Mere Existence Of Power Under S. 9 Of Arbitration Act Not Sufficient To Justify A S. 9 Petition: Delhi High Court

The Delhi High Court has ruled that the power of the Arbitral Tribunal to grant interim measures under Section 17 of the Arbitration and Conciliation Act, 1996 (A&C Act), is not inferior to the power of a court under Section 9. The bench of Justice Yashwant Varma remarked that though Section 9(3) of the A&C Act is not an ouster clause, it still requires the court to consider whether its intervention is warranted after the Arbitral Tribunal has been constituted and is in seisin of the dispute. For allowing a Section 9 petition, there must be compelling reasons for the court to conclude that the Tribunal would either be unable to grant effective and emergent relief or for various other reasons the Tribunal would constitute an inefficacious forum, the Court said. “The mere existence of the power invested in a court by Section 9 would thus not be sufficient to justify a petition under the said provision being entertained,” it ruled. Section 9 (3) provides that once the arbitral tribunal has been constituted, the Court shall not entertain an application for interim measures under Section 9(1), unless the Court finds that circumstances exist which may not render the remedy provided under Section 17 efficacious. The dispute between the heirs and descendants of the Late Hakeem Hafiz Abdul Majeed Sahib, relating to the segregation of Hamdard Institute of Medical Sciences and Research (HIMSR) from the Jamia Hamdard (deemed University), was referred to arbitration. Seeking reliefs in respect of a resolution passed by the Jamia Hamdard Society, in terms of which a decision came to be taken for converting HIMSR from a “constituent institution” to a ‘school’ of the Jamia Hamdard, the petitioners, including Asad Mueed, filed a petition under Section 9 of the A&C Act before the Delhi High Court. The petitioners sought an interim injunction restraining Jamia Hamdard Society (respondent no. 5) from registering the amended and ratified Memorandum of Association of Jamia Hamdard (respondent no. 4), contending that the same was illegally amended to change the legal status of HIMSR from a constituent institution to a school. The petitioner submitted that the respondents, including Hammad Ahmed, were acting in breach of the prescriptions relating to HIMSR, as contained in the Family Settlement Deeds executed between the parties. The petitioner argued before the Court that since the 5th respondent, Jamia Hamdard Society, as well as the 4th respondent, Jamia Hamdard, do not stand arrayed as parties before the Arbitral Tribunal, the petitioners have no other efficacious remedy and are compelled to invoke the Court’s jurisdiction under Section 9. The petitioner further averred that the powers conferred on the Arbitral Tribunal under Section 17 is not of the same plenitude as the powers conferred on the courts under Section 9. While contending that all aspects arising out of or relating to the said resolution passed by the respondent no. 5- Society, have been duly taken cognizance of and are pending consideration of the Arbitral Tribunal, the respondent, Hammad Ahmed, submitted that the petitioners cannot be permitted to agitate identical issues before two forums. The respondent further pleaded that the petitioners had failed to show that the remedy provided under Section 17 was inefficacious and thus, the petition under Section 9 was liable to be dismissed. Referring to the provisions of Section 17 of the A&C Act, as substituted by the Amendment Act of 2015, the Court ruled that the powers conferred upon a court under Section 9 and the powers exercisable by an Arbitral Tribunal under Section 17, are similar. The Court thus concluded that it would be incorrect to recognize the power of the Arbitral Tribunal under Section 17 as inferior to the power of a court under Section 9. “The amended Section 17 is an embodiment of the legislative intent to arm the Tribunal with powers similar and akin to those conferred upon a court,” the Court said, while holding that the amended provision enables the Arbitral Tribunal to frame injunctions and pass orders of protection in terms identical to those conferred upon a court under Section 9. Referring to Section 9(3), the bench said, “While Section 9(3) may not be an ouster clause, it still bids the court to consider whether its intervention is warranted notwithstanding the Tribunal having been constituted and being in seisin of the entire dispute.” “The mere existence of the power invested in a court by Section 9 would thus not be sufficient to justify a petition under the said provision being entertained. The court would also have to be convinced that its emergent intervention is warranted since the remedy provided by Section 17 would not be efficacious,” it added. While holding that there must be compelling reasons for the court to conclude that the Arbitral Tribunal would be...

Mere Existence Of Power Under S. 9 Of Arbitration Act Not Sufficient To Justify A S. 9 Petition: Delhi High Court

Parina Katyal

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