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2020 (9) TMI 1204 - HC - Indian LawsSeeking an interim direction, to Respondent No. 1, to furnish a bank guarantee - discontinuance of payment of running accounts bills submitted by the petitioner, consequent breach, by Respondent No.1, of Clause 3.3 of the sub-contract agreement and discontinuance of the allocation of work to the petitioner - Section 9 of the the Arbitration and Conciliation Act, 1996 - HELD THAT:- While Section 9(1)(ii)(b) of the 1996 Act unquestionably empowers the court to secure the amount in dispute in the arbitration, any such direction has, in principle, to conform to the discipline of Signature Not Verified Digitally Signed. Order XXXVIII Rule 5 of the Code of Civil Procedure, 1908. Further, it is not enough for the petitioner to establish a prima facie case, balance of convenience and irreparable loss; additionally, the petitioner would have to establish, on facts, that, were security not to be directed as prayed, the arbitral proceedings were likely to be frustrated. Section 9 is not intended to operate as an alternative to Section 17. Prima facie, the concern expressed by Mr. Ravi Ranjan is purely in the realm of apprehension and conjecture at present. It Signature Not Verified Digitally Signed hinges on several imponderables, with no supportive material forthcoming from the record - that apart, the mere perceived difficulty in the enforcement of a possible arbitral award, which might ensue in favour of a party, cannot, prima facie, be a ground to direct the furnishing of security, in a proceeding under Section 9 of the 1996 Act. Various notices to be issued - Renotify on 19th November, 2020.
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