2022 (12) TMI 1526 - HC - Indian Laws

Arbitration application dismissed as tribunal's interim payment order under Section 17 falls within expanded powers

Gainwell Commosales Private Limited Versus Minsol Limited

Gainwell Commosales Private Limited Versus Minsol Limited - TMI Issues Involved:1. Whether the Tribunal has acted dehors the Agreement while passing the Impugned Order.2. Whether the Impugned Order deserves to be set aside.Issue A: Whether the Tribunal has acted dehors the Agreement while passing the Impugned OrderRs.The Tribunal's powers under Section 17 of the Arbitration and Conciliation Act, 1996, have been amplified by the 2015 Amendment, making them almost pari passu with the powers a court exercises under Section 9 of the Act. The Tribunal is not strictly bound by the technicalities of the CPC but must be guided by the basic principles while granting interim relief. The Tribunal's order is intended to secure the amount in dispute in arbitration and does not explicitly contravene the contract. The Tribunal has tried to resolve complexities and facilitate the carrying out of contractual obligations while keeping the points of dispute open for future deliberation.The Tribunal's orders dated December 22, 2021, and March 7, 2022, laid down modalities for carrying out various stage-wise contractual obligations and were accepted by both parties, even though not in strict conformity with the agreement. The Tribunal noted that the claimant raised apprehensions, and directed the petitioner to provide a bank guarantee to the extent of the Impugned Amount. This exercise of power is reasonable and does not go against the agreement but facilitates it.Issue B: Whether the Impugned Order deserves to be set asideRs.The scope of interference with orders of the Tribunal under Section 37 of the Act is very limited. The Delhi High Court in Sanjay Arora v. Rajan Chadha and Ors. noted that interference is warranted only where the order suffers from patent illegality or perversity. The Tribunal's order has not been found to be perverse or patently illegal. The Tribunal has been thorough with regards to facts and has done a commendable job in contractual facilitation while keeping disputes for future deliberation.The Tribunal considered the apprehensions of both sides and directed the petitioner to furnish a bank guarantee to balance the convenience and protect against the future award becoming a mere paper award. This exercise of power is adept and reasonable. The Tribunal's intention to deal with the respondent's application dated July 13, 2022, is evident from the mention of a 'common order' and the detailed discussion of the history of the dispute in the Impugned Order.Conclusion:The Tribunal has not acted dehors the Agreement while passing the Impugned Order. The Impugned Order does not deserve to be set aside. The arbitration application [A.P.O. 74 of 2022] and IA NO. GA 1/2022 are accordingly dismissed. There shall be no order as to cost. Urgent Photostat certified copy of this order, if applied for, should be made available to the parties upon compliance with the requisite formalities.