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2025 (4) TMI 1 - HC - Indian LawsContempt petition is in respect of violation of an order dated 03.04.2024 - HELD THAT - Learned counsel for the respondent herein seeks a specific direction that pendency of this petition will not come in the way of continuation of the arbitral proceedings for which an Arbitrator was appointed by the order dated 03.04.2024. There is no prayer one way or the other with regard to continuation or stay of the arbitral proceedings in this contempt petition. It is therefore unnecessary for this Court to make any comment thereupon. The parties are before the learned Arbitrator and may make their submissions before the learned Arbitrator. List before the Roster Bench on 28.11.2024.
ISSUES PRESENTED and CONSIDERED
The core legal questions considered in this judgment include:
ISSUE-WISE DETAILED ANALYSIS 1. Enforceability of the Order Dated 03.04.2024 The relevant legal framework includes the Arbitration and Conciliation Act, 1996, particularly Sections 9 and 37(1)(b), which pertain to interim measures and appeals, respectively. The Court noted that the order dated 03.04.2024 was issued under Section 9 for interim measures of protection, and its enforceability was questioned following the withdrawal of an appeal against it. The Court interpreted the Division Bench's order, which dismissed the appeal as withdrawn, as not setting aside the order dated 03.04.2024. The Court reasoned that the order remains in effect as an interim measure, subject to any subsequent orders by the Arbitral Tribunal. The withdrawal of the appeal does not negate the interim order's validity, but rather clarifies that the observations within it are not binding on the arbitral proceedings. 2. Violation of the Order Dated 03.04.2024 by Continuing Criminal Complaints The key evidence includes the acknowledgment by the respondents that the amount of Rs.21.95 crores has been deposited, fulfilling the condition set forth in the order. The Court noted that the continuation of criminal complaints by the respondents potentially violates the order, which explicitly stated that such complaints should not proceed upon the deposit of the specified amount. The Court applied the law to the facts by emphasizing that the order's stipulations regarding the cessation of criminal complaints remain effective until modified by the Arbitral Tribunal. The respondents' continuation of complaints, therefore, constitutes a prima facie violation. 3. Impact of the Division Bench's Clarification The Division Bench's order clarified that the observations in the order dated 03.04.2024 are not final, allowing the Arbitral Tribunal to adjudicate disputes uninfluenced by these observations. The Court treated this as a clarification that does not render the order ineffective but allows for flexibility in arbitral adjudication. The Court concluded that the interim order remains valid and enforceable, with the Arbitral Tribunal having the authority to issue further directives as necessary. 4. Continuation of Arbitral Proceedings The respondents sought assurance that the contempt petition would not hinder the arbitral proceedings. The Court confirmed that there was no request to stay or continue the arbitral proceedings within the contempt petition, rendering any commentary on this matter unnecessary. The parties are free to proceed with arbitration and present their submissions to the Arbitrator. SIGNIFICANT HOLDINGS The Court held that:
Key legal reasoning includes the interpretation that interim orders issued under Section 9 of the A&C Act remain effective unless explicitly set aside, and the withdrawal of an appeal does not inherently invalidate such orders. The Court emphasized the importance of adhering to interim directives until the Arbitral Tribunal issues further orders.
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