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.
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