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Showing contexts for: interim measures in National Shipping Company Of Saudi ... vs Sentrans Industries Limited on 12 January, 2004Matching Fragments
"(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;
7. In Pushpa P. Mulchandani (Mrs.) and Ors. v. Admiral Radhakrishin Tahilani (Retd.) and Ors., , the learned Single Judge of this Court held that the provision contained in Section 9 of the Act of 1996 was a self operative code and that the provisions of Civil Procedure Code are not applicable while considering the application under Section 9 of the Act of 1996. The learned Single Judge held thus :
"(19) A significant fact which strike one is that there is no Section in the 1996 Act corresponding to Section 41 of the 1940 Act. The intention of the 1996 Act appears to be to steer clear of the earlier position, namely, that the provisions of the Code of Civil Procedure, 1908 would apply to all proceedings under the Arbitration Act subject to the provisions of the Act and Rules made thereunder. On the contrary, there is internal evidence in the 1996 Act which tends to suggest that the intention is to make it a self-contained Code. Reference may be made to Section 9 of the 1996 Act. Section 9 deals with the power of the Court to make interim measures for (i) appointment of a guardian pendente lite for a minor or a person of unsound mind (ii) the preservation, interim custody or sale of any goods which are the subject-matter of the Arbitration agreement, (iii) securing the amounts in dispute in the Arbitration, (iv) the detention, preservation or inspection of any property or tiling which is the subject-matter of the dispute in Arbitration, or authorising for any of the said purposes any person to enter upon any land or building in the possession of any party, or authorising any samples to be taken or any observation to be made, or experiment to be tried, which may be necessary or expedient for the purpose of obtaining full information or evidence, (v) issuing interim injunction, (vi) appointment of a Receiver; (vii) such other interim measure of protection as may appear to the Court to be just and convenient. In my view, these provisions in Section 9 indicate an intention on the part of, the legislature to make the 1996 Act a self-contained, self-operative Code with regard to the subject matter of Arbitration and Conciliation. If the intention was to apply the provisions of the Code of Civil Procedure to Arbitration under the 1996 Act, then there was no reason for the legislature to specially enact Section 9 in the 1996 Act dealing with the interim measures for all the said powers would have been available in the different orders in the Schedule to the Civil Procedure Code. I am thus fortified in my opinion that the 1996 Act is enacted to make the law a self-contained Code and that the provisions of the Civil Procedure Code are not applicable, unless specifically made applicable."
"The power of the Court to secure the amount in dispute under Arbitration is not hedged by the predicates as set out in Order 38, all that the Court must be satisfied is that an interim measure is required. In other words, 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. Therefore, the Court would not to be bound by the requirement of Order 38, Rule 5. Since the power is discretionary, the Court must be satisfied that it is in the interest of justice, based on the material before it to pass order to secure the petitioner before it. The discretion to be exercised would be based as set out earlier on the material before it and the petitioner making out a case that there is need for an interim measure of protection. However, once the Court passes the order, then the, order to secure would be as per the procedure as laid down in the Code of Civil Procedure. In so far as preservation, interim custody etc. is concerned, the power as conferred under Order 39, Rule 7 is also provided by Section 9(ii)(c). Appointment of Receiver is covered by Section 9(ii)(d). Power to sell goods at interim stage is specifically provided for in Section 9(ii)(a). Apart from that there is general power reserved in the Courts for such interim measure as it may thought proper under Section 9(ii)(a). The substantive provisions of granting interim relief as provided for in the Code of Civil Procedure therefore, cannot be read into Section 9. There are independent provisions in the Act itself. The exercise of the power must be construed, bearing in mind the object of the Act and the need to dispose of the matter as expeditiously and not hedged in, by the provisions of the Code of Civil Procedure. To my mind, therefore, it is not necessary for the Court when called upon to secure the amount in dispute to find out whether the respondent before it is seeking to dispose of the property or taking the property outside the jurisdiction of the Court. The Court is not hedged by such restriction. If it were to be so, the legislature considering that the petition lies to the Civil Court could have provided that Court can exercise all the powers it has under the Civil Procedure Code for granting interim relief. On the contrary only procedural provisions to give effect to the power under Section 9 have been conferred. Considering that, to my mind, the observation of the learned Judge of the Delhi High Court in M/s. Global (supra), when it noted that the principles of the Code of Civil Procedure will have to be borne in mind would only restrict the exercise of powers under Section 9. The power under Section 9 cannot be fettered by reading into it the requirements for granting interim reliefs which are not provided. To that extent, I am unable to agree with the view expressed by the Delhi High Court."
10. Section 9 in the Act of 1996 is a substantive provision which empowers the Court to pass an interim order before or during Arbitral proceedings or any time after the making of the Arbitral Award but before it is executed under Section 36. Since we are concerned with Section 9(ii)(b), it may be noticed that it provides for an interim measure of protection for securing the amount in dispute in the Arbitration. Sort of clarification it also provides that the Court shall have the same power for making orders as it has for the purpose of and in relation to any proceeding before it. Such provision as enacted in Section 9 is a provision that enables a party to apply for interim protection if action of the other party to the agreement providing for Arbitration is either in breach of the terms of the agreement or is inequitable, unfair on in breach of natural justice. The order under Section 9(ii)(b) is in the nature of interim protection order. In a special provisions of the nature like Section 9(ii)(b), we are afraid, exercise of power cannot be restricted by importing the provisions of Order 38, Rule 5 of the Code of Civil Procedure as it is. The legislature while enacting Section 9(ii)(b) does not seem to us to have intended to read into it the provisions of Order 38, Rule 5 of the Civil Procedure Code as it is. It is true and as has been held by the Supreme Court in ITI Ltd, (supra), that for want of specific exclusion of the Code of Civil Procedure in the Act of 1996, it cannot be inferred that the Code was not applicable but that would not mean that provisions of Code have to be read into as it is when the Court exercises its powers as prescribed in the Act of 1996. The procedural aspects provided in the Code about which the Act of 1996 is silent, needless to say, when the Court exercises its substantive power under the Act of 1996 shall be applicable but the guiding factor for exercise of power by the Court under Section 9(ii)(b) has to be whether such order deserves to be passed for justice to the cause. The provisions of Order 38, Rule 5, CPC cannot be read into the said provision as it is nor can power of the Court in passing an order of interim measure under Section 9(ii)(b) be made subject to the stringent provision of Order 38, Rule 5. The power of the Court in passing the protection order to secure the amount in dispute in the Arbitration before or during Arbitral proceedings or at any time of making of the Arbitral amount but before it is enforced cannot be restricted by importing the provisions set out in Order 38 of C.P.C. but has to be exercised ex debito justitiae and in the interest of justice. The Court while considering the application for interim protection under Section 9(ii)(b) is guided by equitable consideration and each case has to be considered in the light of its facts and circumstances. The interim protection order contemplated under Section 9(ii)(b) is granted by the Court to protect the interest of the party seeking such order until the rights are finally adjudicated by the Arbitral Tribunal and to ensure that the Award passed by Arbitral Tribunal is capable of enforcement. Though the power given to the Court under Section 9(ii)(b) is very wide and is not in any way controlled by the provisions of the Code but such exercise of power, obviously, has to be guided by the paramount consideration that the party having a claim adjudicated in its favour ultimately by the Arbitrator is in a position to get the fruits of such adjudication and in executing the Award. While dealing with the application for direction to the other party to deposit the security of the amount in dispute in the Arbitration, the Court also has to keep in mind the drastic nature of such order and unless a clear case not only on the merits of the claim is made out but also the aspect that denial of such order would result in grave injustice to the party seeking such protection order in as much as in the absence of such order, the applicant party succeeding before the Arbitral Tribunal may not be able to execute the Award. The obstructive conduct of the opposite party may be one of the relevant considerations for the Court to consider the application under Section 9(ii)(b). The party seeking protection order under Section 9(ii)(b) ordinarily must place some material before the Court, besides the merits of the claim that order under Section 9(ii)(b) is eminently needed to be passed as there is likelihood or an attempt to defeat the Award, though as indicated above, the provisions of Order 38, Rule 5, CPC are not required to be satisfied. The statutory discretion given to the Court under Section 9(ii)(b) must be exercised judicially in accordance with established legal principles and having regard only to relevant considerations. In our view, this is the proper approach for consideration of the application for interim relief under Section 9(ii)(b) and we hold that the provisions of Order 38, Rule 5 of the Civil Procedure Code cannot be read as it is and imported in Section 9 of the Act of 1996. We also hold without hesitation that the Court is competent to pass an appropriate protection order of interim measure as provided under Section 9(ii)(b) outside the provisions of Order 38, Rule 5, Code of Civil Procedure. Each case under Section 9(ii)(b) of the Act of 1996 has to be considered in its own facts and circumstances and on the principles of equity, fair play and good conscience. The power of the Court under Section 9(ii)(b) cannot be restricted to the power conferred on the Court under Civil Procedure Code though analogous principles may be kept in mind.