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Arbitral Tribunal can grant an interim measure under Section 17
Even in case of Statutory Arbitration, Arbitral Tribunal can grant an interim measure under Section 17
The Supreme Court in the case of State of Gujarat through Chief Secretary and Anr. v. Golden Builders, Civil Appeal No. 8307 of 2019 settled on 8th January 2020, that a Statutory Arbitration Tribunal has the ability to act outside the extent of the Statute if it is permissible under the A&C Act.
In the State of Gujarat, all the disputes emerging out of the works contract entered by the State Government or the Public Sector Undertakings with any individual are administered under the Gujarat Public Works Contracts Dispute Arbitration Tribunal Act, 1992 (the Act). The issues of the dispute are referred to as the Gujarat Public Works Contract Dispute Tribunal under Section 3 of the Act.
The agreement was entered between the State and the contractor for a time of 4 years after which the contractor demanded the release of the security amount. The State gave a letter for the contractor to pay Rs. 1,09,00,092/-, as the street work was not as per the agreement and took steps to withhold the payments from the security deposit and the bills that were pending. The contractor challenged the notice by filing a writ petition in the Gujarat High Court, contending that the State isn't capable of withholding such a sum. The State claimed that the work was defective and they needed to complete the work from the third party and had to bear the vital expense for the same. The High Court held that without proper evaluation of the sum, that is to be recovered, the State government cannot recover the said amount unilaterally from the installment that is due.
The State contended that the High Court doesn't have the jurisdiction as all the issues of the dispute were managed by the Tribunal. The contractor contended that the statute under which the Tribunal was formed doesn't provide for the tribunal the power to pass such an order.
On an appeal by the State, the matter went to the Supreme Court and the Court held that, in order to arrive at an appropriate remedy for the contractor, the had to approach the Arbitral Tribunal constituted under the Gujarat Act. The jurisdiction, therefore, 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 expressed that the power is vested in the Arbitral Tribunal under Section 17 of the A&C Act such powers can be exercised by the Tribunal constituted under the Gujarat Act as there is no inconsistency 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 A&C Act compliments these powers and subsequently, it can't be said that the arrangements of Section 17 of the A&C Act are conflicting with the Gujarat Act. The appeal by State was allowed and the High Court Order was set aside.
hat the High Court does not have the jurisdiction as all the matters of the dispute was dealt with the Tribunal. The contractor argued that the statute under which the Tribunal was formed does not provide for the tribunal the power to pass such an order.
On an appeal by the State, the matter went to the Supreme Court and the Court held that, in order to arrive at an appropriate remedy for the contractor, the had to approach the Arbitral Tribunal constituted under the Gujarat Act. The jurisdiction, therefore, 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 A&C Act such powers can be exercised by the Tribunal constituted under the Gujarat Act as there is no inconsistency 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 A&C Act compliments these powers and therefore it cannot be said that the provisions of Section 17 of the A&C Act are inconsistent with the Gujarat Act. The appeal by State was allowed and the High Court Order was set aside.
- Even in case of Statutory Arbitration, Arbitral Tribunal can grant an interim measure under Section 17.
- The Supreme Court in the case of State of Gujarat through Chief Secretary & Anr. v. Amber Builders, Civil Appeal No. 8307 of 2019 decided on 8th January 2020,
- that a Statutory Arbitration Tribunal has the power to act outside the scope of the Statute if it is permissible under the A&C Act.
