Case: Alka Chandewar Vs. Shamshul Ishrar Khan

Chapter V, Conduct of arbitral proceedings. Further, it is well settled that a marginal note can be used as an internal aid to interpretation of statutes only in order to show what is the general drift of the section. It may also be resorted to when the plain meaning of the section is not clear. In the present case we must go by the plain meaning of sub-section (5). This being the case, we find it difficult to appreciate the reasoning of the High Court. Also, in consonance with the modern rule of interpretation of statutes, the entire object of providing that a party may approach the Arbitral Tribunal instead of the Court for interim reliefs would be stultified if interim orders passed by such Tribunal are toothless. It is to give teeth to such orders that an express provision is made in Section 27(5) of the Act. 8. In fact, the Delhi High Court by the judgment dated 18th August, 2009, reported in 2009 (112) Delhi Reported Judgments 657, has correctly construed Section 27(5) of the Act. Further, it must be remembered that this Court in M/s Ambalal Sarabhai Enterprises v. M/s Amrit Lal & Co. & Anr. 2001(2) R.C.R.(Rent) 328 : (2001) 8 SCC 397 has held that parties to arbitration proceedings are put to an election as to whether to apply for interim relief before the Tribunal under Section 17 or before the Court under Section 9. Such election would be meaningless if interim orders passed by the Arbitral Tribunal were to be written in water, as all parties would then go only to the Court, which would render Section 17 a dead letter. 9. Coming to Shri Rana Mukherjees submission that sub-section (2) of Section 17 introduced by the 2015 Amendment Act now provides for the necessary remedy against infraction of interim orders by Tribunal, suffice it to state that the Law Commission itself, in its 246th report, found the need to go one step further than what was provided in Section 27(5) as construed by the Delhi High Court (supra). The Commission, in its report, had this to say: POWERS OF TRIBUNAL TO ORDER INTERIM MEASURES 46. Under section 17, the arbitral tribunal has the power to order interim measures of protection unless the parties have excluded such power by agreement. Section 17 is an important provision, which is crucial to the working of the arbitration system, since it ensures that even for the purposes of interim measures, the parties can approach the arbitral tribunal rather than await orders from a Court. The efficacy of section 17 is however, seriously compromised given the lack of any suitable statutory mechanism for the enforcement of such interim orders of the arbitral tribunal. 47. In Sundaram Finance Ltd. v. NEPC India Ltd., 1999(1) R.C.R.(Civil) 580 : (1999) 2 SCC 479 , the Supreme Court observed that though section 17 gives the arbitral tribunal the power to pass orders, the same cannot be enforced as orders of a court and it is for this reason only that section 9 gives the court power to pass interim orders during the arbitration proceedings. Subsequently, in M.D. Army Welfare Housing Organisation v. Sumangal Services Pvt. Ltd., 2003(4) R.C.R.(Civil) 767 : (2004) 9 SCC 619 the Court had held that under section 17 of the Act no power is conferred on the arbitral tribunal to enforce its order nor does it provide for judicial enforcement thereof. 48. In the face of such categorical judicial opinion, the Delhi High Court attempted to find a suitable legislative basis for enforcing the orders of the arbitral tribunal under Section 17 in the case of Sri Krishan v. Anand, (2009) 3 Arb LR 447 (Del) (followed in Indiabulls Financial Services v. Jubilee Plots, OMP Nos.452-453/2009 Order dated 18.08.2009). The Delhi High Court held that any person failing to comply with the order of the arbitral tribunal under section 17 would be deemed to be making any other default or guilty of any contempt to the arbitral tribunal during the conduct of the proceedings under section 27(5) of Act. The remedy of the aggrieved party would then be to apply to the arbitral tribunal for making a representation to the Court to mete out appropriate punishment. Once such a representation is received by the Court from the arbitral tribunal, the Court would be competent to deal with such party in default as if it is in contempt of an order of the Court, i.e., either under the provisions of the Contempt of Courts Act or under the provisions of Order 39 Rule 2A Code of Civil Procedure, 1908. 49. The Commission believes that while it is important to provide teeth to the interim orders of the arbitral tribunal as well as to provide for their enforcement, the judgment of the Delhi High Court in Sri Krishan v. Anand is not a complete solution. The Commission has, therefore, recommended amendments to section 17 of the Act which would give teeth to the orders of the Arbitral Tribunal and the same would be statutorily enforceable in the same manner as the Orders of a Court. In this respect, the views of the Commission are consistent with (though do not go as far as) the 2006 amendments to Article 17 of the UNCITRAL Model Law. 10. Pursuant to this report, sub-section(2) to Section 17 was added by the Amendment Act 2015, so that the cumbersome procedure of an Arbitral Tribunal having to apply every time to the High Court for contempt of its orders would no longer be necessary. Such orders would now be deemed to be orders of the Court for all purposes and would be enforced under the Civil Procedure Code, 1908 in the same manner as if they were orders of the Court. Thus we do not find Shri Rana Mukherjees submission to be of any substance in view of the fact that Section 17(2) was enacted for the purpose of providing a complete solution to the problem.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]7. If Section 27(5) is read literally, there is no difficulty in accepting the plea of learned senior advocate for the appellant, because persons failing to attend in accordance with the court process fall under a separate category from any other default. Further, the Section is not confined to a person being guilty of contempt only when failing to attend in accordance with such process. The Section specifically states that persons guilty of any contempt to the Arbitral Tribunal during the conduct of the Arbitral proceedings is within its ken. The aforesaid language is, in fact, in consonance with the Chapter heading of Chapter V, Conduct of arbitral proceedings. Further, it is well settled that a marginal note can be used as an internal aid to interpretation of statutes only in order to show what is the general drift of the section. It may also be resorted to when the plain meaning of the section is not clear. In the present case we must go by the plain meaning ofn (5). This being the case, we find it difficult to appreciate the reasoning of the High Court. Also, in consonance with the modern rule of interpretation of statutes, the entire object of providing that a party may approach the Arbitral Tribunal instead of the Court for interim reliefs would be stultified if interim orders passed by such Tribunal are toothless. It is to give teeth to such orders that an express provision is made in Section 27(5) of the Act9. Coming to Shri Rana Mukherjees submission thatn (2) of Section 17 introduced by the 2015 Amendment Act now provides for the necessary remedy against infraction of interim orders by Tribunal, suffice it to state that the Law Commission itself, in its 246th report, found the need to go one step further than what was provided in Section 27(5) as construed by the Delhi High Court (supra)10. Pursuant to this report,) to Section 17 was added by the Amendment Act 2015, so that the cumbersome procedure of an Arbitral Tribunal having to apply every time to the High Court for contempt of its orders would no longer be necessary. Such orders would now be deemed to be orders of the Court for all purposes and would be enforced under the Civil Procedure Code, 1908 in the same manner as if they were orders of the Court. Thus we do not find Shri Rana Mukherjees submission to be of any substance in view of the fact that Section 17(2) was enacted for the purpose of providing a complete solution to the problem