Kirby Building Systems and Structures India Private Limited vs M/s. Vellapally Brothers

Regard being had to the controversy involved in the aforesaid cases, they were heard together and are being decided by a common order.

The facts of COMCA.No.38 OF 2021 are reproduced as under:-

The present appeal is arising out of the order dated 19.07.2021 passed by the learned Judge, Special Court for Trial and Disposal of Commercial

Disputes, Hyderabad, on an application preferred under Section 9 of the Arbitration and Conciliation Act, 1996 (for short ‘the Act of 1996’) i.e.,

COP.No.26 of 2021.

The undisputed facts of the case reveal that the appellant before this Court and the respondents have entered into an agreement and a bank guarantee

was also furnished for a sum of Rs.1.00 crore. As there was a dispute between the parties, an application was preferred under Section 9 of the Act of

1996 by the appellant for issuance of an order restraining the respondents therein from encashment of the bank guarantee.

Learned counsel for the appellant is fair enough in stating before this Court that the bank guarantee has already been encashed and therefore, the only

relief for which he is praying today is that the order passed by the Court below on an application under Section 9 of the Act of 1996 should not come

in the way of the parties, in case arbitration clause is invoked.

Learned counsel for the respondents has argued before this Court that there is no arbitration clause and therefore, the application under Section 9 of

the Act of 1996 itself was not maintainable.

In the considered opinion of this Court, the questions as to whether the arbitration clause is in existence or not and whether the dispute is arbitrable or

not have to be looked into by the appropriate Forum, in case an application is preferred under Section 11 of the Act of 1996.

Therefore, the present appeals stand disposed of with a liberty to take recourse to the other legal remedies available under the law and the order

passed by the Court below will not come in the way of the parties. In case an Arbitrator is appointed under Section 11 of the Act of 1996, the

Arbitrator shall pass an appropriate award, based upon the evidence adduced by the parties, not being influenced by the order passed by the Court

below.

Pending miscellaneous applications, if any, shall stand closed. There shall be no order as to costs.