TaxTMI 
TaxTMI 
TaxTMI 
1999 (1) TMI 413
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....by the respondent, the first instalment was payable on 29-9-1995 and the last was due by 25-8-1998. In all the payment was to be made by 36 instalments. 4. According to the appellant the respondent paid the first fifteen instalments and thereafter committed default and payment was not made in spite of several demands being made by the appellant. The hire-purchase agree- ment contained an arbitration clause which reads as follows : "All disputes, differences and/or claims, arising out of this hire purchase agreement whether during its subsistence or thereafter shall be settled by arbitration in accordance with the provision of Indian Arbitration Act, 1940 or any statutory amendments thereof and shall be referred to the sole arbitration of an arbitrator nominated by the Managing Director of the owner. The award given by such an arbitrator shall be final and binding on all the parties to this agreement. It is a term of this agreement that in the event of such an arbitrator to whom the matter has been originally referred doing or being unable to act for any reason, the Managing Director of the owner, at the time of such death of the arbitrator or his inability to act as arbitrator, ....
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....f the Act. It could not have been the intention of the Legislature in enacting the present Arbitration Act. Further, the very facts that section 9 comes after section 8 which deals with the reference of disputes to Arbitration, the only interpretation that could be given to section 9 is that it could be availed of when an arbitration proceeding is pending before the Arbitral Tribunal or is at the reference stage before the Court or after the Arbitral award has been made." While coming to the conclusion that the application under section 9 before the Trial Court was misconceived, as no effort had at the time of filing of such an application, being made by the appellant to have an Arbitrator appointed, the High Court chose not to consider the merits of the Trial Court's order as in its opinion the Trial Court had no jurisdiction to entertain such an application. Hence these appeals by special leave. 7. Under the provisions of the Arbitration Act, 1940, the powers of the Court to pass interim orders were derived from section 41(b) read with Second Schedule to the Arbitration Act, 1940. Mr. Gopal Subramaniam, the Learned Senior Counsel appearing for the respondent, placed reliance on ....
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..... In order to get help in construing these provisions it is more relevant to refer to the UNCITRAL Model Law rather than the 1940 Act. 10. Some of the provisions of the 1996 Act which are relevant in the present case are sections 2(d), 9, l7 and 21. Section 2(d) defines an Arbitral Tribunal to mean a sole arbitrator or a panel of arbitrators. Section 9 of the 1996 Act, which gives power to the Court to pass interim orders, and with the interpretation of which we are concerned in the present case, reads thus: "9. Interim measures, etc., by Court - A party may, before or during arbitral proceedings or at any time after the making of the arbitral award but before it is enforced in accordance with section 36, apply to a Court:- (i)for the appointment of a guardian for a minor or a person of unsound mind for the purposes of arbitral proceedings; or (ii) for an interim measure of protection in respect of any of the following matters, namely:- (a)the preservation, interim custody or sale of any goods which are the subject-matter of the arbitration agreement; (b)securing the amount in dispute in the arbitration; (c)the detention, preservation or inspection of any property or thing w....
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.... Act, 1940 was that a party could commence proceedings in Court by moving an application under section 20 for appointment of an arbitrator and simultaneously it could move an application for interim relief under the Second Schedule read with section 41(b) of the 1940 Act. The 1996 Act does not contain a provision similar to section 20 of the 1940 Act. Nor is section 9 or section 17 similar to section 41(c) and the Second Schedule to the 1940 Act. Section 8 of the new Act is not i n pari materia with section 20 of the 1940 Act. It is only if in an action which is pending before the Court that a party applies that the matter is the subject of an arbitration agreement does the Court get jurisdiction to refer the parties to arbitration. The said provision does not contemplate, unlike section 20 of the 1940 Act, a party applying to a Court for appointing an arbitrator when no matter is pending before the Court. Under the 1996 Act appointment of arbitrator/s is made as per the provision of section 11 which does not require the Court to pass a judicial order appointing arbitrator/s. The High Court was, therefore, wrong in referring to these provisions of the 1940 Act while interpreting se....
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....eaning that the said party had waived its right to take recourse to arbitration. Article 9 of the UNCITRAL Model Law seeks to clarify that merely because a party to an arbitration agreement requests the Court for an interim measure 'before or during arbitral proceedings 'such recourse would not be regarded as being incompatible with an arbitration agreement. To put it differently the arbitration proceedings can commence and continue notwithstanding a party to the arbitration agreement having approached the Court for an order for interim protection. The language of section 9 of the 1996 Act is not identical to article 9, but the expression 'before or during arbitral proceed-ings 'used in section 9 of the 1996 Act seems to have been inserted with a view to give it the same meaning as those words have in article 9. It is clear, therefore, that a party to an arbitration agreement can approach the Court for interim relief not only during the arbitral proceedings but even before the arbitral proceedings. To that extent section 9 of the 1996 Act is similar to article 9. 16. It will also be useful to refer to a somewhat similar provision in the Arbitration Act, 1996 of England. Section 44....
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.... for the purpose of and in relation to a reference, the same power of making orders in respect of - (h) interim injunctions or the appointment of a receiver; as it has for the purpose of and in relation to an action or matter in the High Court...." Construting this Staughton, LJ observed as under: "In my view this power can be exercised before there has been any request for arbitration or the appointment of arbitrators, provided that the applicant intends to take the dispute to arbitration in due course. Whatever the meaning of "reference" to section 12(6 )(h) (and it is not always easy to determine the precise meaning of the word in arbitration statutes) I would hold that the power of the Court in such a case would be exercised for the purpose of and in relation to a reference." We are in respectful agreement with the aforesaid observations which are in conformity with the view which we have taken in construing section 9 of the 1996 Act. 19. It was submitted by Mr. Subramaniam that even if the Court can exercise jurisdiction under section 9 before the arbitral proceedings have commenced the party seeking to invoke section 9 must express a manifest intention to arbitrate. The l....