9911796707
TMI Blog2016 (10) TMI 1353X X X X Extracts X X X X X X X X Extracts X X X X ..... d apply to pending arbitral proceedings. The proposal that the Amendment Act shall apply only to fresh arbitrations was accepted as is plainly evident from the language of the latter part of Section 26 of the Amendment Act. No. specific provision was enacted with regard to the applicability of the amendment to fresh applications . However, it was enacted that the Amendment Act would come into force from 23.10.2015 and therefore would be plainly applicable to the proceedings instituted after the said date. Whether by virtue of the proviso introduced in Section 2(2) of the Act, recourse to Section 9 of the Act is available in relation to the arbitral proceedings? - HELD THAT:- In the present case, there is no dispute as to the law governing the arbitration. Clause 15.1 of the Agreement expressly provides that the laws as applicable in Singapore will apply to the entire contract. Further the seat of the arbitration is also in Singapore. The petitioners had also applied under Section 12(6) of the International Arbitration Act, (IAA) - the law as applicable to the International Arbitration in Singapore - for the judgment in terms of the order passed by the Arbitral tribunal. W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ement of interim measures. However the Act does not contain any provision pari materia to Article 17H for enforcement of interim orders granted by an Arbitral Tribunal outside the India. Section 17 of the Act is clearly not applicable in respect of arbitral proceedings held outside India - the emergency award passed by the Arbitral Tribunal cannot be enforced under the Act and the only method for enforcing the same would be for the petitioner to file a suit. A party seeking interim measures cannot be precluded from doing so only for the reason that it had obtained a similar order from an arbitral tribunal. Needless to state that the question whether the interim orders should be granted under section 9 of the Act or not would have to be considered by the Courts independent of the orders passed by the arbitral tribunal. Recourse to Section 9 of the Act is not available for the purpose of enforcing the orders of the arbitral tribunal; but that does not mean that the Court cannot independently apply its mind and grant interim relief in cases where it is warranted - It is relevant to note that the provisions under Article 17 I (2) of the Model Law, the court enforcing an interim orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epresentatives and employees (including but not limited to the Respondent No. 3) from taking any steps whatsoever in contravention of clause 3.1.2 of the Share Purchase Agreement dated 12 March 2015; 2. At the outset, the respondents have taken a preliminary objection as to the maintainability of the present petition. The respondents contend that the present petition under Section 9 of the Act is not maintainable principally on the ground that Part-I of the Act is inapplicable to arbitral proceedings held outside India - in this case Singapore - and the parties have impliedly agreed to exclude the applicability of Section 9 of the Act. The respondents also contend that the Arbitration and Conciliation (Amendment) Act, 2015 (hereafter 'the Amendment Act') is inapplicable to the present proceedings as the arbitral proceedings had commenced prior to 23.10.2015. The petitioners contend otherwise. 3. At this stage, the limited controversy that arises for consideration is whether the petition filed by the petitioners is maintainable. 4. Briefly stated, the facts necessary to address the aforesaid controversy are as under:- 4.1 Raffles Education Corporation Li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gapore. Further the Arbitration would be held in Singapore under the Arbitration Rules of the Singapore International Arbitration Centre (hereafter 'SIAC Rules'). 4.5 On 15.09.2015, the petitioners invoked the arbitration clause by filing a Notice of Arbitration with the Singapore International Arbitration Centre (hereafter 'SIAC') with a copy thereof to the respondents. Pursuant to Rule 26.2 of the SIAC Rules, a request for appointment of an Emergency Arbitrator was made by the petitioners to SIAC on 25.09.2015, which was opposed by the respondents. The respondents by a notice dated 25.09.2015, terminated the Agreement alleging that Petitioners were in repudiatory breach of the Agreement. Thereafter, on 28.09.2015, the Vice President of the Court of Arbitration, SIAC appointed Mr. Michael Lee as the Emergency Arbitrator to consider the Emergency Application filed by the claimants (petitioners herein). 4.6 The Emergency Arbitrator passed an Interim Emergency Award dated 06.10.2015 (hereafter ' the Emergency Award') wherein the Interim relief sought by the claimants was granted and respondents were restrained from taking any action that deprived the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore and the Agreement was entered into after the Supreme Court had delivered the judgment in Bharat Aluminium Company v. Kaiser Aluminium Technical Services Inc.: (2012) 9 SCC 552, Part I of the Act would not apply and therefore, the present petition is not maintainable. Mr. Dutt drew the attention of this Court to Section 26 of the Amendment Act and contented that by virtue of Section 26 of the Amendment Act, it was not applicable in respect of arbitral proceedings that had commenced before the Amendment Act came into force, that is, 23.10.2015. 7. Next, he referred to Clause 15 of the Agreement and without prejudice to the contention that the Amendment Act did not apply, contended that since it was expressly agreed between the parties that the arbitration would be governed by the laws of Singapore and the arbitral proceedings would be conducted in accordance with the Rules of SIAC, the parties had impliedly excluded the applicability of Part I of the Act to the arbitral proceedings. He further submitted that proviso to Section 2(2) as amended by the Amendment Act provided that sections 9, 27, 37(1)(a) and 37(3) were applicable subject to an agreement to the contrary . Mr. D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onstitution bench of the Supreme Court in Bharat Aluminium (supra). He also submitted that mere choosing SIAC Rules for arbitration does not in any way indicate that Part I has been impliedly excluded by the parties. 11. Mr. Vashist stated that the present petition is not an enforcement proceeding per se and has been filed to prevent the respondents from frustrating the rights of the petitioners. 12. Mr. Vashist also countered the submission on behalf of the respondents that the Amendment Act would not be applicable to arbitral proceedings commenced before commencement of the Amendment Act on the following grounds : (i) the expression to arbitral proceedings as used in Section 26 of the Amendment Act would not apply to proceedings before a court; and (ii) Petition was filed under the Ordinance and on the day it was filed, there was No. provision in the ordinance excluding the applicability of the amendments to arbitral proceedings commenced prior to 23.10.2015 and by virtue of Section 27(2) of the Act, all acts done under the Ordinance were saved. Reasoning and Conclusion 13. In the aforesaid context as to the maintainability of the present petition, the follo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s that have commenced under Section 21 of the Act prior to 23.10.2015 and those that are commenced after 23.10.2015 do not exhaust the entire statutory space to which the Amendment Act is applicable, then plainly the provisions of Section 26 as to the applicability of the Act are not exhaustive. In other words, Section 26 is silent as to the applicability of the Amendment Act to proceedings which are not expressly indicated under Section 26 of the Act. 18. The second aspect to be kept in mind is the meaning of the expression arbitral proceedings . Section 21 of the Act provides for commencement of arbitral proceedings and reads as under: 21. Commencement of arbitral proceedings.--Unless otherwise agreed by the parties, the arbitral proceedings in respect of a particular dispute commence on the date on which a request for that dispute to be referred to arbitration is received by the respondent. 19. Section 32 of the Act contains provisions regarding termination of proceedings. The said section is set out below:- 32. Termination of proceedings.-- (1) The arbitral proceedings shall be terminated by the final arbitral award or by an order of the arbitral tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that context the Supreme Court, inter alia, held as under:- The provisions of the old Act (Arbitration Act, 1940) shall apply in relation to arbitral proceedings which have commenced before the coming into force of the new Act (the Arbitration and Conciliation Act, 1996). The phrase in relation to arbitral proceedings cannot be given a narrow meaning to mean only pendency of the arbitration proceedings before the arbitrator. It would cover not only proceedings pending before the arbitrator but would also cover the proceedings before the court and any proceedings which are required to be taken under the old Act for the award becoming a decree under Section 17 thereof and also appeal arising thereunder. * * * The expression in relation to is of the widest import as held by various decisions of this Court in Doypack Systems (P) Ltd., Mansukhlal Dhanraj Jain, Dhanrajamal Gobindram and Navin Chemicals Mfg. This expression in relation to has to be given full effect to, particularly when read in conjunction with the words the provisions of the old Act. That would mean that the old Act will apply to the whole gambit of arbitration culminating in the enforceme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h a view to convey different meanings. 25. To summarise, Section 26 of the Amendment Act is silent as to, (i) arbitral proceedings commenced before 23.10.2015 to which Part-I of the Act does not apply; (ii) proceedings in courts in relation to arbitral proceedings commenced before 23.10.2015 to which part-I of the Act applies; and (iii) proceedings in courts in relation to arbitral proceedings commenced before 23.10.2015 to which Part-I does not apply. 26. The next aspect to be examined is whether the Amendment Act would apply to proceedings before the court. As discussed earlier, Section 26 of the Amendment Act is silent as to the applicability of the Amendment Act to proceedings (other than arbitral proceedings commenced before 23.10.2015) which are commenced before or after 23.10.2015 but are in relation to or connected with arbitral proceedings commenced before 23.10.2015. 27. The Amendment Act must be held applicable from the date it came into force. The Act as it stands in the statute book stands amended with effect from 23.10.2015. The applicability of the Amendment Act to arbitral proceedings that have commenced prior to that date has expressly been excluded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith regard to matters that cannot be classified as mere procedural matters. This would include the question as to whether the disputes are arbitrable; the question as to jurisdiction; the scope of challenge to the awards; and, to some extent even the supportive and supervisory roles of Courts in relation to arbitrations. Thus, the Amending Act does to certain extent affect the substantive rights of parties. The question thus arises is: whether in view of the such effect, the applicability of the Amendment Act to proceedings instituted in courts in relation to arbitral proceedings instituted prior to 23.10.2015, should be interpreted to be excluded? 32. It is also well settled that an amending enactment is not retrospective merely because it also applies to persons to whom the pre-amended Act applies. In Punjab University v. Subhash Chander and Anr.: 1984 (3) SCC 603, the Supreme Court set aside the decision of the Full Bench of the Punjab and Haryana High Court, whereby it was held that the amendment to the rules to award lower grace marks would not be applicable to students who had been admitted to the course prior to the amendment. In Bishan Naraian Mishra vs. State of U.P.: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gory. The parties are free to derogate from most of such provisions and agree to a separate set of rules for conduct of arbitrations. The parties are also free to adopt the rules of any institutional arbitration such as International Chambers of Commerce (ICC), London Court of International Arbitration (LCIA), Delhi International Arbitration Centre (DIAC) etc. The third category of provisions relate to the interface between the courts and the arbitration process. The Act contains provisions in aid of arbitral proceedings such as role of courts in appointment of arbitrators, assistance in taking evidence, etc. This category would also include provisions relating to exercise of supervisory role by courts including setting aside of awards. One facet of this category would also be enforcement of awards by courts. 36. As discussed earlier, insofar as the rules pertaining to conduct of arbitral proceedings are concerned, the legislature in its wisdom has specifically provided that the Amendment Act would not apply to arbitral proceedings that were commenced prior to 23.10.2015. The applicability of the provisions of the Amendment Act that relate to the supportive and supervisory rol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecourse to the courts to assist the arbitral process being conducted overseas. 40. Significant amendments have been introduced to Section 11 of the Act principally to restrict the judicial intervention at pre-arbitral stage in conformity with Section 8 and 45 of the Act and further to promote institutional arbitrations. Section 11A and IVth Schedule to the Act have been introduced in respect of the arbitral fees. The issue as to excessive arbitral fees had been flagged by the Supreme Court in Union of India v. Singh Builders Syndicate: (2009) 4 SCC 523; and notice of this was taken by the Law Commission. The amendments to Section 12 have been made and Vth Schedule has been introduced to ensure the neutrality of the arbitrators as this issue had been highlighted in several decisions rendered by the Supreme Court. Substantial amendments have been brought in Section 17 of the Act to enable arbitral tribunals to pass orders which can be effectively enforced. The Supreme Court in Sundaram Finance Ltd. v. NEPC India Ltd.: (1999) 2 SCC 479 had pointed out that the orders passed by the arbitral tribunal cannot be enforced as orders of the Court and, therefore, the parties have to reso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted; it is difficult to understand the rationale as to why the supportive and supervisory role of Courts in regard to those proceedings be not provided as per the Amendment Act. If the contention as advanced by the respondents is accepted, it would mean that the courts would adopt different approach in lending their aid to proceedings and enforcement of awards depending upon when the arbitral proceedings commenced. 45. As an illustration, let us consider a case where two sets of parties enter into similar contracts prior to 23.10.2015. Disputes relating to one agreement arises before 23.10.2015 and one of the parties invokes the arbitration clause. In the other case, disputes arise after 23.10.2015 and the arbitral proceedings commence thereafter. Arbitral awards in respect of disputes between both the sets of parties are made on the same date - after 23.10.2015. By virtue of the amendment to Section 36 of the Act, the stay of an arbitral award is No. longer automatic after the period for setting aside the award under Section 34 of the Act has expired and unless the Court hearing an application under Section 34 of the Act grants a stay, the arbitral award is liable to be enfor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efence of public policy within the scope of that defence, as explained by the Supreme Court in Renu Sagar (supra). The suggestion that changes introduced in Section 34 of the Act are substantial therefore affect the vested rights of the parties, is also inconsiderable. The extent of impairment to extant rights is an essential measure to evaluate whether the law should be interpreted in a manner so as to exclude from its scope the extant rights. 49. The fundamental premise of arbitration is that the parties have agreed to accept the decision of an arbitral tribunal as final and binding. Any amendment to restrict judicial intervention essentially enforces the aforesaid ethos; thus, it cannot be considered to be divesting any part of its vested right to any significant extent so as to read Section 34 of the Act to be inapplicable in respect of the awards rendered pursuant to arbitral proceedings initiated prior to 23.10.2015. 50. In Secretary of State for Social Security and Another v. Tunnicliffe: (1991) 2 All ER 712, the Court of Appeal observed as under: In my judgment the true principle is that Parliament is presumed not to have intended to alter the law applicab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ttle and provided a remedy, it has reconciled itself to the continuation of arbitral proceedings already irrevocably stamped with a risk of injustice. I find it impossible to accept that Parliament can have intended any such thing, and with due respect to those who have suggested otherwise I find the meaning of s. 13A sufficiently clear to persuade me that in the interests of reform Parliament was willing to tolerate the very qualified kind of hardship implied in giving the legislation a partially retrospective effect. 52. The view that a statutory provision can be applied retrospectively on the doctrine of fairness was accepted by the Supreme Court in Vijay v. State of Maharashtra: 2006 (6) SCC 289. In that case, the Court was concerned with the applicability of provisions of Bombay Village Panchayats Act, 1958 which enacted that No. person, who has been elected as Councillor of Zila Parishad or as member of the Panchayat Samiti shall be a member of Panchayat or continue as such. The Supreme Court rejected the contention that the said provision would not be applicable to the existing members. The relevant observations of the court are quoted below:- It is now well-sett ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e and Industry and other stake holders submitted a report on 04.08.2005. The Committee also recommended that the Bill of 2003 may be withdrawn to bring a fresh legislation. The said Bill of 2003 was thereafter withdrawn for further examination. In 2010, the Government of India issued the Consultation Paper inviting suggestions from public and other stakeholders. 56. Thereafter, the Ministry of Law and Justice asked the Law Commission of India to undertake a study of the proposed amendments. The Law Commission of India submitted its report on 05.08.2014 and proposed several amendments to the Act. The Amended Act is essentially based on the said proposals. Most of the amendments also address the issues that were sought to be addressed by the 2003 Bill. Thus, it is clear that there has been a long standing demand for amending the Act to make it more effective. The amendments for restricting Judicial Review and for removing the provision for an automatic stay of execution of the awards have been on the anvil since several years. The Government of India caused the President to promulgate the Arbitration and Conciliation (Amendment) Ordinance, 2015 [No. 9 of 2015], which was publish ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll be prospective in operation and shall apply only to fresh arbitrations and fresh applications, except in the following situations- (a) the provisions of section 6-A shall apply to all pending proceedings and Arbitrations. Explanation: It is clarified that where the issue of costs has already been decided by the court/tribunal, the same shall not be opened to that extent. (b) the provisions of section 16 sub-section (7) shall apply to all pending proceedings and arbitrations, except where the issue has been decided by the court/tribunal. (c) the provisions of second proviso to section 24 shall apply to all pending arbitrations. (2) For the purposes of the instant section-- (a) fresh arbitrations mean arbitrations where there has been No. request for appointment of arbitral tribunal; or application for appointment of arbitral tribunal; or appointment of the arbitral tribunal, prior to the date of enforcement of the Arbitration and Conciliation (Amending) Act, 2014. (b) fresh applications mean applications to a court or arbitral tribunal made subsequent to the date of enforcement of the Arbitration and Conciliation (Amending) Act, 2014. [ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion is made. Arbitral proceedings can be said to commence, when a request for reference to arbitration is received by the respondent and/or the authority competent under the arbitration agreement, upon notice to the respondent. The arbitral proceedings, which so commence, terminate with a final award as provided in Section 32(1) of the 1996 Act or with an order under Section 32(2) of the 1996 Act Proceedings in Court under the 1996 Act whether initiated before, during or after the termination of the arbitral proceedings, would not attract Section 26 of the Amendment Act of 2015. 61. In New Tirupur Area Development Corporation v. Hindustan Construction Company Limited (A.No. 7674 of 2016 in O.P. No. 931 of 2015), the Madras High Court has held that the Amendment Act shall apply to petitions pending under Section 34 of the Act. The Bombay High Court in a recent decision in M/s. Rendezvous Sports World v. The Board of Control for Cricket in India [Chamber Summons No. 1530 of 2015 in Execution Application (L) No. 2481 of 2015 decided on 14.06.2016] has also accepted the view that Section 36 of the Act as amended shall apply to proceedings pending before Courts. 62. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es is the law as applicable in Singapore. The seat of arbitration is also Singapore and therefore the law as applicable to the arbitral proceedings, lex arbitri, is also the law as applicable in Singapore. The legal principle that the law as applicable to arbitral proceedings would be the law as applicable where the seat of arbitration is situated has been authoritatively settled by a Constitution Bench of the Supreme Court in Bharat Aluminium (supra). 66. The Supreme Court in Bhatia International (supra) had considered the question whether Part I of the Act would be applicable to International arbitrations and had held as under:- In cases of international commercial arbitrations held out of India provisions of Part I would apply unless the parties by agreement, express or implied, exclude all or any of its provisions. In that case the laws or rules chosen by parties would prevail. Any provision, in Part I, which is contrary to or excluded by that law or rules will not apply. 67. Thus, prior to decision in Bharat Aluminium (supra) the position of law was that unless the parties had agreed to the contrary, the provisions of Part I of the Act would be applicable. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the proviso, it is subject to an agreement to the contrary. In other words the proviso is applicable only if there is No. agreement to the contrary; that is, there is No. agreement, which excludes the applicability of sections 9, 27, 37(1)(a) and 37(3) of the Act. 70. It is relevant to note that the Law Commission in its 246th report had proposed the following amendments to Section 2(2) of the Act: (vi) In sub-section (2), add the word only after the words shall apply and delete the word place and insert the word seat in its place. [NOTE: This amendment ensures that an Indian Court can only exercise jurisdiction under Part I where the seat of the arbitration is in India. To this extent, it over-rules Bhatia International v. Bulk Trading S.A. and Anr. (2002) 4 SCC 105 Anr., (2002) 4 SCC 105, and re-enforces the seat centricity principle of Bharat Aluminium Company and Ors. etc. v. Kaiser Aluminium Technical Service, Inc and Ors. etc., (2012) 9 SCC 552] Also insert the following proviso Provided that, subject to an express agreement to the contrary, the provisions of sections 9, 9, 37(1)(a) and 37(3) shall also apply to international commercial arbi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Arbitration. (c) Notwithstanding anything to the contrary in this agreement, the Shareholders shall at all times act in accordance with the Companies Act and other applicable Acts/Rules being in force, in India at any time. 73. In the aforesaid context, the Court, inter alia, held that the non obstante clause - clause (c) as quoted above - would override the entirety of the contract including clause (b) which deals with the settlement of disputes by arbitration. The Court rejected the contention that the afore-quoted clause (c) could not be construed to mean that Indian law was the substantive law of contract or the Indian law would not govern the Disputes Resolution clause - clause (b) quoted above. The Court concluded the Part-I of the Act could not be held to be excluded by the parties. 74. In M/s. Indtel Technical Services Pvt. Ltd. v. W.S. Atkins Rail Ltd.: (2008) 10 SCC 308, the Supreme Court considered the application under Section 11 of the Act and was concerned with an agreement which included the clause that read as under:- CLAUSE 13 - SETTLEMENT OF DISPUTES 13.1. This Agreement, its construction, validity and performance shall be governed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Article 23. This Article 23 will have to be read in the backdrop of Article 22 and more particularly, Article 22.1. It is clear from the language of Article 22.1 that the whole Agreement would be governed by and construed in accordance with the laws of The Republic of Korea. xxxx xxxx xxxx xxxx If we see the language of Article 23.1 in the light of the Article 22.1, it is clear that the parties had agreed that the disputes arising out of the Agreement between them would be finally settled by the arbitration in Seoul, Korea. Not only that, but the rules of arbitration to be made applicable were the Rules of International Chamber of Commerce. This gives the prima facie impression that the seat of arbitration was only in Seoul, South Korea. 77. In Videocon Industries (supra), the Supreme Court considered the controversy as to the applicability of the Part-I of the Act in the context of the following clauses of the agreement:- 33.1 Indian Law to Govern Subject to the provisions of Article 34.12, this Contract shall be governed and interpreted in accordance with the laws of India. 33.2 Laws of India Not to be Contravened - Subject to Article 17.1 nothing in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dispute or difference should arise under this charter, general average/arbitration in London to apply, one to be appointed by each of the parties hereto, the third by the two so chosen, and their decision or that of any two of them, shall be final and binding, and this agreement may, for enforcing the same, be made a rule of Court. Said three parties to be commercial men who are the members of the London Arbitrators Association. This contract is to be governed and construed according to English Law. For disputes where total amount claim by either party does not exceed USD $ 50,000 the arbitration should be conducted in accordance with small claims procedure of the London Maritime Arbitration Association. 80. The Supreme Court after noticing various earlier decisions held as under: 50. Thus, interpreting the clause in question on the bedrock of the aforesaid principles it is vivid that the intended effect is to have the seat of arbitration at London. The commercial background, the context of the contract and the circumstances of the parties and in the background in which the contract was entered into, irresistibly lead in that direction. We are not impressed by the submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s applicable to the International Arbitration in Singapore - for the judgment in terms of the order passed by the Arbitral tribunal. In paragraph 41 of the petition filed before the Singapore High Court, the petitioner has stated as under:- 41. It is undisputed that the IAA applies to SIAC 179 as Singapore is the seat of the arbitration (as confirmed by the Emergency Arbitrator in paragraph 10 of the Emergency Award [TAB 1]). The Plaintiffs understand that this Honourable Court has supervisory and/or curial jurisdiction over SIAC 179 and Section 12(6) of the IAA specifically provides that all orders or directions made or given by an arbitral tribunal in the course of an arbitration shall, by leave of the High Court or a Judge thereof, be enforceable in the same manner as if they were orders made by a court. Accordingly, I believe that Singapore is an appropriate forum for the filing of this action for enforcement of the Emergency Award. 85. Thus, the question that needs to be addressed is: whether an agreement between the parties that a foreign law would be applicable to the arbitration, implicitly excludes the applicability of Section 9 of the Act? 86. As noted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nterim relief under Section 9 of the Act in the following words:- (xvii) It may be stated that it is the broad principle in International Commercial arbitration that a law of the country where it is held, namely, the Seat or forum or laws arbitri of the arbitration, governs the arbitration. However, if all the provisions of Part I are not made applicable to International Commercial arbitration where the seat of arbitration is not in India, some practical problems are arising. There may be cases where the properties and assets of a party to arbitration may be in India. Section 9 of the Act which falls in Part I provide for interim measures by the Court. As per Section 9, a party may, apply to a court for certain interim measures of protection including for preservation, interim custody or sale of goods, securing the amount in disputes, detention, preservation or inspection of any property, interim injunction etc. If provision of Section 9 is not made applicable to International Commercial arbitration where seat of arbitration is not in India, a party may be out of remedy if the assets and property are in India. In cases of international arbitration where the seat of arbitratio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... henever they are faced with a case arising from an arbitration agreement executed pre-BALCO. 89. It is also necessary to reiterate that amendment to Section 2(2) of the Act was made on the basis of the United Nations Commission on International Trade Law (UNCITRAL) Model Law as adopted on 21.06.1985 and as amended on 07.07.2006. Article 1.2 of UNCITRAL Model Law reads as under:- Article 1. Scope of Application (1) xxxx xxxx xxxx xxxx (2) The provisions of this Law, except articles 8, 9, 17H, 17I, 17J, 35 and 36, apply only if the place of arbitration is in the territory of this State. (Article 1(2) has been amended by the Commission at its thirty-ninth session, in 2006) 90. The Article 9, 17H, 17I and 17J, of the Model Law are relevant and are set out below:- Article 9. Arbitration agreement and interim measures by court It is not incompatible with an arbitration agreement for a party to request, before or during arbitral proceedings, from a court an interim measure of protection and for a court to grant such measure. xxxx xxxx xxxx xxxx Article 17H. Recognition and enforcement (1) An interim measure issued by an arbitral tribun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt-ordered interim measures A court shall have the same power of issuing an interim measure in relation to arbitration proceedings, irrespective of whether their place is in the territory of this State, as it has in relation to proceedings in courts. The court shall exercise such power in accordance with its own procedures in consideration of the specific features of international arbitration. 91. The Article 17-J of the Model Law specifically provides that the Court shall have the same powers for issuing interim measures in relation to the arbitral proceedings irrespective of the seat of such arbitral proceedings. In terms of the UNCITRAL Model Law, arbitral proceedings are governed by the law as applicable at the seat of the arbitration; nonetheless, it would be open for the Courts to issue interim orders even in respect of the arbitral proceedings that are held outside the State. The object of amending Section 2(2) of the Act is inter alia to incorporate such provision in the Act. 92. The contention that the parties have impliedly agreed to exclude Section 9 of the Act, has to be considered in the above backdrop. 93. It is seen that the parties had expressly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nterim orders granted by an Arbitral Tribunal outside the India. Section 17 of the Act is clearly not applicable in respect of arbitral proceedings held outside India. 99. In the circumstances, the emergency award passed by the Arbitral Tribunal cannot be enforced under the Act and the only method for enforcing the same would be for the petitioner to file a suit. 100. However, in my view, a party seeking interim measures cannot be precluded from doing so only for the reason that it had obtained a similar order from an arbitral tribunal. Needless to state that the question whether the interim orders should be granted under section 9 of the Act or not would have to be considered by the Courts independent of the orders passed by the arbitral tribunal. Recourse to Section 9 of the Act is not available for the purpose of enforcing the orders of the arbitral tribunal; but that does not mean that the Court cannot independently apply its mind and grant interim relief in cases where it is warranted. 101. It is relevant to note that the provisions under Article 17 I (2) of the Model Law, the court enforcing an interim order passed by an Arbitral Tribunal in prescribed form und ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
