SUPREME COURT OF INDIA
INDIRA BANERJEE, J.K. MAHESHWARI, JJ.
Arcelor Mittal Nippon Steel India Ltd. - Appellant
Versus
Essar Bulk Terminal Ltd. - Respondent
Civil Appeal No. 5700 of 2021 [Arising out of Special Leave Petition (Civil) No.13129 of 2021]
Decided On : 14-09-2021
Constitution of India,1950 - Article 15 and 227 - Arbitration Act – Sections 9 , 17 , 9 , 9(3) , 9(1), 11(4)(a) ,11(6) 11 , 36 and 37 - Code of Civil Procedure, 1908 - Land Acquisition Act - Section 49 - Amendment Act - Section 26 - Sole Arbitrator appointed mutually by the parties - Cargo Handling Agreement - Appointment of a guardian for a minor or a person of unsound mind for purposes of arbitral proceedings - Appellant approached High Court of Gujarat under Section 11 of the Arbitration Act, for appointment of an Arbitral Tribunal - Respondent replied to notice of arbitration, contending that disputes between parties were not arbitrable and further contending that total amount due and payable by Appellant - commencement of the arbitral proceedings, a Court passes an order for any interim measure of protection under sub-section (1), arbitral proceedings shall be commenced within a period of ninety days from date of such order or within such further time as Court may determine - Inspection of any property or thing which is subject matter of dispute in arbitration, or as to which any question may arise and authorising for any of aforesaid purposes any person to enter upon any land or building in possession of any party, or authorising any samples to be taken, or any observation to be made, or experiment to be tried, which may be necessary or expedient for purpose of obtaining full information or evidence – Held, Arbitral Tribunal must exercise jurisdiction over the dispute under arbitration agreement - If it retains jurisdiction, it may make an award on substance of dispute, without waiting for the outcome of any court action aimed at deciding issue of jurisdiction - Court for interim measures before commencement of arbitral proceedings, during arbitral proceedings or at any time after making of an arbitral award but before it is enforced and in accordance with Section 36 of the Arbitration Act - Bar of Section 9(3) operates where application under Section 9(1) had not been entertained till constitution of Arbitral Tribunal. Ofcourse it hardly need be mentioned that even if an application under Section 9 had been entertained before constitution of Tribunal - Court always has the discretion to direct the parties to approach Arbitral Tribunal, if necessary by passing a limited order of interim protection, particularly when there has been a long time gap between hearings and application has for all practical purposes, to be heard afresh, or hearing has just commenced and is likely to consume a lot of time - High Court has rightly directed the Commercial Court to proceed to complete the adjudication - Appeal is allowed.
JUDGMENT :
Indira Banerjee, J.
Leave granted.
2. The short question of law raised in this appeal is, whether the Court has the power to entertain an application under Section 9(1) of the Arbitration and Conciliation Act, 1996, hereinafter referred to as “the Arbitration Act”, once an Arbitral Tribunal has been constituted and if so, what is the true meaning and purport of the expression “entertain” in Section 9(3) of the Arbitration Act. The next question is, whether the Court is obliged to examine the efficacy of the remedy under Section 17, before passing an order under Section 9(1) of the Arbitration Act, once an Arbitral Tribunal is constituted.
3. The Appellant and the Respondent entered into an agreement for Cargo Handling at Hazira Port. The said Cargo Handling Agreement was amended from time to time.
4. Article 15 of the said Cargo Handling Agreement provided that all disputes arising out of the Cargo Handling Agreement were to be settled in Courts, in accordance with the provisions of the Arbitration Act and be referred to a sole Arbitrator appointed mutually by the parties.
5. Disputes and differences having arisen under the said Cargo Handling Agreement, the Appellant invoked the arbitration clause by a notice of arbitration dated 22nd November 2020. According to the Appellant, the Respondent did not respond to the notice of arbitration.
6. The Appellant approached the High Court of Gujarat at Ahmedabad under Section 11 of the Arbitration Act, for appointment of an Arbitral Tribunal. On or about 30th December, 2020, the Respondent replied to the notice of arbitration, contending that the disputes between the parties were not arbitrable and further contending that the total amount due and payable by the Appellant as on 24th December, 2020 was Rs.673.84 crores inclusive of interest of Rs.51.11 crores.
7. On or about 15th January, 2021, the Appellant filed an application being Commercial Civil Miscellaneous Application No.2 of 2021 under Section 9 of the Arbitration Act in the Commercial Court and the 12th Additional District Judge, District & Sessions Court at Surat. On 16th March 2021, the Respondent also filed an application being Commercial Civil Miscellaneous Application No.99 of 2021 in the Commercial Court under Section 9 of the Arbitration Act.
8. Section 9 of the Arbitration Act is set out hereinbelow for convenience:-
(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 preservation, interim custody or sale of any goods which are the subject-matter of the arbitration agreement;
(b) securing the amount in dispute in the arbitration;
(c) the detention, preservation or inspection of any property or thing which is the subject-matter of the dispute in arbitration, or as to which any question may arise therein and authorising for any of the aforesaid purposes any person to enter upon any land or building in the possession of any party, or authorising any samples to be taken or any observation to be made, or experiment to be tried, which may be necessary or expedient for the purpose of obtaining full information or evidence;
(d) interim injunction or the appointment of a receiver;
(e) such other interim measure of protection as may appear to the Court to be just and convenient,
and the Court shall have the same power for making orders as it has for the purpose of, and in relation to, any proceedings before it.
(2) Where, before the commencement of the arbitral proceedings, a Court passes an order for any interim measure of protection under sub-section (1), the arbitral proceedings shall be commenced within a period of ninety days from the date of s
Login now and unlock free premium legal research
Login to SupremeToday AI and access free legal analysis, AI highlights, and smart tools.
Login
now!
India’s Legal research and Law Firm App, Download now!
Copyright © 2023 Vikas Info Solution Pvt Ltd. All Rights Reserved.