ultimately the tender of the appellant was accepted and the agreement dated 29.11.2003 was executed between the parties. The original contractual period was upto 45 months from the date of the notification of the work and two months’ time had been stipulated for mobilization and 12 months defect liability period was fixed. Though the agreement also stipulated the extension of time. Clause 38 of the agreement provided for settlement of the dispute. Various reasons had occurred. It has further been submitted that appellant engaged sub-contractor with full concurrence and approval of the respondent. The appellant had executed the work, but there were various differences and disputes. Many meetings were held and ultimately the dispute was not resolved and the matter was referred to the Arbitrator Tribunal. The Arbitrator Tribunal, on the basis of the material placed on record, passed the award on 22.04.2016 in favour of the appellant and supplementary award as per the provisions of Section 3 of the 1996 Act was passed on 13.06.2016. The respondent till date has not chosen to file the objections under Section 34 of the 1996 Act. The appellant-Company is an Expert in construction of dams and there are pre-requisite/conditions for submitting tender works i.e. few of them are “Net Worth” and “List of Completed Projects”. In case awarded amount is not ordered to be released subject to any terms and conditions, the appellant would suffer irreparable loss and balance of convenience lies in their favour. The respondent had been instrumental in delaying the proceedings before the Arbitrator as the reference was sought in July 2007 and Award came to be passed in 2016 amounting to Rs.1,08,70,73,697/- along with interest @ 12%. In case the amount is not release, it was seriously effect in fetching the future tenders, in essence, would have a serious impact on many other aspects.

3. He further submits that it would not only hamper the business of the appellant and all concerned employees, but would also be a prejudicial to the interest of the respondent as it is the responsibility of Government Organisation to deposit the amount at the earliest in order to avoid unnecessarily burden of huge interest. The provisions of Section 9 of the 1996 Act envisage three situations i.e. “before”, “during”, the arbitration proceedings or at any time “after” making of the arbitral award, but before it is enforced in accordance with Section 36 of the 1996 Act. The granting of interest would not be sufficient in mitigating the loss and sufferance rather provided an opportunity to the appellant to bring the work for the company and as well as to the workers, much less, it would facilitate the improvement of the financial condition of the appellant so as to fetch other work/tenders. Since, the act and conduct of the respondent in adopting delaying tactic evident that from entering into reference till the passing of the Award an