ARCELOR MITTAL NIPPON STEEL INDIA LTD. versus ESSAR BULK TERMINAL LTD.

Citation: [2021] 5 S.C.R. 1022 · Decided: 14-09-2021 · Supreme Court of India · Bench: INDIRA BANERJEE, J.K. MAHESHWARI · Disposal: Case Partly allowed

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Judgment (excerpt)

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SUPREME COURT REPORTS
[2021] 5 S.C.R.
   [2021] 5 S.C.R. 1022
1022
ARCELOR MITTAL NIPPON STEEL INDIA LTD.
v.
ESSAR BULK TERMINAL LTD.
(Civil Appeal No. 5700 of 2021)
SEPTEMBER 14, 2021
[INDIRA BANERJEE AND J. K. MAHESHWARI, JJ.]
Arbitration and Conciliation Act, 1996 – ss. 9, 11 and 17 –
Appellant and respondent entered into an agreement for cargo
handling – Disputes arose between the parties – Appellant invoked
arbitration clause and gave notice to respondent – Appellant filed
application u/s.11 of the Act, for appointment of an Arbitral Tribunal
before the High Court – Respondent replied to arbitration notice
stating that the dispute was not arbitrable and there was an amount
due and payable by the appellant – Both appellant and respondent
filed separate applications u/s.9 before the Commercial Court – In
pursuance to the earlier application u/s.11, the High Court appointed
three member Arbitral Tribunal – Thereafter, the appellant filed
application for reference of both the applications filed u/s.9 to the
Tribunal – The Commercial Court dismissed the application for
reference – The order of the Commercial Court was challenged
before the High Court – The High Court held that the Commercial
Court has the power to consider whether the remedy u/s.17 of the
Arbitration Act is inefficacious and pass necessary orders u/s.9 of
the said Act – Before the Supreme Court, the appellant contended
that s.9(3) of the Act restricts the power to entertain an application
under sub-section (1) of s.9 of the Act once an Arbitral Tribunal
has been constituted – Held: s. 9(1) enables the parties to an
arbitration agreement to approach the appropriate Court for interim
measures before the commencement of arbitral proceedings, during
arbitral proceedings or at any time after the making of an arbitral
award but before it is enforced and in accordance with s.36 of the
Arbitration Act – The bar of s. 9(3) operates where the application
u/s. 9(1) had not been entertained till the constitution of the Arbitral
Tribunal – If an application u/s. 9 had been entertained before the
constitution of the Tribunal, the Court always has the discretion to
direct the parties to approach the Arbitral Tribunal, if necessary by
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passing a limited order of interim protection, particularly when there
has been a long time gap between hearings and the application has
for all practical purposes, to be heard afresh, or the hearing has
just commenced and is likely to consume a lot of time – The High
Court has rightly directed the Commercial Court to proceed to
complete the adjudication – It is clarified that it shall not be
necessary for the Commercial Court to consider the efficacy of relief
u/s. 17, since the application u/s. 9 has already been entertained
and considered by the Commercial Court.
Arbitration and Conciliation Act, 1996 – s. 9(3) – Expression
‘entertain’ – Held: the expression “entertain” means to consider by
application of mind to the issues raised – The Court entertains a
case when it takes a matter up for consideration.
Partly allowing the appeal, the Court
HELD: 1. The bar of Section 9(3) operates after an Arbitral
Tribunal is constituted. There can therefore be no question of
usurpation of jurisdiction of the Arbitral Tribunal under Section
17 before the Arbitral Tribunal is constituted. The Court is
obliged to exercise power under Section 9 of the Arbitration Act,
if the Arbitral Tribunal is yet to be constituted. Whether the Court
grants interim relief or not is a different issue, for that would
depend on the facts of the case - whether the Applicant has made
out a good prima facie case, whether the balance of convenience
is in favour of relief being granting to the applicant, whether the
applicant would suffer irreparable injury by refusal of interim relief
etc. [Para 88][1049-G-H; 1050-A-B]
2. It is now well settled that the expression “entertain”
means to consider by application of mind to the issues raised.
The Court entertains a case when it takes a matter up for
consideration. The process of consideration could continue till
the pronouncement of judgment. Once an Arbitral Tribunal is
constituted the Court cannot take up an application under Section
9 for consideration, unless the remedy under Section 17 is
inefficacious. However, once an application is entertained in the
sense it is taken up for consideration, and the Court has applied
its mind to the Court can certainly proceed to adjudicate the

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