Sona Corporation India Private Limited v. Ingram Micro India Private Limited, 2020
Court: Delhi High Court
Coram: Justice Jyoti Singh
Date of Judgement: 4th March 2020
Appellant: Sona Corporation India Private Limited
Respondent: Ingram Micro India Private Limited
Facts of the Case:
- The appellant and the respondent entered into two registered lease deeds. Disputes arose due to violation of the terms of the deeds and their unilateral termination. The Hon'ble Delhi High Court referred the matter to the Arbitral Tribunal.
- The respondent, during the course of the arbitral proceedings, filed an application under Section 17 of the Arbitration and Conciliation Act, 1996 seeking a refund of the security deposit amounting to Rs. 2,70,00,000 made under the lease deeds. The Tribunal secured the refund of the security deposit and ordered that the property should not be sold or transferred in any other manner vide its order dated 11th December 2018.
- Thereafter the respondent filed two applications: (a) The respondent filed an application under Section 27(5) of the Arbitration and Conciliation Act, 1996 for initiating contempt proceedings against the appellant and its directors for violation of the order dated 11th December 2018. (b) The respondent also filed an application under Section 17 of the act under the contention that the property referred to in the order dated 11th December 2018 has been mortgaged by the appellant.
- The Arbitral Tribunal recalled the order dated 11th December 2018 and directed the appellant to furnish a bank guarantee of Rs. 2.7 crores which will be valid for 12 months (1 year) or deposit the said amount in a fixed deposit with an endorsement that it will be payable at the Arbitral Tribunal's discretion, vide order dated 26th February 2019.
- The appellant was aggrieved by the same and filed an appeal against the order dated 26th February 2018 under Section 37(2) of the Arbitration and Conciliation Act, 1996.
Issue of the Case: Whether there is a bar in law for an Arbitral Tribunal to pass an order in a subsequent application filed under Section 17 of the Arbitration and Conciliation Act, 1996 in a variation of the order passed under the original application filed under Section 17 of the act.
The judgment of the Case:
- The Court compared the power to grant interim measures given to an Arbitral Tribunal under Section 17 of the Arbitration and Conciliation Act, 1996 to that of the court mentioned in Section 9 of the act. It referred to the judgment given in Shakti International Private Limited v. Excel Metal Processors, 2016 which stated that Section 17 of the act has been made akin to the jurisdiction of the court under Section 9 of the act. A party seeking interim relief before the Arbitral Tribunal must fulfill express provisions of Section 9 of the act and must be provided for by the language in Section 17 of the Act.
- The Court held that an Arbitral Tribunal may modify its previous order.
This Article Does Not Intend To Hurt The Sentiments Of Any Individual Community, Sect, Or Religion Etcetera. This Article Is Based Purely On The Authors Personal Views And Opinions In The Exercise Of The Fundamental Right Guaranteed Under Article 19(1)(A) And Other Related Laws Being Force In India, For The Time Being.