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=461277 https://www.taxtmi.com/caselaws?id=461277 Invocation of force majeure clause - whether the Applicant is liable to pay any escalation on Variable Fee attributable to movement of containers by Rail as per the agreement, especially when the Bank Guarantees furnished by the Applicant were/are not covered any amount other than Fixed Fee and Variable Fee @Rs.405/TEU ? - HELD THAT:- This court has already opined in Dinesh Gupta v. Anand Gupta [ 2020 (9) TMI 1322 - DELHI HIGH COURT] , Augmont Gold Pvt Ltd v. One97 Communication Ltd [ 2021 (9) TMI 1572 - DELHI HIGH COURT] and Sanjay Arora v Rajan Chadha [ 2021 (10) TMI 1460 - DELHI HIGH COURT] that the restraints which apply on the court while examining a challenge to a final award under Section 34 equally apply to a challenge to an interlocutory order under Section 37(ii)(b). In either case, the court has to be alive to the fact that, by its very nature, the 1996 Act frowns upon interference, by courts, with the arbitral process or decisions taken by the arbitrator. This restraint, if anything, operates more strictly at an interlocutory stage than at the final stage, as interference with interlocutory orders could interference with the arbitral process while it is ongoing, which may frustrate, or impede, the arbitral proceedings. The pre-eminent consideration, which should weigh with the arbitrator while examining a Section 17 application, is the necessity to preserve the arbitral process and ensure that the parties before it are placed on an equitable scale. The interlocutory nature of the order passed under Section 17, therefore, must necessarily inform the court seized with an appeal against such a decision, under Section 37. Additionally, the considerations which apply to Section 34 would also apply to Section 37(ii)(b). The view, of the learned arbitrator, that no case for injuncting invocation of the bank guarantees by the respondent at that stage existed, does not suffer from any infirmity, let alone patent illegality - No case for interference with the order dated 17th June 2020, therefore, exists. The present case is not even one of non-consideration of the material placed by the appellant. Indeed, Mr. Sibal, very fairly, did not fault the learned arbitrator for not considering the material placed on record. His submission was that the learned arbitrator had not recorded reasons for rejecting the said material. In exercise of my appellate jurisdiction under Section 37(2)(b), it is not convinced that a case for interference with the impugned order, on this ground, exists. The learned arbitrator was clearly alive to the material placed by the appellant, and has seen the said material. He has, therefore, summarized the contentions of the appellant and the respondent, qua the aspect of force majeure. Having done so, the learned arbitrator has held that the additional material placed on record by the appellant did not convince him to revisit his earlier view. The learned arbitrator having opined, prima facie, on this aspect one way, at the interlocutory stage, no case for interference under Section 37(2)(b) can be said to exist. For this reason, therefore, it cannot be said that the impugned order deserves to be set aside merely for want of what Mr. Sibal would call sufficient reasons in dealing with the force majeure plea advanced by the appellant. Conclusion - i) The appellant s invocation of force majeure was unjustified, given that operations continued during the pandemic, and the appellant failed to demonstrate substantial disruption. ii) The learned arbitrator having opined, prima facie, on this aspect one way, at the interlocutory stage, no case for interference under Section 37(2)(b) can be said to exist. There are no reason to interfere in this appeal which is accordingly dismissed. Case-Laws Indian Laws Wed, 24 Nov 2021 00:00:00 +0530