M/S. Techtrans Construction India Pvt. Ltd. vs M/S. Technic Construction Co.

On the last date of hearing, noting that the appellant (respondent No.1 in COP No.100 of 2020), is aggrieved by an order dated 17.03.2021, passed

by the Special Court for Trial and Disposal of Commercial Disputes at Hyderabad, whereby a petition filed by the respondent No.1 under Section 9 of

the Arbitration and Conciliation Act (‘the Act’, for short) for restraining the appellant from invoking and encashing the bank guarantee of a sum

of Rs.16,72,50,000/-, was allowed in favour of the respondent No.1 and the appellant was restrained from invoking the said bank guarantee, this court

had enquired from learned counsel for the appellant as to whether the Arbitral Tribunal had been constituted so far.

Surprisingly, though the dispute between the parties had arisen in the year 2014, no effort was made by them, till the aforesaid date, to constitute an

Arbitral Tribunal. Instead, they were busy in battling it out before a legal forum in Iran.

On the last date of hearing, Mr. S. Ravi, learned Senior Advocate appearing for the respondent No.1 had informed this court that though his client

had given a written intimation to the appellant on 01.06.2021 suggesting the name of an Arbitrator, the other side had not taken any steps to nominate

an Arbitrator. Mr. Vedula Srinivas learned Senior Advocate appearing for the appellant had assured this court that the appellant shall convey the

name of the nominated Arbitrator to the otherside within one week.

Today, we are informed by learned counsel for the parties that both sides have nominated the Arbitrators and they have inturn, appointed an

Umpire. The Arbitral Tribunal has entered upon reference and issued a Memo dated 12.07.2021, calling upon the parties to appear before it. Neither

side is in a position to assist the court by giving the exact date on which the parties have been directed to appear before the Arbitral Tribunal.

In view of the aforesaid developments, Mr. S. Ravi, learned Senior Advocate appearing for the respondent No.1 states that though the impugned

order has been passed in favour of the respondent No.1 and the appellant has been restrained from invoking and encashing the subject bank

guarantee, his client is willing to move an application before the Arbitral Tribunal for the very same relief on the condition that the respondent No.1

may be extended adequate protection till a decision is taken on said application proposed to be moved under Section 17 of the Act. He assures this

court that the respondent No.1 shall move the said application within ten days from today.

Mr. Vedula Srinivas, learned Senior Advocate appearing for the appellant submits on instructions that he is agreeable to the said suggestion, but

states that it should be left to the Arbitral Tribunal to take decision on the application proposed to be moved by the respondent No.1 under Section 17

of the Act, the matter should be argued and decided afresh uninfluenced by the impugned order.

The present appeal is disposed of accordingly along with the pending applications, if any. The respondent No.1 is given ten days time to move an

application under Section 17 of the Act before the Arbitral Tribunal, with a copy to learned counsel for the appellant who shall file a reply thereto

within ten days therefrom. When the parties appear before the Arbitral Tribunal on the next date of hearing, the order passed in the present appeal

shall be placed before it for perusal with a request to hear and decide the above application, proposed to be filed by the respondent No.1, as

expeditiously as possible, preferably within a period of four weeks from the date of concluding arguments on the said application, uninfluenced by the

observations made in impugned order dated 17.03.2021 passed in COP No.100 of 2020. Neither side shall be accommodated for any adjournment. Till

the said application is decided, the appellant is restrained from invoking/encashing the subject bank guarantee.