Arbitration interim deposit order upheld: High Court rejected recall, waiver and jurisdiction objections in the dispute

The Delhi High Court held that the respondents had not shown grounds to recall or review the interim order directing deposit of the sale proceeds. Their objection that the amount had not been received earlier was rejected because they were present when the order was passed and had not promptly raised that point, while the arbitration record showed the dispute had proceeded on the basis that the proceeds were received and were to be held in agreed proportions. The Court further held that Section 4 of the Arbitration and Conciliation Act, 1996 did not assist the respondents, rejected the plea of per incuriam, and confirmed that it had jurisdiction under Section 9 and its incidental powers to issue the direction.

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Issues: Whether the respondents had made out grounds to recall or review the order directing deposit of the amount and whether the order was vitiated by non-receipt of the sale proceeds, waiver, or lack of jurisdiction.

Analysis: The Court found that the respondents had been present when the order was passed and had not promptly objected that the amount of US$ 550,000 had not been received by them. The arbitration agreement and the earlier proceedings showed that the dispute proceeded on the basis that the sale proceeds had been received and were to be held in custody in agreed proportions. The Court also held that Section 4 of the Arbitration and Conciliation Act, 1996 did not assist the respondents, since the appellant was not objecting to the arbitration proceedings on the ground of non-compliance. The plea that the order was per incuriam was rejected, and the Court held that it had jurisdiction, under Section 9 of the Arbitration and Conciliation Act, 1996 and the Court's incidental powers, to pass the impugned interim direction.

Conclusion: The application for recall or review was rejected, and the respondents' objections to the direction for deposit were overruled.

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