Justice Somasekhar Sundaresan, delivering the judgment on March 17, 2025, expressed surprise at the respondent's treatment of legal provisions, stating it was "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."
The case revolves around Commercial Arbitration Application No. 419 of 2024, filed by Fab Tech Works under Section 11 of the Arbitration and Conciliation Act, 1996, seeking appointment of an arbitrator. The dispute began when Fab Tech invoked the arbitration agreement on June 28, 2024, which Savvology contested in a July 8 reply claiming the invocation was not maintainable.
A previous order dated July 22, 2024, granted interim reliefs under Section 9 of the Act, including a disclosure requirement that Justice Sundaresan found was inadequately fulfilled. The court noted that Savvology's disclosure contained "just three lines" giving purported values for "Stocks," "Fixed Deposit," and "Mutual Funds," which was "evidently not in compliance with the order."
"When a Learned Single Judge of this Court has already considered existence of the arbitration agreement and has thought it fit to pass an order under Section 9, it would be expected that the party affected by it would such order in appeal or for an appropriate intervention, or comply with it. This is the only manner of having deference to the rule of law," Justice Sundaresan emphasized.
The court appointed advocate Mandar Soman as the Sole Arbitrator, directing that arbitral costs be "borne by the parties equally in the first instance, and shall be subject to any final Award that may be passed by the Tribunal in relation to costs."
A related Contempt Petition (L) No. 29354 of 2024 has been kept pending, with replies due by March 24, 2025, and rejoinders by March 28, 2025. The court has scheduled further consideration for April 7, 2025.
Justice Sundaresan referenced recent precedents, including "the decisions of a seven-judge Bench in the Interplay Judgement followed by multiple others, including SBI General and Patel," to limit the court's review under Section 11 to examining "the existence of a validly existing arbitration agreement."
This case highlights the court's approach to enforcing arbitration agreements in commercial disputes while emphasizing compliance with interim orders as essential to maintaining the rule of law.
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keywords: arbitration agreement, investment dispute, contempt petition, interim relief, commercial arbitration, sole arbitrator
