Arbitral tribunal's power to secure disputed ? Security order upheld, with appellate interference limited to perversity or arbitrariness.

Section 17(1)(ii)(b) of the Arbitration and Conciliation Act, 1996 empowers an arbitral tribunal to secure the amount in dispute, and that discretion must be exercised consistently with interim protection principles and the Act's policy of minimal court intervention. Principles underlying Order XXXVIII Rule 5 CPC may guide the exercise of power, but cannot be imported rigidly to narrow the tribunal's discretion. In an appeal under Section 37(2)(b), interference is limited to cases of arbitrariness, perversity, or disregard of settled principles. The HC upheld the tribunal's direction to furnish security, finding that it had considered the rival claims, balanced equities, and adopted a measured interim safeguard without jurisdictional error or patent illegality.

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Issues: Whether the arbitral tribunal's direction requiring the appellant to furnish security for the amount in dispute under Section 17 of the Arbitration and Conciliation Act, 1996 was warranted, and whether such a discretionary interim order called for interference in appeal under Section 37(2)(b).

Analysis: The appeal arose from an interlocutory order passed under Section 17 directing security to protect the respondent's claim pending adjudication of disputed financial transfers. The Court held that Section 17(1)(ii)(b) expressly empowers the arbitral tribunal to secure the amount in dispute, and that this power must be exercised with reference to settled principles governing interim protection, while bearing in mind the statutory policy of minimal judicial intervention under Section 5 of the Act. The Court further held that although the principles underlying Order XXXVIII Rule 5 of the Code of Civil Procedure, 1908 may inform the exercise of power, they are not to be bodily imported so as to curtail the tribunal's discretion. In appeals under Section 37(2)(b), interference with such discretionary interim orders is confined to cases of arbitrariness, perversity, or disregard of settled principles. On the facts, the tribunal had examined the rival claims, balanced the equities, and chosen a less drastic measure than the relief sought by the respondent, namely furnishing of security instead of direct restitution or injunctive restraint. The Court found no jurisdictional error, patent illegality, or unconscionable exercise of discretion.

Conclusion: The direction to furnish security was upheld and no ground for appellate interference was made out.

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