TaxTMI Login
AI OCR ✕Convert scanned orders, printed notices, PDFs and images into clean, searchable, editable text within seconds. Starting at 2 Credits/page
Try Now →Just a moment...
AI OCR ✕Convert scanned orders, printed notices, PDFs and images into clean, searchable, editable text within seconds. Starting at 2 Credits/page
Try Now →
Press 'Enter' to add multiple search terms. Rules for Better Search
Use comma for multiple locations.
---------------- For section wise search only -----------------
Accuracy Level ~ 90%
of 
Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of Press 'Enter' after typing page number.
Issues: (i) Whether interference under Section 37(2) of the Arbitration and Conciliation Act, 1996 was warranted with the Arbitral Tribunal's interim order under Section 17 directing preservation of part of the claim amount; (ii) Whether the order directing preservation of Rs. 5 crores in the form of an FDR suffered from violation of natural justice or any perversity in exercise of discretion.
Issue (i): Whether interference under Section 37(2) of the Arbitration and Conciliation Act, 1996 was warranted with the Arbitral Tribunal's interim order under Section 17 directing preservation of part of the claim amount.
Analysis: The scope of appellate review over an interim order passed by an arbitral tribunal is narrow. Interference is justified only where the discretion is shown to be arbitrary, capricious, perverse, or contrary to settled principles governing interim protection. The statutory policy of minimal judicial intervention under the Arbitration and Conciliation Act, 1996 requires the Court to defer to a plausible discretionary order passed on relevant material, especially at an interlocutory stage.
Conclusion: Interference was not warranted.
Issue (ii): Whether the order directing preservation of Rs. 5 crores in the form of an FDR suffered from violation of natural justice or any perversity in exercise of discretion.
Analysis: The record showed that notice of the arbitral proceedings and of the hearing on the Section 17 application had been given repeatedly, including through email and by physical mode. The party complaining of denial of hearing chose not to participate despite notice. The tribunal was not bound to keep the proceedings in abeyance merely because an appeal against appointment had been filed, especially in the absence of any stay. On merits, the tribunal considered the acknowledged balance shown in the parties' records, the closure of the respondent corporation, and the need to secure the subject matter so that the award would not become ineffective. The direction was for preservation of a part of the claim, not for payment of money.
Conclusion: The order did not violate natural justice and was not perverse.
Final Conclusion: The interim preservation order was upheld, the challenge failed, and the arbitral tribunal was left free to decide the merits uninfluenced by the observations made in the appeal.
Ratio Decidendi: In an appeal under Section 37(2), a court will not interfere with an arbitral tribunal's Section 17 interim measure unless the decision is perverse, arbitrary, or contrary to law, and a preservation order securing the disputed amount may be sustained where it is supported by a prima facie assessment and a need to protect the efficacy of the eventual award.
TaxTMI 
TaxTMI 
