Delhi High Court: In an appeal filed under Section 37(1)(b) of the Arbitration & Conciliation Act, 1996 (A&C Act) challenging the judgement dated 09-05-2024 rejecting the petition on the grounds that it approached the court with unclean hands, the Division Judge Bench of Vibhu Bakhru*, Tara Vitasta Ganju, JJ., held that the Commercial Court had not properly examined the petition’s merits and the impugned order lacks detailed reasoning and focusses on procedural issues.
A petition was filed under Section 9 of the A&C Act by appellant claiming interim measures of protection, that the respondent be restrained from invoking the bank guarantee dated 15-02-2015 amounting to Rs. 58,64,277/-. The Commercial Court rejected the said petition on the ground that the appellant had already preferred a similar petition before the District Judge, Commercial Court, Saket criticizing the appellant for approaching the court with “unclean hands.”
It was pointed out that prior to filing the petition under Section 9 of the A&C Act, the appellant had preferred a similar petition before the District Judge, Commercial Court, Saket, however, had withdrawn the same. The said order indicates that the appellant had at the outset, without going into the merits of the case, withdrawn the said petition on the ground that the same has been wrongly filed in South District, Saket Courts. It was also found by the Commercial Court that the petitioner withdrawn a petition in another case after obtaining an interim order of protection in respect of another bank guarantee and the petitioner had not disclosed this fact in the instant petition.
The Court heard the appellant’s explanation for withdrawing the petition filed before the District Judge, Commercial Court, South District. According to the appellant, the arbitration agreement specifically provided that the arbitration should be held at New Delhi. The appellant had construed the same to mean that the District Judge, New Delhi District alone would have jurisdiction. Concededly, the said understanding is erroneous.
The Court stated that, as the petition filed under Section 9 of the A&C Act, requires to be filed before a Court as defined under Section 2(1)(e) of the A&C Act. Since, all Courts in New Delhi would have jurisdiction by virtue of the seat of arbitration being at New Delhi, all Courts at New Delhi which conform to the jurisdiction under Section 2(1) (e) of the A&C Act would have the jurisdiction to consider the petition under Section 9 of the A&C act.
The Court was also of the view that, “non-disclosure of the petition under Section 9 of the A&C Act in another matter cannot be termed as a case of egregious fraud, which would disentitle the appellant from pursuing its petition under Section 9 of the A&C Act.”
The Court noted that the Commercial Court has not addressed the issue on merits. It has merely stated in one sentence that the petitioner was not entitled to the relief on merits but has provided no reasons for the same.
The Court refrained from expressing any view as the impugned judgment does not reflect that the Commercial Court has examined the petition on merits. Thus, the Court, set aside the impugned judgment and remanded the matter to the Commercial Court to consider afresh on merits.
[Tata Projects Ltd. vs. PGCIL, FAO (COMM) 93 of 2024, order dated: 27-05-2024]
*Order by: Justice Vibhu Bakhru
Advocates who appeared in this case :
For Appellant: Rajeev Nayar, Sr. Advocate; Naveen Chawla & Surabhi Rana, Advocates.
For Respondent: Jayant M. Mehta, Sr. Advocate; Rishabh Kapur, Advocate.
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