13 October 2021| Godrej Properties Ltd. v. Goldbricks Infrastructure Pvt. Ltd. | Commercial Arbitration Petition (L) No. 23500 of 2021| GS Kulkarni J | High Court of Bombay | 2021 SCC OnLine Bom 3448

The case concerns a real estate development project. The respondent’s entitlement in the revenue was already the subject matter of an application before the tribunal. However, the respondent made another application praying several injunctions (against the sale of inventory, disclosure etc.). The tribunal granted the injunction without conducting a hearing but fixing a date for a hearing.

Setting the order aside, while giving liberty to move the tribunal for a hearing, the Bombay High Court ruled that:

1. Treating parties with equality and giving parties a full opportunity to present the case are fundamental requirements [citing Sections 18 ACA, 19 & 24 ACA].
2. The crucial provision, however, is of Section 24. Sub-Section (2) of Section 24, among other things, mandates that the parties ‘shall be’ given sufficient advance notice of ‘any hearing.’
3. Section 18, 19 and 24 would be required to be read in conjunction, as there is a common thread passing through these provisions concerning the conduct of the arbitral proceedings, i.e., fair treatment at all stages and adequate opportunity incumbent upon the arbitral tribunal to give sufficient notice of any hearing to the parties.
4. The Indian legislature has not accepted the 2006 Amendment in the UNCITRAL Model Law on International Commercial Arbitration, allowing the tribunal to grant ex parte reliefs.
5. Even assuming that there was jurisdiction to pass an ex parte ad-interim order (when in there is none), such order was undoubtedly not warranted considering the nature of the Section 17 application as filed.
6. The requirement of Rule 3 of Order XXXIX CPC, which is notice before granting an injunction, is recognized by sub-section (2) of Section 24 ACA.
7. However, the proviso, which deals with the power conferred on the court to pass ex parte orders, cannot be applied to arbitral proceedings because of sub-section (2) of Section 24, read with Section 18 ACA.
8. So, even if the arbitral tribunal has the same power for making orders as that of the court, for the purposes of and in relation to any proceedings before it, it cannot grant reliefs without advance notice of any hearing, equal treatment, and giving a full opportunity to present its case.

Read the judgment here.