Pradeep Anand vs I.T.C. Ltd. & Ors.
2000 Latest Caselaw 316 Del

ORDER

S.K. Mahajan, J.

1. The Appellant has challenged the Order dated April 23, 1999 passed by a learned Single Judge of this Court whereby further proceedings before the Arbitrator appointed by the International Chamber of Commerce in Arbitration Case No. 8080/BGD have been stayed till decision AO (OS) No. 134/99 of the objections to the Award dated April 28, 1998 rendered by the Arbitrator in the aforesaid matter.

The facts in short are : -

2. That on September 11, 1990 a Cooperation Agreement was executed between late Shri C L Anand, father of the Appellant representing his family and associate Companies (hereinafter referred to as "Anands"), ITC Limited, Toshiba Corporation, Toshiba Battery Company and Toshiba Anand Battery Limited. The Agreement on behalf of ITC Limited (hereinafter referred to as "ITC Limited") was signed by Mr D P Barua. In terms of the Agreement, ITC was to arrange for the purchase of 48% of the share holdings in Toshiba Anand Battery Limited in two lots of 24% each either by itself or through its associate Companies. Under the Agreement Respondents 1 to 3 were to release the personal guarantees given by Anands to the Banks and financial institutions in lieu of the loans and other facilities extended to Respondent No. 4 Toshiba Anand Battery Limited. As certain disputes arose between the parties to the Agreement, the Appellant invoked the Arbitration Clause and filed a claim on September 9, 1993 before the International Chamber of Commerce. In its reply dated 20th December, 1993 to the request for Arbitration the ITC challenged the validity of the Cooperation Agreement on the ground that it had not given authority to any person to sign any Agreement on its behalf with Anands much less the Cooperation Agreement dated 11th September, 1990 and that the said Agreement did not constitute any legal, valid or binding Agreement between the parties. The ICC was, therefore, requested not to proceed any further with the matter.

3. It appears that on or about 16th August, 1994 ITC filed a Suit, which was numbered as Suit No. 50/95, in this Court for a declaration that the Cooperation Agreement was not valid and binding on them. By a letter dated 5th January, 1995 the ICC informed the parties that in its session held on 4th January, 1995 the International Court of Arbitration has decided that the matter shall proceed for Arbitration and would be submitted to the sole Arbitrator. On receipt of this letter the ITC Limited on or about 31st January, 1995 filed an Application in Suit No. 50/95 for stay of the Arbitration proceedings pending the hearing and final disposal of the Suit. On 30th August, 1995 the ICC appointed Respondent No. 5 as the sole Arbitrator. On 9th October, 1995 ITC filed an Application before the Court for withdrawal of Suit No. 50/95. It was stated in the Application that in terms of Rule 8.3 of the ICC Rules of Conciliation and Arbitration should one of the parties raise one or more pleas concerning the existence or validity of the Agreement to arbitrate and should the International Court of Arbitration be satisfied of the prima facie existence of such an Agreement the Court may, without prejudice to the admissibility or merits of the plea or pleas, decide that the Arbitration shall proceed and in such a case any decision as to the Arbitrator's jurisdiction shall be taken by the Arbitrator himself. It was, therefore, stated in the Application that as the said Rule is deemed to be incorporated in the Arbitration Clause itself the ITC was agreeable to having the said issue regarding the existence and binding effect of the document dated 11th September, 1990 determined by the Arbitrator alongwith all other issues arising out of the claim made by Anands in the Arbitration proceedings and the defenses raised by the paries thereto. On this Application having been filed, the Suit being Suit No. 50/95 was dismissed as withdrawn.

4. In the meantime, the ITC had also filed an Application being OMP No. 16/95 under Section 33 of the Arbitration Act 1940 for determination of the existence and validity of the Cooperation Agreement. This Application was also dismissed as withdrawn on 17th October, 1995 on an Application having been made to that effect by the ITC. It may be stated here that on 2nd April, 1994 Toshiba Corporation and Toshiba Battery Company filed a Suit claiming a decree of declaration that the Agreement dated 11th September, 1990 was valid and binding on ITC and that the Court should pass a decree for Rs. 10 crores in their favour and against ITC and Anands alongwith interest. The Petition under Sections 32, 33 and 35 of the Arbitration Act was also filed by the said Toshiba Corporation and Toshiba Battery Company for determining the validity and existence of the Arbitration Agreement contained in the Cooperation Agreement dated 11th September, 1990 and for a declaration that the Arbitration had ceased to exist insofar as they were concerned. Both the Suit being Suit No. 1033/94 and the Petition under Sections 32, 33 and 35 of the Arbitration Act being OMP No. 10/96 are still pending before a learned Single Judge of this Court. On 9th June, 1996 Shri C L Anand expired and on 5th November, 1996 the Kerala High Court ordered Toshiba Anand Battery Limited to be wound up and an Official Liquidator was appointed.

5. After hearing the parties, the Arbitrator made and published his award, which he termed as the partial award, on 24th April, 1998. On receipt of a Notice from the Arbitrator of his having made and published a partial award, the ITC wrote to the Arbitrator on 15th May, 1998 to file the original Award in the High Court of Delhi or alternatively to authorise ITC to file the Award received by them on its behalf. No authority having been received from the Arbitrator, ITC filed a Petition under Section 14(2) of the Arbitration Act registered as Suit No. 1084/98 for a direction to the Arbitrator to file the Award in Court. On the said Application being filed, the Court issued Notice to the Arbitrator for 16th September, 1998 to file the Award alongwith Arbitration proceedings in Court. In the meantime, in OMP No. 10/96 filed by Toshiba Corporation and Toshiba Battery Company, the Court by an Order dated 22nd May, 1998 in IA No. 3658/97 passed an Order to the effect that final Award will not be given till 16th July, 1998 when the said Petition was listed for hearing. The Appellant also filed a Petition under Section 14(2) read with Section 17 of the Arbitration Act registered as Suit No. 1737/98 for a direction to the Arbitrator to file the Award in Court and to make the same a Rule of the Court. Notice of this Application was issued to the Arbitrator for 20th August, 1998. On 2nd June, 1998 the Advocates of the ITC wrote to the Arbitrator informing him of the Suit, being Suit No. 1084-A/98, having been filed under Section 14(2) of the Arbitration Act and also faxed to him a copy of the Dasti Notice issued by this Court for filing the Award alongwith Arbitration proceedings in Court. On 4th June, 1998 the Arbitrator is alleged to have acknowledged the receipt of Notice issued by the High Court and the letter of Advocates of ITC. The authority was, however, not given to the ITC to file the Award in Court. In the meantime, against the Order dated 22nd May, 1998 passed in IA No. 3658/97 in OMP No. 10/96 an Appeal was filed by the Appellant and on 22nd July, 1998 a Division Bench of this Court in FAO (OS) No. 146/98 while disposing of the Appeal directed that if the final Award was made it would not be implemented till the Applications before the learned Single Judge were decided. It was further stated by the Division Bench that the learned Single Judge would be free to make such Orders which he may deem just, fit and proper in the facts and circumstances of the case. On 27th July, 1998 the Arbitrator wrote to the parties that he proposes to issue directions inter alia to the Appellant to deliver documentary evidence to ITC and Toshiba Battery Company in support of its claim for monetary compensation and unless he was restrained by any Court Order from continuing with the Arbitration he propose to issue formal directions to that effect. The alleged partial Award made and published by the Arbitration on 24th April, 1998 was not filed in Court till that date.

6. On 20th August, 1998 the Appellant filed his Affidavit in evidence before the Arbitrator raising a monetary claim of over Rs. 41 crores. On the filing of this Affidavit and due to the fact that the Arbitrator instead of filing the Award in Court was proceeding with further hearing, ITC filed an Application under Section 33 read with Sections 30 and 31(4) of the Arbitration Act challenging the legality/validity of the partial Award as well as the Cooperation Agreement. In this Petition under Section 33 read with Sections 30 and 31 of the Arbitration Act, ITC challenged the Award as well as the Arbitration Agreement on many grounds. One of the grounds was that after the conclusion of the hearing on 23rd August, 1997 the Arbitrator by his letter dated 21st November, 1997 had informed the parties that the draft final Award had been sent by him on that day to the ICC International Court for its scrutiny, which was also confirmed by the Secretariat of the ICC by its letter dated 5th February, 1998 informing the parties that the draft final Award was under scrutiny process of the ICC Court and notification of the final Award will be made to the parties in due course, but the Secretariat of the ICC vide its letter dated 30th April, 1998 sent a copy of the partial Award dated 24th April, 1998 alleged to have been made by the sole Arbitrator. This Award was allegedly approved by the International Court of Arbitration on 24th April, 1998. It was, therefore, alleged in the said Petition by the ITC that alteration or amendment of the final Award to a partial Award at the instance and directions of the International Court of Arbitration was contrary to Indian laws, which admittedly govern the present case and it was only the sole Arbitrator who had the jurisdiction and authority to decide all the questions and issues arising in the Arbitration and he was not supposed to take assistance or help from any other quarter including the ICC Court. The Award having been altered or modified or amended by the ICC Court was, therefore, according to the ITC, liable to be set aside.

7. Many other grounds about the validity of the Arbitration Agreement and the Award were also taken in the said Petition. The said Petition was numbered as OMP No. 197/98. Alongwith the Petition an Interlocutory Application being IA No. 7558/98 for stay of further proceedings before the Arbitrator was also filed by the ITC. Reply to the Application was filed by the Appellant raising certain objections to the maintainability of the Petition under Section 33 of the Arbitration Act. On December 19, 1998 the Arbitrator is stated to have forwarded the original copy of the Award to the Registrar of this Court, however, the documents forming part of the Arbitration proceedings were not filed. It appears that the said Award did not reach the Court and on 6th February, 1999 the ITC again wrote to the Arbitrator stating that the Award sent by him had not been received in the High Court of Delhi and again requested him for permission to file on his behalf the original copy of the Award received by the ITC. The Arbitrator by Fax then clarified that the Award filed by the ITC Limited in the High Court was with his authority. It may not be out of place to mention here that the copy of the Award, which the Arbitrator had later on sent was with his authority, was filed in Suit No. 1084/98 and not in OMP No. 197/98.

8. On 26th February, 1999 the Court issued Notice of filing of the Award to the parties. Objections thereto were filed by ITC Limited in Suit No. 1084/98. By the Impugned Order dated 22nd April, 1999 the learned Single Judge allowed the Interlocutory Application of the ITC Limited filed in OMP No. 197/98 and stayed further proceedings till the objections filed by the parties to the Award were disposed of by the Court. Aggrieved by the said Order, the Appellant has filed this Appeal.

9. Before dealing with the respective contentions of the parties, a few more facts which need to be noted are that on 11th February, 1999 Toshiba Corporation and Toshiba Battery Company had filed a Petition being OMP No. 41/99 under Section 11 of the Arbitration Act seeking removal of the Arbitrator. This Petition is still pending in this Court. Still another Petition under Section 11 of the Arbitration Act being OMP No. 271/99 was filed by ITC Limited on 10th September, 1999 for removal of the Arbitrator. The said Petition is also pending before a learned Single Judge of this Court.

10. The Order of the learned Single Judge has been assailed by the Appellant on the ground that OMP No. 197/98 itself was not maintainable inasmuch as the ITC Limited had already initiated proceedings by filing a Suit under Section 14 of the Arbitration Act for getting the Award filed in Court. In those proceedings also the ITC Limited had filed an Application for stay of further proceedings before the Arbitrator. Subsequently the ITC Limited itself filed a copy of the Award received from the Arbitrator in Suit No. 1084-A/98 and this was authorised subsequently by the Arbitrator himself. That being the position it is contended by Mr Sanghi that the Award could be challenged only once by way of objections under Sections 17, 30 and 33 of the Arbitration Act on the grounds as provided in the Arbitration Act. It is his submission that once the Award had been made, no Petition for declaration under Section 33 of the Arbitration Act could be filed and the Award could be set aside only on the grounds under Section 30 of the Act by filing objections thereto. Challenge to the Award could be entertained only in those proceedings where the Award was filed and the Petition, being OMP No. 197/98, was not maintainable as the Award could not be challenged in any proceedings in which the same had not been filed by the Arbitrator. It is the further contention of Mr Sanghi that once the Petition itself was not maintainable, no interim Injunction could be passed in the said Petition and the Impugned Order, therefore, passed in IA No. 7558/98 in OMP No. 197/98 was wholly without jurisdiction.

11. It is also the contention of Mr Sanghi that in view of the consent Order of the Division Bench in FAO (OS) No. 146/98 to the effect that the final Award could be given but could not be implemented till the decision of the learned Single Judge in IA No. 3658/97 in OMP No. 10/96, the interests of all the parties were protected and the ITC could not approach the Court for stay of proceedings before the Arbitrator after having consented to his making the final Award. It is further argued by him that the ITC Limited having earlier challenged the validity of the Arbitration Agreement and the Cooperation Agreement by filing OMP No. 16/95 and Civil Suit No. 50/95 and having invited the jurisdiction of the Court to decide on the validity of the Agreement and having unconditionally withdrawn the Suit as well as the Petition and having agreed to the Arbitrator deciding the said issue of jurisdiction and all other issues in accordance with the ICC Rules, it could not file a Petition again for the same relief and the Petition was, therefore, gross abuse of the process of the Court.

12. Mr Anil Diwan, learned Senior Advocate, appearing on behalf of the ITC Limited, has challenged the very maintainability of this Appeal on the ground that under Section 39(i) of the Arbitration Act, an Appeal can be filed only from the specified Orders passed under the Act and from no others. It was, therefore, his contention that as the Order in question was passed under the provisions of the Arbitration Act, it was not one of the Orders specified under Section 39 of the Act and no Appeal, therefore, lies. To this argument of Mr Diwan, the contention of Mr Sanghi is that the Order of Injunction passed by the learned Single Judge of this Court was without jurisdiction and de hors the Arbitration Act. It is his contention that an Order of Injunction could be passed only under Clause (b) of Section 41 read with Schedule-II of the Act for the purposes of and in relation to the Arbitration proceedings before the Court. It was submitted that a party who had refuted the Arbitration Agreement could not claim Injunction under Section 41(b) as it was not for the purposes of and in relation to the Arbitration proceedings. Reliance for this was placed upon the decision of the Supreme Court in M/s. H. M. Kamaluddin Ansari and Company Vs. Union of India and Others, . It is, therefore, submitted by Mr Sanghi that as the Order was not under the Arbitration Act, an Appeal could be filed under the provisions of the Code of Civil Procedure read with Section 10 of the Delhi High Court Act. Reliance for this is placed upon a Division Bench judgment of this Court in The East India Hotels Limited Vs. Jyoti Private Limited reported as 1996 (2) Arbitration Law Reporter 95. It is, therefore, his submission that the Order being not an Order under the Act, the Appeal was maintainable.

Before dwelling upon the merits of the case, we would first like to deal with the preliminary objections raised by the ITC Limited to the maintainability of the Appeal. Under Section 39 of the Act, an Appeal lies only from the specified Orders passed under the Act and from no others. If, therefore, the Order passed under the Act was not one of the orders specified under that Section, the Appeal was not maintainable. Section 39 of the Arbitration Act, 1940 reads as under :-

"Appeal able Orders :- (1) An appeal shall lie from the following orders passed under this Act (and from no others) to the Court authorised by law to hear appeals from original decrees of the Court passing the Order :-

An Order :-

(i) Superseding an arbitration;

(ii) on an award stated in the form of a special case;

(iii) modifying or correcting an award;

(iv) filing or refusing to file an arbitration agreement;

(v) staying or refusing to stay legal proceedings where there is an arbitration agreement;

(vi) setting aside or refusing to set aside an award;

Provided that the provisions of this section shall not apply to any order passed by a Small Cause Court.

(2) No second appeal shall lie from an order passed in appeal under this section, but nothing in this section shall affect or take away any right to appeal to the Supreme Court.

13. The question, therefore, is whether the Impugned Order is an Order passed under the Act or is an Order passed de hors the Act. To appreciate the rival contentions of the parties, we may have to see as to whether the Petition under Section 33 of the Act filed by the ITC Limited was itself maintainable. If the Petition itself was not maintainable Mr Sanghi may be correct in saying that the Impugned Order is not an Order under the Act. However, in case the Petition under Section 33 of the Act was maintainable, the Court may have to see whether the Order impugned was under the Act or de hors the Act. Sections 30 and 33 of the Act are as under:-

Section 30

(1) It is not incompatible with an arbitration agreement for an arbitral tribunal to encourage settlement of the dispute and, with the agreement of the parties, the arbitral tribunal may use mediation, conciliation or other procedures at any time during the arbitral proceedings to encourage settlement.

(2) If, during arbitral proceedings, the parties settle the dispute, the arbitral tribunal shall terminate the proceedings and, if requested by the parties and not objected to by the arbitral tribunal, record the settlement in the form of an arbitral award on agreed terms.

(3) An arbitral award on agreed terms shall be made in accordance with Section 31 and shall state that it is an arbitral award.

(4) An arbitral award on agreed terms shall have the same status and effect as any other arbitral award on the substance of the dispute.

Section 33

Correction and interpretation of award; additional award - (1) Within thirty days from the receipt of the arbitral award, unless another period of time has been agreed upon by the parties -

(a) a party, with notice to the other party, may request the arbitral tribunal to correct any computation errors, any clerical or typographical errors or any other errors of a similar nature occurring in the award;

(b) if so agreed by the parties, a party, with notice to the other party, may request the arbitral tribunal to give an interpretation of a specific point or part of the award.

(2) If the arbitral tribunal considers the request made under sub-section (1) to be justified, it shall make the correction or give the interpretation within thirty days from the receipt of the request and the interpretation shall form part of the arbitral award.

(3) The arbitral tribunal may correct any error of the type referred to in clause (a) of sub-section (1), on its own initiative, within thirty days from the date of the arbitral award.

(4) Unless otherwise agreed by the parties, a party with notice to the other party, may request, within thirty days from the receipt of the arbitral award, the arbitral tribunal to make an additional arbitral award as to claims presented in the arbitral proceedings but omitted from the arbitral award.

(5) If the arbitral tribunal considers the request made under sub-section (4) to be justified, it shall make the additional arbitral award within sixty days from the receipt of such request.

(6) The arbitral tribunal may extend, if necessary, the period of time within which it shall make a correction, give an interpretation or make an additional arbitral award under sub-section (2) or sub-section (5).

(7) Section 31 shall apply to a correction or interpretation of the arbitral award or to an additional arbitral award made under this section."

14. As already mentioned above, it is the contention of Mr. Sanghi that the Award could be challenged only once by way of objections on the grounds provided in the Act and that too only in that Court and in those proceedings where the Award has been filed. He submits that the Respondent having already filed a Suit being Suit No. 1080-A/98 under Section 14 of the Arbitration Act and Notice having already been issued in that Suit to the Arbitrator to file Award in Court, the Petitioner could not file the OMP No. 197/98 under Sections 30 and 33 of the Arbitration Act challenging the legality/validity of the Award as well as the Cooperation Agreement. For this, reliance is placed upon the Judgments reported as Bhajahari Saha Banikya Vs. Behary Lal Basak, 1906 (XXXIII) Calcutta 881 Satish Kumar and Others Vs. Surinder Kumar and Others ; Munshi Ram Vs. Banwari Lal, (1962) Supp.2 SCR 477; Kumbha Mawji Vs. Union of India, 1953 SCR 878 ; and Food Corporation of India and Others Vs. E. Kuttappan, .

15. In Bhajahari Saha Banikya Vs. Behary Lal Basak (Supra) the point for consideration before the Court was whether an Award is operative even though neither party had sought to enforce it by Suit or by an Application under Section 525 of the Code of Civil Procedure (1882). While dealing with this question, the Court held that as the ordinary rule, a valid Award operates to merge and extinguish all claims embraced in the submission and after it has been made the submission and Award furnish the only basis by which the rights of the parties can be determined and constitute a bar to any action on the original demand. We fail to understand as to how this Judgment will be of any assistance to the Appellant. The question before the Court is whether a Petition filed under Sections 30 and 33 of the Arbitration Act challenging the validity of an Award is maintainable even when the Award has still not been filed in Court. This Judgment does not in any manner deal with the said question.

16. In Satish Kumar and Others Vs. Surinder Kumar and Others (Supra), it was held by the Court that all claims which are the subject matter of reference to Arbitration merge in the Award which is pronounced in the proceedings before the Arbitrator and after an Award has been pronounced, the rights and liabilities of the parties in respect of the said claims can be determined only on the basis of the said Award. After an Award is pronounced, no action can be started on the original claim which had been the subject matter of the reference. The position under the Act is in no way different from what it was before the Act came into force. Therefore, the conferment of exclusive jurisdiction on a Court under the Arbitration Act does not make an Award any less binding than it was under the provisions of the Second Schedule of the Code of Civil Procedure. The Court in Satish Kumar's case has relied upon an unreported Judgment in M/s.Uttam Singh Dugal & Company Vs. Union of India in Civil Appeal No. 162/62 delivered on 11th October, 1962. In Uttam Singh's case an Award in respect of certain disputes had already been made by the Arbitrator. By a subsequent reference, the Union of India called upon another Arbitrator to adjudicate upon the matter in dispute between the parties. The case of Uttam Singh Dugal & Company was that the purported reference to the new Arbitrator to adjudicate on the matters alleged to be in dispute between them was not competent case because an Award passed earlier, all the relevant disputes between the parties had been decided. The Uttam Singh Dugal & Company, therefore, filed an Application under Section 33 for deciding the validity and effect of the reference. The Supreme Court holding that the Application under Section 33 was competent made the aforesaid observations about the general rule that all claims which are subject matter of a reference to Arbitration merge in the Award. In our view, this Judgment will also not be of any assistance to the Appellant and on the contrary it may to some extent help the Respondent inasmuch as it has been held that a Petition under Section 33 is competent without there being an Award before the Court.

17. The Judgment in Munshi Ram Vs. Banwari Lal (Supra), is also not relevant to the facts of the present case inasmuch as the Court in Munshi Ram's case was concerned whether a decree passed on the basis of an Award between the parties was a nullity.

18. In Kumbha Mawji Vs. Union of India (Supra), it was held by the Supreme Court that mere filing of Award in Court by a party to it without the authority of the Arbitrator or Umpire is not sufficient compliance with the terms of Section 14 of the Indian Arbitration Act nor can it be inferred from the mere handing over of the original Award by the Umpire to both the parties that he authorised them to file the same in Court on his behalf. It was held that that authority has to be specifically alleged and proved. In Kumbha Mawji's case (Supra), the Respondent who was a party to an Award filed an Application before the Subordinate Judge under Section 14(2) of the Act praying for a direction to the Umpire to file the Award in Court. As the original Award had been handed over to the parties, the Umpire sent a copy of the Award signed by him to the Court. The Court then directed the Respondent to file the original Award in Court and he did so on 3rd September, 1994. Meanwhile the Appellant's Solicitors sent to the Registrar of the Calcutta High Court (Original Side) on 17th August, 1949 the original Award for being filed in Court and the Award was filed on 29th August, 1949. It was on these facts that the Court held that as the Umpire had, on the direction of the Subordinate Judge of Gauhati sent a copy of the Award signed by him to that Court on the 18th August, 1949, the earlier filing for the purposes of Section 31(3) of the Arbitration Act was in the Gauhati Court and not in the Calcutta High Court, though the original Award was filed by the Respondent in Gauhati Court only after the Appellant's Solicitor had sent the Award for filing to the Calcutta High Court. In these circumstances it was held that the Gauhati Court alone had the jurisdiction to proceed with the hearing of the disputes under Section 31 of the Act. Thus it is to be seen that the Court in that case was concerned only with Section 31 of the Act and as to whether the Court at Gauhati or the Calcutta High Court had the jurisdiction to entertain proceedings on the basis of the Award. In our view, this Judgment will also not in any case support the contentions of the Appellant.

19. In Food Corporation of India and Others Vs. E. Kuttappan (Supra), the Court again was concerned with the authority of a party to file the Award on behalf of the Arbitrator. While dealing with this question, the Court held that authority of a party to file the Award on behalf of the Arbitrator can be implied. Forwarding the Award and entire records by Arbitrator to a party's counsel accepting the party's request, held, amounted to authorising the party to file the Award. The Court in FCI's case also was not at all concerned whether a Petition under Section 30 and 33 of the Arbitration Act was maintainable when the Award had still not been filed in Court and even subsequently the Award was not filed in those proceedings.

20. This above question whether a Petition under Section 33 of the Arbitration Act without the Award being filed in Court was maintainable was considered by the Calcutta High Court in I. G. H. Ariff and Others Vs. Bengal Silk Mills Limited, AIR (36) 1949 Calcutta 350. The Court in that case was dealing with the question whether an Application under Sections 30 and 33 of the Arbitration Act was premature inasmuch as the Award had not been filed in Court at the date of the Application. While dealing with the question, the Court held as under:-

"In the case before me, the applicant through her attorneys issued a notice of motion on 22nd November, 1944, intimating that an application will be made on 29th November, 1944. It has been recently reaffirmed by the Court on appeal in Srichand Daga Vs. Sohanlal Daga, 47 C.W.N.450 : [AIR (30) 1943 Cal. 257], that the taking out of a notice of motion is not the making of an application but is a mere warning that an application will be made on a future date named in the notice. In this case the date fixed for the making of the application was 29th November, 1944. The Award had been actually filed in Court on 25th November, 1944 i.e. before the date of the application. If the matter rested here, then the two cases cited by learned counsel would be of no assistance to his client. The Petition, however, is complicated by the fact that on 23rd November, 1944, learned counsel for the applicant filed the Petition in Court and obtained an interim injunction. No order could be made by the Court unless an application had been made to it. Therefore, it must be held that an application was made to the Court on 23rd November, 1944, before the Award had been filed in Court. But this limited application was in aid of the main future application about which the applicant had on 22nd November, 1944, given warning and the making of which she had by the notice fixed for 29th November, 1944. This limited application was not for setting aside the Award but for an interim injunction pending the proposed application for setting aside the Award. This limited application does not appear to me to be hit by the decisions in the two cases I have been referred to.

21. In the second place the main application in so far as it prays for a declaration that there was no submission or arbitration agreement and that the umpire had no jurisdiction to act as such umpire was clearly maintainable even if the Award had not been filed. Indeed Chagla J. at pp.453-454 of the report of the Bombay case observed as follows:-

"It is clear that under sub-section (2) the phrase 'the Court in which the Award under the arbitration agreement may be filed' has reference only to proceedings in connection with the arbitration agreement. If a question arises with regard to the validity, effect or existence of an arbitration agreement, then the question has got to be decided by the Court in which the Award which may result from that arbitration agreement may be filed. If the question is with regard to the Award itself, then the question has got to be determined by the Court in which the Award has been filed."

22. The prayer to which I have referred and which is set out in Clause (2) of the notice of motion raises a question as to the validity, effect or existence of the arbitration agreement and can therefore be sought for in an application to this Court where the Award may be filed even though the Award had not been actually filed at the date of the application. Even assuming that the main application for setting aside the Award is to be deemed to have been made on 23rd November, 1944 when the interim injunction was issued, must it be dismissed on the ground that the Award had not been filed prior thereto although the Award had, in fact, been filed two days later on but before the disposal of the application? It is argued by learned counsel for the Respondent company, on the analogy of the principle that the cause of action in a suit must be antecedent to the institution of the suit, that the cause of action for an application to set aside the Award must be antecedent to the making of the application and that there is no cause of action for setting aside an Award until the Award has been filed in Court. I do not agree that the filing of the Award is any part of the cause of action for setting aside the Award. The grounds for setting aside an Award are set out in Section 30, Arbitration Act. As soon as the conditions there laid down are fulfillled, the cause of action for setting aside the Award is complete. Is the actual filing of the Award in Court which has undoubtedly been held in the two decisions cited above, to be necessary for maintaining an application for setting aside the Award to be also regarded as a condition precedent, the non-fulfillment of which cannot be cured by subsequent filing of the Award? It is a condition precedent like leave under Clause 13, Letters Patent, which must be obtained before the institution of the suit or is it a mere condition like leave to sue a receiver or leave under Order 2 Rule 2 or Order 2 Rule 4 which may be obtained at any time before judgment? I do not see why the defect due to the non-filing of the Award at the date of the application cannot be cured by the filing thereof before the disposal of the application.

23. In many cases events happen after the institution of a suit or proceeding bringing about a change of circumstances and to shorten litigation or to do complete justice between parties it becomes incumbent upon the Court to take notice of these subsequent events and to mould its decision according to the circumstances as they stand at the time the decree or order is made (See Nurimian Vs. Ambica, 44 Cal. 47 at p.55 : (AIR (4) 1917 Cal 716). The Award having now been actually filed in this Court, this Court has become the only Court which under Section 31, Arbitration Act, 1940, has jurisdiction to decide all questions regarding the validity, effect or existence of the Award or the arbitration agreement under which the Award has been made. It will serve no useful purpose if I dismiss the application today for want of jurisdiction due to non-filing of the Award before the date of the application, for the applicant will be entitled to bring on another application on the same grounds immediately after such dismissal. Such a course will only involve multiplicity of proceedings and unnecessary costs. In my judgment the filing of the Award on 25th November, 1944, immediately cured the defect in the jurisdiction of this Court to entertain the application.

24. In certain cases judgments and orders are directed to be entered nunc pro tunc (See R.S.C.O. 52 R.15). In Toronto Railway Vs. King, (1908) A.C.260 : (77 L.J.P.C. 77), their Lordships of the Judicial Committee gave special leave to the Respondent to cross appeal nunc pro tunc. This doctrine of nunc pro tunc has been applied by Courts in this country. (See Hara Krishna Mitra Vs. Ramgopal Mitra 14 C.W.N.759 : (6 I,C.170). In the case now before me requisition was given on 23rd November, 1944 for filing the Award and the Award was filed on 25th November 1944. The delay in the Court office should not prejudice the applicant and if necessary I shall be prepared to direct that the Award be filed nunc pro tunc and dated as on 23rd November, 1944.

25. For reasons stated above, I cannot give effect to the second ground of objection as to the maintainability of this application".

26. In the present case, it is not in dispute that in Suit No. 1084-A/89 the Court had issued Notice to the Arbitrator on 27th May, 1998 to file the original of the partial Award alongwith Arbitration proceedings in Court well before the next date of hearing in that case, namely, 16th September, 1998. This Notice was duly given to the Arbitrator as is apparent from the letter of the ITC's Advocates dated 2nd June, 1998. The Arbitrator, however, did not file the Award in Court. It was only on 19th December, 1998 that the Arbitrator stated that he had forwarded the original copy of the Award to the Registrar of this Court. This Award does not appear to have been received in this Court. It was thereafter on the request of the ITC that the Arbitrator on 6th February, 1999, clarified that the Award filed by the ITC in this Court was with his authority. In the meantime, the Arbitrator was proceeding with the reference for giving the final Award. On 2nd September, 1998 the ITC filed an Application under Section 33 read with Sections 30 and 31(4) of the Arbitration Act challenging the legality/validity of the Award as well as the Co-operation Agreement. This Application was numbered as OMP. No. 197/98. As on this date, the Award had not been filed in Court. Similar argument as raised in the aforesaid Judgment of the Calcutta High Court was raised in this case stating, inter alia, that as the Award was not in Court, the Application was not maintainable and moreover there was another Petition being Suit No. 1084-A/98 under Section 14 of the Arbitration Act in which a Notice had already been issued to the Arbitrator to file the Award and consequently a separate Application challenging the Award which had not yet been filed was not maintainable.

27. As held by the Calcutta High Court in the aforesaid case, we do not see why the defect due to the non-filing of the Award at the date of the Application cannot be cured by the filing thereof before the disposal of the Application. The Award admittedly had been filed in Court before the interim Application in OMP. No. 197/98 was disposed of. There was no difficulty in the learned Single Judge consolidating the two proceedings and disposing of the Application thereafter. However, even if it has not been done, we do not see that it is fatal to the case of the Respondent. As held by the Calcutta High Court in many cases events happen after the institution of a suit or proceeding bringing about a change of circumstances and to shorten litigation or to do complete justice between parties it becomes incumbent upon the Court to take Notice of these subsequent events and to mould its decision according to the circumstances as they stand at the time the Decree or Order is made. The Award having not been actually filed in Court, the Court had become the only Court which, under Section 31 of the Arbitration Act, had jurisdiction to decide all questions regarding validity, effect or existence of the Award under which the Award had been made. It would serve no useful purpose if this Application was dismissed today for want of jurisdiction due to non-filing of the Award or due to the Award having been filed in another Suit and force the applicant to bring another Application in Suit No. 1084-A/98 on the same grounds immediately after such dismissal. In our view, the filing of the Award in Court immediately cures the defect, if any, to entertain this Application. Moreover in case the Award had been filed by the Arbitrator in Court immediately on receipt of Notice from the Court, there was no need for the applicant to move a separate Petition under Sections 30, 31 and 33 of the Arbitration Act as in that case this Application could have been filed in the Suit where the Award had been filed. We are, therefore, in full agreement with the observations of the learned Single Judge that "by the aforesaid conduct of the Arbitrator, the Petitioner could not have been rendered remedy less and thus gagged". The scheme of the Arbitration Act does not envisage such a peculiar situation. However, the situation is now changed because before the Application under consideration for stay could be decided, the Arbitrator filed the Award in Suit No. 1084-A/98, though very late, and also authorised the Petitioner to file its copy on his behalf. The learned Single Judge was right in holding that the Court should not stick to the technicalities of procedure and should change the rules where substantial justice otherwise require the same to be done. Sticking to the form, if it defeats justice, should not be followed. The learned Single Judge was also right in holding that in view of the facts and changed situation, the Application should not be thrown out by telling the Petitioner that their OMP was, perhaps, not maintainable when it was moved.

28. The other objection to the maintainability of the Petition taken by the Appellant is that the ITC had earlier challenged the validity of the Co-operation Agreement by filing OMP. No. 16/95 and Civil Suit No. 50/95 and having invoked the jurisdiction of the Court to decide on the validity of the Agreement and having unconditionally withdrawn the same and having agreed to the Arbitrator deciding the said issue of jurisdiction and all other issues in accordance with the ICC rules, could not file a Petition again for the same relief and the Petition was allegedly an abuse of the process of the Court. To recollect OMP. No. 16/95 and Suit No. 50/95 were withdrawn by the ITC on the ground that the Arbitrator Tribunal would have jurisdiction to decide the existence and binding effect of the document dated 11th September, 1990 alongwith all other issues arising out of the claim made by Anand's in the Arbitration proceedings and the defenses raised by the parties thereto. In our view, merely because the earlier Petition was withdrawn on the Applicant agreeing for the Arbitrator to decide the issue of the existence and binding effect of the document, it cannot be said that after the decision has been given by the Arbitrator, the party cannot challenge the decision. In the earlier case, the ICC was intending to challenge the binding effect of the Agreement itself but in the later case what the ITC was trying to challenge was the decision of the Arbitrator about the existence and validity of the Arbitration Agreement. In our view, there is nothing wrong in challenging the decision of the Arbitrator in case after hearing the parties on the objections raised by the Applicant, it is held by the Court that Arbitrator could not arrive at the decision about the existence and validity of the Arbitration Agreement. The Court may still hold that there was no binding Agreement between the parties. Merely filing of an earlier Petition under Sections 30 and 33 of the Arbitration Act or the Suit challenging the existence and validity of the Agreement, in our view, will not come in the way of the ITC filing the present Application under Sections 30, 31 and 33 of the Arbitration Act.

29. In view of the above discussion, we are clearly of the opinion that the Petition being OMP. No. 197/98 challenging the existence and validity of the Arbitration Agreement was maintainable.

30. The next contention of Mr. Sanghi is that even assuming the Petition was maintainable, the Impugned Order was without jurisdiction and de hors the Arbitration Act in view of the law laid down in M/s. H. M. Kamaluddin Ansari and Company Vs. Union of India and Others (Supra). It is the contention of Mr. Sanghi that an Order of Injunction can be passed only under Clause (b) of Section 41 readwith Schedule-II of the Act for the purpose of and in relation to the Arbitration proceedings and where a party had moved an Application under Section 33 denying the applicability of the Arbitration Agreement, he cannot take advantage of Section 41(b). It is also his contention that unless there are Arbitration proceedings before the Court, Section 41(b) of the Act cannot be invoked. It is, therefore, his submission that as no Application under Section 41(b) of the Act was maintainable because of the Applicant ITC having denied the existence of the Arbitration Agreement, the Court could not pass an Order of Stay under its inherent powers.

31. In M/s. H. M. Kamaluddin Ansari and Company Vs. Union of India and Others (Supra), the Supreme Court was dealing with two Appeals. One was filed by M/s. H. M. Ansari and Company from the Judgment and Order of the Allahabad High Court and the other was against the Judgment and Order passed by the Delhi High Court in Shankar Vijay Saw Mill Vs. Union of India, . In Shankar Vijay Saw Mill's case (Supra), the High Court of Delhi was dealing with a Petition challenging the existence of an Arbitration Agreement. The contention of the Petitioner in that case was that there was no concluded contract between the parties and consequently there was no Arbitration Agreement in existence under which the matter could be referred to the Arbitrator. By way of an Interim Application in that Petition, the Petitioner sought an Injunction against the Respondent seeking restraint from recovering any amount allegedly due to the Petitioner in respect of some other contracts. The Court while dealing with the case has observed that large number of Applications under Sections 32 and 33 of the Arbitration Act had been moved in the High Court of Delhi in matters similar to that. In most of the cases, Injunctions were issued by the learned Single Judges restraining the Respondents from taking, appropriating or withholding the amount from other bills of the contractor. One such Order was modified by the Supreme Court in Union of India Vs. Raman Iron Foundry, . Following that Judgment of the Supreme Court, the High Court of Delhi started moulding its Injunctions accordingly and refused to issue an Order of Injunction which may include the word "withholding" because it took the view that that Order really meant an Order to make the payment which could not be passed. The Division Bench, therefore, in Shankar Vijay Saw Mill's case held that the Court in Arbitration proceedings was not competent to issue an Injunction restraining the Union of India from withholding the amount claimed by the Union from the bills of other contracts of the Petitioner. For the payment sought to be due from other bills, the Petitioner must seek his remedy outside those Arbitration proceedings. Any Injunction Order issued by the Court, therefore, must necessarily restrict itself to an Order restraining the Union of India from recovering or appropriating the amount claimed on account of damages unless it had been adjudicated upon. The Division Bench, therefore, has specifically held that in a Petition under Sections 32 and 33 of the Arbitration Act challenging the validity and existence of the Arbitration Agreement, an Injunction could be issued by the Court. This Judgment was upheld by the Supreme Court in M/s. H. M. Kamaluddin Ansari and Company Vs. Union of India and Others (Supra). It would thus be seen that the Judgment in Ansari's case does not lay down that a party who has filed a Petition under Section 33 cannot resort to the provisions of Section 41(b) of the Act to obtain Interlocutory Orders. The Judgment of the High Court of Delhi in Shankar Vijay Saw Mill's case (Supra) having been approved by the Supreme Court clearly show that even in a Petition under Section 33 of the Arbitration Act an Application under Section 41(b) can be filed.

32. In our view, the Judgment of the Supreme Court in M/s. H. M. Kamaluddin Ansari and Company Vs. Union of India and Others (Supra) is not applicable to the facts of the present case. This Judgment, as already mentioned above, was in Appeal from the Judgment of the High Court of Delhi in Shankar Vijay Saw Mill's case and the Judgment of the High Court of Delhi was affirmed by the Supreme Court. The High Court of Delhi in Shankar Vijay Saw Mill's case was deciding a Petition under Section 33 of the Arbitration Act and it was in this Petition that an Order of stay was passed by the Court. The Supreme Court has not directly dealt with the questions involved in the present case. Some of the observations of the Supreme Court in paragraph 17 of the Judgment are in any case not applicable to the facts of the present case.

33. In M/s.Sant Ram and Company Vs. State of Rajasthan and Others, , it was held that to avail the remedy under the provisions of the Code of Civil Procedure, when an Application for Injunction under Section 41(b) read with Schedule II is filed, the Court shall have, pending proceedings for the purpose of and in relation to the Arbitration proceedings availed through the process of the Court, the same power of making Orders in respect of any matters set out in the second Schedule as it had for the purpose of and in relation to any proceedings before the Court. The initiation of pendency of any proceedings in the Court in relation to the Arbitration proceedings would, therefore, be a pre-condition for the exercise of the power by the Civil Court under Section 41(b) and second Schedule of the Act. By filing a Petition under Sections 30 and 33 of the Act, the ITC had initiated proceedings in Court in relation to the Arbitration proceedings. The pre-condition as laid down by the Supreme Court in Sant Ram's case (Supra) for the exercise of the power under the second Schedule of the Act, therefore, existed and the learned Single Judge was competent to pass an Order on the said Application.

34. Moreover under Section 41(b) of the Act, the Court shall have, for the purposes of, and in relation to, Arbitration proceedings, the same power of making Orders in respect of any of the matters set out in the second Schedule as it has for the purposes of, and in relation to, any proceedings before the Court. Under the second Schedule besides other powers, the Court has also the power to grant Interim Injunctions. The only thing the Court has to see at the time of granting Injunction is that such an Injunction is for the purpose of, and in relation to, Arbitration proceedings. Whether or not a stay of Arbitration proceedings is to be granted is, therefore, clearly a matter in relation to and for the purposes of Arbitration proceedings. The ITC in the present case has filed an Application under Sections 30 and 33 of the Arbitration Act challenging the legality and validity of the Agreement as well as the partial Award given by the Arbitrator. On such a Petition being filed, in our view, there was no impediment for the Court to consider the Application under Order 39 Rules 1 and 2 CPC for the grant of interim relief if the same was for the purposes of and in relation to the Arbitration proceedings. The Court having thus passed an Order staying the proceedings, in our view, the same was within its powers and it cannot be said that the Application was not maintainable only because the ITC had challenged the legality and validity of the Agreement as well as the Award. In the present case, the ITC has challenged the decision of the Arbitrator in the form of an Award which includes his decision on the validity of the Arbitration Agreement. We are, therefore, clearly of the opinion that the Application for stay was maintainable and the Order passed on this Application is an Order under the Act.

35. Having come to this conclusion that the Petition was maintainable and the Order is under the Act, the next question for determination is whether the Appeal against the Impugned Order was maintainable. Under Section 39 of the Act, an Appeal lies only from the specified Orders passed under the Act and from not others.

36. If the Order passed on the Application is an Order under the Act, an Appeal would lie only if the Order appealed from was one of the Orders specified in Clauses I to VI of Section 39 of the Act. Mr.Sanghi, learned counsel for the Appellant, however, submits that the Order appealed from was not an Order under the Act and consequently an Appeal would lie under the provisions of the Code of Civil Procedure read with Section 10 of the Delhi High Court Act. For this, he relies upon a Division Bench Judgment of this Court in East India Hotels Limited Vs. Jyoti Private Limited, 1996 (2) Arbitration Law Reporter 95.

37. Before we deal with the Judgment in East India Hotels's case (Supra) it will be useful to refer to two Judgments of this Court in Subhash Chander Kakkar Vs. D.S.I.D.C., 1990 (2) Delhi Lawyer 21 and N. C. Bhalla and Others Vs. R. C. Bhalla and Others, 1990 (2) ALR 395. In Subhash Chander Kakkar Vs. D.S.I.D.C. (Supra) the Court was dealing with a Petition under Section 33 of the Arbitration Act wherein the Petitioner had prayed that the Court should declare that there was no legal, valid and subsisting Arbitration Agreement between the parties. In that Petition, an Application for stay of the Arbitration proceedings was also filed. The Court in that case held that admittedly, an Application under Section 33 of the Arbitration Act was filed and during the pendency of that Application, the Appellant had moved an Application for Interim Injunction. According to the Court, therefore, that could be done only by invoking the provisions of Section 41 of the Arbitration Act read with second Schedule. It was by virtue of these two provisions that in any Arbitration proceedings pending in Court, the Court gets jurisdiction to exercise powers under Order 39 of the Code of Civil Procedure. Therefore, when the Court passes an Order under Order 39 of the Code of Civil Procedure, during the pendency of any proceedings before it which have been commenced under any of the Section of Arbitration Act, the Court is in effect exercising its jurisdiction by virtue of provisions of Section 41 of the Arbitration Act. Section 39 of the Arbitration Act clearly specifies what are the appeal able Orders. An Order passed under Section 41 of the Act read with second Schedule and Order 39 Rules 1 and 2 CPC was held not to be an appeal able Order.

38. In N. C. Bhalla and Others Vs. R. C. Bhalla and Others (Supra) reliance was placed upon the earlier decision of this Court in Subhash Chander Kakkar's case (Supra) and it was held that the Appeal against an Order passed on an Application under Section 41(b) read with second Schedule of the Act and Order 39 Rules 1 and 2 CPC was not maintainable as no Appeal lies from Orders other than those specified in Section 39 of the Act.

39. In East India Hotel Limited's case the facts were that Suit was filed by the Appellant for appointment of an Arbitrator. Another Suit was filed by the Respondent seeking appointment of an Arbitrator. The learned Single Judge by an Order passed in these Suits appointed an Arbitrator referring all the claims and counter claims to him for decision. By the same Order, an Interlocutory Application for grant of Injunction was rejected and the Application of the Respondent for vacation of Injunction was allowed. Against this Order rejecting the Application for grant of Injunction and allowing the Application of the Respondent vacating the Injunction, two Appeals were filed. On an objection being taken that the Appeal was not maintainable as an Appeal could be filed only against an Order specified in Clauses I to VI of Section 39 of the Act and against no others, the Court held that the Order was passed under the Act and as such the same was not appea lable under Section 39 of the Act. However, certain observations were made by the Court as to under what circumstances an Appeal would like against an Order passed by the learned Single Judge and the Court went on to decide a question as to what would happen if an Arbitration Court exercises power to grant an Injunction de hors the provisions contained in Section 41(b) of the Arbitration Act and whether the party aggrieved would be left without any remedy. While dealing with this question, the Court made the following observations:-

"21. It has already been stated hereinabove that an arbitration Court does not have power to issue an injunction away from the provisions contained in Section 41(b) of the Act, still if it exercises such power it would be in purported exercise of power conferred by Order XXXIX and Section 94 of the CPC. The arbitration court would be deemed to have exercised a power not vested in it and hence an appeal would lie against such an order under Order 43 Rule 1(r) CPC. The expression "and from no others" as used in Section 39(1) of the Arbitration Act refers to orders under the Arbitration Act only (see Rebati Ranjan Vs. Suranjan and Jhamaklal Vs. Mishrilal and Sri Kishen Vs. Radha Kishan. In Trideshwar Dayal Vs. Maheshwar Dayal, their Lordships have reiterated the following view of the law which was taken earlier in Janardhan Reddy Vs. State of Hyderabad which was taken after referring to a number of decisions:-

"It is well settled that if a court acts without jurisdiction, its decision can be challenged in the same way as it would have been challenged if it had acted with jurisdiction i.e. an appeal would lie to the Court to which it would lie if its order was with jurisdiction."

22. To sum up :-

(i) the only power to grant an injunction conferred on arbitration court is for the purpose of and in relation to arbitration proceedings;

(ii) the power to grant an injunction cannot be exercised by an arbitration court by reference to clause (a) of Section 41 of Arbitration Act, for the scope of clause (a) is confined to procedural matters merely as laid down by the Supreme Court in H.K. Ansari's case (supra);

(iii) an order of the arbitration court disposing of a prayer for an interim injunction is not appeal able; rather an appeal there from is specifically prohibited by Section 39(1) of the Arbitration Act;

(iv) if an arbitration court may grant an injunction de hors the provisions contained in Section 41(b) of the Arbitration Act, the same would be liable to be set aside in appeal under Section 43(1)(r) of CPC. The order would be appea lable inasmuch as the order being not an order under the Arbitration Act, neither the prohibition on right of appeal contained under Section 39(1) of the Arbitration Act would apply nor the question of appealability shall be required to be determined by reference to the said Section 39(1).

40. Thus it would be seen that the observations made in paragraph 21 and 22 of the Judgment were not directly related to the issue before the Court and are merely obiter. However, these observations of the Court would not in any way be of any assistance to the Appellant inasmuch as the Judgment of this Court in Subhash Chander Kakkar's (Supra) case which was similar to the facts of the present case, is clearly applicable to the facts of the present case. Moreover, the Court in that case has not held that an Order passed on an Application under Section 41(b) of the Act in a Petition under Section 33 of the Act cannot be an Order under the Act.

41. As we have held that the Order passed by the learned Single Judge was an Order under the Act, Section 10 of the Delhi High Court Act will not be of any avail to the Appellant to contend that right of Appeal having been provided by Section 10, this right could not be taken away by Section 39 of the Act. In a Full Bench Judgment of this Court in Union of India Vs. A. S. Dhupia and Another, , it was held that Section 10 of the Delhi High Court Act provides only a forum of Appeal and the question of right of Appeal is to be decided by reference to Section 39 of the Act and not by reference to Section 10 of the Delhi High Court Act. The Appeal is a creature of statute. There is no inherent right of Appeal. The right to file an Appeal has to be conferred by legislation. It is, therefore, under the provisions of Section 39 of the Arbitration Act that one has to look into to decide whether an Order of the nature appealed against is appeal able or not. The Order in the present case, therefore, being not one of the Orders specified in Section 39 of the Act, in our view, the present Appeal is not maintainable.

42. Having held that the Appeal is not maintainable, it was not necessary for us to go into the question as to whether the learned Single Judge was right in passing an Order staying the proceedings before the Arbitrator. However, as the matter has been fully argued by the parties, we are indicating our view on the question whether the proceedings before the Arbitrator should be stayed.

43. It is contended by Mr. Sanghi that in view of the Order of the Division Bench in F.A.O.(OS).No. 146/98 to the effect that final Award can be given but would not be implemented till the decision of the learned Single Judge in IA.No. 3556 in OMP. No. 10/96, the interest of all the parties was protected and no prejudice would be caused to ITC if the final Award was passed. It is also contended that the Respondent having consented to the jurisdiction of the Arbitrator, it was not correct on their part to challenge his jurisdiction and seek stay of proceedings before him. It is submitted that the entire sum of US $ 65,000 has been paid to the Arbitrator by the Appellant and the balance of convenience was, therefore, in its favour as the proceedings had to be brought to an end. It is also contended that the conduct of the Respondent cannot be completely ignored and it was not entitled to the grant of a discretionary relief from the Court. It is submitted that in view of the Judgment of the Supreme Court in Jammu & Kashmir State Forest Corporation Vs. Abdul Karin Wani and Others, no Injunction can be passed to frustrate the Arbitration proceedings but can be passed only for the purpose and in relation to the Arbitration proceedings.

44. To appreciate the arguments of the Appellant, it would be necessary to refer to certain events which are relevant to decide the question as to whether a stay of proceedings before the Arbitrator was justified. Mr.C.L. Anand before the Arbitrator had made the following claims:-

"4.12 In the foregoing circumstances, the Claimant prays the arbitral tribunal may be pleased to take steps for settling the disputes and make the undermentioned Award directing the defendants;

(a) Jointly and severally to take immediate and appropriate steps to ensure that all personal guarantees given by the Claimant, Shri C.L.Anand and his son Pradeep Anand to the Banks and Financial Institutions are returned to the Claimant duly discharged and cancelled;

(b) Alternatively, to Award to the Claimant the amounts that he and his son Pradeep Anand are called upon to reimburse to the Banks and Financial Institutions in respect of the said personal guarantees;

(c) Alternatively, to hold the defendants liable for all losses and consequences arising to the Claimant and his son Pradeep Anand as a result of any legal actions taken by the Banks and Financial Institutions pursuant to the personal guarantees;

(d) To Award costs of this Reference to Arbitration; and

(e) Any other relief, as may be prayed for, from time to time, in the circumstances of the case."

45. Mr. C. L. Anand had died in the meantime and he is being represented by the Appellant. It is thus to be seen that the Appellant had claimed that he be awarded the amounts that he may be called upon to reimburse to banks and financial institutions in respect of personal guarantees and/or alternatively to hold that the Respondents should be liable for all losses and consequences arising to the Appellant as a result of any legal action taken by the banks and financial institutions pursuant to the personal guarantees. Terms of reference were finalised by the Arbitrator and by letter dated 7th March, 1997 the terms of reference were forwarded to the parties. Under Clause 12.1 of the terms of reference, the Arbitrator has mentioned that the law to be applied to the dispute and Arbitration proceedings shall be the laws of India.

46. It is contended by Mr.Anil Diwan, learned Senior counsel for the Respondent, that under the laws to be applied to the Arbitration proceedings, the time within which the Award is to be rendered by the Arbitrator is four months. However, by its letter the Arbitrator informed the parties that in accordance with Article 18 of the ICC Rules, six months time limit for the Award start from that date. According to Mr. Diwan, therefore, there being a conflict between the Indian laws and the ICC Rule, it would be the Indian laws which would be applicable to the facts of the case. We are, for the moment, not deciding the question as to whether the Award could be given within six months from the date of the Arbitrator having settled the terms of reference or within four months from his entering upon the reference, as we are deciding this Appeal de hors this question.

47. In Paragraph 13.1 of the terms of reference the Arbitrator determined the issues which were to be decided by him. Under reference No.13.6 the Arbitrator framed the issue "As to whether the claimant is entitled to all and/or any of the reliefs claimed in this reference." To recollect one of the reliefs claimed before the Arbitrator was that he may be awarded the amount that he is called upon to reimburse to banks and financial institutions in respect of personal guarantees given by him and/or alternatively to hold the Respondents liable for all losses and consequences arising to the Appellant as a result of any legal action taken by the banks and financial institutions pursuant to the personal guarantees.

48. The issue 13.6 (A), therefore, covered all the claims of the Appellant. There was no other claim before the Arbitrator at that time except what had been mentioned in the statement of claim filed by the Appellant. The Arbitrator also framed an issue about the existence and validity of the Co-operation Agreement dated 11th September, 1990 and as to whether the same was bad in law, null and void and not binding upon ITC. ITC filed an Application before the Arbitrator for treating this issue as a preliminary issue before any other issue was decided by him. The Arbitrator, however, held that having regard to Article 8(iv) of the ICC Rules of Arbitration, he could not agree that the aforesaid issue could be treated as a preliminary issue. He, therefore, directed that all other claims in clause 13 of the Terms of Reference would be heard and dealt with by the parties at the arbitral hearing. Even the issue about the entitlement of the Appellant to any amount was a part of Clause No.13. It is thus clear that the Arbitrator had decided to hear the entire reference and not decided the question raised in Clause 13.2 as preliminary issue. The Arbitrator, therefore, informed all the parties that all the issues in clause 13 of the terms of reference would be heard at the arbitral hearing to be held in Mumbai between 18th August, 1997 and 23rd August, 1997 and that the entire reference would be heard on day-to-day basis until the Arbitration hearing is complete and closed. It was, therefore, clearly understood between the parties that all issues in the case would be heard by the Arbitrator on the dates mentioned in the notice dated 28th July, 1997. On 23rd August, 1997 the Arbitration hearing was closed.

49. A letter dated 21st November, 1997 was received by the parties from the Arbitrator informing them that the draft final Award pertaining to the reference had been despatched to the ICC Secretariat for scrutiny of ICC International Court of Arbitration pursuant to Article 21 of ICC Rules of Arbitration. The letter dated 21st November, 1997 received from the Arbitrator was as follows :-

"Re ICC ARBITRATION 8080/BGD/OLG"

"This is to inform you that I have this day despatched to ICC Secretariat the draft Final Award pertaining to the abovenamed Reference for the scrutiny of ICC International Court of Arbitration pursuant to Article 21 of ICC Rules of Arbitration so that the parties can apprise the Delhi High Court accordingly on 03 December 97".

Another letter dated 5th February, 1998 was received by the parties from the International Court of Arbitration informing them that the draft final Award was under scrutiny and process of the Court and notification of the same would be made in due course. This letter was in the following terms :-

"Dear Sir,

The Secretariat acknowledges receipt of Claimant's tele fax dated February 4, 1998, a copy of which is enclosed for Defendants' attention.

We look-forward to receiving the extension of the bank guarantee N 5377 before February 24, 1998, the expiry date.

Please note that the draft Final Award is under the scrutiny process of the Court. Notification of the Final Award of the parties will be made in due course."

Alongwith the letter dated 30th April, 1998 the Secretariat of the ICC sent to the parties the copy of the Impugned Award dated 24th April, 1998 made by the Arbitrator. This Award was described as "Partial Award rendered by the sole Arbitrator".

50. The contention of Mr.Diwan is that the Arbitrator had actually drafted a final Award and it was no part of his duty to send the said Award to the International Court of Arbitration for scrutiny. It is further his contention that the final Award was changed into partial Award at the intervention of the International Court of Arbitration. He, therefore, submits that the Arbitrator having taken instructions and directions from a third party has totally mis-conducted himself and the proceedings and the Award was, therefore, liable to be set aside. Further his contention is that till such time this Court adjudicates upon the Petition of Respondent No.1 under Sections 30 and 33 of the Arbitration Act the Arbitrator should not be permitted to hold further proceedings.

51. Mr. Sanghi has naturally objected to this contention and it is his submission that Arbitration being the chosen forum of the parties and the ITC having itself withdrawn its earlier challenge, agreeing to go before the Arbitrator to get all issues decided, there was no case made out for stay of proceedings. It is also his submission that the approach of the Court should be to save the Award rather than kill it and, therefore, the courts would lean in favour of saving the Award rather than rejecting it. He submits that no Injunction Order can be passed to frustrate the Arbitration proceedings but can be passed only for the purpose of and in relation to Arbitration proceedings. It is also submitted by him that domestic Court should not stay International Arbitration proceedings.

52. It is not in dispute that the Arbitrator had written a letter on 21st November, 1997 informing the parties that he had prepared the draft final Award and sent the same to the ICC International Court for its scrutiny. It is also not in dispute that the Secretariat of the ICC in its letter dated 5th February, 1998 had informed the parties that the draft final Award was under the scrutiny process of the ICC Court of Arbitration. It is also not in dispute that ultimately the Award which was sent to the parties was described as a partial Award. The question, therefore, naturally coming to the mind of the Court is how the draft final Award prepared by the Arbitrator and sent to the ICC Court of Arbitration was changed to partial Award. The other question which comes to the mind of the Court is as to how and under which provision of law the Arbitrator can send the Award for scrutiny or approval to another forum which has nothing to do with Arbitration. It is admitted between the parties that Indian laws were applicable to the Arbitration proceedings. It is well settled that under the Indian laws the Award of the Arbitrator leaving a matter in dispute to be decided by a third person is invalid as it is not open to the Arbitrators to delegate their authority to a stranger. Even a partial delegation of authority vitiates the Award if the defective part cannot be separated from the rest. Delegation of his authority and functions by an Arbitrator amounts to judicial misconduct. Such an Award suffers from a serious infirmity and as such is liable to be set aside. In this case, it is not denied that the Arbitrator did send the Award for scrutiny to the International Court of Arbitration.

53. In our view, therefore, prima facie, it appears to us that the whole approach of the Arbitrator in sending the Award to the ICC Court of Arbitration amounted to delegation of authority to a third party. Prima facie, the Award is suffering from serious infirmity. At the time of deciding this Application for stay, it cannot be said whether or not the Arbitrator has committed mis-conduct by sending the Award to a third party. It may also not be possible for this Court to decide at this stage as to how and in what circumstances the final Award was changed to a partial Award. There is nothing before the Court also to find out as to what was written in the draft final Award sent to the International Court of Arbitration for scrutiny and to what extent this draft final Award was changed so as to be described as a partial Award. All these questions have to be gone into during the hearing of the main petition.

54. It is also to be seen that the Arbitrator in spite of the notice of the Court has not even sent the proceedings to the Court for scrutiny. To a letter dated 21st May, 1999 written by the counsel for ITC to the Arbitrator to send to the Court the copy of the draft final Award, the communications and documents exchanged between the Arbitrator and the ICC before the partial Award was issued and the record of the Arbitration proceedings, the Arbitrator forwarded this request to the ICC Court of Arbitration for their views as questions of confidentiality and privilege were allegedly involved. Subsequently on 1st July, 1999 the Arbitrator wrote to the counsel for ITC that in his opinion the information requested for was confidential and privileged and the ICC International Court of Arbitration had not authorised him to give it to the counsel.

Under Section 14 of the Arbitration Act, the Arbitrator shall at the request of any of the parties to the Arbitration Agreement or any person claiming under such party or if so directed by the Court and upon payment of the fee and the charges due in respect of the Arbitration and Award and all the costs and charges of filing the Award, cause the Award or a signed copy of it, together with any depositions and documents which may have been taken or proved before him, to be filed in Court, and the Court shall thereupon give notice to the parties of the filing of the Award. It is thus clear that under the Indian laws, the Arbitrator is bound to file in Court depositions or documents which might have been taken and proved before him to be filed in Court. The Arbitrator cannot claim privilege or confidentiality of any such document or deposition. Once an Award has been filed in Court, it is the duty of the Arbitrator on being so required by the Court or by the party, to file in Court the deposition and documents. The objections filed by the ITC to the Award described as a partial Award cannot be decided without such deposition and documents before the Court. It is, therefore, but natural that it was incumbent upon the Arbitrator to file the same on being so required either by the parties or by the Court. Non-filing of the depositions and documents and claiming privilege and confidentiality about the same, prima facie, show that the Arbitrator is being influenced by the opinion of a third party, may be in the present case the International Court of Arbitration. That being the position, in our view, the Arbitrator could not be permitted to continue with the Arbitration proceedings till such time the objections to the partial Award were decided by the Court. In our opinion, therefore, there was a, prima facie, case for the stay of further proceedings before the Arbitrator. We are, therefore, in complete agreement with the view of the learned Single Judge that in the interest of justice, further proceedings before the Arbitrator should be stayed.

55. In our view, there is no case for interfering with the Judgment of the learned Single Judge. Moreover, once the discretion vested in the Court has been exercised by the learned Single Judge, this Court would be very slow to interfere with the exercise of that discretion. In dealing with the matters raised before it at the Appellate stage, the Appellate Court would normally not be justified in interfering with the exercise of discretion solely on the ground that if it had considered the matter at the trial stage, it may have come to a contrary conclusion. If the discretion has been exercised by the learned Single Judge reasonably and in a judicial manner, the fact that the Appellate Court would have taken a different view may not justify interference with the learned Single Judge's exercise of discretion. It is ordinarily not open to the Appellate Court to substitute its own exercise of discretion for that of the learned Single Judge. But if it appears to the Appellate Court that in exercising its discretion the learned Single Judge has acted unreasonably or capriciously or has ignored relevant facts and has adopted an unjudicial approach, then it would certainly be open to the Appellate Court to interfere with the learned Single Judge's exercise of discretion.

56. Looking from any angle, in our view, there is no case made out by the Appellant for interfering with the Judgment of the learned Single Judge. We otherwise do not find any infirmity in the Impugned Judgment.

57. There are no merits in this Appeal and the same is, accordingly, dismissed leaving the parties to bear their own costs. Any observation made in this Order shall not have any bearing on the merits of the objections under Sections 30, 31 and 33 of the Act pending before the learned Single Judge.