https://www.taxtmi.com/css/info/rss_sitemap/rss_feed.css?v=1746094055 https://www.taxtmi.com Business/Tax/Law/GST/India/Taxation/Policies/Legal/Corporate Tax/Personal Tax/Vat Law/Legal Information/Tax Information/Legal Services/Tax Services Tax Management India. Com / MS Knowledge Processing Pvt. Ltd. All rights reserved. One stop solution for Direct Taxes and Indirect Taxes https://www.taxtmi.com/caselaws?id=461263 https://www.taxtmi.com/caselaws?id=461263 Jurisdiction of Arbitral Tribunal to convert a Section 9 petition into a Section 17 application - absence of a Statement of Claim affects the maintainability of a Section 17 application or not - Whether the finding of the learned Arbitral Tribunal, regarding prima facie liability, on the part of the appellant, to continue to pay the EMIs into the loan account of RBT, was, or was not, sustainable in law? HELD THAT:- This Court has already opined, in Dinesh Gupta v. Anand Gupta [ 2020 (9) TMI 1322 - DELHI HIGH COURT] and [ 2021 (9) TMI 1572 - DELHI HIGH COURT] that the considerations guiding exercise of appellate jurisdiction under Section 37(2)(b) are, fundamentally, not really different from those which govern exercise of jurisdiction under Section 34 of the 1996 Act. Objection to the Arbitral Tribunal having permitted OMP to be treated as an application under Section 17 - HELD THAT:- If the learned Arbitral Tribunal agreed to treat the Section 9 petition as an application under Section 17, it is not convinced that the decision suffers from any such error as may be regarded as fatal to the impugned order. It is also observed, in this context, that the appellant has not referred, in its appeal, to any provision of the 1996 Act which prohibits the learned Arbitral Tribunal from doing so; nor has any such provision come to my notice - The objection, of the appellant, to the learned Arbitral Tribunal having treated the Section 9 petition as an application under Section 17 is, therefore, rejected. Objection regarding maintainability of Section 17 application in absence of Statement of Claim - HELD THAT:- The arbitral protocol, under the 1996 Act is, however, somewhat peculiar in its dispensation. Section 9 itself envisages grant of interim protection, by a Court, before institution of arbitral proceedings and can be invoked, in an appropriate case, even before the notice of arbitration, under Section 21, is issued. The reason is that, while considering the prayer for interim protection under the 1996 Act, whether under Section 9 or under Section 17, apart from the troika of a prima facie case, balance of convenienceand irreparable loss, the Court, or Arbitral Tribunal, is also required to preserve the sanctity of the arbitral process, which is the very raison d etre of the 1996 Act. All efforts to foster and promote the arbitral process, and prevent its interception or interdiction have, therefore, to be made. The Court under Section 9, or the Arbitral Tribunal under Section 17 is also, therefore, empowered to grant interim protection where any possibility of the arbitral proceedings being frustrated is found to exist, whether such frustration be before the arbitral process is initiated, during the arbitral process or even after the passing of the Award. If, therefore, before a Statement of Claim is filed, the situation that presents itself is such that interim protection has to be granted, to ensure the preservation of the arbitral process, the Court under Section 9, and the Arbitral Tribunal under Section 17, is empowered to grant such protection. Read conjointly, Sections 21 and 17, therefore, empower the Arbitral Tribunal to pass orders in terms of Section 17 at any point of time. The arbitral proceedings have commenced even before the Arbitral Tribunal is constituted, as the notice invoking arbitration would necessarily be prior in point of time. From its very inception, therefore, the Arbitral Tribunal is empowered to pass orders on any application filed, before it, under Section 17, by any of the parties. The requirement of filing of a statement of claim, prior to moving the Arbitral Tribunal under Section 17, can no longer be regarded as a mandatory requirement, after the amendment of Section 17 with effect from 23rd October, 2015. The objection, of the appellant, to the Arbitral Tribunal having condescended to entertain the Section 17 application of the Chadhas, even before a statement of claim was filed by it, is also, therefore, rejected. This Court has noted that, as a matter of routine, appeals are preferred against interlocutory orders passed by the Arbitral Tribunal, even if they do not result in irreparable prejudice to the appellant and are always capable of being modified when the final arbitral award is passed. Unlike the course of action, which it follows while dealing with petition under Section 9, the Court, when seized with an appeal against an interlocutory order of the learned Arbitral Tribunal under Section 17 of the Act, is constrained to return findings on merits, on the issues in controversy, as the Court is effectively sitting in judicial review over the findings of the learned Arbitral Tribunal. These findings have the potentiality of effecting, to some extent, the future course of the arbitral proceedings, as well as the final award that may come to be passed, even if the Court enters the usual cautionary caveat, that the findings are intended only to dispose of the appeal against the Section 17 order. Conclusion - i) It is established that Section 17 application could be maintained without a prior Statement of Claim, emphasizing the need to preserve the arbitral process and the Tribunal s power to grant interim measures during proceedings. ii) The appellant is directed to continue paying EMIs into RBT s loan account during the pendency of arbitral proceedings. Appeal dismissed. Case-Laws Indian Laws Tue, 05 Oct 2021 00:00:00 +0530