Invocation Of Section 9 & Section 11 Of Arbitration Act Does Not Constitute Parallel Proceedings: Bombay High Court

The Bombay High Court single bench of Justice Somasekhar Sundaresan held that the mere invocation of Section 9 and Section 11 of the Arbitration and Conciliation Act, 1996 does not amount to parallel proceedings. Further, the High Court noted that Section 9 is intended to provide interim relief to safeguard the subject matter of arbitration. On the other hand, Section 11 is limited to the appointment of an arbitrator when there is a dispute regarding the arbitration agreement. Brief Facts: The matter pertained to an application filed under Section 11 of the Arbitration and Conciliation Act, 1996 (“the Act”), seeking appointment of an arbitrator to adjudicate disputes. The disputes arose between the parties under an Investment Agreement. The Applicant invoked the arbitration clause to which the Respondent replied. The Respondent contended that the invocation of arbitration was not maintainable since two parallel proceedings (one under Section 9 of the Act and the other under Section 11) could not proceed simultaneously. In July 2024, a Single Judge of the Bombay High Court (“High Court”) granted interim reliefs under Section 9 of the Act. One of which required the Respondent to make a disclosure. The Respondent purportedly complied with this order by submitting Exhibit 'F' as part of the Interim Application which sought the withdrawal of the July 2024 order on the grounds that it was obtained through misrepresentation. However, exhibit 'F' contained only three lines disclosing values under the headings “Stocks,” “Fixed Deposit,” and “Mutual Funds”. According to the Applicant, this did not constitute proper compliance with the High Court's order. Observations by the High Court: The High Court noted that the existence of disputes between the parties in light of the earlier order passed under Section 9. The High Court also noted that the question of whether disputes existed is to be determined by the arbitral tribunal under Section 16 of the Act. The High Court rejected the Respondent's argument that proceedings under Sections 9 and 11 constituted parallel proceedings. The High Court held that: “It is rather surprising that invocation of Section 9 and Section 11 have been treated in a cavalier manner by the Respondent, terming them as parallel proceedings on the same cause of action in the teeth of the scheme of the Act. Section 9 is meant to grant temporary interim protection in aid of the arbitral tribunal conducting proceedings. Non- compliance with the agreed commitment to refer disputes to arbitration is the basis of filing a Section 11 Application.” The High Court also noted that the Respondent failed to challenge the Section 9 order in appeal or seek appropriate intervention. Referring to Section 11(6A), the High Court held that its jurisdiction under Section 11 was confined to examining the existence of an arbitration agreement. It held that substantive questions regarding the validity or scope of disputes were matters for the arbitral tribunal to decide under Section 16. Therefore, the High Court referred the disputes to arbitration. It appointed Mandar Soman as the sole arbitrator to adjudicate the disputes arising out of the Investment Agreement. Case Title: Fab Tech Works & Constructions Pvt. Ltd. vs Savvology Games Pvt. Ltd. & Ors. (Commercial Arbitration Application No. 419 Of 2024 and Related Matters)Citation: 2025 LiveLaw (Bom) 121 Advocates for the Applicant: Mr. Nadeem Shama, a/w Hrishikesh Nadkarni, Salman Athania, i/b PAN India Legal Services LLP, for the Applicant. Advocates for the Respondent: Mr. Pathik Muni, a/w Chinton B., for Respondent. Click Here To Read/Download The Order

Invocation Of Section 9 & Section 11 Of Arbitration Act Does Not Constitute Parallel Proceedings: Bombay High Court

Smita Singh

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