Partly allowed¶25

M/S Manish Taxi Service Derhadun v. the Airports Authority of India

Arbitration and Conciliation Act, 1996 – Section 9(1) interim measures

Uttarakhand HC9 Jun 2025AO/168/2025

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Case brief

AI extract

What is this about?

Uttarakhand High Court, Nainital; A.O. No. 168 of 2025; decided 9 June 2025; bench G. Narendar, C.J. and Alok Mahra, J.; M/s Manish Taxi Service Dehradun v. Airports Authority of India; Section 9 Arbitration and Conciliation Act 1996; interim measures; pre-arbitration mediation clause not a precondition; bank guarantee invocation during pendency; fait accompli; Commercial Court rejection unsustainable; appeal allowed in part and remitted for merits.

What did the court decide?

Appeal allowed in part; matter remitted back to the concerned Court (Commercial Court) for consideration on merits; no order as to costs; pending application, if any, disposed of accordingly. ¶25

M/S Manish Taxi Service Derhadun Vs the Airports Authority… — Arbitration | Uttarakhand HC (2025)

What the court decided

AI extract

Outcome

Appeal allowed in part; matter remitted back to the concerned Court (Commercial Court) for consideration on merits; no order as to costs; pending application, if any, disposed of accordingly.

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Issue for consideration

Whether the reason assigned by the Commercial Court for rejecting the Application is sustainable in the light of the provisions of sub-section (1) of Section 9 of the Arbitration and Conciliation Act, 1996. +1 more

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Court's answer

Failure to initiate or ask for mediation is not a ground to reject an Application under Section 9 of the Act; sub-section (1) confines invocation to the specific grounds enumerated in Clauses i, ii (a) to (e), so the Commercial Court's mediation-based reasoning misreads the provision.

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Ratio / Principle

Interpreting Section 9 so as to require prior mediation would permit the answering party to present a fait accompli (here, invocation of the bank guarantees during pendency) and render Section 9 nugatory; it is settled law that a provision cannot be interpreted in a manner which would render it ineffective.

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Key takeaways

The reasoning set out by the Commercial Court for rejecting the Section 9 Application has no legs to stand and warrants interference by this Court.ratio¶24

Detailed headnote1 paragraphs

Arbitration and Conciliation Act, 1996 — Section 9(1) interim measures — Application rejected by Commercial Court because contract mandated mediation prior to instituting arbitral proceedings — Held: sub-section (1) enables invocation only on the specific grounds enumerated in Clauses i, ii (a) to (e); failure to invoke the mediation clause cannot defeat a Section 9 Application; permitting otherwise would enable the answering party to present a fait accompli (bank guarantees invoked during pendency) and render Section 9 nugatory, and a provision cannot be interpreted in a manner which renders it ineffective — Appeal allowed in part; matter remitted to the concerned Court for consideration on merits; no order as to costs. (Per G. Narendar, C.J.; Alok Mahra, J.)

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2025:UHC:4693-DB

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HIGH COURT OF UTTARAKHAND AT NAINITAL HON’BLE THE CHIEF JUSTICE MR. G. NARENDAR AND HON’BLE SRI JUSTICE ALOK MAHRA 9 TH J UNE, 2025

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A.O. NO. 168 OF 2025

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M/s Manish Taxi Service Dehradun and another.

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.....Appellants.

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Versus

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The Airports Authority of India …..Respondent

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Counsel for the appellants : Mr. Jitendra Chaudhary, learned counsel. Counsel for the respondent : Mr. Sagar Kothari, learned counsel.

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JUDGMENT : ( per Mr. G. Narendar, C.J.)

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Heard learned counsel for the appellant and

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learned counsel for the respondent.

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The question, which arises for consideration in this Appeal, is:-

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“Whether the reason assigned by the Commercial Court for rejecting the Application is sustainable in the light of the provisions of sub-section (1) of Section 9 of the Arbitration and Conciliation Act, 1996?”

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The short point that is canvassed is that the order

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on the Application preferred by the appellant invoking the provisions of Section 9 of the Arbitration and Conciliation Act, 1996 (for short “the Act”) is per se contrary to the provisions of sub-section (1) of Section 9 of the Act itself.

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2025:UHC:4693-DB

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Learned counsel for the respondent would invite the attention of the Court to the findings of the Commercial Court in Paragraph Nos. 16, 17, 18, 19 and 20 recorded in the impugned judgment.

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On perusal of the same, it is seen that the Commercial Court has been carried away by the condition of contract, which mandates that the parties shall resort to mediation prior to instituting arbitral proceedings. In that view, the Trial Court has deemed it fit to reject the Application.

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A bare reading of the provisions of sub-section (1) of Section 9 of the Act clearly belies the understanding drawn by the Commercial Court. Sub-section (1) enables a party to invoke the provisions of Section 9 on specific ground enumerated in Clauses i, ii (a) to (e) only. That being the case, the failure to invoke the mediation clause would not in any manner defeat the purpose and objective of the provisions of Section 9 of the Act. The purpose and objective of Section 9 is discernible in Clauses i, ii (a) to (e). The failure to initiate or ask for mediation cannot, in our considered opinion, be a ground to reject an Application invoking the provisions of Section 9 of the Act. There may be innumerable circumstances, where delay in considering

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2025:UHC:4693-DB

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the interim relief could render the very proceeding itself infructuous. In fact, counsel for the respondent would set out a similar defense. He would submit that the Application was directed against the respondents to restrain them from invoking the bank guarantee and encashing the same; that during the pendency, the bank guarantees have been invoked and in that view, the Appeal and the proceedings are rendered infructuous. This is exactly the scenario and circumstance, which cannot be permitted. If such a procedure is adopted, it would only facilitate the answering party to present a fait accompli to Court and would, thus, render the provisions of Section 9 nugatory. It is no more res integra and is settled law that the Court cannot interpret a provision in a manner, which would render any provision ineffective.

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In that view of the matter, we are of the considered opinion the reasoning set out for rejecting the Application has no legs to stand and warrants interference at the hands of this Court.

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Accordingly, the Appeal is allowed in part and the matter is remitted back to the concerned Court for consideration on merits.

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There shall be no order as to costs.

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2025:UHC:4693-DB

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Pending application, if any, also stands disposed

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of accordingly.

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________________

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G. NARENDAR, C.J.

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_____________ ALOK MAHRA, J.

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Dt: 9^th June, 2025

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Rathour

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PRAVINDRA SINGH RATHOUR Digitally signed by PRAVINDRA SINGH RATHOUR DN: c=IN, o=HIGH COURT OF UTTARAKHAND, ou=HIGH COURT OF UTTARAKHAND, 2.5.4.20=23699ccc2fd40ad81b6fd13323779d9e3aeb1097d17dbb53d481cabd25946eed, postalCode=263001, st=UTTARAKHAND, serialNumber=1F65499E931DF71CDAF92A40CC6179B8E010331BA695239171F906FD5C45C4E8, cn=PRAVINDRA SINGH RATHOUR Date: 2025.06.11 10:06:55 +05'30'

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M/S Manish Taxi Service Derhadun v. the Airports Authority of India

Case brief

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M/S Manish Taxi Service Derhadun v. the Airports Authority of India

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