High Court Emphasizes Jurisdictional Limits Under Section 9 of Arbitration and Conciliation Act, 1996
In a significant ruling, the Kerala High Court, presided over by Justice S. Manu, has set aside an interim order passed by the Vacation Court, which had permitted the release of 50% of the final bill amount to one of the parties involved in a contractual dispute. The case, M.J. Thomas v. V.P. Abdul Azeez, revolved around a partnership agreement linked to a construction contract awarded by the Kerala Water Authority.
The dispute arose when M.J. Thomas, the appellant, sought to prevent the disbursement of funds to V.P. Abdul Azeez, the respondent, arguing that the funds should be held in a joint account as per their partnership agreement. The Vacation Court had previously allowed partial disbursement, a decision now overturned by the High Court.
Justice S. Manu highlighted that the Vacation Court exceeded its jurisdiction under Section 9 of the Arbitration and Conciliation Act, 1996, by stepping into the merits of the case, which is the domain of the appointed arbitrator. The High Court emphasized that interim measures under Section 9 are intended solely for protection and should not determine substantive rights.
The High Court’s decision underscores the importance of adhering to jurisdictional boundaries in arbitration cases, ensuring that interim relief does not preempt the arbitrator's role in resolving the dispute's merits. The case has been remanded to the District Court for expedited resolution, with instructions to consider any pending applications for vacating interim orders promptly.
Bottom line:-
Arbitration and Conciliation Act, 1996 - Section 9 - Interim relief granted by the vacation court must not exceed its jurisdiction or delve into the merits of the dispute, which are reserved for arbitration.
Statutory provision(s): Arbitration and Conciliation Act, 1996, Section 9
M.J. Thomas v. V.P. Abdul Azeez, (Kerala) : Law Finder Doc id # 2907209
