(Judgment of the court was delivered by Dr.Anita Sumanth) This appeal challenges an order of the learned Single Judge dated 23.10.2013 in O.S.A.No.598 of 2013 passed in terms of section 9 of the Arbitration and Conciliation Act, 1996 (in short, the Act). The order challenged directs the respondent in the Original Application to furnish security to the extent of Rs.61,10,74,680/- within a period of four weeks from the date of order failing which there shall be an order of attachment of the equity shares held by them in Karaikkal Port Private Limited, subject to the encumbrance already created in favour of the banks. The short point urged before us is that the provisions of section 34 read with section 36 of the Act, operate as an automatic and deemed stay of the award and as such the order of the learned Single Judge directing interim measures of protection is contrary to law.
2. Upon a perusal of the provisions of
sections 9 as well as 36 of the Act, we are of the view that the reliefs set out thereunder are different and distinct. The provisions of
Section 36 of the Act, no doubt, provide for an automatic stay of enforceability of the award as seen below:-
36. Enforcement.- Where the time for making an application to set aside the arbitral award under
section 34 has expired, or such application having been made, it has been refused, the award shall be enforced under the Code of Civil Procedure, 1908 (5 of 1908) in the same manner as if it were a decree of the Court. However,
Section 9 provides for interim measures of protection and as such, the two provisions operate in different domains.
Section 9, as is relevant for the present case, is extracted below;
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 endorsed in accordance with
section 36, apply to a court-
.
(ii) for an interim measure of protection in respect of any of the following matters, namely;-
In the present case, the petition filed by the respondent in terms of section 9 of the Act, seeks to secure the amount in dispute in the arbitration. The direction issued is for furnishing of security to the extent of Rs.61.10 crore and is in terms of
section 9(ii)(b) of the Act for the purpose of providing an interim protection of the subject matter of the arbitration.
3. Mr.Arvind Pandian, Senior Counsel appearing on behalf of Mr.K.Rajasekaran for the appellant would urge us to take note of the judgment of the Supreme Court in the case of National Aluminium Company Ltd. Vs. Presteel and Fabrications Pvt. Ltd and Anr. to the effect that there is an automatic suspension of the execution of the award from the moment an application challenging the said award is filed under
section 34 of the Act. He would point out that this judgment has been consistently followed by the Supreme Court as well as other High Courts including this court in the case of R.R. Donnelley Publishing India Private Limited Vs. Canara Traders and Printers Private Limited. We note however that the aforesaid judgments relate only to an appeal in terms of
section 34 of the Act and not to interim protection under
section 9.4. In the present case the application filed was in terms of
section 9 of the Act seeking the protection of the amount in dispute in the arbitration. Statute envisages a difference between the protection/preservation/securing of the subject matter of arbitration and the enforcement/execution of the award itself. While
section 9 deals with the former and can be invoked before, during or after the making of the arbitral award,
section 36, providing for the suspension of the award would come into play only when an appeal has been filed in terms of
section 34 of the Act or the time limit for filing of an appeal has expired. The reliefs set out under
section 9 and
section 34 r/w 36 thus do not overlap and the scheme of the Act would support such a conclusion. In view of the above discussion, this appeal is dismissed.
(S.N.J.) (A.S.M.J.) 16.02.2017 Msr Speaking Order/Non speaking order Index:Yes/No S.NAGAMUTHU, J.
& DR.ANITA SUMANTH, J.
msr O.S.A.No.6 of 2014 16.02.2017 http://www.judis.nic.in