TaxTMI 
TaxTMI 
2021 (10) TMI 1457
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.... unsold flats/inventories of Residential Zone-II in any manner whatsoever, without express/written permission or consensus of the claimant and sharing of the Gross Sales Revenue thereof with the Claimant in accordance with terms agreed upon between the parties, pending adjudication of the present proceeding by the Hon'ble Tribunal; b) Restrain the Respondent from deducting the alleged pending D. M. Fees towards 'Facilities Agreement' and 'Villa DMA' or any other claim/s from the Gross Sales Revenue of the unsold inventories or any other receivables from Flat purchasers in the Residential Zone-II Project, pending adjudication of its claims by the Hon'ble Tribunal and without express permission to the effect being granted by the Hon'ble Tribunal, in the peculiar facts and circumstances of the present case; c) Direct the Respondent to disclose all the transactions made by it in respect of all the inventories of Tower 'F' or any other part of the Residential Zone-II, and also to provide copies of all Deeds, Sale Agreements etc. in respect of all such transactions, which are yet not provided by the Respondent to the Claimant; d) Direct the Respo....
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....ing the Hon'ble Tribunal for fixing an early date for the hearing of the said application, so that the Claimant is in a position to demonstrate to the Hon'ble Tribunal the illegalities on the part of the Respondent and request for grant of appropriate interim relief. (emphasis supplied) 4. The learned Arbitrator immediately on the next day i.e. on 8 October 2021 and suo moto, considered the respondent's section 17 application, even without hearing the respondent/applicant on the said application much less the appellant, and passed the following ex-parte order:- The arbitral Tribunal is in receipt of the second application u/s. 17 of the A&C Act, 1996 filed by the Claimant. Let the Respondent file Reply to the application in 10 days. Subject to the reply being filed, the Tribunal can hear this application on 20.10.2021 from 11.30 am to 1.30 pm and 2.30 pm to 4.30 pm. Learned Counsel for the parties are requested to block the above date for hearing on the application and confirm to the undersigned if they are agreeable for such hearing. The date 23-10-2021 (time 5 to 7 pm) already appointed, may not permit hearing on this application being accommodated. The partie....
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....he year 2006 under the UNCITRAL Model Law on International Commercial Arbitration (for short "the UNCITRAL Model Law"). In this regard reference is made to Section 2 of the 2006 amendment to the UNCITRAL Model Law, which was adopted by the Commission at its thirty-ninth session in 2006, to incorporate the provisions inter alia on Interim measures and Preliminary orders by Section 2 thereof, whereby Article 17B providing for 'applications for preliminary orders and conditions for granting preliminary orders' came to be inserted. Sub Article (1) of Article 17 B provided that unless otherwise agreed by the parties, a party may, without notice to any other party, make a request for an interim measure together with an application for a preliminary order directing a party not to frustrate the purpose of the interim measure requested. Sub-article (2) provided that the arbitral tribunal may grant a preliminary order provided it considers that prior disclosure of the request for the interim measure to the party against whom it is directed risks frustrating the purpose of the measure. Referring to these amendments to the UNCITRAL Model Law it is submitted that although an occasion ar....
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....ranted by the arbitral tribunal, and if an award is made, it would be rendered a paper award as also there is likelihood of multiplicity of proceedings. Mr. Dewani has also referred to the contents of the impugned order to submit that the learned Arbitrator has indicated a clear concern, that the parties were heard earlier on the initial Section 17 applications and orders on such applications were under consideration of the arbitral tribunal. It is submitted that in such context, looking at the nature of the grievance as raised in the Section 17 application, the learned Arbitrator has recorded that he was "persuaded by the consideration that the facts set out in the application call for status quo being maintained till the application is heard." It is Mr. Dewani's submission the parties would now be heard by the arbitral tribunal on the adjourned date of hearing, and the parties would be at liberty to assert their respective pleas before the arbitral tribunal. He has accordingly prayed for dismissal of this appeal. Discussion and Conclusion 8. I have heard learned Counsel for the parties, as also I have perused the record and the impugned ex-parte order passed by the arbitral....
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....reflected from the said provisions of the Act, it would be unknown to law and quite peculiar for an arbitral tribunal to pass an ex-parte ad-interim order, on the mere filing of a Section 17 application, without hearing even the party making the application, much less the contesting respondent, who would certainly be affected and/or prejudiced by an ex-parte order. It may be that the arbitral tribunal is of a firm opinion in the facts of a given case, that some urgent orders are required to be passed to protect the arbitral interest of the parties, however, fairness of the procedure and more particularly as reflected by the provisions, as discussed above, would not permit an arbitral tribunal to pass an ex parte order on a section 17 application and moreso when the parties are sufficiently before the arbitral tribunal. 11. It is seen that the Indian legislature has kept away and/or not accepted as to what was inserted by the 2006 Amendment in the UNCITRAL Model Law on International Commercial Arbitration. It clearly appears that under the UNCITRAL Model Law, upto the year 2006, there was no provision for any preliminary orders to be passed in arbitral proceedings. However a depart....
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....f the interim measure requested. (2) The arbitral tribunal may grant a preliminary order provided it considers that prior disclosure of the request for the interim measure to the party against whom it is directed risks frustrating the purpose of the measure. (3) The conditions defined under article 17A apply to any preliminary order, provided that the harm to be assessed under article 17A(1)(a), is the harm likely to result from the order being granted or not." 12. The amendment of such nature as incorporated under the UNCITRAL Model Law, does not appear to be a common feature in the arbitral jurisprudence prevailing in many countries, as observed in the commentary of Michael W. Buhler and Thomas H. Webster titled 'Handbook of ICC Arbitration" on the subject "ex parte orders". The learned authors have observed such amendment as incorporated in the UNCITRAL Model Law, to be the most controversial part of the modification. They observe that an ex parte order as passed under the amended provisions of the UNCITRAL Model Law, does not appear to reflect the accepted practice in the major centres of arbitration. It is stated that a tribunal needs to carefully consider whether it ....
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....bunal to apprehend or fully appreciate arguments to which it may not otherwise give adequate weight. 23-24 Another question is whether a preliminary order would be effective in the circumstances of the case and how the Tribunal should act after the preliminary order has been issued. The effectiveness of a preliminary order will in many instances depend on enforceability in state courts, a subject that is dealt with in the UNCITRAL Model Law. As regards the procedure to be followed after the preliminary order has been issued. Art. 17C of the UNCITRAL Model Law provides overall guidance. However, a corresponding provision is not generally available in most arbitration laws and therefore there is an issue as to enforceability." 13. Now coming to the contention as urged by Mr. Dewani pointing out several paragraph of the Section 17 application, that the respondent's application fulfilled the need for an ex parte ad-interim order. It is difficult to accept Mr. Dewani's contention on a reading of such application. In my opinion, the application certainly did not reflect any glaring extraordinary situation for passing of an ex-parte order of the nature passed by the arbitral tr....