Gujarat Public Works Contract Disputes Arbitration Tribunal has jurisdiction to make interim orders under Section 17 of the Arbitration and Conciliation Act: SC
[ by Kavita Krishnan ]In this case, the question before the Supreme Court of India was whether the Gujarat Public Works Contract Disputes Arbitration Tribunal constituted under Section 3 of the Gujarat Public Works Contracts Disputes Arbitration Tribunal Act, 1992 (Gujarat Act) has jurisdiction to make interim orders in terms of Section 17 of the Arbitration and Conciliation Act, 1996...
In this case, the question before the Supreme Court of India was whether the Gujarat Public Works Contract Disputes Arbitration Tribunal constituted under Section 3 of the Gujarat Public Works Contracts Disputes Arbitration Tribunal Act, 1992 (Gujarat Act) has jurisdiction to make interim orders in terms of Section 17 of the Arbitration and Conciliation Act, 1996 (A&C Act).
The Supreme Court comprising of Justices Deepak Gupta and Aniruddha Bose answered in the affirmative.
The issue was in relation to the State of Gujarat withholding the amount payable to the respondent-contractor who was awarded a contract for strengthening a section of National Highway in the State. The State was of the opinion that since the work of the contractor was defective, the State had got the work done from another person at the risk of the contractor.
The Gujarat Public Works Contract Disputes Arbitration Tribunal (the Tribunal) ordered that it can only exercise jurisdiction, powers and authority conferred on it by or under the Gujarat Act of which it is a creation. The Tribunal further held that if the Gujarat Act does not empower the Tribunal to grant injunction, it cannot take recourse to the Code of Civil Procedure, 1908 for grant of interim relief. It also held that an order of interim injunction, as prayed for like in the present case, does not fall within the ambit of ‘interim award’. The Tribunal held that there is no power to grant such injunction.
The Apex Court held that Section 9 of the A&C Act empowers the Court to grant interim measures. However, Section 9(3) clearly provides that once an Arbitral Tribunal is constituted, the Court shall not entertain an application under Section 9(1) unless the Court comes to the conclusion that such circumstances exist which would make the remedy under Section 17 not efficacious.
The Court ruled that insofar as the powers vested in the Arbitral Tribunal in terms of the Section 17 of the A&C Act are concerned, such powers can be exercised by the Tribunal constituted under the Gujarat Act because there is no inconsistency in these two Acts as far as the grant of interim relief is concerned. This power is already vested in the Tribunal under the Gujarat Act and Section 17 of the A&C Act compliments these powers and therefore it cannot be said that the provisions of Section 17 of the A&C Act are inconsistent with the Gujarat Act.
The Court further held that the Stage Legislature intended that all disputes relating to works contract between the State Government and the persons executing the works defined as works contract would be compulsorily referred to the Arbitral Tribunal constituted under Section 3 of the Gujarat Act.
The Supreme Court remitted the case back to the Tribunal and directed the Tribunal to decide the case on merits.