ORAL JUDGMENT (PER ANOOP V. MOHTA, J.):-
Heard the learned counsel appearing for the Appellant, as well as, the learned Senior Counsel appearing for the Respondent No.1. finally, by consent of the parties, at the stage of admission itself.
2 The present Appeal under Section 37 of the Arbitration and Conciliation Act, 1996 (for short, "the Arbitration Act") is filed by Appellant-Original Respondent No.1 in Arbitration Petition No. 167 of 2012 and the Petitioner in Arbitration Petition No. 595 of 2012 against the common Judgment and Order dated 3 September 2015, passed by the learned Single Judge, whereby the Petition under Section 9 of the Arbitration Act filed by Respondent No.1 in both the Petitions, have been allowed by observing as under:-
"89. I, therefore, pass the following order :-
(a) The respondent no.1 is directed to furnish security by depositing in this court a sum of
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Rs.Three Ninety Crores only within four weeks from today.
(b) Prothonotary and Senior Master is directed to invest the said amount of Rs. Three Ninety Crores only if deposited by the respondent no.1 in the fixed deposit of a nationalized bank, initially for a period of one year and thereafter for like period of one year each after obtaining further orders from this court. The petitioner would be at liberty to apply for enhancement of security amount.
(c) There shall be interim relief in terms of prayer clause (cb).
(d) The respondent no.2 is restrained by an order and injunction from paying over, parting with, reimbursing, adjusting or in any way transferring any amount due and payable to the respondent no.1 and shall deposit the said amount in this court within six weeks from today.
(e) If the respondent no.1 deposits the sum of Rs. Three Ninety Crores only as directed aforesaid in this court within the time prescribed, the interim measures granted in paragraphs (c) and (d) aforesaid shall stand vacated.
(f) Arbitration Petition Nos. 167 of 2012 and 595 of 2012 are disposed of in the aforesaid terms. No order as to costs.
Mr. Andhyarujina, learned counsel for the respondent no.2 seeks stay of the operation of the order recorded in paragraph 89(c) which is opposed by the learned counsel for the petitioner. Application for stay is rejected."
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3 The Appellant entered into three separate Media Right License Agreements (for short, "MRLA") with Respondent No.1 for broadcasting international matches for years 2010 to 2014. The Appellant and Respondent No.1 thereafter, entered into two Addendum to the MRLA on the terms and conditions stipulated therein. Under the MRLA, the Appellant provided Bank Guarantees (BGs) of Rs.2000 Crores in favour of Respondent No.1. On 12 December 2011, Respondent No.1 issued a termination notice under clause 10.3 of the MRLA. On 13 December 2011, Respondent No.1 invoked the BGs to the tune of Rs.1600 Crores.
4 On 15 December 2011, the Appellant filed Arbitration Petition (L) No. 1425 of 2011, under Section 9 of the Arbitration Act seeking injunction restraining Respondent No.1 and the bankers from encashing the BGs. This Court recorded the statement of the bankers to the effect that they did not intend to make payment to Respondent No.1 under the BGs. On 19 December 2011, Respondent No.1 filed Arbitration Petition (L) No. 1439 of 2011 before this Court under Section 9 of the Arbitration Act, seeking injunction restraining the
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bankers from returning the margin money to the Appellant. This Court recorded the statement of the bankers that they did not intend to return margin money to the Appellant.
5 On 29 December 2011, the Appellant addressed a letter to Respondent No.1 seeking refund of Rs.191,28,12,500/- towards advance right fees paid by the Appellant to Respondent No.1. On 5 January 2012, Respondent No.1 issued a notice invoking Arbitration as per clause 28.3 of MRLA claiming outstanding right fees from the Appellant. On 6 January 2012, Respondent No.1 filed Arbitration Petition No. 167 of 2012 against the Appellant and Respondent No.2 before this Court under Section 9 of the Arbitration Act. On 19 January 2012, this Court granted ad-interim relief(s) in favour of Respondent No.1 against the Appellant and Respondent No. 2. On 27 February 2012, the Appellant challenged order dated 19 January 2012 granting ad-interim relief(s) in favour of Respondent No.1 by preferring an Arbitration Appeal Nos. 191 and 193 of 2012 before the Division Bench of this Court. The same came to be dismissed. The Division Bench of this Court permitted the Appellant to furnish the security instead of depositing the money. On 4 April 2012, the
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Appellant has challenged order dated 27 February 2012, passed by the Division Bench by preferring a Special Leave Petition (SLP) before the Supreme Court of India, the same was dismissed.
6 On 20 December 2012, Respondent No.1 filed a Summary Suit against the Bankers in this Court and sought the conditional leave to defend and direction to deposit sum of Rs.400 crores. On 15 April 2013, Respondent No.1 challenged order dated 20 December 2012 by preferring a SLP before the Supreme Court. The Apex Court also dismissed the same. In the order, it was directed that the amount of Rs.400 crores be transferred to the account of Respondent No.1 subject to an undertaking that in case the suit fails, Respondent No.1 shall return the deposited amount with interest.
7 On 3 September 2015 and 4 September 2015, the learned Single Judge disposed of Arbitration Petition No. 167 of 2012, directing the Appellant inter alia to furnish security of Rs.390 crores before this Court within a period of 4 weeks from the date of the order. The order was modified on 4 September 2015. The interim orders are passed against Respondent No.2 upon the failure of
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Respondent No.1 to furnish security of Rs.390 crores. Hence the present Arbitration Appeal.
8 Impugned order is dated 3 September 2015. The present Appeal is filed on 17 February 2016, along with Notice of Motion for condonation of 73 days delay(104 days delay, as per the office). The Appeal is pending, without any stay against the impugned order till this date. Admittedly, there are no compliances of the impugned order, by the Appellants, even of ad-interim order. There is non- compliance of order dated 27 February 2012 of the Division Bench of this Court also.
9 Admittedly, Respondent No.2-Neo Sports Broadcast Private Limited, in the Arbitration Petition, has not challenged the impugned order till this date, apart from the non-compliance so recorded, within the prescribed period. The filing of Contempt Petition by the Respondents, nowhere improves the conduct of the Appellant, so far as the aspect of non-compliance of the orders passed by the learned Single Judge.
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10 The Appeal is arising out of the order passed by the learned Single Judge in a Section 9 Petition. The Appellate Court, needs to take into consideration all the aspects of equitable reliefs and the doctrine of injunction, which include the elements of a prima facie case, balance of convenience, equity, irretrievable injury and the conduct of the parties. The power of Appellate Court to interfere in such protective or injunctive order is quite restricted, unless a case of illegality, perversity, greater hardship and injustice is made out.
11 Both the learned counsel read and referred the reasons and the earlier orders so passed by this Court against the Appellant. Apart from, non-compliances of the orders so referred above, we have noted the reasonings given by the learned Single Judge while dealing with the contention so raised, even in the Appeal, referring to the stated counter-claim for Rs.2000 crore damages against the Respondents. The counter-claim of the Appellant, even if any, at this stage, just cannot be considered to be accepted as final, unless it is adjudicated in accordance with law, in due course by the due Tribunal/Court.
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12 The learned Single Judge has observed in paragraph Nos. 74, 76, 77 82 and 88 of the impugned order as under:-
"74. The question that arises for consideration of this court is whether amount of Rs.400 crores in the hands of the petitioner could be construed as a security which can be enforced by the petitioner in the event of the petitioner succeeding in the arbitral proceedings and such amount would be available for attachment and for recovery of the awarded sum. Similarly issue has arisen between the parties in the Arbitration Petition
(L) No. 1449 of 2015 in case of Board of Control for Cricket in India vs. Nimbus Communications Ltd. This Court by an order dated 12th August, 2015 has considered this issue and has taken a prima facie view that in view of the letters addressed by the respondent no.1 to those three banks not to permit encashment of those bank guarantees, the banks did not allow the petitioner to encash those three banks guaranrtees, through the same were unconditional bank guarantees."
"76. This Court has also taken a prima facie view that the three banks were granted leave to defend those suits on deposit of Rs.400 crores in the summary suits under Order 37 Rule 6(b) of the Code of Civil Procedure and thus it could not be said that the said amount of Rs.400 crores lying in the hands of the petitioner would be a security available in the hands of the petitioner in the event of the petitioner succeeding in the arbitral proceedings. This court has also considered that fact that the banks have not made any statement in that proceedings that the bank would not have any claim in the said amount deposited in this court and allowed to be withdrawn by the petitioner. This Court held that the petitioner is entitled to secure its claim in view of the defaults committed by the respondent by not complying with
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the order passed by this court in arbitration petition, order passed by the Division Bench and also by the Supreme Court."
"77. By the said order, the petitioner passed an order of attachment of the amount which the petitioner were liable to pay to the respondent no.1 arising out of the arbitral award in another matter upon the petitioner depositing the said amount in this court. The said order was also made subject to the further orders that may be passed in the present petition filed by the petitioner and other connected proceedings. The prima facie view taken by this court in the said Arbitration Petition (L) No.1449 of 2015 would also apply in the present proceedings between the same party on the same issue while dealing with this petition under section 9 and in taking prima facie view again in the present proceedings."
"82. In my view merely because the respondent no.1 has made counter claim of about 2000 crores against the petitioner, that could not be a ground for non complying with the ad-interim order passed by this court. Be that as it may, the liability of the respondent no.1 having been admitted, counter claim made by the respondent no.1 which is in the nature of damages cannot be equated with the admitted liability of the petitioner. The orders passed by this court thus cannot be refused to be complied with by the respondent no.1 on that ground. The respondent no.1 could not have refused to comply with the ad-interim order passed by this court on the ground that the banks were demanding margin money for issuing further bank guarantees on behalf of the respondent no.1 in favour of the petitioner. The respondent no.1 itself was responsible for the same."
"88. Insofar as submission of the learned senior counsel for the respondent no.1 that when the ad-interim order
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was passed by this court, the petitioner was without any security whatsoever in respect of its claims, however as on the date of hearing of the present application, the petitioner has sufficient security in its hand of Rs.400 crores allowed to be withdrawn pursuant to the liberty granted by the Supreme Court and thus no interim measures should be granted is concerned, in my view there is no merit in this submission of the learned senior counsel for the respondent no.1. This court has already take a prima facie view in Arbitration Petition (L) No.1449 of 2015 and has negatived this contention."
The findings, so given need no interference, as there is nothing perverse, illegal and contrary to the law.
13 Even otherwise, during the pendency of Arbitration proceedings, there was no interim stay/order obtained against the impugned order. When inquired with the Appellant about the non- compliance, the submission is made that the Contempt Petition is pending and they will make their submission and defence in the Contempt Petition by an appropriate reply. Another statement is made that the Appellant is not in position to deposit the amount so directed. These are also important elements to grant the protective reliefs of security/injunction.
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14 The security order, pursuance to the orders passed in other proceedings as stated above referring to Order 37 Rule 6(b) of the Code of Civil Procedure, itself is in no way, sufficient to accept the case of the Appellant to disturb the findings so arrived at by the learned Single Judge, when the Respondent's liability is not specifically denied. The learned Judge has passed the order after the directions of the Supreme Court and maintained not only the reasoned ad-interim order passed but, also by adding the reasons to the contention raised which, in our view, are well within the framework of law and the record.
15 We are inclined to maintain the orders, as all the requisites of grant of protective reliefs and security, as contemplated under Section 9, pending the main Arbitration Petition are made out by the Respondents. No case is made out by the Appellant for any reliefs so prayed. The Arbitral Tribunal to pass appropriate order at the time of passing of the final award.
16 Therefore, taking overall view of the matter and even the
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grounds so raised in this Appeal, we see no case is made out to interfere with the order so passed by the learned Single Judge.
17 Appeal is dismissed. No costs.
(G.S. KULKARNI, J.) (ANOOP V. MOHTA, J.)
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