1. This is an appeal filed under Section 27 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Act'). Brief facts of the case are that the appellant-company is incorporated under the laws of Mauritius. In November 1997, the appellant-company and the first respondent-a Company incorporated in India along with other Companies including respondents 2 to 8 executed a shareholders agreement dated 5-11-1997 at Hongkong for the objects and performance of obligations contained therein. The said agreement contained an arbitration Clause which provided for arbitration to be held in London, United Kingdom in accordance with International Chamber of Commerce Rules. The original shareholders agreement dated 30-4-1997 was executed by the parties in Hongkong and the amended and restated shareholders agreement dated 5-11-1997 was executed in London. There is a dispute as to whether the shareholders agreement or the amended and restated shareholders agreement was executed in Bangalore.
2. On October 26, 2001, the appellant initiated the Arbitral proceedings under the ICC Rules in ICC reference No. 11827/PE/MW was brought against the first respondent herein and other respondents. The Arbitral Tribunal issued Order for directions that established the timetable and framework for the remedies hearing in the Deccan Arbitration. After the arbitration process started the first respondent herein filed AS No. 51/2003 before the lower Court and sought an interim Order under Section 9 of the Act with a prayer to stay the arbitration proceedings which is going on in London. The lower Court granted such an Order and against the same the present appellant filed M.F.A. No. 7750 of 2003 and this Court vacated the interim Order granted by the lower Court and directed the continuation of the Arbitral proceedings. It is stated that Order passed by this Court was taken up before the Hon'ble Supreme Court which did not interfere with the Order passed by this Court. Thereafter, the arbitration proceedings appears to have continued at London and the Arbitral Tribunal passed a partial award on 20-8-2004 declaring that each of the respondents has breached and is in ongoing breach of the shareholders agreement. It declared each of the respondents other than the first respondent to be in breach of the purchase agreement. It ordered that the appellant's remedies were to be determined and damages to be assessed at a remedies hearing to be held at London on a date to be fixed further and directed a pre-hearing conference to discuss the scope, nature and approach to the remedies hearing to be held at London. The Arbitral Tribunal ordered that the respondents pay and be responsible jointly and severally for the appellants' reasonable and other costs to the date of partial award pertaining to Arbitral Tribunal's determination of liability issues.
3. That the pre-hearing conference was fixed for 15-10-2004 at the IDRC in London and on that day despite having been duly summoned by the Arbitral Tribunal in accordance with the ICC Rules, neither the respondents nor their Counsel appeared and on that day the Arbitral Tribunal issued Order for directions No. 8 that established the timetable and framework for the remedies hearing.
4. The first respondent however approached the lower Court and filed a petition under Section 34 of the Act challenging the partial award and along with the petition filed 3 applications for interim orders. The first application LA. No. I filed by the first respondent sought for stay of the operation of the impugned partial award and not to give effect to the partial award. The second application the first respondent sought for restraining the respondents that is, the appellant and others from participating and proceeding further or taking any steps whatsoever in the arbitration proceedings at London. And under the third application LA. No. III, the first respondent sought for stay of all further proceedings in the arbitration proceedings at London.
5. It was contended by the first respondent before the lower Court that it has filed the above suit challenging the partial award which according to the first respondent accepts the provisions in the shareholders' agreement which is repugnant to the Companies Act, 1956 and the same will be void to the extent it is so repugnant by virtue of Section 9 of the Companies Act. The first respondent contended before the lower Court that the Arbitral Tribunal in its partial award grossly misinterpreted the repugnant provisions of the shareholders' agreement and misapplied the principles governing the doctrine of repugnancy to arrive at their patently erroneous conclusions. The first respondent further contended that the partial award by the majority of the members of the Arbitral Tribunal exhibited patent error apparent on the face of the award and on that ground alone deserves to be set aside as being contrary to the public policy of India as it is clearly contrary to the laws of India. The first respondent cited several judgments to contend that the partial award is contrary to the Companies Act and against public policy and thus bad in law. After arguing that there is a prima facie case for him under Section 34 of the Act the first respondent contended that there cannot be any further award and the respondents should be restrained from participating or proceeding further or taking any steps whatsoever in the arbitration proceedings. It was submitted that the partial award will be causing grave damage or prejudice to the first respondent and that no damages or prejudice would be caused to the appellant if the appellant is to be restrained from participating or proceeding further or taking any steps in the arbitration proceedings. The first respondent therefore contended before the lower Court that he may be granted an Order restraining the first appellant from participating in the proceedings.
6. The appellant who had entered caveat submitted before the lower Court that he would argue on the maintainability of the petition as well as on the interim applications. The learned Counsel appearing for the appellant had also sought for time to file written statement and objections on the ground that his client is residing abroad. The Court below after hearing the learned Counsels appearing for the parties held that the first respondent-petitioner before it had made out a prima facie case in its favour for grant of an interim Order to restrain the respondents-appellants and others from participating or proceeding further or taking any steps whatsoever in the arbitration proceedings being held at London and accordingly allowed LA. No. II. It is against this Order passed by the lower Court that the appellant has filed this appeal.
7. We have heard Sri B. V. Acharya, the learned Senior Counsel appearing for the appellant and Sri Dushyant Dave, the learned Senior Counsel appearing for the respondents. It is contended on behalf of the appellant that the impugned Order under appeal is wholly without jurisdiction and contrary to the judgment of the Supreme Court. That the Order is arbitrary and capricious, that no prima facie case has been made out nor any case made out showing balance of convenience nor irreparable injury. It was, therefore, submitted that this Court should interfere with the impugned Order and allow the appeal and set aside the impugned order, dismiss the proceedings before the lower Court and reject the interim prayer.
8. On the other hand, learned Senior Counsel appearing for the respondents supported the impugned Order and sought for dismissal of the appeal. Both the learned Senior Counsels cited several judgments to contend for and against the proposition that even though the arbitration proceedings in question is an international arbitration, still in view of the interpretation given by the Hon'ble Supreme Court to the provisions of the Act the Courts in India have jurisdiction to entertain an appeal or application under the Act. Relying on the decision in Force Shipping Limited v. Ashapura Minechem Limited, 2003(6) Bom. CR 28 where a Single Judge of Bombay High Court held that it is not possible to accept the contention advanced on behalf of the respondents that Section 34 of the Act would be attracted to challenge a foreign award before the Court. The learned Single Judge considering the judgment of the Hon'ble Supreme Court in Bhatia International v. Bulk Trading S.A, : [2002]2SCR411 was of the view that the interpretation given by the Hon'ble Supreme Court in the said case to Section 34 is that the applicability of the Act will depend upon the context of the particular case. The learned Judge held that when there are general provisions under the statute unless the statute expressly states that they are not to apply, then in that event the general provisions would apply and when the statute provides special provisions for enforcement it is the special provisions which will apply and. not the general provisions and when under the Act, there are special provisions for enforcement of foreign awards, then the general provisions would be excluded. The learned Single Judge also held that on the law set out by the Hon'ble Supreme Court in the above mentioned case, Section 9 of the Act would not apply insofar as foreign awards are concerned after the award is made. From the several judgments cited it was contended on behalf of the appellant that the application filed under Section 34 of the Act before the lower Court is not maintainable in view of Part II of the Act and the several decisions. Thus, the main contention of the appellant in regard to the maintainability of the application under Section 34 of the Act before the City Civil Court is that when there is special provisions to challenge the foreign award, the challenge made by filing an application under Section 34 is not maintainable.
9. On the other hand, Sri Dushyant Dave, learned Senior Counsel appearing for the respondents relied upon the judgment of the Division Bench of Gujarat High Court in Nirma Limited v. Lurgi Energie Und Entsorgung GMBH, Germany and Ors, AIR 2008 Guj. 145 which held that when there is an agreement between an Indian Company and a foreign Company, the arbitration arising out of the said agreement is an international commercial arbitration and the proper law governing the arbitration is the law of India and hence an application under Section 34 of the Act can be entertained by the District Court. It held that despite subscribing to ICC Rules of arbitration, it cannot be said that the provisions of the Act cannot be taken recourse to by the parties. The learned Counsel in Order to support the proceedings initiated by the respondent before the lower Court vehemently contended that when under the agreement the parties have admittedly agreed that the law applicable to the transaction will be the law of the India then there cannot be any impediment to the parties approaching the Court under the law of India and filing an application under Section 34 of the Act.
10. After bearing the learned Senior Counsels on question as to the maintainability of the application filed under Section 34 of the Act before the learned Principle Civil Court of original jurisdiction at Bangalore, we are of the view that it may not be necessary for us to deal with the matter in extenso in the view we are taking in this appeal. However, from the various judgments cited before us by the learned Counsels regarding maintainability of an application under Section 34 of the Act in the case of an international arbitration, we are of the view that such an application prima facie appears to be maintainable especially when the parties under the agreement have agreed to apply the Indian Laws while adjudicating the disputes referred to arbitration. Therefore, we shall assume that the respondent-plaintiff has been able to make out a prima facie case on the maintainability of the application filed agains; the partial award made by the Arbitral Tribunal in London. We are also of the view that a partial award could be challenged under Section 34 of the Act.
11. Several arguments were raised by both the parties and written arguments were also filed. Before proceeding with the questions in controversy between the parties we will just casually mention some of the submissions made. It is stated on behalf of the respondent that the agreement entered into between the appellant and respondent 1 is void ab initio under the provisions of the Indian Contract Act. It is stated that one of the arbitrators upheld the contention of the respondent holding the agreement as ab initio, void and against public policy in view of the relevant provisions of the Indian Contract Act. It is not disputed that the partial award has been made in view of the majority decisions of the two arbitrators who held that despite the invalidity of a part of the agreement the other part of the agreement are valid. Even though several arguments are addressed on these questions, we are of the view that it is not necessary for us to give opinion one way or the other on those questions since the matter is before the lower Court which will be considered at the time of final hearing of the applications filed by the first respondent under Section 34 of the Act. Even the question as to the maintainability of the application in view of some defects noted with reference to the Rules framed by this Court will also to be decided at the time of final hearing.
12. In our view, the question that has to be considered by us in this appeal is as to whether the Order of stay of the Arbitral proceedings could be possible under Section 9 of the Act and restrain the parties from taking part in the arbitration proceedings. It is also necessary to consider as to whether the stay of the arbitration proceedings could be said to be an interim measure under Section 9. Even assuming that it could be said to be an interim measure then whether such an Order could be granted and whether the first respondent has made out a prima facie case for grant of such an Order and to restrain the appellant or respondent from participating in the arbitration proceedings. Whether the first respondent has produced anything to show that he will be put to hardship and irreparable injury if the interim Order is not granted.
13. Section 9 of the Act reads as follows.--
'9. Interim measures etc., by Court.--A party may, before or during Arbitral proceedings or at any time after the making of the Arbitral award but before it is enforced in accordance with Section 36, apply to a Court.--
(i) for the appointment of a guardian for a minor or a person of unsound mind for the purposes of Arbitral proceedings; or
(ii) for an interim measure of protection in respect of any of the following matters, namely.--
(a) The preservation, interim custody, or sale of any goods which are the subject-matter of the arbitration agreement;
(b) securing the amount in dispute in the arbitration;
(c) the detention, preservation or inspection of any property or thing which is the subject-matter or the dispute in arbitration, or as to which any question may arise therein and authorising for any of the aforesaid purposes any person to enter upon any land or building in the possession of any party, or authorising any samples to be taken or any observation to be made, or experiment to be tried, which may be necessary or expedient for the purpose of obtaining full information or evidence;
(d) interim injunction or the appointment of a receiver;
(e) such other interim measure of protection as may appear to the Court to be just and convenient, and the Court shall have the same power for making orders as it has for the purpose of, and in relation to, any proceedings before it'.
14. As could be seen from the above provision of Section 9 which empowers the Court to grant interim measures for preservation and several custody of the properties involved in the arbitration proceedings the power of the Court under Section 9 of the Act is not unbridled but it is subject to the limitations and restrictions and the Court can exercise the discretion to the same extent and in the same manner as it can for the purpose or in relation to any other proceedings before it. Under Section 9 the Court has to exercise the discretion in the interest of justice and take interim measures to preserve the properties involved in the arbitration proceedings. The interim measures are to protect the properties and it must appear to the Court to be just and convenient. That the words used 'just and convenient' do not mean that the Court can pass any Order simply because the Court thinks it convenient. Such Order should be passed only to protect the properties involved in the matter. It cannot be disputed that as an interim measure the Court can also grant an Order of temporary injunction. But can an Order be issued preventing the parties to an arbitration from appearing before the Arbitral Tribunal? Further even in a case where an Order of injunction is to be granted the parties seeking the injunction should satisfy the Court that it has got a prima facie case and that if the Order is refused it would result in irreparable injury to the party and further the applicant should show that the balance of convenience lie in favour of granting the Order rather than refusing it. Even though the powers to grant an interim measure under the Section is wide it has to be exercised in the spirit of the underlying principles enunciated in the section.
15. A clear reading of the provision show that stay of the arbitration proceedings cannot be said to be an interim measure that could be granted under the Section 9. The Section does not contemplate such an Order to be granted in favour of a party. It has to be kept in mind that the provisions of the Act are designed to reduce to an acceptable, minimum the interference of the Courts with the conduct of arbitration and the finality of awards. It is recognised that in the interest of justice and the healthy Arbitral system there should be only a limited scope for recourse to Courts. But it is also recognised particularly in response to international commercial opinion, that the parties, having chosen their Tribunal should not be allowed to evade the decision of the Tribunal or obstruct or delay the decision.
16. The Hon'ble Supreme Court in Bhatia International's case, has held that under Section 9 a party could apply to the Court before, during or after making of the Arbitral award but before it is enforced for any interim measure before the Courts in India whether or not the arbitration takes place in India. That when once an award is passed the award itself could be executed under the provisions of the Act. The Hon'ble Supreme Court in para 29 of the said judgment held as follows.--
'29. We see no substance in the submission that there would be unnecessary interference by Courts in Arbitral proceedings. Section 5 provides that no judicial authority shall intervene except where so provided. Section 9 does not permit any or all applications. It only permits applications for interim measures mentioned in Clauses (i) and (ii) thereof. Thus, there cannot be applications under Section 9 for stay of Arbitral proceedings or to challenge the existence or validity of arbitration agreements or the jurisdiction of the Arbitral Tribunal. All such challenges would have to be made before the Arbitral Tribunal under the said Act'.
17. Thus the Hon'ble Supreme Court has clearly and specifically held that there would not be any unnecessary interference by Courts in Arbitral proceedings and that Section 9 of the Act does not permit stay of Arbitral proceedings or challenging the existence or validity of arbitration agreements or the jurisdiction of the Arbitral Tribunal and such challenges would have to be made before the Arbitral Tribunal under the Act. We do not think that the Hon'ble Supreme Court has made the above observation only as an obiter dicta as contended by the learned Senior Counsel.
18. In Sumitomo Heavy Industries Limited v. Oil and Natural Gas Commission Limited and Ors., : AIR1998SC825 the Hon'ble Supreme Court has held that the curial law i.e., the law governing the conduct of the individual reference operates during the continuance of the proceedings before the Arbitrator to govern the procedure and conduct thereof and the Courts administering the curial law have the authority to entertain applications by the parties to arbitrations being conducted within their jurisdiction for the purpose of ensuring that the procedure that is adopted in the proceedings before the Arbitrator conforms to the requirements of the curial law and for the reliefs incidental thereto and such authority of the Courts administering the curial law ceases when the proceedings before the Arbitrator are concluded. The said decision was under the old Act.
19. The Hon'ble Supreme Court in Pradeep Anand v. I.T.C. Limited and Ors., : AIR2002SC2799 in the said case a multiparty co-operation agreement came into being on 11-9-1990 in Tokyo. The parties were M/s. Toshiba Corporation and M/s. Toshiba Anand Batteries Limited. Disputes between the parties were agreed to be settled under the Rules of Conciliation and Arbitration under the ICC Rules. The Arbitrator passed partial award. The said award granted relief of compensation for breach of contract with damages to be assessed under Section 21(2) of Specific Relief Act, 1963. The respondent 1 filed an application under Section 14 of the 1940 Act praying for that the Arbitrator file the award in Court and while that application was pending respondent 1 filed another application under Sections 30 and 33 of the said Act challenging the partial award. Later, the first respondent filed an application for stay of arbitration proceeding contending that there had been irregularities in the procedure which resulted in making the award invalid. A Single Judge of the High Court of Delhi allowed the application and stayed the arbitration proceedings. The Division Bench upheld the Single Judge's Order and dismissed the appeal. The Hon'ble Supreme Court set aside the Order of the Delhi High Court and held that even though the grant of stay is a matter of discretion of the Court and if the Trial Court on consideration passes the Order of stay the Appellate Court should be slow to interfere with the same but that does not mean that if the Order of stay passed by the Trial Court is based on non-judicial consideration such Order is not liable to be interfered with by the Appellate Court. It therefore, set aside the interim Order granted by the Delhi High Court.
20. What is now contended by the learned Counsel appearing for the respondent is that Sub-clause (e) of the Section 9(ii) gives the required jurisdiction to the Court to pass an interim Order restraining the party from proceeding with the arbitration. The learned Counsel has relied upon the unreported judgment of the Delhi High Court in Union of India v. D. H. O. L. Power Company, I.A. No. 6663 of 2003 in Suit No. 1268 of 2003, DD: 5-5-2004 In that case, a learned Single Judge of the High Court granted an Order restraining the defendant in the case from proceeding further with the Arbitral proceedings in London till the decision of the Supreme Court on the question of the jurisdiction of MERC is pronounced. The Delhi High Court held that the proceeding in London in which the plaintiff is already raising the same question appears to be oppressive for the reason that in spite of the pendency of the matter before the Supreme Court the Arbitrators are trying to proceed further without realising that the decision of the Apex Court would go to the root of the matter pending before them.
21. The respondent has also relied upon the judgment of the Hon'ble Supreme Court in Oil and Natural Gas Commission v. Western Company of North America, : [1987]1SCR1024 . In the said case, the Hon'ble Supreme Court has held that in the facts and circumstances of the case, the case was one eminently suitable for granting a restraint order. The Hon'ble Supreme Court held that even though it was true that the Apex Court sparingly exercises the jurisdiction to restrain a party from proceeding further with an action in a foreign Court and that even though the Apex Court had the utmost respect for the American Court but on the facts and circumstances of the case, the Hon'ble Supreme Court held that it would not be unjust and unreasonable not to restrain the petitioner-company from proceeding further with the action in the American Court in the facts and circumstances outlined by it. The Hon'ble Supreme Court further held that it would be extremely slow to grant such a restraint order. But in view of the facts and circumstances of the case which according to the Apex Court was one of those rare cases where it would be failing in their duty if it hesitated in granting the restraint Order for, to oblige the ONGC to face the aforesaid proceedings in the American Court which would be oppressive.
22. From the above mentioned judgment what could be gathered is that even though a restraint Order could be granted but it could be granted only in a rare case. Further that case was considered under the 1940 Arbitration Act.
23. Let us now see the facts of the present case which are not in dispute. The Arbitral proceedings have already started and it is being held in London. The parties admittedly appeared before the Tribunal. Evidence has been led. The Arbitral Tribunal has already passed a partial award. It is true that there is difference of opinion, as to the questions of law involved in the matter, between the Arbitrators. It appears that the Arbitrators have found that one of the clauses in the agreement is contrary to the public policy of India and contrary to Section 24 of the Contract Act, 1872 and therefore it is void to that extent. Even though one of the Arbitrators has held that the agreement is void and cannot be enforced, the other two Arbitrators were of the view that despite the illegality of a part of the agreement, that the rest of the agreement could be sustained and accordingly proceeded to pass the partial award. The next stage is to assess the damages in pursuance of the award. As held by the Hon'ble Supreme Court in the above mentioned judgment in Bhatia International's case cited supra, the question as to existence or validity of arbitration agreements are to be decided by the Arbitral Tribunal, and those questions should be argued before the Arbitral Tribunal under the Act. It is only after the Arbitral Tribunal decides those questions finally that the party can challenge the same under the provisions of the Act. Such challenge could be made at the time of the even while executing an international award.
24. The Hon'ble Supreme Court in Oil and Natural Gas Corporation Limited v. SAW Pipes Limited, : [2003]3SCR691 has held that for the purpose of achieving the object of speedier disposal of dispute, justice in accordance with law cannot be sacrificed. That giving limited jurisdiction to the Court for giving finality to the award and resolving the dispute by speedier method would be much more frustrated by permitting patently illegal award to operate and such award has to be set at naught as otherwise it would promote injustice. What could be gathered from the several judgments cited before us is that it is only under exceptional circumstances the Court could stay an Arbitral proceeding. However in the facts and circumstances of the case, we do not find any such exceptional circumstances to stay the Arbitral proceedings.
25. In Wander Limited and Anr. v. Antox India Private Limited, 1990 Suppl. SCC 727 it was held by the Hon'ble Supreme Court that the Appellate Court will not interfere with the exercise of discretion of the Court of first instance and substitute its own discretion except where the discretion has been shown to have been exercised arbitrarily, or capriciously or perversely or where the Court had ignored the settled principle of law governing grant or refusal interlocutory injunctions. An appeal against exercise of discretion is to be an appeal on principle and that the Appellate Court will not reassess the material and seek to reach a conclusion different from the one reached by the Court below solely on the ground that if it had considered the matter at the trial stage it would have come to a contrary conclusion. That if the discretion has been exercised by the Trial Court reasonably and in a judicial manner the fact that the Appellate Court would have taken a different view may not justify interference with the Trial Court's exercise of discretion. This is the principle enunciated by the Hon'ble Supreme Court in respect of the exercise of appellate power by the High Court against an interim discretionary Order passed by the lower Courts and all the High Courts have been following the said principle. Even though several judgments has been cited on this aspect also, it may not be necessary to cite all those decisions. We have kept in view the above principles laid down by the Hon'ble Supreme Court.
26. It is a fact that on the earlier occasion, the first respondent had moved the Principal Court of Civil Jurisdiction at Bangalore and secured an interim Order of stay of the Arbitral proceedings which was challenged before this Court and this Court set aside the said Order and which was confirmed by the Apex Court and it is thereafter that the respondent appeared before the Arbitral Tribunal at London and the Arbitral proceedings have almost come to an end and a partial award has been passed and only the final assessment has to be done by the Arbitral Tribunal. It is at that stage, the first respondent has once again moved the Principal Civil Court of original jurisdiction questioning the partial award under Section 34 of the Act. In that proceedings the applications were moved seeking stay of the further proceedings before the Arbitral Tribunal. Even though it is true that the majority opinion while passing the partial award holds that the relevant Clause in the shareholders' agreement that is, Clause 4.03 is void, that cannot be made a ground to stay the further proceedings. Any legal issues involved could be argued before the Court while questioning the partial award. The further proceedings which is remedial hearing before the Tribunal is to specify the relief to be awarded. There is absolutely no material produced to show that the first respondent will be forced to spend Rs. 15 crores in proceeding with the arbitration proceedings at London. Admittedly, the first respondent under the agreement has agreed to have any dispute arising between them adjudicated by the Arbitral Tribunal at London. When the parties have already agreed to have the arbitration proceedings conducted at London, they should be assumed to know that to attend the proceedings they have to spend some money. When there is already an Order of this Court confirmed by the Hon'ble Supreme Court to appear before the Arbitral Tribunal in the earlier proceedings, the first respondent cannot be now heard to say once again that the further proceedings will cause serious prejudice to him in terms of time and money.
27. Justice Jagannath Shetty in K. Krishna Moorthy v. Bangalore Turf Club Limited and Ors., 1975(2) Kar. L.J. 428 : ILK 1975 Kar. .1957 has held that the party seeking an Order of temporary injunction has to make out a prima facie case in the sense that the case he has proved calls for an answer and that in other words his case may not be frivolous or vexatious and might appear strong on the balance of probabilities, but that itself is no ground for any Court to issue an Order of injunction and what matters is the balance of convenience. That must be the major consideration. It is for the Court to decide as to in whose favour the balance of convenience lies. It is for the party seeking the aid of the Court to satisfy the Court that its interference is necessary to protect him from that species of injury which the Court calls irreparable, before the legal right can be established upon trial. The Court must pertinently put the question 'will the party suffer irreparable damage if no injunction is granted now?', the Court should also look to the conduct of the party and should refuse to interfere unless the conduct of the party in the matter has been fair and honest and in particular without acquiescence or delay. What could be seen from the facts of the present case is that the first respondent despite acknowledging the agreement entered into by it with the appellant tried to obtain stay of the arbitration proceedings when the arbitration was to commence at London as agreed by the parties under the agreement.
28. Even though the first respondent succeeded in obtaining such an Order of stay before the lower Court, this Court set aside the Order which Order was confirmed by the Apex Court. It is, thereafter that the arbitration proceedings went on and the interim award has admittedly been passed. Just because certain questions of law are involved which admittedly could be argued even at the time of execution of the award, there is absolutely no ground to grant a stay of the arbitration proceedings. When once the Arbitrators have already come to a conclusion on all the aspects of the disputes between the parties and when only the remedies hearing are to be held in London there is absolutely no ground to stay the arbitration proceedings. The final award will merge with the partial award which will facilitate the parties to challenge the entire matter before the appropriate forum under the provisions of the Act In our view no prejudice will be caused to the first respondent if such proceedings are not stayed. Further the first respondent has not produced any material show that the first respondent has to spend Rs. 15 crores to attend the remedial hearing. Spending money to attend the arbitration proceedings which are agreed to by the parties cannot be said to be an injury much less irreparable injury which would cause loss to the first respondent.
29. As already discussed earlier the lower Court has not properly considered the facts and circumstances of the case. It has failed even to refer to the earlier Order passed by this Court which was confirmed by the Hon'ble Supreme Court which set aside the Trial Court's Order and directed the parties to proceed with the arbitration. It has further failed to consider the conduct of the first respondent who was always looking for an opportunity to see that the arbitration proceedings do not begin. Further no material is produced to show that the first respondent will suffer irreparable injury. Merely travelling to London to attend the arbitration proceedings cannot be said to be irreparable injury. The parties have agreed to hold the arbitration proceedings at London and therefore they knew that going to London will cost them substantial expenses and therefore money towards expenses to attend the arbitration proceedings cannot be said to be irreparable injury to the first respondent.
30. Thus after considering all the facts and circumstances of the case, we are of the view that an Order restraining a party from proceeding with the arbitration while challenging a partial award cannot be said to be an interim measure as contemplated under Section 9 of the Act. We are the view that the lower Court has failed to consider the different facts and circumstances of the case. It has ignored the previous proceedings initiated by the first respondent seeking similar reliefs and the relief given by the lower Court which was ultimately set aside by this Court and upheld by the Hon'ble Supreme Court. The lower Court has thus not taken into consideration the conduct of the first respondent who has been trying to see that the arbitration proceedings does not proceed. The reasoning given by the lower Court to grant stay of the Arbitral proceedings which is only the remedies hearing and any Order passed in the proceeding could as well be challenged before the lower Court and it will be a part of the award and the Order given in such a remedies herein will be the final Order and thereafter the first respondent could take all the grounds available to him before the lower Court either under Section 34 or 48 of the Act if execution is filed. We are of the view that the reasonings given by the lower Court is not only arbitrary but capricious and perverse and ignoring the settled principle of law regulating grant or refusal of an Order under Section 9 of the Act. The impugned Order therefore, cannot be sustained and it is accordingly, set aside. The application filed by the respondent 1 seeking stay of the arbitration proceedings and the prayer to restrain the appellant from appearing before the Arbitral Tribunal at London is rejected. The appeal is accordingly, allowed with costs of Rs. 10,000/-.