Calcutta HC: Application for interim protections under Section 9 of Arbitration Act is maintainable Post-stay order stage

 

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The Calcutta High Court bench comprising of J. Sanjib Banerjee and Arijit Banerjee in M/S. Satyen Construction v. State of West Bengal, on October 6, 2020 discussed the post-award and post-stay order applicability of Section 9 of the Arbitration and Conciliation Act, 1996 (“Arbitration Act”).

In the present case, an award was granted in favour of the appellant against which, a stay order was obtained from the Court by the award-debtor state under Section 36 of the Arbitration Act. After issuance of the stay order, the appellant applied for the variation of the stay order.

Issue

Whether an application under Section 9 of Arbitration Act can be maintained after a stay-order has been passed.

Decision

The court observed that an application under Section 9 may be made at any stage before the execution of the arbitral award. Hence, an application for interim reliefs can be made even at the post-award and post-stay order stage. Further, when a stay-order is passed under Section 36 of the Arbitration Act, the award-holder is entitled under Section 9 to seek modification of such order only on the basis of such material which could not have been placed before the court granting the stay order due to some insurmountable difficulty or on the basis of subsequent events or developments.

Hence, it was held that Section 9(1)(e) is wide enough to allow an application for interim protection even after an order staying the executing of the arbitral award has been passed, either conditionally or unconditionally. Moreover, the court observed that once an application for modification of stay order is treated as an interim measure under Section 9 then any order passed therewith will become appealable under Section 37 of the Arbitration Act.

Read judgement here.

By Sakshi Dewangan