Dear Prakhar,

First, it is not an Arbitration ‘court’. It is a Tribunal.

Second, pl understand the funda behind arbitration. The idea is for it to be an ‘alternative’ dispute resolution mechanism. So, if every matter pending in an arbitration / every award from the tribunal is permitted to be challengalable in the courts, it would defeat the very purpose of arbitration. Therefore, court intervention is heavily regulated in arbitration matters. That is the general understanding of Arbitration law. There are, however, a few exceptions such as public policy grounds, etc.

Third, what is the ground for the challenge in the High Court? The arbitration & conciliation act lays down select grounds on which an award may be challenged. However, this is not an award. This is a matter ‘pending’ before the tribunal. Again, what ground do you want to challenge the arbitration on? Find this out, and then see if this would be permitted as per the Act and you have your answer.

I m really stuck in this .. plz help me out.. i havnt studied arbitration yet n these is makin me totally confused..

Plz ans if proper legal actions have been taken or not-

Mis Mohanwires Ltd. awarded a contract for a captive power plant to Mis Bright Energy Ltd.

Bright Energy Ltd. in turn awarded a part of that work to Mis Shanti Vigyan Ltd. and in this

connection issued four work / purchase orders :

(i) Work Order No. 1648 dated 16.08.1998/16.09.1998 for a sum ofRs. 78,00,000/-

(ii) Work Order No. 1649 dated 16.08.1998/16.09.1998 for a sum ofRs. 36,00,000/-

(iii) Work Order No. 1650 dated 16.08.1998/16.09.1998 for a sum ofRs. 18,00,000/-

(iv) Work Order No. 1651 dated 16.08.1998/16.09.1998 for a sum ofRs. 90,00,000/-

As required by the terms and conditions of the said work / purchase orders, Mis Shanti

Vigyan Ltd. submitted four Bank guarantees from the State Bank of Baroda dated

20.08.1998, bearing numbers 372/98, 373/98, 374/98, 375/98 in sum of Rs. 78,00,000/-,

36,00,00/-, 18,00,000/- and 90,00,000/- respectively. They were unconditional irrevocable

bank guarantees in which the Bank agreed to pay to Bright Energy the amount demanded or

claimed by them. The amounts guaranteed there under were payable with or without any

reason in writing from Mis Bright Energy without protest or demur or proof of satisfaction

and without reference to the Mis Shanti Vigyan Ltd., upon being called by the Bright Energy,

irrespective of any dispute between the Bright Energy and Shanti Vigyan with regard to or

touching any of the contractual terms between them. They were, however subjected to the

aggregate limits stipulated in each of the bank guarantees.

On 20.05.1998, the Bright Energy and Shanti Vigyan entered into a “Wrap - Around

Agreement”, under which it was agreed that the Shanti Vigyan would perform its contractual

obligations on a turnkey basis viz as a composite one. This principle was also made

applicable to the bank guarantees. Thus Clause (4) of this agreement in terms say: “In case

of any material breach of any contracts, Bright Energy shall have the right to embark upon

the retentions and encashment of Bank Guarantees of all the contracts”

On 23.04.2000, Bright Energy invoked the four Bank guarantees. On 26.04.2000, Shanti

Vigyan invoked the arbitration clause, as provided in the work / purchase orders. On

27.04.2000, Shanti Vigyan moved a petition under Section 9 of the Arbitration and

Conciliation Act, 1996 before the District Court of Baroda, seeking a declaration that Bright

Energy was not entitled to invoke the four Bank Guarantees. Shanti Vigyan Ltd. also sought

an interim injunction against the Bright Energy restraining them from encashing or receiving

any amount under the bank guarantees, pending disposal of the arbitration proceedings.

On 12.06.2001, the learned Principle District Judge, Baroda dismissed the Shanti Vigyan’s

petition by holding that this was not a case where “irretrievable injustice” would be done by

enforcement of the Bank Guarantees, nor was it a case where a strong prima facie of fraud

had been made out. Despite this finding, the learned District Judge took the view that

although the Bright Energy was not entitled to an order of injunction, their right would have

to be safeguarded till the matter was disposed of in the arbitration proceedings. Accordingly,

the learned judge directed the Bright Energy to maintain status quo for a period of one month

(from the date of the order), within which the arbitral proceedings were to be disposed of.

The parties were directed to seek their remedies before the arbitrator.

In the month of September, an application was made under Section 17 of the Arbitration Act

before the Arbitral Tribunal. Shanti Vigyan preferred an appeal before the Higher Court of

Maharashtra, challenging the order and judgement of the District Judge. On 10.10.2001, even

while the arbitral proceedings were pending, the High Court made an interim order. Further,

by the impugned judgement dated 24.12.2001, the High Court allowed the appeal preferred

by the Shanti Vigyan and granted the injunction as prayed for, and set aside the order of the

District Judge.

Bright energy, the appellant filed an appeal against the order of high court in 2002

@prakhar - i guess u r interning sumwhere and they gave this problem to u to solve. I guess you have used the real names, this may lead you and your firm in problem. Try contacting the moderator and delete this thread and replace the problem with fictitious names. All the best.

these r all fake names. i take full responsibility of this.. its a moot proposition ..

The court’s intervention here is highly irregular. That is why this is a moot problem. You need something to argue for which is against the settled principles and the statutory provisions.

isse badiya hai hath main katora le le..

tu vakalat nhi jalalat kar rha hai…

apni clge ki puri moot prob. yaha chep di..

u jackass

btw i hav cracked the prob its really simple.

case is interesting looking complex

what r the issues u framed?