Hilton Worldwide Management Ltd ... vs Palm Grove Beach Hotels Pvt Ltd
2021 Latest Caselaw 11643 Bom

                                                        (9) CARBP (L) 12352.2021.doc


                      IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                         ORDINARY ORIGINAL CIVIL JURISDICTION
                              IN ITS COMMERCIAL DIVISION

                  COMM. ARBITRATION PETITION (L) NO. 12352 OF 2021


            Hilton Worldwide Management Ltd. & anr.          ... Petitioners

                     Vs

            Palm Grove Beach Hotels Pvt. Ltd.                ... Respondent


            Farhan Dubhash a/w Gaurav Mohanty i/b. Shardul Amarchand
            Mangaldas for the petitioners.

            Karl Tamboly a/w Alya Khan i/b. Vashi & Vashi for the
            respondent.

                                     CORAM : B.P. COLABAWALLA, J.

TUESDAY , 24TH AUGUST, 2021

P.C. :

1 This Arbitration Petition is fled under Section 9 of the

Arbitration and Conciliation Act, 1996, seeking various interim

reliefs. When this matter had come up on 18 th June, 2021, this

Court had granted limited ad-interim relief which was to operate

till 31st August, 2021. This is clear from the paragraphs 22 to 27

of the said order.

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2 Today when the matter is called out, Mr. Dubhash, the

learned advocate appearing on behalf of the petitioners requested

that the ad-interim order be extended by a period of 4 weeks from

31st August, 2021. He submitted that the extension is required

because of the formalities for constituting the arbitral tribunal

under the SIAC Rules have not yet been completed for no fault of

the petitioners.

3 On the other hand, Mr. Tamboly, the learned advocate

appearing on behalf of the respondent submitted that without

prejudice to the rights and contentions of the respondent, it has

no objection if the ad-interim order dated 18th June, 2021 is

extended by a period of 3 weeks from 31 st August, 2021 i.e. upto

and including 21st September, 2021.

4 I have heard both learned advocates and have perused

the papers and proceedings in the Section 9 petition. The

relevant portion of the ad-interim order dated 18 th June, 2021 is

as follows :-

22. Mr Khambata has an apprehension about what it is that Hilton will claim from Rahejas in arbitration. Specifically, the Rahejas' apprehension is that Hilton

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will run up needless expenses, not limiting itself to only reasonable expenses, because it will then be able to claim these from the Rahejas. The response from Mr Dhond is to scof at the suggestion. "Why", he asks, somewhat rhetorically (with no real expectation that I should answer the question) "would I incur more expenses now only to chase the inherent uncertainty of being able to recover these in arbitration?" If this is Mr Dhond emulating Hamlet and calling for a judgment, I can do no better than echo Osric and say, "A hit, a very palpable hit." Whatever Hilton may say or do or claim in arbitration, the Rahejas will have the fullness of their defences available to them. To put it diferently: the Rahejas cannot, prima facie, purport to exercise a power not conferred by contract in opposition to Hilton's demand that the Rahejas fulfil their contractual commitments. The Rahejas may have other remedies; ordering the closure of the hotel is not one of them.

23. For this reason, I do not see how it is possible to limit Hilton in the claim that it makes in arbitration. The only answer is to say that all contentions are kept at large.

24. This is the limited aspect today. Unless the Rahejas are able to show that they have a contractual right clearly spelt out to issue the kind of stop-operations directive that they did on 31st May 2021, Mr Dhond is undoubtedly entitled to relief. That relief, as more specifically set out below, balances the competing equities: Hilton's concerns about keeping the hotel running are addressed and, at the same time, the Rahejas' apprehensions about financing are allayed, albeit for a limited period. Such an ad-interim order, even if described as 'mandatory', is always possible where strong circumstances indicate that the order would protect the rights and interests of both sides, and that refusing relief would be unjust.

25. The statement that Mr Dhond makes and which I accept as an undertaking to Court, to bear reasonable expenses to keep the Hotel running is a sufficient safeguard.

26. Both sides are agreed that 31st August 2021 is a reasonable period during which this order can be

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expected to continue. By that time the parties must appoint an arbitral tribunal as contemplated under the contract. By that date, Hilton must obtain an ad- interim order of some kind, including a continuance of this order if the arbitral tribunal thinks fit. That application under Section 17 will be decided on its own merits entirely uninfuenced by this order.

27. If for any reason the arbitral tribunal cannot be constituted within a reasonable time from today so as to make it feasible to obtain an arbitral order by 31st August 2021, then this Petition itself will have to be taken up for the remaining reliefs, or a reconfirmation or an extension of this order. For that purpose it will be listed on 13th August 2021.

28. The Respondent will file its Affidavit in Reply to this Petition by 12th July 2021. A Rejoinder, if any, is to be filed and served on or before 26th July 2021. There is to be no further Affidavit thereafter without leave of the Court or the arbitral tribunal as the case may be.

29. If the arbitral tribunal is indeed constituted, the Petition the Reply and the Rejoinder may be presented before the arbitral tribunal as an application under Section 17 with its reply and rejoinder.

30. I clarify that the arbitral tribunal will have fullest power to continue (after its Section 17 order or 31st August 2021), refuse to continue, modify or substitute this order. The arbitral tribunal is also at the fullest liberty to order the cessation of this order even before 31st August 2021.

5 Today, both sides before me have fairly stated that the

ad-interim order can be extended so as to enable the petitioners

to approach the tribunal under Section 17 for either continuation

of this order or even for seeking further and other reliefs. The

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only dispute between the parties is with reference to the duration

of the extension. Mr. Dubhash contends that time should be

extended by a period of 4 weeks from 31 st August, 2021 whereas

Mr. Tamboly on instructions has stated that time can be extended

by a period of 3 weeks from 31st August, 2021.

6 After perusing the record, I am of the view that

extending the time by a period of 3 weeks from 31 st August, 2021

would be just, fair and reasonable to both sides.

7 In these circumstances, the following order is passed :

(a) The ad-interim order dated 18 th June, 2021 shall be continued for a period of 3 weeks from 31st August, 2021 i.e. on and upto 21st September, 2021.

(b) This extension of the ad-interim order dated 18th June, 2021 is strictly without prejudice to the rights and contentions of both sides in the arbitration and/or any interim application (s) taken out in the arbitration

(c) As recorded in paragraph 26 of the order dated 18th June, 2021 any application by the

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petitioners for interim reliefs in the arbitration shall be decided on its own merits and completely uninfuenced by the order dated 18th June, 2021 or this order.

(d) The present order of extension is being passed to give the petitioners suffcient time to move an application for interim reliefs before the arbitral tribunal.

(e) Both parties have stated before me that they will co-operate in constitution of the arbitral tribunal.

                           (f)    Liberty to apply.



                       8          The present petition is disposed of in the aforesaid

terms. However, there shall be no order as to costs.

9 This order shall be digitally signed by the Private

Secretary/Personal Assistant of this Court. All concerned shall

act on production by fax or e-mail of a digitally signed copy of this

order.

Digitally signed by B.P. COLABAWALLA, J.

VINA     VINA ARVIND
         KHADPE
ARVIND   Date:
KHADPE   2021.08.30
         17:54:34
         +0530