The court cannot grant interim relief under Section 9 of the Arbitration Act once the Arbitral Tribunal is constituted, unless the petitioner demonstrates that such relief cannot be obtained effectively from the Tribunal.

Headnote:(A) Arbitration and Conciliation Act, 1996 - Section 9 - Interim measures - Petitioner sought injunction against respondents from dealing with assets pending arbitration proceedings - Court held that since Arbitral Tribunal was constituted, the petitioner should seek relief from it, not the court - Interim orders to continue for three months. (Paras 29-34)

(B) Jurisdiction of Court - The court cannot entertain applications under Section 9 once the Arbitral Tribunal is constituted unless it finds that the remedy provided under Section 17 is not efficacious. (Paras 29-31)

Facts of the case:
Petitioner, an investment company, sought an injunction against respondents to prevent them from dealing with assets valued at USD 235,187,165.78 pending arbitration regarding alleged breaches of a financing agreement. (Paras 1-2)

Findings of Court:
The petitions were rejected as the Arbitral Tribunal was already constituted, and the petitioner was advised to seek interim relief from the Tribunal. (Paras 34)

Issues: Whether the petitioner could obtain an interim injunction from the court after the constitution of the Arbitral Tribunal. (Para 14)

Ratio Decidendi: The court emphasized that once the Arbitral Tribunal is constituted, the appropriate course for seeking interim measures is through the Tribunal, not the court, unless specific circumstances render that remedy ineffective. (Paras 29-31)

Result: Petitions rejected; liberty granted to seek clarification or interim relief from the Arbitral Tribunal.

CAV ORDER

These petitions are filed under Section 9 of the Arbitration and Conciliation Act, 1996 read with Rule 9 of the Arbitration(Proceedings before the Court) Rules, 2001.

2. The Petitioner is a company duly incorporated under the laws of Qatar and has its principal place of business at the address as mentioned in the cause title. The Petitioner makes investments in companies world wide with the objective of capital formation for the investee companies, to generate long-term capital appreciation for itself. The petitioner entered into a Cash-Settled Option Transaction pursuant to a long-form confirmation letter dated 7^th September, 2022 with respondent No. 1 to part-finance the acquisition by the letter of 17,891,289 equity shares ("Aakash Shares") of a public limited company named Aakash Educational Services Limited having its registered office at Bengaluru (Aakash).

2.1. Respondent No. 1 is a company incorporated under the laws of Singapore. Respondent No. 1 is an investment vehicle of Respondent No. 2; it is a wholly- owned subsidiary of Byju's Global Pte. Ltd., an entity registered under the laws of Singapore ("Global"), in which Respondent No. 2 is the sole shareholder. Respondent No. 1 is also an affiliate of and owns shares in, a company called Think & Learn Private Limited ("T&L"), which is co- founded and majority-owned by Respondent No. 2.

2.2. On 7th September, 2022, Global executed a Share Security Agreement in favour of the Petitioner, to secure the Transaction. Respondent No. 2 is an Indian national, and is a co-founder of the ed-tech platform named BYJU which is owned and operated by T&L. Respondent No. 2 executed a Deed of Personal Guarantee in favour of the Petitioner on 7^th September, 2022 regarding the obligations of respondent No.1 under the confirmation letter (personal guarantee). The Petitioner filed these petitions under Section 9 of the Arbitration and Conciliation Act, 1996 (hereinafter referred as the "Arbitration Act") seeking specific interim measures of protection for respondent no.1's breaches of its obligations under the Transaction. The arbitration clause relevant for the purposes of the present petition is Clause 13 of the Confirmation Letter read with the ISDA Master Agreement. On 7^th March, 2024, the petitioner invoked arbitration under the Singapore International Arbitration Centre (hereinafter referred to as ‘SIAC’) Rules against the respondents in accordance with, and obtained an interim award dated 28^th March, 2024 passed by the Emergency Arbitrator appointed by SIAC on 8^th March, 2024. The Emergency Arbitrator passed an Award restraining the respondents until the conclusion of the Arbitration or until further order from dealing in, parting with, selling, charging, pledging, or in any other way, disposing of or encumbering any of their assets, up to the value of USD 235,187,165.78.

2.3. Respondent No.2 on 18.4.2024 disclosed certain assets of Respondent No.1 and himself, by way of an affidavit filed by him in the arbitration, in partial compliance with the Emergency Arbitrator’s direction in the Emergency Arbitrator award. These disclosures further evidence the malafides of the respondents. Respondent No.2 has failed to specify the value of any of the disclosed assets. It is contended that, the respondents breaches, and their conduct in transferring/encumbering/disposing of their assets, which would inevitably result in the frustration of the petitioner’s claim in the arbitration. The petitioner is constrained to approach this Court seeking urgent protective interim relief restraining respondent no.1, including its partners, officers, agents, servants etc. from, in any manner dealing with, transferring, selling, disposing of the alienating, encumbering or creating any rights, title, interest inter alia, the assets, more particularly listed in the schedule to the present petition. It is contended that the Arbitral Tribunal has not yet been constituted. In the absence of the constitution

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2025 Supreme(Online)(KAR) 12443

The court cannot grant interim relief under Section 9 of the Arbitration Act once the Arbitral Tribunal is constituted, unless the petitioner demonstrates that such relief cannot be obtained effectively from the Tribunal.

Cases Referred (3)