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5. In the light of the above pleadings, we have heard Mr. A.L.Somayaji, learned senior counsel for the Techmo Car Spa and Mr. C.A. Sundaram, learned senior counsel for the Madras Aluminium Company Limited (MALCO).

6. The only point for consideration in this appeal is, whether the petitioner has made out a prima facie and strong case directing Techmo Car to furnish security; and whether the learned Additional District Judge is right in partly allowing the said application.

7. First we shall consider the objection regarding maintainability of the petition before the District Court. There is no dispute that MALCO has filed Arbitration O.P. under Section 9 of the Act before the District Court, Salem. The objection of the learned senior counsel for the appellant/petitioner is that at the relevant point of time, the District Court was not having jurisdiction in respect of the matter in issue. Though learned senior counsel for the respondent submitted that this objection was not raised in the District Court, the counter filed before that Court (District Court) shows that an objection was raised regarding maintainability of the petition before the said Court. As per Section 9 of the Act, any party to the arbitral proceedings can file an application before a Court having jurisdiction. The word "Court" has been defined in Section 2(1)(e) of the Act as follows:

15. In J & K., State Forest Corporation v. Abdul Karim Wani, , while considering relevant provisions in the Jammu and Kashmir Arbitration Act, 2002, the Supreme Court has held that "the interim direction can be issued only for the purpose of arbitration proceedings and not to frustrate the same".

16. Mr. C.A. Sundaram, learned senior counsel for MALCO, has pressed into service the following conclusion reached in the case of Ganesh Benzoplast Ltd., v. Sundaram Finance Ltd., reported in 2002 2 CTC 238 (para 10,11,16,18 and 19) "10. Coming to the obligation of the applicant/first respondent herein to satisfy the requirement as contemplated under Order 38, Rule 5, C.P.C. is concerned, at the outset, we have to point out that all the judgments cited by the learned senior counsel deals with the application filed either under Order 38 Rule 5 C.P.C or under Section 18 of the Arbitration Act, 1940. If we look at the provision of Section 18 of the Arbitration Act, 1940, it is analogous to Order 38, Rule 5, C.P.C. Further Section 41 of the Arbitration Act, 1940 provides the applicability of C.P.C. in respect of the proceedings under the Arbitration Act.

23. Though it is claimed that the respondent Company being a foreign company have no assets in India, it is not the claim of the petitioner that they were not aware of the same at the time of entering into an agreement. Though Section 9 enables the party to the agreement to approach the concerned Court for necessary interim order, there must be strong material to substantiate their claim. We have already referred to the objection of the respondent/foreign company regarding Ex. A-10. Though the petitioner has claimed that prima facie case exists on their side and the learned District Judge has also accepted the same, as discussed earlier, after perusing the various averments in the petition as well as in the counter, we are satisfied that the petitioner has not established and substantiated their claim for the relief under Section 9 of the Act. Section 9 could be invoked for an interim measure of protection, inter alia, for securing the amount in dispute in the arbitration. To put it differently a party could seek interim measure of protection only if there is an amount in dispute in the arbitration. It is demonstrated before us that in the instant case, on the date when the petition under Section 9 of the Act was filed, there was no amount in dispute or arbitration. As a matter of fact, it is only the foreign company, namely, Techmo Car which initiated the arbitral proceedings on 9-5-2003 and the MALCO-respondent herein had not filed any claim, however, has filed a counter claim only on 14-8-2003. It is also relevant to note that though the dispute is said to have arisen pursuant to the termination of the Agreement by the petitioner on 29-1-2003, the MALCO had not taken effective steps to refer the dispute for adjudication immediately before the international Chamber of Commerce in terms of the arbitration agreement between the parties.

24. It is also brought to our notice that by the time the order was passed by the Additional District Judge on 22-10-2003, much water had flown into the arbitral proceedings as subsequent to the claim of the Techmo Car submitted on 9-5-2003, the MALCO also appointed their arbitrator under the letter dated 13-6-2003 and submitted their response on 14-8-2003. The appellant herein had also submitted its response to the claim to the respondent on 21-10-2003; accordingly the whole issue was now before the Arbitral Tribunal and, as rightly argued by Mr. A.L. Somayaji, learned senior counsel for the petitioner/Appellant, the question of interim measure would have been more appropriate for the Arbitral Tribunal to consider, as provided under Section 17 of the Act rather than the Court under Section 9 of the Act. As observed earlier, the party coming to the Court must show that if it is not secured, the award which it may obtain would result in a paper decree or a decree which cannot be enforced on account of acts of a party pending arbitral process. These aspects have not been substantiated by placing acceptable materials for an order under Section 9 of the Act. Though the Court is vested with powers to grant interim relief, but the Court's discretion must be exercised sparingly and only in appropriate cases. The Court's discretion ought to be exercised in exceptional cases when there is adequate material on record, leading to a definite conclusion that the respondent is likely to render the entire arbitral proceedings infructuous by disposing of the properties or funds either before or during the pendency of the arbitral proceedings. We are also satisfied that in view of the fact that both parties have taken appropriate steps by appointing their respective Arbitrators and submitting their response/reply etc., any order, in the absence of adequate material, will further delay the arbitral proceedings and we are satisfied that this aspect has not been considered by the learned Additional District Judge. Though we are conscious of the fact that in spite of the proceedings before the Arbitral Tribunal, I.C.C. Rules permit the parties to apply to the competent judicial authority for interim and conservatory measures, unless the Court satisfies by placing material, there cannot be any interim order. In our case, as observed earlier, the petitioner knows that the respondent i.e., other party is a foreign party and also knows that they are not having any property in India and in spite of this, they entered into an agreement. We are satisfied that the Court below committed an error in exercising its discretion arbitrarily and without acceptable materials. We have already referred to the stand taken by the foreign company, their claim before the Arbitral Tribunal and the necessary steps taken by them for early commencement of the arbitral proceedings to solve the dispute in question. We have also held that the learned Additional District Judge committed an error in accepting the auditor's report under Ex. A-10 and we are satisfied that the petitioner has not placed acceptable material to show that prima facie case exists in their favour for grant of interim order. We have already referred to the factual information regarding the claim of Techmo Car against MALCO US $ 27,93,60,000 whereas the claim by the MALCO against Techmo Car is to the tune of US $ 58,91,295. These material facts were lost sight of by the learned Additional District Judge. We are also satisfied that the reasons set out by the learned Additional District Judge for allowing the O.P., are unacceptable, perverse and liable to be set aside.