in ,

Commercial Court would have no jurisdiction to quash the order of blacklisting proceeding: Chattisgarh HC

Arbitration

chhattisgarh High court
Share
  •  
  •  
  •  
  •  
  •  
  •  

Invoking the appellate jurisdiction of this Court under Section 37 of the
Arbitration and Conciliation Act, 1996 (for short, ‘the Act of 1996’) read
with Section 13 of the Commercial Courts Act, 2015, this arbitration
appeal has been preferred by the appellants questioning the
impugned order passed by the Commercial Court (District Level) granting application under Section 9 of the Act of 1996, as
unsustainable and contrary to law.

Arbitration Respondent No.1 herein filed an application under Section 9 of the Act
of 1996 seeking interim measures under Section 9(1)(ii)(d) & (e) of the
Act of 1996 stating inter alia that the contract awarded to it was
terminated on 7-2-2021 illegally and he was blacklisted vide order
dated 12-5-2021 and the order of recovery dated 12-5-2021 and the
order of the bank guarantee dated 13-5-2021 were passed
against it. It has been further stated that arbitration pursuant to the order of
termination dated 7-2-2021, the order of blacklisting dated 12-5-2021
and the order of recovery dated 12-5-2021; bank guarantee has also
been sought to be on 13-5-2021, and respondent No.1 has
claimed that the action of the appellants herein is illegal, arbitrary and
unreasonable and not bona fide, and the orders impugned have been
passed without giving opportunity. It is also the case of respondent
No.1 that as per clause 13 of the general terms and conditions of the
contract, dispute should be resolved firstly by an in-house committee
to be constituted by the appellants herein and if could not be resolved
by that committee, then it should be resolved by appointing an
arbitrator under clause 13A of the general terms and conditions of the
contract. Injunction was sought to stay the effect and operation of the
termination order, the order of blacklisting and the order seeking
recovery dated 12-5-2021 restraining the appellants SECL from
the bank guarantee and other interim reliefs were also
claimed in the application under Section 9 of the Act of 1996.

Also Read  Percentage of Permanent Disability certificate cannot be reduced by MACT tribunal for assessment: Rajasthan HC

Reply was filed by the appellants herein opposing the application
under Section 9 of the Act of 1996. It has been admitted that the
contract has been terminated and respondent No.1 has been blacklisted and bank guarantee has been directed to be and
amount is being recovered from respondent No.1 herein.

True it is that respondent No.1 did not pray for quashing the order of
blacklisting which has been passed against it by order dated 12-5-
2021 and it is also beyond the scope of Section 9(1)(i)(d) of the act of 1996 The Commercial Court in its jurisdiction under Section 9 of the
Act of 1996 would have jurisdiction to pass interim injunction or such
other interim measure of protection as may appear to it to be just and
convenient, but certainly, it would not include to quash the order of
blacklisting and the Commercial Court would have no jurisdiction to
quash the order of blacklisting proceeding under Section 9 of the Act
of 1996 in the garb of granting interim injunction as it is absolutely
without jurisdiction and beyond the scope of power under Section 9 of
the Act of 1996.

This appeal has been preferred by the appellants / SECL merely on
the ground that the order setting aside the order of blacklisting of
respondent No.1 Company debarring it to take part in future tenders,
is clearly unsustainable and bad in law in view of Section 9(1)(ii)(d) &
(e) of the Act of 1996.

Accordingly, the part of order passed by the Commercial Court
directing of the order of blacklisting dated 12-5-2021 filed
as Annexure A-37 before the Commercial Court and debarring
respondent No.1 herein from taking part in future tenders, is hereby
set aside, as the same is without jurisdiction and without authority of
law. Rest of the order passed by the Commercial Court qua
paragraphs 39(ii), (iii) & (iv) of the order impugned is hereby
maintained. However, respondent No.1 herein is at liberty to proceed
in accordance with law against the order of blacklisting and debarring
it by order dated 12-5-2021, if so advised

The arbitration appeal is allowed to the extent indicated herein-above.
No order as to cost(s).