The Bombay High Court, in a significant ruling, has clarified that the invocation of Sections 9 and Section 11 of the Arbitration and Conciliation Act, 1996, does not constitute parallel proceedings. Justice Somasekhar Sundaresan, presiding over the matter, emphasized that these provisions serve distinct purposes within the arbitration framework.
Distinct Roles of Section 9 and Section 11
Section 9 of the Act is designed to provide interim relief, safeguarding the subject matter of arbitration before or during the arbitral process. On the other hand, Section 11 is concerned solely with the appointment of an arbitrator in cases where disputes arise regarding the arbitration agreement.
The case in question involved an application under Section 11 seeking the appointment of an arbitrator to resolve disputes under an Investment Agreement. The Respondent contended that the arbitration invocation was invalid as two proceedings—one under Section 9 and the other under Section 11—were being pursued simultaneously.
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The High Court observed that disputes between the parties were already acknowledged in an earlier order under Section 9. It reiterated that the existence of disputes falls within the purview of the arbitral tribunal, as provided under Section 16 of the Act.
Rejecting the Respondent's argument that Sections 9 and 11 proceedings were parallel, the Court held:
"It is rather surprising that invocation of Section 9 and Section 11 have been treated in a cavalier manner by the Respondent, terming them as parallel proceedings on the same cause of action in the teeth of the scheme of the Act. Section 9 is meant to grant temporary interim protection in aid of the arbitral tribunal conducting proceedings. Non-compliance with the agreed commitment to refer disputes to arbitration is the basis of filing a Section 11 Application."
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The Court further noted that the Respondent failed to challenge the Section 9 order through an appeal or seek appropriate intervention. The Court referenced Section 11(6A) to highlight that its jurisdiction under Section 11 is limited to examining the existence of an arbitration agreement. Any substantive questions regarding the validity or scope of disputes are to be determined by the arbitral tribunal under Section 16.
Considering these findings, the High Court directed the matter to arbitration. It appointed Mandar Soman as the sole arbitrator to adjudicate disputes under the Investment Agreement.
Case Details:
- Case Title: Fab Tech Works & Constructions Pvt. Ltd. vs Savvology Games Pvt. Ltd. & Ors.
- Case Number: Commercial Arbitration Application No. 419 Of 2024 and Related Matters
- Advocates for the Applicant: Mr. Nadeem Shama, a/w Hrishikesh Nadkarni, Salman Athania, i/b PAN India Legal Services LLP
- Advocates for the Respondent: Mr. Pathik Muni, a/w Chinton B.
