{"id":327381,"date":"2024-07-26T09:00:08","date_gmt":"2024-07-26T03:30:08","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=327381"},"modified":"2024-07-30T11:56:35","modified_gmt":"2024-07-30T06:26:35","slug":"bombay-hc-interim-relief-arbitration-conciliation-act-section-9-absence-remedy-under-section-17","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2024\/07\/26\/bombay-hc-interim-relief-arbitration-conciliation-act-section-9-absence-remedy-under-section-17\/","title":{"rendered":"\u2018One business partner\u2019s conduct detrimental to another\u2019; Bombay HC grants interim relief u\/s 9 to aggrieved partner, in absence of efficacious remedy u\/s 17 of Arbitration Act, 1996"},"content":{"rendered":"
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Bombay High Court:<\/span> In rival petitions before a Single Judge Bench of Arif S. Doctor, J.<\/span>, filed by partners, i.e., petitioner and respondents 1 and 2 of respondent 3, a construction company (“Firm”), owing to certain differences, where the petitioner contended that the respondents 1 and 2 were dealing with the business of the Firm to his detriment. The contending parties had referred their case to arbitration as per the Partnership Deed between them, for which a Sole Arbitrator was appointed by the Court. The instant Court had issued a status quo order, effective till the final decision of the Arbitral Tribunal. The Court noted that the petitioner had blatantly violated the status quo order by commencing construction at a Firm’s property. Therefore, the Court dismissed the petitioner’s petition. However, the respondent’s petition for the appointment of a Court Receiver to safeguard the Firm property was allowed.<\/p>\n

Background<\/p>\n

Due to the petitions arising from the same order, the commonality of the parties and the issues for determination, both petitions were heard together by the Court. In the present case, Commercial Arbitration Petition (L) No. 33385 of 2023 was filed under Section 9<\/a> of the Arbitration and Conciliation Act, 1996<\/a> (“Act”) and Arbitration Petition No. 100 of 2024 was filed under Section 37<\/a> of the Act<\/a>. The Court referred the parties as they were arrayed in Commercial Arbitration Petition (L) No. 33385 of 2023.<\/p>\n

As petitioner contented that the respondents 1 and 2 were dealing with the business of the Firm in a manner detrimental to him, therefore, he invoked arbitration under their Partnership Deed, and later filed a petition under Section 9<\/a> of the Act<\/a> for the appointment of a Court Receiver, and under Section 11<\/a> of the Act<\/a>, for the appointment of an Arbitrator. In 2020, the instant Court appointed a Sole Arbitrator (“Arbitrator”), and the respondent 1 was directed to abide by the Partnership Deed, until a final award was rendered (“status quo<\/span> order”).<\/p>\n

The petitioner contended that the respondent 1 soon after the passing or the status quo<\/span> order, proceeded to commence construction activities at a Virar property, to which the status quo<\/span> order applied as well. The petitioner submitted that the respondent 1’s conduct and brazen disregard for the status quo<\/span> order left him with the only option of application for a Court Receiver under Section 9<\/a> of the Act<\/a>, to safeguard the Virar property.<\/p>\n

Court’s Analysis and Judgment<\/p>\n

The Court stated that the scope of judicial interference under Section 37(2)(b)<\/a> of the Act<\/a> was now more than well settled. Referring to Elster Instromet B.V.<\/span> v. Mrunal Gandhi<\/span>, 2024 SCC OnLine Bom 350<\/a>; Max Healthcare Institute Ltd.<\/span> v. Touch Healthcare (P) Ltd.<\/span>, 2023 SCC OnLine Bom 2715<\/a>; Karanja Terminal & Logistics (P) Ltd.<\/span> v. Sahara Dredging Ltd.<\/span>, 2023 SCC OnLine Bom 594<\/a>; and Raymond Ltd.<\/span> v. Akshaypat Singhania<\/span>, 2019 SCC OnLine Bom 227<\/a>, the Court observed that the following were well-settled:<\/p>\n