A Final Relief Cannot Be Granted Under Section 9 Of Arbitration And Conciliation Act, 1996: Delhi High Court

The bench of Justice Chandra Dhari Singh held that relief contemplated under Section 9 of the Act is only interim in nature I.e., ‘in the intervening time’ or ‘provisional’ and it has to be in aid of the enforcement of the award and subject to the final relief given in the award. The Court refused to injunct the respondent from withholding the payment on account of alleged delay as the Court observed that the relief claimed by the petitioner was final in nature as it was neither subject to any award or in aid of any enforcement.

The Court further reiterated that the court cannot either enforce an award, in the garb of interim relief, under Section 9 of the Act or grant an interim relief which is beyond the reliefs granted under the award.

Facts

The parties entered into a concession agreement dated 31.03.2006. A dispute arose between the parties related to the terms of the agreement regarding the renewal of the work every five years. Accordingly, the dispute was referred to arbitration and an award dated 14.01.2020 was passed wherein the relief claimed by the petitioner was partially allowed. The award has been put to challenge by both the parties and is pending consideration before the Court.

Thereafter, the petitioner raised an invoice for the payment of 22^nd Annuity. Another dispute arose between the parties when the respondent deducted an amount from the invoice on the ground of delay in completing the 2^nd renewal work. Aggrieved with the deductions made, the petitioner filed the application under Section 9 of the Act praying for refund of the amount deducted.

Contention of the Parties

The petitioner sought refund on the following grounds:

• The deductions made by the respondent is against the award dated 14.01.2020.
• The petitioner cannot be faulted for the delay in the completion of the 2^nd renewal work as the Coordinate bench of the High Court, on an interlocutory application moved in the challenge petition, had stayed the operation of the direction of the arbitral tribunal directing the petitioner to carry out the renewal work.
• Prior to that, the Arbitral tribunal had itself stayed the operation of the second renewal work, therefore, the operation of the 2^nd renewal work was stalled, firstly, at the directions of the tribunal and then at the directions of the Court, thus, no cause of action has arisen for the respondent to levy damages on the petitioner for the alleged delay.
• Moreover, there is no clause in the agreement to permit the respondent to make deductions from the annuity payments, also the agreement provides that notwithstanding any dispute between the parties, the annuity payments are to be released in full.

The respondent opposed the petition on the following grounds:

• The petitioner is claiming a final relief in the form of release of the payment withheld by the respondent. The relief is final in nature as it is not subject to any prospective arbitration nor in aid of enforcement of the award.
• The arbitral tribunal has directed the petitioner to complete the 2^nd renewal work and that finding of the arbitral tribunal has not yet been set aside, therefore, the award remains in operation, thus, the respondent can impose damages on the petitioner for any delay.
• The interim order of the tribunal stands vacated in view of the final award.

Analysis by the Court

Firstly, the Court dealt with the preliminary objection regarding the nature of relief. The Court referred to Section 9 of the Act and several judgments by the Courts to decide the nature of relief that can be claimed and granted by the Court exercising powers under Section 9 of the Act.

The Court held that Section 9 provides for interim relief and the word interim here means ‘in the interim period’ or ‘provisional’. The Court held that Section 9 is to be understood by ‘Literal Rule of Interpretation’, thus, the relief can only be interim in nature and not a final relief.

The Court also observed that the Court cannot grant an interim relief that has the effect of rendering the final relief as infructuous, thus, the interim relief must be made subject to the final relief. Also, when the award is passed but before it is enforceable under Section 39 of the Act, the scope of interim relief must be limited to the final relief granted in the award.

The Court observed that the relief that the petitioner is claiming is in the nature of final relief as it is not claiming refund of the amount so withheld subject to the proceedings under Section 34 or the enforcement of the award but in the nature of a permanent order. It observed as under:

“Although the petitioner is seeking an order on the prayers sought under Section 9(1) of the Arbitration Act, however, is attempting to obtain a permanent relief of release of amount of Rs. 12,56,72,430/- in its favour which it alleges has been wrongfully, illegally, and arbitrarily deducted. It is not the case of the petitioner that the amount to be released in its favour is merely a provisional payment necessary for sustenance or immediate operations etc., required only till the disposal of proceedings or enforcement of Award, which shall be returned or reimbursed to the respondent after the proceedings under Section 36 of the Arbitration Act are concluded. Rather, the petitioner is seeking a relief in the nature of a permanent order by praying for directions to the respondent to remit the amount deducted by it once and for all.”

Accordingly, the Court dismissed the petition.

Case Title: GMR Pochanpalli Expressways Limited v. NHAI

Citation: 2023 LiveLaw (Del) 104

Date: 10.01.2023

Counsel for the Petitioner: Mr. Atul Sharma and Harshita Agarwal

Counsel for the Respondent: Mr. Ankur Mittal and Mr. Abhay Gupta

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