In the present matter, the Bombay High Court held that the Court has the power to grant interim relief under Section 9 of the Arbitration and Conciliation Act, 1996 (“A&C Act”) even after an Arbitral Tribunal is constituted, if circumstances so warrant. The dispute involved partners of a construction firm wherein one partner (“Petitioner”) invoked arbitration under the partnership Deed dated 21.10.2021 against other 2 partners (“Respondents”) of the firm mainly on the ground that that the Respondents were dealing with the business of the firm and firm’s property to the detriment of the Petitioner. The Petitioner filed a petition under Section 9 and also an Application under Section 11 of the A&C Act for appointment of an Arbitrator.
Subsequently, the Petitioner was able to secure a status quo order in Section 9 petition and the Petition was disposed of. The Court also appointed a Sole Arbitrator and directed that status quo order would continue to operate until the Arbitrator makes and renders the final award. Thereafter, the Petitioner was constrained to file an Application under Section 17 of the A&C Act since Respondent No. 1 was not complying with the order and had resumed construction activities in collusion with Respondent No. 2. Since the Petitioner could not get relief under Section 17 of the A&C Act, the Petitioner filed this Section 9 petition for the appointment of a Court Receiver.
The court observed after considering various cases, that it would not interfere with the exercise of discretion by the Arbitral Tribunal and substitute its own view except when the Arbitral Tribunal has acted arbitrarily, capriciously, or ignored well-settled principles of law regulating the grant or refusal of interlocutory injunctions. Also, the court cannot reassess the material on which the Tribunal has based its decision as long as the Tribunal has taken a plausible view and exercised its discretion reasonably and judiciously. However, the court allowed this Petition, stating that Respondent No. 1 had acted with impunity and in brazen disregard of the Tribunal’s order. Citing the Hon’ble Supreme Court case of Arcelor Mittal Nippon Steel (India) Ltd. v. Essar Bulk Terminal Ltd., the court observed that a harmonious reading of Sections 9(1) and 9(3) of the Arbitration Act indicates that the court is not deprived of its power to grant interim relief when an Arbitral Tribunal is constituted. The court must examine whether the Applicant has an efficacious remedy under Section 17 of the A&C Act. In such circumstances, the court has the discretion to entertain an application for interim relief under Section 9 of the Arbitration Act.
In light of the above, the court correctly exercised its power and appointed a Court Receiver, granting the said relief to Petitioner under Section 9.