India Entry & Business Startup Consultings

State of Gujarat through Chief Secretary v. Amber Builders- 199(IBC) 159/2020- Supreme Court

It was held by the Honourable Supreme Court that:

  • Section 13 of the IBC, 2016 specifically bars the jurisdiction of the Civil Courts. This means that powers vested in a Civil Court under the Arbitration & Conciliation Act, 1996, such as the powers to grant interim relief in terms of Section 9 of the Arbitration & Conciliation Act, 1996 and the powers for setting aside an award under Section 34 of the Arbitration & Conciliation Act, 1996 cannot be exercised by the Civil Courts insofar as the awards made under the Gujarat Act are concerned.
  • That the appropriate remedy available for the contractor was to approach the arbitral tribunal which is constituted under the Gujarat Act since that would have jurisdiction to decide whether the notice issued by the Government was a legal notice and whether the Government was, in fact, entitled to recover any amount from the contractor. To decide whether the contractor has made out a prima facie case for grant of interim relief, would also be within the jurisdiction/powers of the Arbitral Tribunal. It would not be proper to make any comments on the merits of the case because once the Tribunal has the jurisdiction to entertain and adjudicate upon the dispute, it would not be proper to make any comments on the merits.
  • On a conjoint reading and after doing a careful analysis of both the Acts together, we are of the view that insofar as the powers vested in the Arbitral Tribunal in terms of Section 17 of the Arbitration & Conciliation Act, 1996 are concerned, such powers can be exercised by the Arbitral Tribunal constituted under the Gujarat Act because both these two Acts are not inconsistent as far as the grant of interim relief is concerned. This power is already vested in the Arbitral Tribunal under the Gujarat Act and Section 17 of the Arbitration & Conciliation Act, 1996 already compliments these powers and therefore, it cannot be said that the provisions of Section 17 of the Arbitration & Conciliation Act, 1996 are inconsistent with the Gujarat Act.
  • In view of the above discussion, bot the appeals filed by the State of Gujarat are allowed, and the judgements of the High Court of Gujarat are set-aside. However, Contractor(s) have been given liberty to approach the Gujarat Public Works Contract Disputes Arbitration Tribunal and if the Tribunal is approached within 2 months from today, it shall not dismiss the claim on the issue of limitation. The Tribunal shall decide on the same merits. If there are any pending application(s), they shall stand disposed-off.

 

Leave a Reply

Your email address will not be published. Required fields are marked *

 

SUBSCRIBE OUR NEWS LETTER