HIGH COURT OF DELHI- Delhi High Court Reaffirms Specific Performance Of Contract Cannot Be Directed Under Section 9 Of Arbitration & Conciliation Act

A division bench of the Hon’ble High Court of Delhi comprising of Justices Jyoti Singh and Anoop Kumar Mendiratta has held that power given in Section 9 of the Arbitration and Conciliation Act, 1996^[1] can only be exercised for safeguarding the subject matter of the dispute till the decision of the Arbitral Tribunal. The Bench further held that a direction to the effect of extending the contract for an additional period would be akin to granting specific relief of the contract which is out of the purview of Section 9.

The appellant Pink City Expressway Private Limited and the respondent National Highways Authority of India (NHAI) had entered into a Concession Agreement. Under the Agreement, the appellant was to commence certain work on a specified section of NH-8. The appellant also operated a toll plaza for collecting tolls. Later on, the Appellant sought an extension of the Concession Period from the Respondent. However, the request was rejected and an extension only up till a certain date was approved by NHAI. In the meanwhile, the NHAI awarded a fresh tender to third parties for the collection of tolls on the specified section of NH-8 for the period after the expiry of the Concession Period. The same was challenged by the Appellant under Section 9 seeking interim protection of its rights under the Concession Agreement but it was dismissed. The Appellant challenged the order before the Division bench contending that the Concession Period stood automatically extended if the Actual Traffic at NH-8 fell short of the Specific Target Traffic and also submitted the recommendation of the extension of an Independent Engineer.

It was the case of the Respondent that the appellant had withdrawn its writ petition challenging awarding of the fresh tender and had also failed to challenge awarding of the tender under its petition under Section 9.

It was observed by the Division Bench that there was no infirmity in the order of the Single Judge holding that there is no automatic extension of the Concession Period as the Appellant had failed to challenge the interim extension of the Concession Period. Therefore, in absence of such a challenge, the Appellant could not seek an extension of the Concession Period. It was also noted that since the appellant had withdrawn the writ petition filed by it against the fresh tendering process initiated by the respondent, the appellant cannot challenge the award of tender by the respondent in favour of the third parties. Thus, the Bench did not find any merits in the appeal and dismissed it.

[1] 9. Interim measures, etc., by Court.—1 [(1)]A party may, before or during arbitral proceedings or at any time after the making of the arbitral award but before it is enforced in accordance with section 36, apply to a court— (i) for the appointment of a guardian for a minor or person of unsound mind for the purposes of arbitral proceedings; or (ii) for an interim measure of protection in respect of any of the following matters, namely:— (a) the preservation, interim custody or sale of any goods which are the subject-matter of the arbitration agreement; (b) securing the amount in dispute in the arbitration; (c) the detention, preservation or inspection of any property or thing which is the subject matter of the dispute in arbitration, or as to which any question may arise therein and authorising for any of the aforesaid purposes any person to enter upon any land or building in the possession of any party, or authorising any samples to be taken or any observation to be made, or experiment to be tried, which may be necessary or expedient for the purpose of obtaining full information or evidence; (d) interim injunction or the appointment of a receiver; (e) such]