Arbitrator's interim order on Term Sheet upheld under Section 37(2)(b) - limited scope for interference with discretionary decisions

Bombay HC dismissed petition challenging arbitrator's interim order under Section 37(2)(b) of Arbitration Act. Court held that arbitrator's finding that Term Sheet was agreement to enter into agreement was plausible view based on relevant material and detailed consideration of clauses. HC emphasized limited scope of interference with arbitrator's discretionary orders, stating it would not interfere merely because another view was possible. Court found no grounds to hold arbitrator's findings perverse or illegal warranting intervention.

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Issues Involved:
1. Scope of jurisdiction under Section 37(2)(b) of the Arbitration and Conciliation Act, 1996.
2. Interpretation of the Term Sheet, particularly whether it constituted a binding offer or merely an agreement to agree.
3. Whether the date of 12.04.2023, specified in the Term Sheet, was sacrosanct and whether it was extended by mutual agreement in writing.

Detailed Analysis:

1. Scope of Jurisdiction under Section 37(2)(b) of the Arbitration and Conciliation Act, 1996:
The court examined the scope of its jurisdiction under Section 37(2)(b) of the Arbitration Act, which allows appeals against orders granting or refusing interim measures under Section 17. It was noted that while exercising jurisdiction under Section 37(2)(b), the court should apply principles akin to those applicable to an Appeal from Order under Order 43 of the CPC. The court emphasized that it should not conduct a merit-based review or substitute its own view for that of the arbitrator, provided the arbitrator has considered all relevant material and adopted a plausible view. The court cited precedents, including the judgments in *Wander Ltd. vs. Antox India Pvt. Ltd.*, *Swan Energy Limited vs. Peninsula Land Limited*, and *Karanja Terminal & Logistics Pvt. Ltd. v. Sahara Dredging Ltd.*, to support this position.

2. Interpretation of the Term Sheet:
The petitioner contended that the Term Sheet was a binding offer, which upon acceptance, converted into a concluded contract. The respondents argued that the Term Sheet was non-binding and merely an agreement to agree, requiring further negotiations. The arbitrator examined the Term Sheet in detail and concluded that it was an agreement to enter into an agreement, not a binding offer. The court found that the arbitrator’s view was plausible, considering the clauses of the Term Sheet, which indicated that various steps were required before a binding SPA could be executed. The court held that the arbitrator’s findings were not perverse or illegal and therefore, did not warrant interference under Section 37(2)(b) of the Arbitration Act.

3. Sacrosanct Nature of the Date 12.04.2023 and Its Extension:
Clause 16 of the Term Sheet specified that the Term Sheet would terminate on 12.04.2023 unless extended in writing. The petitioner argued that the date was extended through communications, including emails and WhatsApp messages. The arbitrator analyzed these communications and concluded that there was no written agreement to extend the date as required by Clause 16. The court agreed with the arbitrator’s interpretation, noting that the petitioner’s claim of "automatic extension" was contrary to the Term Sheet’s clear terms. The court found that the arbitrator’s view that the Term Sheet terminated on 12.04.2023 was plausible and supported by the evidence.

Conclusion:
The court dismissed the petition, holding that the arbitrator’s findings were based on a plausible view of the Term Sheet and the relevant material. The petitioner failed to demonstrate sufficient grounds for interference under Section 37(2)(b) of the Arbitration Act. The court emphasized that it would not interfere with the arbitrator’s discretion unless the findings were perverse or illegal, which was not the case here.

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