Madras High Court
M/S.Tiong Woon Project & Contracting ... vs Everrenew Energy Private Limited on 7 October, 2025
Author: N.Anand Venkatesh
Bench: N.Anand Venkatesh
Arbitration Application No.762 of 2025
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 07.10.2025
CORAM
THE HONOURABLE MR.JUSTICE N.ANAND VENKATESH
Arbitration Application No.762 of 2025
M/s.Tiong Woon Project & Contracting (India)
Private Limited,
represented by its Director,
Mr.Silambarasan Devadass
Having its registered office at:
No.194, 2nd Floor, O-Block,
Ganapathy Colony, Anna Nagar East,
Chennai – 600 102. .... Applicant
Vs.
Everrenew Energy Private Limited
represented by its Authorised Signatory,
Mr.V.T.Mohan Prakash
Having its administrative office at:
Aneja Towers,
2nd Floor, B Block,
Developed Plot Estate,
Perungudi, OMR<
Chennai – 600 096.
And Registered Office at:
NTC Tower,
No.97, Old No.47,
Linghi Chetty Street,
Chennai – 600 001. .... Respondent
PRAYER
1/12
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Arbitration Application No.762 of 2025
Arbitration Application filed under Order XIV Rule 8 of
Madras High Court Original Side Rules r/w Section 9(1)(ii)(b) of the
Arbitration and Conciliation Act, 1996 and Order XXXVIII Rule 5 &
Section 151 of Code of Civil Procedure, 1908, praying to pass an order
directing the respondent to furnish security to the tune of
Rs.2,05,53,473.39 (Rupees Two Crores Five Lakhs Fifty Three Thousand
Four Hundred and Seventy Three and Thirty Nine Paise only) within any
time frame to be fixed by this Court, failing which to pass an order of
attachment of the Bank Account of the Respondent.
For Applicant : Mr.B.Arvind Srevatsa
For Respondent : Mr.P.J.Rishikesh
*****
ORDER
This application has been filed under Section 9 of the
Arbitration and Conciliation Act, 1996 (for brevity 'the Act') for a
direction to the respondent to furnish security to the tune of
Rs.2,05,53,473.39 within the time frame fixed by this Court, failing
which to pass an order of attachment of the bank account of the
respondent.
2. The case of the applicant is that on 20.04.2023, the
respondent had sent an e-mail to the applicant expressing their interest
and inviting offers for supply of Crane for Windmill Erection Works on a
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Arbitration Application No.762 of 2025
rental basis. The application had sent their offer to the request made by
the respondent. After a series of discussions, it was mutually agreed
between the parties that the applicant will provide the respondent with the
Crane as per the specification for a contract period of 2 years and the
monthly rental was also agreed upon to the tune of Rs.57,50,000/-
including ancillary charges. Pursuant to the same, the parties entered into
a Crane Agreement dated 10.08.2023. This agreement was entered into
for a period of 26 months from the date of issuance of the purchase order
or the date of the commissioning of the Crane at the site, whichever is
later. The said agreement provides for various terms and conditions.
3. The specific case of the applicant is that the applicant had
complied with their part of the obligations under the agreement and had
already mobilised and made available the Crane with the specification
agreed upon. Only on 28.11.2023, the respondent issued the purchase
order for the rental of the Crane for a period of six months from
October'2023 to March'2024. Even subsequently, purchase orders were
issued and this was going on till November 2024.
4. The grievance of the applicant is that the respondent failed to
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Arbitration Application No.762 of 2025
make payments as per the payment terms under the agreement. Hence,
the applicant sent an e-mail dated 02.07.2024 to the respondent
requesting for release of payments. The respondent gave a reply dated
31.07.2024 promising to release the outstanding payments by the end of
August'2024. Yet another e-mail dated 06.08.2024 was received by the
applicant from the respondent stating that the payment of Rs.67,85,000/-
will be paid before 24.08.2024. The applicant believing the undertaking
given by the respondent was awaiting for the payment, however, payment
was not forthcoming and the respondent did not honour the commitments.
5. The applicant is claiming total outstanding dues to the tune
of Rs.3,31,88,285.82 as of December'2024. After adjusting various
payments made by the respondent, the applicant is claiming for the
balance sum of Rs.2,05,53,473.39. The applicant has come up with the
case to the effect that there is no dispute with regard to these payments to
be made by the respondent. However, no substantial assets are available
with the respondent. Hence, even if the arbitral proceedings are initiated
and an award is passed in favour of the applicant, the applicant may not
be able to enforce the award since the respondent does not possess with
sufficient/substantial assets. It is under these circumstances, the present
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Arbitration Application No.762 of 2025
application came to be filed before this Court for a direction to the
respondent to furnish security to the tune of Rs.2,05,53,473.39 and
failing to do so to attach the bank account of the respondent.
6. Considering the nature of dispute between the parties, an
attempt was made to resolve the dispute amicably. However, the
mediation talks failed. Hence, the respondent filed a counter on
23.09.2025 and this Court directed the matter to be posted for hearing on
merits today.
7. This Court carefully considered the submissions made on
either side and the materials available on record.
8. Apart from the merits of the case, it is brought to the notice
of this Court that during the pendency of this application, the applicant
has already issued the trigger notice dated 17.06.2025 under Section 21 of
the Act by invoking the arbitration clause 21 and also suggested the name
of the Arbitrator. Thereafter, a corrigendum notice dated 19.06.2025 was
issued to the respondent. On receipt of the same, a reply dated 09.07.2025
has been given by the respondent.
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Arbitration Application No.762 of 2025
9. The short issue that arises for consideration in the present
application is as to whether the averments made in the affidavit filed in
support of the application will be sufficient to direct the respondent to
furnish security and on failure to do the same, to order attachment of the
bank account.
10. The affidavit filed in support of the application goes on the
premise that the respondent does not possess substantial assets to satisfy
the claim made by the applicant to the tune of Rs.2,05,53,473.39. Apart
from that, learned counsel for applicant submitted that the communication
between the parties shows that the respondent has admitted the liability
and therefore, the probability of the applicant succeeding in the
proceedings before the Arbitrator, justifies issuance of a direction to the
respondent to furnish security in this case.
11. In reply to the above submission, learned counsel for
respondent submitted that even before the termination of the agreement
through termination notice dated 24.12.2024, the respondent made
substantial payments on 30.10.2024 - Rs.1 crore, 07.12.2024 - Rs.40
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Arbitration Application No.762 of 2025
lakhs and 12.12.2024 - Rs.60 lakhs. Learned counsel further submitted
that the respondent will be entitled to make a counter claim against the
applicant. Learned counsel further submitted that the principles under
Order XXXVIII Rule 5 of Code of Civil Procedure, 1908, will equally
apply even while considering an application under Section 9 of the Act
and the affidavit filed in support of the application does not fulfill the
requirement. To substantiate this submission, learned counsel relied upon
the judgment of the Apex Court in Sanghi Industries Limited v. Ravin
Cables Ltd. and another [(2022) SCC OnLine SC 1329]. Learned
counsel also relied upon the judgment of this Court in Renox
Commercials Limited v. Inventa Technologies [(2000) SCC OnLine
Mad 94] and the judgment of the Delhi High Court in Dr.Vivek Jain v.
Prepladder Private Limited [2023 SCC OnLine Del 6370].
12. Learned counsel for the applicant submitted that during the
pendency of this application, proceedings have been initiated before the
NCLT under the Insolvency and Bankruptcy Code and hence, it is clear
that the respondent is facing financial distress and it also justifies the
claim for a direction to the respondent to furnish security for the claim
amount.
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Arbitration Application No.762 of 2025
13. While dealing with an application under Section 9 of the
Act where the applicant is seeking for furnishing security and on failure
to do so for attachment of bank account, the principles governing Order
XXXVIII Rule 5 of Code of Civil Procedure, 1908, will have to be
satisfied. The Court must be satisfied that the respondent is trying to sell
their properties to defeat the award that may be passed in favour of the
applicant or the applicant must be able to point out any other conduct on
the part of the respondent which may tantamount to an attempt on the part
of the respondent to defeat the award that may be passed in the arbitral
proceedings. The Court cannot mechanically order for furnishing
security, particularly, in a case of money claim. The Apex Court in the
judgment in Sanghi Industries Limited's [supra] case made it very clear
that the principles under Order XXXVIII Rule 5 of Code of Civil
Procedure, 1908, will equally apply while dealing with an application
under Section 9 of the Act. The relevant portion is extracted hereunder:
''4. Having heard learned counsel appearing on behalf
of the respective parties and in the facts and circumstances of the
case, more particularly, when the bank guarantees were already
invoked and the amounts under the respective bank guarantees
were already paid by the bank much prior to the Commercial
Court passed the order under Section 9 of the Arbitration Act,
1996 and looking to the tenor of the order passed by the
Commercial Court, it appears that the Commercial Court had
passed the order under Section 9(ii)(e) of the Arbitration Act,
1996 to secure the amount in dispute, we are of the opinion that
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Arbitration Application No.762 of 2025
unless and until the pre-conditions under Order XXXVIII Rule 5
of the CPC are satisfied and unless there are specific allegations
with cogent material and unless prima-facie the Court is satisfied
that the appellant is likely to defeat the decree/award that may be
passed by the arbitrator by disposing of the properties and/or in
any other manner, the Commercial Court could not have passed
such an order in exercise of powers under Section 9 of the
Arbitration Act, 1996. At this stage, it is required to be noted that
even otherwise there are very serious disputes on the amount
claimed by the rival parties, which are to be adjudicated upon in
the proceedings before the arbitral tribunal.
5. The order(s) which may be passed by the
Commercial Court in an application under Section 9 of the
Arbitration Act, 1996 is basically and mainly by way of interim
measure. It may be true that in a given case if all the conditions of
Order XXXVIII Rule 5 of the CPC are satisfied and the
Commercial Court is satisfied on the conduct of
opposite/opponent party that the opponent party is trying to sell
its properties to defeat the award that may be passed and/or any
other conduct on the part of the opposite/opponent party which
may tantamount to any attempt on the part of the
opponent/opposite party to defeat the award that may be passed
in the arbitral proceedings, the Commercial Court may pass an
appropriate order including the restrain order and/or any other
appropriate order to secure the interest of the parties. However,
unless and until the conditions mentioned in Order XXXVIII
Rule 5 of the CPC are satisfied such an order could not have been
passed by the Commercial Court which has been passed by the
Commercial Court in the present case, which has been affirmed
by the High Court."
14. In the case in hand, there are no specific allegations made in
the affidavit filed in support of the application satisfying the requirements
under Order XXXVIII Rule 5 of Code of Civil Procedure, 1908. Hence,
this Court exercising its jurisdiction under Section 9 of the Act cannot
pass an order directing the respondent to furnish security.
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Arbitration Application No.762 of 2025
15. Considering the nature of dispute between the parties and
also considering the fact that the trigger notice has also been issued by the
applicant on 17.06.2025, this Court enquired both sides as to whether
they will consent for appointment of an Arbitrator by this Court. Learned
counsel appearing on either side submitted that they will consent for
referring the dispute to an Arbitrator appointed by this Court.
16. As per the arbitration clause 21.3, it contemplates a three
member Arbitral Tribunal whereby each party has to appoint one
Arbitrator and two Arbitrators so appointed will appoint the third
Arbitrator. Considering the value of the claim made by the applicant, this
Court was of the view that if a three member Arbitral Tribunal is
appointed, it will only increase the cost of the proceedings for both sides.
Therefore, this Court suggested that a sole Arbitrator can be appointed to
resolve the dispute and both sides readily consented for the same. If the
parties require any interim protection pending the arbitral proceedings, it
will be left open to them to move an application under Section 17 of the
Act before the sole Arbitrator and the same will be dealt with on its own
merits and in accordance with law.
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Arbitration Application No.762 of 2025
17. In the light of the above discussion, this Court appoints
Mr.Sharath Chandran, Advocate, No.6, Gopala Menon Street, Vepery,
Chennai 600 007 [Mobile No.98844 45442] as the sole Arbitrator and the
sole Arbitrator is requested to adjudicate the arbitral disputes that had
arisen between the parties and render arbitral award by holding sittings in
the 'Madras High Court Arbitration Centre under the aegis of this Court'
(MHCAC) as per Madras High Court Arbitration Proceedings Rules 2017
and fee of sole Arbitrator shall be in accordance with the Madras High
Court Arbitration Centre (MHCAC) (Administrative Cost and Arbitrator's
Fees) Rules 2017.
Accordingly, this application is disposed of.
07.10.2025
NCC:Yes
Index:Yes
Speaking Order
gm
N.ANAND VENKATESH, J.
gm
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Arbitration Application No.762 of 2025
Arbitration Application No.762 of 2025
07.10.2025
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