TaxTMI 
TaxTMI 
2021 (8) TMI 385
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....ur, Advocate Mr Shaurya Mittal, Advocate Mr Abhisar Vidyarthi, Advocate Ms Ninaee Deshmukh, Advocate Mr Pawan Bhushan, Advocate Ms Hima Lawrence, Advocate Ms Ujwala Uppaluri, Advocate Mr Mohit Pandey, Advocate Ms Raka Chatterji, Advocate Mr Vinay Tripathi, Advocate Mr Aishvary Vikram, Advocate Mr Kaustubh Prakash, Advocate Ms Anushka Shah, Advocate Ms Neelu Mohan, Advocate Mr Aspi Chinoy, Sr. Advocate Mr Gourab Banerji, Sr. Advocate Mr Amit Sibal, Sr. Advocate Mr Nakul Dewan, Sr. Advocate Mr Anand S Pathak, Advocate Mr Amit K Mishra, Advocate Mr Shashank Gautam, Advocate Mr Shashank Manish, AOR Ms Sreemoyee Deb, Advocate Mr Vijay Purohit, Advocate Mr Mohit Singh, Advocate Ms Smriti Shah, Advocate Mr Harshad Pathak, Advocate Mr Promit Chatterjee, Advocate Mr Shivam Pandey, Advocate Ms Samridhi Hota, Advocate Ms Kanika Singhal, Advocate Ms Saloni Agarwal, Advocate Ms Nidhi Sahay, Advocate Ms Didon Misri, Advocate Ms Nikita Bangera, Advocate Mr Pratik Jhaveri, Advocate Mr Faizan Mithaiwala, Advocate Mr Vijayendra Pratap Singh, Advocate Mr Rachit Bahl, Advocate Ms Roopali Singh, Advocate Mr Abhijnan Jha, Advocate Mr Priyank Ladoia, Advocate Mr Tanmay Sharma, Advocate Ms Vanya Chhabra, ....
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....ture Retail Limited, India's second-largest offline retailer ["FRL"] (ii) Respondent No.2 - Future Coupons Pvt. Ltd., a company that holds 9.82% shareholding in FRL and is controlled and majority-owned by Respondents No. 3 to 11 ["FCPL"] (iii) Respondent No.3 - Mr. Kishore Biyani, Executive Chairman and Group CEO of FRL (iv) Respondent No.8 - Mr. Rakesh Biyani, Managing Director of FRL (v) Respondents No. 4 to 7 and 9 to 11 - other members of the Biyani family, namely, Ms. Ashni Kishore Biyani, Mr. Anil Biyani, Mr. Gopikishan Biyani, Mr. Laxminarayan Biyani, Mr. Sunil Biyani, Mr. Vijay Biyani, and Mr. Vivek Biyani, who are promoters and shareholders of FRL (vi) Respondents No. 12 and 13 - Future Corporate Resources Pvt. Ltd. and Akar Estate and Finance Pvt. Ltd., group companies of FRL Respondents No. 1 to 13 are hereinafter collectively referred to as the "Biyani Group". 2.2. The seat of the arbitral proceedings is New Delhi, and as per the arbitration clause agreed upon by the parties, SIAC Rules apply. 2.3. Three agreements were entered into between the parties. A Shareholders' Agreement dated 12th August, 2019, was entered into....
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....our of the said group. 2.5. Amazon initiated arbitration proceedings and filed an application on 5th October, 2020 seeking emergency interim relief under the SIAC Rules, asking for injunctions against the aforesaid transaction. Mr. V.K. Rajah, SC was appointed as the Emergency Arbitrator and heard detailed oral submissions from all parties and then passed an "interim award" dated 25th October, 2020, in which the learned Arbitrator issued the following injunctions/directions: "B. Dispositive Orders/Directions 285. In the result, I award, direct, and order as follows: (a) the Respondents are injuncted from taking any steps in furtherance or in aid of the Board Resolution made by the Board of Directors of FRL on 29 August 2020 in relation to the Disputed Transaction, including but not limited to filing or pursuing any application before any person, including regulatory bodies or agencies in India, or requesting for approval at any company meeting; (b) the Respondents are injuncted from taking any steps to complete the Disputed Transaction with entities that are part of the MDA Group; (c) without prejudice to the rights of any current Pro....
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....the governmental approvals, this Court finds that FRL has made out a prima facie case in its favour for grant of interim injunction. However, the main tests in the present case are in respect of "balance of convenience" and "irreparable loss". Even if a prima facie case is made out by FRL, the balance of convenience lies both in favour of FRL and Amazon. If the case of FRL is that the representation by Amazon to the statutory authorities /regulators is based on illegal premise, Amazon has also based its representation on the alleged breach of FCPL SHA and FRL SHA, as also the directions in the EA order. Hence it cannot be said that the balance of convenience lies in favour of FRL and not in favour of Amazon. It would be a matter of trial after parties have led their evidence or if decided by any other competent forum to determine whether the representation of Amazon that the transaction between FRL and Reliance being in breach of the FCPL SHA and FRL SHA would outweigh the plea of FRL in the present suit. Further in case Amazon is not permitted to represent its case before the statutory authorities/Regulators, it will suffer an irreparable loss as Amazon also claims to have created....
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....udge passed a detailed judgment giving reasons for an order made under Section 17(2) read with Order XXXIX, Rule 2-A of the Code of Civil Procedure, 1908 ["Code of Civil Procedure"] in which it was held that an Emergency Arbitrator's award is an order under Section 17(1) of the Arbitration Act. Since breaches of the Agreements aforementioned were admitted, the only plea being raised being that the Emergency Arbitrator's award was a nullity, the learned Single Judge held that such award was enforceable as an order under the Arbitration Act, and further held that the injunctions/directions granted by the said award were deliberately flouted by the Biyani Group. He also found that any so-called violations of Foreign Exchange Management Act, 1999 ["FEMA"] did not render the Emergency Arbitrator's award a nullity, and therefore, issued a show-cause notice under Order XXXIX, Rule 2-A of the Code of Civil Procedure, after imposing Rs. 20 lakh as costs to be deposited with the Prime Minister Relief Fund for being used for providing COVID vaccinations to the Below Poverty Line category of senior citizens of Delhi. The learned Single Judge then directed as follows: "Conclusion ....
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.... mentioned therein within 30 days. 195. Show cause notice is hereby issued to respondents No.3 to 13 to show cause why they be not detained in civil prison for a term not exceeding three months under Order XXXIX Rule 2- A(1) of the Code of Civil Procedure for violation of the order dated 25th October, 2020. Reply to the show cause notice be filed within two weeks. Rejoinder within two weeks thereafter. 196. The respondents are directed not to take any further action in violation of the interim order dated 25th October, 2020. The respondents are further directed to approach all the competent authorities for recall of the orders passed on their applications in violation of the interim order dated 25th October, 2020 within two weeks. The respondents are directed to file an affidavit to place on record the actions taken by them after 25th October, 2020 and the present status of all those actions at least three days before the next date of hearing. 197. Respondents No.3 to 11 shall remain present before this Court on the next date of hearing." He listed the matter for further directions on 28th April, 2021. 2.9. Against this detailed judgment, FAO No. 51....
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....s from the same malady. 3.1. Mr. Subramanium then referred us to Sections 2(1)(a), 2(1)(c), 2(1) (d), 2(6), 2(8) and 19(2) to argue that the Arbitration Act reflects the grundnorm of arbitration as being party autonomy, which is respected by these provisions and delineated in several judgments of this Court. He then referred to Section 37, pointing out that an appeal under Section 37(2)(b) is restricted to granting or refusing to grant an interim measure under Section 17, which would refer to Section 17(1) and not Section 17(2). He went on to argue that the Arbitration Act is a complete code in itself and if an appeal does not fall within the four corners of Section 37, then it is incompetent, as has been held by several judgments of this Court. 3.2. He also referred to various judgments of this Court, arguing that an Emergency Arbitrator's award can never be characterised as a nullity and ignored, and cited a number of judgments to show that until the said award is set aside, it must be obeyed. He also referred to the important fact that the award must be taken as it stands as no appeal was made therefrom by the Biyani Group and that, therefore, it was not permissible to go ....
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.... by the very same amendment, a non-obstante clause was added to Section 37(1), thereby making it abundantly clear that unless an appeal falls within the four corners of Section 37, the moment an order is passed under the Arbitration Act, no other appeal could possibly be filed if it was outside the four corners of Section 37. 6. Mr. Harish Salve, learned Senior Advocate appearing on behalf of FRL, stated that he would not go to the extent of arguing that an Emergency Arbitrator's award would be outside the ken of the Arbitration Act, but that it was sufficient for his purpose to argue that an Emergency Arbitrator's award cannot be said to fall under Section 17(1) of the Act. He placed before us an extract of the 246th Law Commission Report, in which the Law Commission advocated the amendment of Section 2 of the Arbitration Act, to include within sub-section (1)(d) a provision for the appointment of an Emergency Arbitrator. He said that despite this suggestion being made, Parliament did not adopt the same when it amended the Arbitration Act by the 2015 Amendment Act, thereby indicating that such orders would not fall within Section 17(1) of the Arbitration Act. He then took us th....
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...., Hong Kong, and English statutes which made it clear that under those statutes, an Emergency Arbitrator's awards were expressly included and could thus be enforced under their provisions. 6.3. Mr. Salve made it clear that the appeal that was filed in the present case was not under Section 37 of the Arbitration Act but was under Order XLIII, Rule 1(r) of the Code of Civil Procedure. He then read Section 9 together with Section 37 of the Arbitration Act to stress that orders may be made under Section 9 until enforcement of an award in accordance with Section 36, and then read Section 36 to make it clear that the contours of Section 37 did not go beyond orders and awards made under the Arbitration Act. Since orders made in enforcement proceedings are not under the Arbitration Act but only under the Code of Civil Procedure, therefore, in enforcement proceedings - both under Section 17(2) and under Section 36(1) - appeals can be filed from such orders under the Code of Civil Procedure. He stressed upon the language of Section 36(1), which made it clear that when a final award is made, it shall be enforced in accordance with the provisions of the Code of Civil Procedure in the same m....
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....nd not by incorporation, leading to the conclusion that it is the Code of Civil Procedure alone under which enforcement takes place. He then reiterated that the expression "due regard" contained in Section 36(3) is fundamentally different from the expression "under the Code of Civil Procedure", and that Section 36(1) and Section 17(2) are pari materia provisions, distinct from Section 36(3), under which a stay of an award may be granted under the Arbitration Act with "due regard to the Code of Civil Procedure". He then added that when different words are used in different provisions, they are meant to be differentiated. He also cited judgments to buttress each one of these submissions. He then went on to discuss various High Court judgments which show that, in practice, appeals that are filed against orders and awards sought to be enforced are filed under the Code of Civil Procedure and not under the Arbitration Act. 7.1. He then referred to Section 17(1) and, in particular, to the expression "and the arbitral tribunal shall have the same power for making orders, as the court has for the purpose of, and in relation to, any proceedings before it" and argued that the expression "i....
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....rbitrator being a nullity, were raised before the learned Single Judge. He also cited various judgments to show that this was a case in which the Emergency Arbitrator lacked inherent jurisdiction, as a result of which his clients were justified in ignoring the award passed by the Emergency Arbitrator. 8. Mr. Vikram Nankani, learned Senior Advocate appearing on behalf of Respondents No. 1 to 12 in Civil Appeal Nos. 4496-4497 of 2021 and Respondents No. 2 to 13 in Civil Appeal Nos. 4494-4495 of 2021, was at pains to point out that in the enforcement application, on the facts of this case, it was specifically pleaded that the High Court was being approached as a civil court, and that the application was filed only under Order XXXIX, Rule 2-A. He also cited judgments to show that the provisions of Order XXXIX, Rule 2-A, being punitive in nature and requiring a heightened standard of wilful disobedience to be applied cannot be applied routinely or in the cavalier manner in which the learned Single Judge has applied the said provision. He also referred to the fact that only the SIAC Rules pertaining to "arbitration" stricto sensu were agreed to between the parties, which would exclude....
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....antly, Section 2(6) makes it clear that parties are free to authorise any person including an institution to determine issues that arise between the parties. Also, under Section 2(8), party autonomy goes to the extent of an agreement which includes being governed by arbitration rules referred to in the aforesaid agreements. Likewise, under Section 19(2), parties are free to agree on the procedure to be followed by an arbitral tribunal in conducting its proceedings. 12. Section 21 provides that arbitral proceedings in respect of a particular dispute commence on the date on which a request for that dispute to be referred to arbitration is received by the respondent. This Section is expressly subject to agreement by the parties. Rule 3.3 of the SIAC Rules reads as follows: "Rule 3: Notice of Arbitration * * * 3.3 The date of receipt of the complete Notice of Arbitration by the Registrar shall be deemed to be the date of commencement of the arbitration. For the avoidance of doubt, the Notice of Arbitration is deemed to be complete when all the requirements of Rule 3.1 and Rule 6.1(b) (if applicable) are fulfilled or when the Registrar determines that there....
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....bject to challenge in appropriate proceedings but not by way of an application under Section 11(6) of the 1996 Act. Where the parties had agreed that the procedure for the arbitration would be governed by the ICC Rules, the same would necessarily include the appointment of an Arbitral Tribunal in terms of the arbitration agreement and the said Rules. Arbitration Petition No. 20 of 2011 under Section 11(6) of the 1996 Act for the appointment of an arbitrator must, therefore, fail and is rejected, but this will not prevent the petitioner from taking recourse to other provisions of the aforesaid Act for appropriate relief." Similarly, in Bharat Aluminium Co. v. Kaiser Aluminium Technical Services Inc., (2016) 4 SCC 126 ["Balco"], this Court stated thus: "5. Party autonomy being the brooding and guiding spirit in arbitration, the parties are free to agree on application of three different laws governing their entire contract - (1) proper law of contract, (2) proper law of arbitration agreement, and (3) proper law of the conduct of arbitration, which is popularly and in legal parlance known as "curial law". The interplay and application of these different laws to an arbitrat....
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....e of arbitrations. This Court has expressed this view in quite a few decisions. In two significant passages in Balco [Bharat Aluminium Co. v. Kaiser Aluminium Technical Services Inc., (2016) 4 SCC 126] this Court dealt with party autonomy from the point of view of the contracting parties and its importance in commercial contracts. In para 5 of the Report, it was observed: (SCC p. 130) "5. Party autonomy being the brooding and guiding spirit in arbitration, the parties are free to agree on application of three different laws governing their entire contract- (1) proper law of contract, (2) proper law of arbitration agreement, and (3) proper law of the conduct of arbitration, which is popularly and in legal parlance known as "curial law". The interplay and application of these different laws to an arbitration has been succinctly explained by this Court in Sumitomo [Sumitomo Heavy Industries Ltd. v. ONGC Ltd., (1998) 1 SCC 305] which is one of the earliest decisions in that direction and which has been consistently followed in all the subsequent decisions including the recent Reliance Industries Ltd. v. Union of India [Reliance Industries Ltd. v. Union of India, (2014) 7 SCC 6....
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.... in either of the two clauses mutually agreed upon by the parties." * * * "46. For the present we are concerned only with the fundamental or public policy of India. Even assuming the broad delineation of the fundamental policy of India as stated in Associate Builders [Associate Builders v. DDA, (2015) 3 SCC 49 : (2015) 2 SCC (Civ) 204] we do not find anything fundamentally objectionable in the parties preferring and accepting the two-tier arbitration system. The parties to the contract have not by-passed any mandatory provision of the A&C Act and were aware, or at least ought to have been aware that they could have agreed upon the finality of an award given by the arbitration panel of the Indian Council of Arbitration in accordance with the Rules of Arbitration of the Indian Council of Arbitration. Yet they voluntarily and deliberately chose to agree upon a second or appellate arbitration in London, UK in accordance with the Rules of Conciliation and Arbitration of the International Chamber of Commerce. There is nothing in the A&C Act that prohibits the contracting parties from agreeing upon a second instance or appellate arbitration - either explicitly or implici....
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....itration Act. There is nothing in the Arbitration Act that prohibits contracting parties from agreeing to a provision providing for an award being made by an Emergency Arbitrator. On the contrary, when properly read, various Sections of the Act which speak of party autonomy in choosing to be governed by institutional rules would make it clear that the said rules would apply to govern the rights between the parties, a position which, far from being prohibited by the Arbitration Act, is specifically endorsed by it. This judgment is, therefore, entirely distinguishable from the fact situation in the present case. 18. However, Mr. Salve argued, relying strongly upon the provisions of Sections 10 to 13, 16, 17, 21, 23, 27, 29A, and 30 of the Arbitration Act, in particular, that the "arbitral tribunal" spoken of in these provisions, and referable to Section 2(1)(d) of the Act, is exhaustively defined, which means a sole arbitrator or a panel of arbitrators, which, when read with these provisions, would only include an arbitral tribunal which can not only pass interim orders, but which is constituted between the parties so that interim and/or final awards can be passed by this very tri....
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....context of Section 17 "otherwise requiring" - the context being interim measures that are ordered by arbitrators. The same object and context would apply even to Section 9(3) which makes it clear that the court shall not entertain an application for interim relief once an arbitral tribunal is constituted unless the court finds that circumstances exist which may not render the remedy provided under Section 17 efficacious. Since Section 9(3) and Section 17 form part of one scheme, it is clear that an "arbitral tribunal" as defined under Section 2(1)(d) would not apply and the arbitral tribunal spoken of in Section 9(3) would be like the "arbitral tribunal" spoken of in Section 17(1) which, as has been held above, would include an Emergency Arbitrator appointed under institutional rules. 21. However, Mr. Salve relied upon Firm Ashok Traders v. Gurumukh Das Saluja, (2004) 3 SCC 155 and, in particular, the following passage: "18. Under the A&C Act, 1996, unlike the predecessor Act of 1940, the Arbitral Tribunal is empowered by Section 17 of the Act to make orders amounting to interim measures. The need for Section 9, in spite of Section 17 having been enacted, is that Sectio....
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.... consultation shall begin promptly after a Party has delivered to another Party a written request for such consultation. In the event the Dispute is not resolved by means of negotiation within a period of 30 (thirty) days or such different period mutually agreed between the Parties, such Dispute shall be referred to and finally resolved by Arbitration in accordance with the arbitration rules of the Singapore International Arbitration Centre ("SIAC"), and such rules (the "Rules") as may be modified by the provisions of this Section 25 (Governing Law and Dispute Resolution). This Agreement and the rights and obligations of the Parties shall remain in full force and effect pending the award in such arbitration providing, which award, if appropriate, shall determine whether and when any termination shall become effective." As has been held by us above, it is wholly incorrect to say that Section 17(1) of the Act would exclude an Emergency Arbitrator's orders. This being the case, even if section 25.2 of the FCPL Shareholders' Agreement (pari materia with section 15.2 of the FRL Shareholders' Agreement) makes the SIAC Rules subject to the Arbitration Act, the said Act, properly constr....
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....t the same time as it files the application for emergency interim relief, send a copy of the application to all other parties. The application for emergency interim relief shall include: a. the nature of the relief sought; b. the reasons why the party is entitled to such relief; and c. a statement certifying that all other parties have been provided with a copy of the application or, if not, an explanation of the steps taken in good faith to provide a copy or notification to all other parties. * * * 3. The President shall, if he determines that SIAC should accept the application for emergency interim relief, seek to appoint an Emergency Arbitrator within one day of receipt by the Registrar of such application and payment of the administration fee and deposits. 4. If the parties have agreed on the seat of the arbitration, such seat shall be the seat of the proceedings for emergency interim relief. Failing such an agreement, the seat of the proceedings for emergency interim relief shall be Singapore, without prejudice to the Tribunal's determination of the seat of the arbitration under Rule 21.1. 5. Prior to accepting app....
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.... reading of the aforesaid Rules indicates that even before an arbitral Tribunal is constituted under the Rules, urgent interim reliefs can be granted by what is termed as an "Emergency Arbitrator". An "Emergency Arbitrator" is defined by Rule 1.3 of these Rules as meaning an arbitrator appointed in accordance with paragraph 3 of Schedule 1. Under paragraph 7 of Schedule 1, the Emergency Arbitrator has all the powers vested in the arbitral tribunal pursuant to SIAC Rules, including the authority to rule on his own jurisdiction. Importantly, under paragraph 8 of Schedule 1 to the SIAC Rules, the Emergency Arbitrator shall have the power to order such interim relief that he deems necessary, and is to give summary reasons for his decision in writing. Under paragraph 9, the interim order is to be made within 14 days of his appointment, unless time is extended. Importantly, once the arbitral tribunal is constituted under paragraph 10, the tribunal may reconsider, modify, or vacate any such interim order. Such interim order or award issued by the Emergency Arbitrator will continue to bind the parties unless it is modified or vacated by the arbitral tribunal, once it is constituted, until ....
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....cated questions of fact or allegations of fraud, corruption, etc." [Note: This amendment is proposed in the light of the Supreme Court decisions (e.g. N. Radhakrishnan v. Maestro Engineers [N. Radhakrishnan v. Maestro Engineers, (2010) 1 SCC 72 : (2010) 1 SCC (Civ) 12]) which appear to denude an Arbitral Tribunal of the power to decide on issues of fraud, etc.]" 28. Mr Saurabh Kirpal then referred to the fact that the aforesaid sub-section was not inserted by Parliament by the 2015 Amendment Act, which largely incorporated other amendments proposed by the Law Commission. His argument therefore was that N. Radhakrishnan [N. Radhakrishnan v. Maestro Engineers, (2010) 1 SCC 72] not having been legislatively overruled, cannot now be said to be in any way deprived of its precedential value, as Parliament has taken note of the proposed Section 16(7) in the 246th Law Commission Report, and has expressly chosen not to enact it. For this proposition, he referred to La Pintada [President of India v. La Pintada Compania Navigacion SA, 1985 AC 104 : (1984) 3 WLR 10 (HL)]. This judgment related to a challenge to an award granting compound interest, inter alia, in a case where ....
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....ment. Parliament may have felt, as was mentioned by Lord Reid in British Railways Board v. Herrington [British Railways Board v. Herrington, 1972 AC 877 : 1972 2 WLR 537 (HL)] , that it was unable to make up its mind and instead, leave it to the courts to continue, case by case, deciding upon what should constitute the fraud exception. [This case is referred to in Lord Brandon's judgment in La Pintada, 1985 AC 104 : (1984) 3 WLR 10 (HL) and distinguished at AC p. 130 of his judgment.] Parliament may also have thought that Section 16(7), proposed by the Law Commission, is clumsily worded as it speaks of "a serious question of law, complicated questions of fact, or allegations of fraud, corruption, etc." N. Radhakrishnan did not lay down that serious questions of law or complicated questions of fact are non-arbitrable. Further, "allegations of fraud, corruption, etc." is vague. For this reason also, Parliament may have left it to the courts to work out the fraud exception. In any case, we have pointed out that dehors any such provision, the ratio in N. Radhakrishnan, being based upon a judgment under the 1940 Act, and without considering Sections 5, 8 and 16 of the 1996 Act in their ....
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....ll permit enforcement of emergency awards), it is time that India permitted the enforcement of emergency awards in all arbitral proceedings. This would also provide legislative support to rules of arbitral institutions that presently provide for emergency arbitrators (See Dennis Nolan and Roger Abrams, 'Arbitral Immunity', Berkeley Journal of Employment and Labour Law, Vol. 11 Issue 2 (1989), pp.228-266). For this purpose, the recommendation made by the LCI in its 246th Report may be adopted." 29. The Delhi High Court judgment in Raffles Design International India Pvt. Ltd. v. Educomp Professional Education Ltd., 2016 SCC OnLine Del 5521 : (2016) 234 DLT 349 dealt with an award by an Emergency Arbitrator in an arbitration seated outside India (as was mentioned in Srikrishna Committee Report). What is of significance is that the said Report laid down that it is possible to interpret Section 17(2) of the Act to enforce emergency awards for arbitrations seated in India, and recommended that the Act be amended only so that it comes in line with international practice in favour of recognising and enforcing an emergency award. 30. It is relevant to note that the 246th Law Commissio....
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....ections 9(2) and 9(3) so far as interim orders passed by courts are concerned. The introduction of Sections 9(2) and 9(3) would show that the objective was to avoid courts being flooded with Section 9 petitions when an arbitral tribunal is constituted for two good reasons - (i) that the clogged court system ought to be decongested, and (ii) that an arbitral tribunal, once constituted, would be able to grant interim relief in a timely and efficacious manner. 33. Similarly, the 246th Law Commission Report recommended the amendment of Section 17 as follows: "Amendment of Section 17 11. In section 17 * * * (vi) In sub-section (1), after sub-clause "(d)", insert sub-clause "(e) such other interim measure of protection as may appear to the Arbitral Tribunal to be just and convenient, and the arbitral tribunal shall have the same power for making orders as the Court has for the purpose of, and in relation to, any proceedings before it." [NOTE: This is to provide the arbitral tribunal the same powers as a civil court in relation to grant of interim measures. When this provision is read in conjunction with section 9(2), parties will b....
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....s ruling. As we have seen hereinabove, having agreed to paragraph 12 of Schedule 1 to the SIAC Rules, it cannot lie in the mouth of a party to ignore an Emergency Arbitrator's award by stating that it is a nullity when such party expressly agrees to the binding nature of such award from the date it is made and further undertakes to carry out the said interim order immediately and without delay. 37. However, Mr. Viswanathan argued that an Emergency Arbitrator under the SIAC Rules is not an independent judicial body like an arbitral tribunal constituted under the very Rules, and referred to and relied upon Rules 3, 9, and 10 to buttress this proposition. Rule 3 merely states that the President may appoint an Emergency Arbitrator if he determines that the SIAC should accept the application for emergency interim relief. Once the Emergency Arbitrator enters upon the reference, he is given all the powers of an arbitral tribunal under Rule 7 and is to decide completely independently of any other administrative authority under the SIAC Rules. Equally, Rule 9 does not, in any manner, impinge upon the independence of the Emergency Arbitrator as it only lays down the timeframe within which....
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....is Court has unequivocally held that even if an order is later set aside as having been passed without jurisdiction, for the period of its subsistence, it is an order that must be obeyed. This Court held: "15. The next thing to be noticed is that certain interim orders were asked for and were granted by the Civil Court during this period. Would it be right to say that violation of and disobedience to the said orders of injunction is not punishable because it has been found later that the Civil Court had no jurisdiction to entertain the suit. Mr Sorabjee suggests that saying so would be subversive of the Rule of Law and would seriously erode the majesty and dignity of the courts. It would mean, suggests the learned counsel, that it would be open to the defendants-respondents to decide for themselves whether the order was with or without jurisdiction and act upon that belief. This can never be, says the learned counsel. He further suggests that if any party thinks that an order made by the Civil Court is without jurisdiction or is contrary to law, the appropriate course open to him is to approach that court with that plea and ask for vacating the order. But it is not open to....
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.... It can. At the same time, it should also decide the objection to jurisdiction at the earliest possible moment. This is the general principle and this is what Section 9-A reiterates. Take this very case. The plaintiff asked for temporary injunction. An ad interim injunction was granted. Then the defendants came forward objecting to the grant of injunction and also raising an objection to the jurisdiction of the court. The court overruled the objection as to jurisdiction and made the interim injunction absolute. The defendants filed an appeal against the decision on the question of jurisdiction. While that appeal was pending, several other interim orders were passed both by the Civil Court as well as by the High Court. Ultimately, no doubt, the High Court has found that the Civil Court had no jurisdiction to entertain the suit but all this took about six years. Can it be said that orders passed by the Civil Court and the High Court during this period of six years were all non est and that it is open to the defendants to flout them merrily, without fear of any consequence. Admittedly, this could not be done until the High Court's decision on the question of jurisdiction. The ques....
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.... question of jurisdiction. The orders made were within the jurisdiction of the Court and once this is so, they have to be obeyed and implemented. It is not as if the defendants are being sought to be punished for violations committed after the decision of the High Court on the question of jurisdiction of the Civil Court. Here the defendants are sought to be punished for the disobedience and violation of the order of injunction committed before the decision of the High Court in Vishanji Virji Mepani [AIR 1996 Bom 366]. According to Section 9-A, the Civil Court and the High Court did have the power to pass interim orders until that decision. If they had that power, they must also have the power to enforce them. In the light of the said provision, it cannot also be held that those orders could be enforced only till the said decision but not thereafter. The said decision does not render them (the interim orders passed meanwhile) either non est or without jurisdiction. Punishing the defendants for violation of the said orders committed before the said decision (Vishanji Virji Mepani [AIR 1996 Bom 366]) does not amount, in any event, to enforcing them after the said decision. Only the or....
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...., Rule 4 or Rule 10 of Order XXXIX;" 43. In order to answer this question, it is important to advert to Sections 9, 17, and 37 of the Arbitration Act. Section 9(1) reads as follows: "9. Interim measures, etc. by Court.-(1) 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 which is the subject-matter of the dispute in arbitration, or as to which any question may arise therein and authorising for any of the aforesaid purposes any person to enter upon any land or building in the possession of any party, or authorising any samples to be taken or an....
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.... under the Code of Civil Procedure, 1908 (5 of 1908), in the same manner as if it were an order of the court." Section 37, within the four corners of which appeals against orders are to be made under the Arbitration Act, reads as follows: "37. Appealable orders.-(1) Notwithstanding anything contained in any other law for the time being in force, an appeal shall lie from the following orders (and from no others) to the court authorised by law to hear appeals from original decrees of the Court passing the order, namely:- (a) refusing to refer the parties to arbitration under Section 8; (b) granting or refusing to grant any measure under Section 9; (c) setting aside or refusing to set aside an arbitral award under Section 34. (2) An appeal shall also lie to a court from an order of the arbitral tribunal- (a) accepting the plea referred to in sub-section (2) or sub-section (3) of Section 16; or (b) granting or refusing to grant an interim measure under Section 17. (3) No second appeal shall lie from an order passed in appeal under this section, but nothing in this section shall affect or take away any right to a....
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....t of Section 9(1) clearly refers to Section 94 of the Code of Civil Procedure read with Order XXXIX thereof. Section 94 of the Code of Civil Procedure reads as follows: "94. Supplemental proceedings.-In order to prevent the ends of justice from being defeated the Court may, if it is so prescribed,- (a) issue a warrant to arrest the defendant and bring him before the Court to show cause why he should not give security for his appearance, and if he fails to comply with any order for security commit him to the civil prison; (b) direct the defendant to furnish security to produce any property belonging to him and to place the same at the disposal of the Court or order the attachment of any property; (c) grant a temporary injunction and in case of disobedience commit the person guilty thereof to the civil prison and order that his property be attached and sold; (d) appoint a receiver of any property and enforce the performance of his duties by attaching and selling his property; (e) make such other interlocutory orders as may appear to the Court to be just and convenient." Order XXXIX, Rules 1, 2, and 2-A read as follows: ....
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.... in the civil prison for a term not exceeding three months, unless in the meantime the Court directs his release. (2) No attachment made under this rule shall remain in force for more than one year, at the end of which time, if the disobedience or breach continues, the property attached may be sold and out of the proceeds, the Court may award such compensation as it thinks fit to the injured party and shall pay the balance, if any, to the party entitled thereto." Prior to the Code of Civil Procedure (Amendment) Act, 1976 ["1976 Amendment Act"], disobedience of an injunction or breach of any of its terms was enforced under sub-rules (3) and (4) of Order XXXIX, Rule 2 as follows: "2. Injunction to restrain repetition or continuance of breach.- * * * (3) In case of disobedience, or of breach of any such terms, the Court granting an injunction may order the property of the person guilty of such disobedience or breach to be attached, and may also order such person to be detained in the civil prison for a term not exceeding six months, unless in the meantime the Court directs his release." (4) No attachment under this rule shall remain in f....
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....t there was disobedience or breach of such order. While considering an application under Order 39 Rule 2-A, the court cannot construe the order in regard to which disobedience/breach is alleged, as creating an obligation to do something which is not mentioned in the "order", on surmises, suspicions and inferences. The power under Rule 2-A should be exercised with great caution and responsibility." He also relied upon the judgment of U.C. Surendranath v. Mambally's Bakery, (2019) 20 SCC 666, and paragraph 7 in particular, which states: "7. For finding a person guilty of wilful disobedience of the order under Order 39 Rule 2-A CPC there has to be not mere "disobedience" but it should be a "wilful disobedience". The allegation of wilful disobedience being in the nature of criminal liability, the same has to be proved to the satisfaction of the court that the disobedience was not mere "disobedience" but a "wilful disobedience". As pointed out earlier, during the second visit of the Commissioner to the appellant's shop, tea cakes and masala cakes were being sold without any wrappers/labels. The only thing which the Commissioner has noted is that "nonremoval of the hoardi....
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....such judgments need to be noticed. In State Wakf Board, Madras v. Abdul Azeez Sahib, AIR 1968 Mad. 79, the expression "relating to" contained in Section 57(1) of the Wakf Act, 1954 fell for consideration before the Madras High Court. The High Court held: "8. We have no doubt whatever that the learned Judge, (Kailasam, J.), was correct in his view that even the second suit has to be interpreted as within the scope of the words employed in S. 57(1) namely, "In every suit or proceeding relating to title to Wakf property". There is ample judicial authority for the view that such words as "relating to" or "in relation to" are words of comprehensiveness which might both have a direct significance as well as an indirect significance, depending on the context. They are not words of restrictive content and ought not to be so construed. The matter has come up for judicial determination in more than one instance. The case in Compagnie Financiec Dae Pacifique v. Peruvian Guano Co, is of great interest, on this particular aspect and the judgment of Brett, L.J., expounds the interpretation of O. 31, R. 12 of the Rules of the Supreme Court, 1875, in the context of the phrase "material to....
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....et out Section 85 of the Arbitration Act in paragraph 2 as follows: "2. This Section 85 of the new Act we reproduce at the outset: "85. Repeal and savings.-(1) The Arbitration (Protocol and Convention) Act, 1937 (6 of 1937), the Arbitration Act, 1940 (10 of 1940) and the Foreign Awards (Recognition and Enforcement) Act, 1961 (45 of 1961) are hereby repealed. (2) Notwithstanding such repeal,- (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force; (b) all rules made and notifications published, under the said enactments shall, to the extent to which they are not repugnant to this Act, be deemed respectively to have been made or issued under this Act." The expression "in relation to" appears in Section 85(2)(a). The question which arose before the Court, and which was answered by the Court, was whether enforcement proceedings would be included within the ambit of Section 85(2)(a). Holding that they did, ....
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....s pertinent to note that the words used are "any tenant" and not "a tenant" who can be called upon to vacate the portion in his occupation. The word "any" has the following meaning: "some; one of many; an indefinite number. One indiscriminately or whatever kind or quantity. Word 'any' has a diversity of meaning and may be employed to indicate 'all' or 'every' as well as 'some' or 'one' and its meaning in a given statute depends upon the context and the subject-matter of the statute. It is often synonymous with 'either', 'every' or 'all'. Its generality may be restricted by the context;" (Black's Law Dictionary, 5th Ed.) 19. Unless the legislature had intended that both classes of tenants can be asked to vacate by the Rent Controller for providing the landlord additional accommodation, be it for residential or non-residential purposes, it would not have used the word "any" instead of using the letter "a" to denote a tenant." Similarly, in Lucknow Development Authority v. M.K. Gupta, (1994) 1 SCC 243, this Court, while construing the word "service" under the Consumer Protection Act, 1986, held as follows: "4. What is the meaning of the ....
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....atable to what was required at the commencement of depillaring process, but the unstowing for the required length must exist always. The expression "at any time" finding place in Condition 6 has to mean, in the context in which it has been used, "at any point of time", the effect of which is that the required length must be maintained all the time. The accomplishment of object of the Act, one of which is safety in the mines, requires taking of such a view, especially in the backdrop of repeated mine disasters which have been taking, off and on, heavy toll of lives of the miners. It may be pointed out that the word 'any' has a diversity of meaning and in Black's Law Dictionary it has been stated that this word may be employed to indicate 'all' or 'every', and its meaning will depend "upon the context and subject-matter of the statute". A reference to what has been stated in Stroud's Judicial Dictionary Vol. I, is revealing inasmuch as the import of the word 'any' has been explained from pp. 145 to 153 of the 4th Edn., a perusal of which shows it has different connotations depending primarily on the subject-matter of the statute and the context of its use. A Bench of this Cou....
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....al to the working of the arbitration system, since it ensures that even for the purposes of interim measures, the parties can approach the Arbitral Tribunal rather than await orders from a court. The efficacy of Section 17 is however, seriously compromised given the lack of any suitable statutory mechanism for the enforcement of such interim orders of the Arbitral Tribunal. 47. In Sundaram Finance Ltd. [Sundaram Finance Ltd. v. NEPC India Ltd., (1999) 2 SCC 479], the Supreme Court observed that though Section 17 gives the Arbitral Tribunal the power to pass orders, the same cannot be enforced as orders of a court and it is for this reason only that Section 9 gives the court power to pass interim orders during the arbitration proceedings. Subsequently, in Army Welfare Housing Organisation v. Sumangal Services (P) Ltd., (2004) 9 SCC 619, the Court had held that under Section 17 of the Act no power is conferred on the Arbitral Tribunal to enforce its order nor does it provide for judicial enforcement thereof. 48. In the face of such categorical judicial opinion, the Delhi High Court attempted to find a suitable legislative basis for enforcing the orders of the Arbitr....
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.... solution" to the problem." 56. It was to remedy this situation that Section 17(2) was introduced. There is no doubt that the arbitral tribunal cannot itself enforce its orders, which can only be done by a court with reference to the Code of Civil Procedure. But the court, when it acts under Section 17(2), acts in the same manner as it acts to enforce a court order made under Section 9(1). If this is so, then what is clear is that the arbitral tribunal's order gets enforced under Section 17(2) read with the Code of Civil Procedure. 57. There is no doubt that Section 17(2) creates a legal fiction. This fiction is created only for the purpose of enforceability of interim orders made by the arbitral tribunal. To extend it to appeals being filed under the Code of Civil Procedure would be a big leap not envisaged by the legislature at all in enacting the said fiction. As a matter of fact, this Court, in Paramjeet Singh Patheja v. ICDS Ltd., (2006) 13 SCC 322, dealt with Section 36 of the Arbitration Act as it stood immediately before the 2015 Amendment Act (Section 36 as it then stood is the mirror image of Section 36(1) post amendment). In answering the question raised before it ....
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....rcement proceedings are different from interim orders, paragraph 26 states as follows: "VI. "As if"-Meaning of 26. The expression "as if" is used to make one applicable in respect of the other. The words "as if" create a legal fiction. By it, when a person is "deemed to be" something, the only meaning possible is that, while in reality he is not that something, but for the purposes of the Act of legislature he is required to be treated that something, and not otherwise. It is a well-settled rule of interpretation that, in construing the scope of a legal fiction, it would be proper and even necessary to assume all those facts on the basis of which alone such fiction can operate. The words "as if" in fact show the distinction between two things and, such words must be used only for a limited purpose . They further show that a legal fiction must be limited to the purpose for which it was created . [Vide Radhakissen Chamria v. Durga Prosad Chamria [(1939-40) 67 IA 360 : (1940) 52 LW 647 : AIR 1940 PC 167], CIT v. S. Teja Singh [AIR 1959 SC 352], Ram Kishore Sen v. Union of India [AIR 1966 SC 644], Sher Singh v. Union of India [(1984) 1 SCC 107 : AIR 1984 SC 200], Stat....
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....o the level of a genie which has been released from a statutory provision and which would encompass matters never in the contemplation of the legislature. 60. In a recent judgment of this Court in Union of India v. Vedanta Ltd., (2020) 10 SCC 1, this Court held that a petition to enforce a foreign award, made under Section 49 of the Arbitration Act, is governed by Article 137 of the Limitation Act, 1963 and not by Article 136 of the said Act. This conclusion was arrived at as follows: "69. Section 36 of the Arbitration Act, 1996 creates a statutory fiction for the limited purpose of enforcement of a "domestic award" as a decree of the court, even though it is otherwise an award in an arbitral proceeding [Umesh Goel v. H.P. Coop. Group Housing Society Ltd., (2016) 11 SCC 313 : (2016) 3 SCC (Civ) 795]. By this deeming fiction, a domestic award is deemed to be a decree of the court [Sundaram Finance Ltd. v. Abdul Samad, (2018) 3 SCC 622 : (2018) 2 SCC (Civ) 593], even though it is as such not a decree passed by a civil court. The Arbitral Tribunal cannot be considered to be a "court", and the arbitral proceedings are not civil proceedings. The deeming fiction is restricted....
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....r execution of foreign awards] would be covered by the residuary provision i.e. Article 137 of the Limitation Act. A three-Judge Bench of this Court in Kerala SEB v. T.P. Kunhaliumma [Kerala SEB v. T.P. Kunhaliumma, (1976) 4 SCC 634] held that the phrase "any other application" in Article 137 cannot be interpreted on the principle of ejusdem generis to be applications under the Civil Procedure Code. The phrase "any other application" used in Article 137 would include petitions within the word "applications", filed under any special enactment. This would be evident from the definition of "application" under Section 2(b) of the Limitation Act, which includes a petition. Article 137 stands in isolation from all other Articles in Part I of the Third Division of the Limitation Act, 1963." * * * "77. The application under Sections 47 and 49 for enforcement of the foreign award, is a substantive petition filed under the Arbitration Act, 1996. It is a well-settled position that the Arbitration Act is a self-contained code. [Fuerst Day Lawson Ltd. v. Jindal Exports Ltd., (2011) 8 SCC 333 : (2011) 4 SCC (Civ) 178; Kandla Export Corpn. v. OCI Corpn., (2018) 14 SCC 715 : (201....
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....ings. No such third party is before us. As to a third party, i.e., a party who is not a party to the arbitration agreement and to the subject matter covered by the award and who is affected by an order made in enforcement, we say nothing, leaving the question open to be argued on the facts of a future case. 62. Mr. Salve then read the provisions of the New Zealand Arbitration Act, 1996, the Hong Kong Arbitration Ordinance (Cap. 209), the Singapore Arbitration Act, 2001 as well as the Singapore International Arbitration Act, 1994, and the English Arbitration Act, 1996 to argue that in all the aforesaid legislations, awards passed by an Emergency Arbitrator were expressly included with varying provisions as to their enforcement. A contrast of these legislations with the provisions of the Indian Arbitration Act, again, does not take us very far, given the fact that we have, on a proper interpretation of the said Act, held that an award/order by an Emergency Arbitrator would be covered by Section 17 of the Arbitration Act, when properly read with other provisions of the Act. 63. Mr. Salve and Mr. Viswanathan then argued that Section 36(1), which is a pari materia provision with S....
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.... opinion of different High Courts on the question as to whether an award under the Arbitration and Conciliation Act, 1996 (hereinafter referred to as "the said Act") is required to be first filed in the court having jurisdiction over the arbitration proceedings for execution and then to obtain transfer of the decree or whether the award can be straightaway filed and executed in the Court where the assets are located is required to be settled in the present appeal." A Division Bench of this Court, after setting out the relevant provisions of the Code of Civil Procedure and the Arbitration Act, then held: "14. ...... The aforesaid provision would show that an award is to be enforced in accordance with the provisions of the said Code in the same manner as if it were a decree. It is, thus, the enforcement mechanism, which is akin to the enforcement of a decree but the award itself is not a decree of the civil court as no decree whatsoever is passed by the civil court. It is the Arbitral Tribunal, which renders an award and the tribunal does not have the power of execution of a decree. For the purposes of execution of a decree the award is to be enforced in the same manner a....
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....of the civil court." This judgment again does not take the matter very much further. It does not deal with Section 17 of the Act at all but deals with Section 36 which, as has been pointed out by us, contains a scheme different from that contained for enforcement of interim orders under Section 17. 69. We now come to the appeal provision in the Arbitration Act. There can be no doubt that Section 37 is a complete code so far as appeals from orders and awards made under the Arbitration Act are concerned. This has further been strengthened by the addition of the non-obstante clause by the Arbitration and Conciliation (Amendment) Act, 2019. 70. This Court, in Kandla Export Corporation v. OCI Corporation, (2018) 14 SCC 715 ["Kandla Export"], held in the context of a Section 50 appeal as follows: "20. Given the judgment of this Court in Fuerst Day Lawson [Fuerst Day Lawson Ltd. v. Jindal Exports Ltd., (2011) 8 SCC 333 : (2011) 4 SCC (Civ) 178] , which Parliament is presumed to know when it enacted the Arbitration Amendment Act, 2015, and given the fact that no change was made in Section 50 of the Arbitration Act when the Commercial Courts Act was brought into force, it ....
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....cases of enforcement of foreign awards, it is Section 50 alone that provides an appeal. Having provided for an appeal, the forum of appeal is left "to the Court authorised by law to hear appeals from such orders". Section 50 properly read would, therefore, mean that if an appeal lies under the said provision, then alone would Section 13(1) of the Commercial Courts Act be attracted as laying down the forum which will hear and decide such an appeal. 23. In fact, in Sumitomo Corpn. v. CDC Financial Services (Mauritius) Ltd. [Sumitomo Corpn. v. CDC Financial Services (Mauritius) Ltd., (2008) 4 SCC 91], this Court adverted to Section 50 of the Arbitration Act and to Sections 10(1)(a) and 10-F of the Companies Act, 1956, to hold that once an appeal is provided for in Section 50, the Court authorised by law to hear such appeals would then be found in Sections 10(1)(a) and 10- F of the Companies Act. The present case is a parallel instance of Section 50 of the Arbitration Act providing for an appeal, and Section 13(1) of the Commercial Courts Act providing the forum for such appeal. Only, in the present case, as no appeal lies under Section 50 of the Arbitration Act, no forum can ....
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....iled [see Section 37(2) of the Act]." 72. In BGS SGS SOMA JV v. NHPC, (2020) 4 SCC 234, this time, the Court dealt with the maintainability of an appeal under Section 37 of the Act in a case in which an application under Section 34 of the Act was ordered to be transferred from a court which had no jurisdiction to a court which had jurisdiction. In deciding this question, this Court referred copiously to Kandla Export (supra) in paragraph 12. It then went on to decide: "13. Given the fact that there is no independent right of appeal under Section 13(1) of the Commercial Courts Act, 2015, which merely provides the forum of filing appeals, it is the parameters of Section 37 of the Arbitration Act, 1996 alone which have to be looked at in order to determine whether the present appeals were maintainable. Section 37(1) makes it clear that appeals shall only lie from the orders set out in sub-clauses (a), (b) and (c) and from no others. The pigeonhole that the High Court in the impugned judgment [NHPC Ltd. v. Jaiparkash Associates Ltd., 2018 SCC OnLine P&H 1304 : (2019) 193 AIC 839] has chosen to say that the appeals in the present cases were maintainable is sub-clause (c). Ac....
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.... force, an appeal shall lie from the following orders (and from no others) to the court authorised by law to hear appeals from original decrees of the Court passing the order, namely:- (a) refusing to refer the parties to arbitration under Section 8;" * * * 74. Despite Section 17 being amended by the same Amendment Act, by making Section 17(1) the mirror image of Section 9(1) as to the interim measures that can be made, and by adding Section 17(2) as a consequence thereof, significantly, no change was made in Section 37(2) (b) to bring it in line with Order XLIII, Rule 1(r). The said Section continued to provide appeals only from an order granting or refusing to grant any interim measure under Section 17. There can be no doubt that granting or refusing to grant any interim measure under Section 17 would only refer to the grant or non-grant of interim measures under Section 17(1)(i) and 17(1) (ii). In fact, the opening words of Section 17(2), namely, "subject to any orders passed in appeal under Section 37..." also demonstrates the legislature's understanding that orders that are passed in an appeal under Section 37 are relatable only to Section 17(1). For examp....