IN THE HIGH COURT OF ALLAHABAD
BEFORE THE HONble M. KATJU, J. , THE HONble S. L. SARAF, J.
L.M.L.LTD. - Appellant
Versus
UNION OF INDIA - Respondents
Writ Petition 40817 Of 1998
Decided On : 12/01/1998
ARBITRATION - INTERIM MEASURES - SECTION 9 OF THE ARBITRATION AND CONCILIATION ACT, 1996 - APPLICABILITY TO PROCEEDINGS UNDER PART II OF THE ACT - CIVIL COURT'S JURISDICTION TO GRANT INTERIM RELIEF - SECTION 45 OF THE ACT - NON OBSTANTE CLAUSE - INTERPRETATION.
Fact of the Case:
Petitioner and respondent entered into an agreement for transfer of technology. Dispute arose and was referred to arbitration under the International Chamber of Commerce (ICC) Rules. Petitioner filed a writ petition seeking a declaration that Section 45 of the Arbitration and Conciliation Act, 1996 is unconstitutional and praying for interim relief.
Finding of the Court:
1. Section 9 of the Arbitration and Conciliation Act, 1996 applies to proceedings under Part II of the Act, and the civil court has jurisdiction to grant interim relief during arbitration proceedings. 2. Section 45 of the Act does not exclude the powers of the civil court to grant interim relief. 3. The non obstante clause in Section 45 is an enabling provision authorizing the judicial authority to refer parties to arbitration without restricting the powers of the civil court to grant interim relief under Section 9 of the Act. 4. The writ petition is misconceived and no order can be passed on it.
Issues: 1. Whether Section 9 of the Arbitration and Conciliation Act, 1996 applies to proceedings under Part II of the Act. 2. Whether the civil court has jurisdiction to grant interim relief during arbitration proceedings. 3. Whether Section 45 of the Act excludes the powers of the civil court to grant interim relief.
Ratio Decidendi: 1. The scheme of the Arbitration and Conciliation Act, 1996, the context, and the object of the Act indicate that Section 9 applies to all kinds of arbitration proceedings, including those under Part II. 2. The non obstante clause in Section 45 is not an impedient but an enabling provision authorizing the judicial authority to refer parties to arbitration without restricting the powers of the civil court to grant interim relief under Section 9 of the Act. 3. The purpose of Section 9 is to give interim protection during arbitration proceedings, and denying interim relief under Section 9 to proceedings under Part II would make Section 45 too harsh.
Final Decision: The writ petition is dismissed in limine.
( 2 ) HOWEVER, the Forum for filing an application under section 9 of the Act is not the High Court but the Civil court.
( 3 ) THE petition is disposed of.
( 4 ) HEARD learned counsel for the petitioner Sri Rajesh Kumar learned counsel for the respondent no. 3 and 4 as well as Sri Mohd. Isa Khan learned counsel for the respondent no. 1
( 5 ) WITHOUT going into the merits of the case we are of the opinion that Section 9 of the Arbitration and Conciliation Act 1996 which provides for interim measures during arbitral proceedings applies also to provision under Part II of the Act No. doubt Section 2 (2) of the Act states that Part I applies where the place of arbitration is in india and section 9 is in Part I of the Act, but it is a settled principle of interpretation that in construing statutes we must see the scheme of the Act, the context, the object etc.
( 6 ) A challenge has been made to Section 45 of the Act, but we are of the opinion that ther court should endeavor to uphold the constitutionality of a provision even if for that purpose we have to give a strained interpretation, rather thanputting an interpretation which makes the statute unconsitutional by taking its plain meaning. In our opinion if Section 9 is treated as inapplicable to Part II it will make Section 45 too harsh. The purpose of Section 9 is to given interim protection during arbitration proceedings. In our view interim protection under section 9 can be given by the court lin all kinds of arbitration proceedings, even those under Part II, otherwise irreparable loss may be caused.
( 7 ) IN the circumstances we dispose off this petition with the liberty to the petitioner to move an application under section 9 of the Act to the court concerned which will decide the same in accordance with law and in the light of the observations made above.
( 8 ) HEARD learned counsel for the parties.
( 9 ) THE present petition relates to a matter which is essentially a civil dispute between Petitioner No. 1 and a foreign collaborator. The petitioners had entered into an agreement with respondent no. 2, inter alia for transfer of technology in respect of certain two wheeler vehicles. The dispute between the parties as per the terms of agreement has now been referred to the arbitration of International chamber of Commerce and the same is to proceed or is proceeding in accordance with the Rules of the said Chamber. Rule 23 (2) of the International Chamber of Commerce Rules (for short I. C. C. Rules) reads as follows:
"23. 2 Before the file is transmitted to ther Arbitral Tribunal and in appropriate circumstances even thereafter, the parties may apply to any competent judicial authority for interim or conservatory measures. The application of a party to a judicial authority for such measures or for the implementation of any such measures ordered by an Arbitral Tribunal agreement and shall not affect the relevant powers reserved to the Arbitral Tribunal. Any such application and any such measures taken by the judicial authority must be notified without delay to the Secretariat. The Secretariat shall inform the arbitral Tribunal thereof. "
Similar provision is made under Section 9 of the Arbitration and conciliation Act, 1996, which reads as under:"9. Interim measures etc. by Court: A party may, before or during arbitral proceedings or at any time after the making of the arbitral award but before it is enforced in accordance with Section 36, apply to a Court:- (i) for the appointment of a guardian for a minor or a person of unsound mind for the purposes of arbitral proceedings, or (ii) for an interim measure of protection in respect of any of the following matters namely:- (a) the preservat
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