Can a Statutory Arbitral Tribunal grant interim measure under Section 17?
The Apex Court in the case of State of Gujarat & Anr. v. Amber Builders, Civil Appeal No. 8307 of 2019 resolute on 8th January 2020, that a Statutory Arbitration Tribunal has the ultra virus to the scope of the Statute, if it is permissible under Arbitration & Conciliation Act.
In the State of Gujarat, all the disputes arising out of the works contract entered by the State Government or the Public Sector happenings with any person are governed under the Tribunal of Gujarat Public Works Contracts Dispute Arbitration Tribunal Act, 1992. The matters of dispute are brought up to Gujarat Public Works Contract Dispute Tribunal under Section 3 of the Act.
The contract was associated between the State and the contractor for a period of 4 years after which the contractor demanded the expulsion of security amount. A letter was accommodate for contractor to pay Rs. 1,09,00,092/-, as the road work was not as in agreement to the contract and threatened to withhold the payments from the security deposit and the bills that were pending. The contractor challenged the notice by filing writ petition in the Gujarat High Court, arguing that the State is not proficient to withhold such an amount. The State argued that the work was faulty or not up to the condition and they had to get the work done from the third party and had to bear the fundamental cost for the same. The High Court held that without proper assessment of the amount, that is to be recovered, the State government cannot recuperate the said amount unilaterally from the payment that is due.
The State withstand to that the High Court does not have the jurisdiction to entertain the matters of the dispute as they were dealt by the Tribunal. The contractor proclaimed that the statute under which the Tribunal was formed does not provide for the tribunal the power to pass such an order.
The State filed an appeal, matter went to the Apex Court and the Apex Court held that, in order to arrive at an appropriate remedy for the contractor, they had to address the Tribunal constituted under the Gujarat Act. The jurisdiction accordingly is with the tribunal to decide whether there is a prima facie case by the contractor for the grant of Interim relief.
The Court further stated that the power is vested in the Arbitral Tribunal under Section 17 of the Arbitration & Conciliation Act such powers can be exercised by the Tribunal constituted under the Gujarat Act as there is no incongruity in the two acts in regards with the interim relief. The power already vests in the tribunal under the Gujarat Act and Section 17 of the Arbitration & Conciliation Act respects these powers and therefore it cannot be said that the provisions of Section 17 of the Arbitration & Conciliation Act are conflicting with the Gujarat Act. The appeal was allowed and the Order which made through High Court was set aside.
This judgment helped in remove the lacuna between the Arbitration & Conciliation Act, 1996 and the statute which is overriding the statutory arbitration. This judgment points out the clear idea that the in favor of arbitration approach of the court as it recognizes that the arbitral tribunal has power to grant short-term measures in cases of statutory arbitration also.