Dalveer Bhandari, J.

1. The petitioners have entered into a number of agreements with the respondents, for the construction of a Five Star Hotel at Saket, New Delhi. It is alleged by the petitioners that during the pendency of the agreement, the respondents have entered into an agreement with ITC, in total contravention of the agreements with the petitioners. It is further alleged that the petitioners agreements with the respondents are subsisting and without requisite notice of termination, the respondents have entered into an agreement with ITC, which is in contravention with the respondents agreement with the petitioners. Consequently, respondent No. 1 be restrained from terminating the Technical Services Agreement, Hotel Operating Agreement, Advisory Services Agreement, License and Royalty Agreement, Pre-opening Technical Assistance Agreement & International Sales and Marketing Agreement dated 8th March, 1997.

2. It is also prayed that the respondents be restrained from entering into any agreement for provision of technical services for the Hotel with any third party, other than petitioner No. 2 or its affiliates.

3. It is further prayed in the petition that the respondents be restrained from disclosing or parting with the confidential information in violation of confidentiality clause contained in the agreement. It is also prayed that the respondents be directed to restore immediately the Marriott banner and sign board at the construction site of the Hotel and direct the respondents to effect payments to petitioner No. 2 as required under the terms of TSA dated 8.3.1997.

4. The petitioners have moved this Court under Section 9 of the Arbitration and Conciliation Act, 1996 for interim measure/relief. The main submission of the petitioners is that there is no valid termination of the petitioners agreement with the respondents. For the sake of convenience, the petitioners hereinafter shall be referred as Marriott and the respondents as Ansals.

5. According to Article 8.02(C), Technical Services Agreement hereinafter referred to as (TSA) required minimum 30 days written notice of termination for breach/default. It is also mentioned that if breach/default is rectified or cured within 30 days then the notice at termination shall be of no force and effect. The respondents have terminated the agreement vide letter dated 13.1.1999 and purport to terminate Marriott TSA with immediate effect with no cure period. According to the petitioners, the termination is illegal. The petitioners replied to the termination letter dated 2.2.1999 and 26.2.1999 but received no response from the respondents.

6. Article 16.02 of Marriott Operating Agreement provides for termination by minimum 90 days notice and if breach/default is rectified or cured within the notice period, then the notice would be of no force and effect. Other Marriott Agreements also contain similar notice provisions. Termination by letter dated 4.3.1999 with immediate effect with no notice period is illegal. Other Marriott Agreements were terminated by letter dated 5.3.1999 with immediate effect with no notice period.

7. It is alleged by the petitioners that the respondents have entered into an agreement with ITC Hotels Limited on 16.1.1999 in utter violation with the petitioners agreement. It is also alleged that ITCHL Hotel Operating Agreement was entered into on 16.1.1999 even before the issue of purported termination letter dated 5.3.1999 for Marriott Operating Agreement and other Marriott Agreements.

8. The ITCHL entered into shareholders agreement on 16.1.1999, during the period when Marriott Hotel Operating Agreement was subsisting, consequently the agreement is clearly in violation of the provisions of Hotel Sale with Marriott Hotel Operating Agreement.

9. It may be pertinent to mention that the petitioners have alleged that on 13.1.1999 the respondents terminated Technical Services Agreement dated 8.3.1997 by alleging that petitioner No. 2 Marriott International Design and Construction Services had failed to perform its obligation thereunder. By letters dated 4-5 March, 1999, the respondents terminated the remaining other agreements with the petitioners by alleging that (i) agreements had not come into operation, and (ii) no consideration had passed between the parties. The agreements by terms do not call for performance by either party until at or near the official opening date of the Hotel, a date that is at least one year away. In addition, the terms of the agreements clearly indicate that a full and fair consideration has passed between the parties. Therefore, such purported termination by the parties is null and void and of no legal force or effect.

10. The petitioners, as such, on the basis of the information received one or more respondents or their affiliates have executed or are about to execute an agreement or agreements with ITC Hotels Limited or its affiliates under which (i) ITC Hotels Limited or its affiliates to operate Hotel or (ii) ITC Hotels Limited will purchase upto 25% of the shares of respondent No. 1 and will provide Hotel operation advice, consultation and technical services to respondent No. 1, to enable respondent No. 1 to operate the Hotel by itself. The provisions of such services by ITC Hotels would constitute a de facto assignment of the Hotel Operating Agreement. The petitioners submitted that Operation of the Hotel under any of the above circumstances is a clear violation of the terms of the agreements between the respondents and the petitioners pursuant to which the petitioners, inter alia, have been appointed as the respondents exclusive agent to operate the Hotel. It is also alleged that the respondents have wrongfully terminated the agruments with the petitioners without sufficient cause to do so, in order to avail themselves of the opportunity to appoint ITC Hotels Limited as the new operator of the Hotel or to enable respondent No. 1 to take over operation of the Hotel itself. The petitioners have been and continue to be harmed by such action on the part of the respondents and ITC Hotels Limited. The relevant portions of the Technical Services Agreement are reproduced.

4.1: General

On behalf of owner, MIDCS shall, subject to the terms and conditions contained herein, provide the technical services set forth in this Article. In general, MIDCS shall advise owner and owners Consultants on the Standards, aesthetics, and systems necessary for the Hotel to be operated by opereator. Such advice shall be provided to Owner and Owners Consultants in the areas of architectural design, interior design, Trade equipment specifications and layouts, life/safety requirements, audio/video, telecommunication, security, and Hotel Systems. In per-forming these technical services, MIDCS shall:

8.02. Termillation

This agreement may be terminated (unless otherwise restricted by applicable, law) on thirty (30) days written notice:

C. By owner upon the occurrence of the following:

(1) If MIDCS shall fail to perform or observe any material obligation orrequirement of this agreement and such failure shall continue for thirty (30) days after written notice thereof from owner specifying the nature and extent of such default; provided, however, that if upon receipt of such notice, MIDCS shall (if such default is not susceptible of being cured within thirty (30) days) promptly commence to cure such default and shall thereafter diligently pursue such efforts to completion, then such notice shall be of no force and effect.

8.03. Survival of Terms

The obligations of owner for compensation to MIDCS as contained in Article V and for indemnification as contained in Sections 3.04 and 9.07 shall survive any termination or expiration of this agreement.

11. The clauses regarding jurisdiction as applicable are set out as under:

A. This agreement is executed pursuant to, and shall be construed under and governed exclusively by, the laws of India.

B. Notwithstanding anything to the contrary herein, either party may seek injunctive relief including, for purposes of illustration, restraining orders and preliminary injunctions in any Court of competent jurisdiction; either party shall be entitled to make an application to the Court requesting that the proceedings referred to arbitration in accordance with the terms of Section 9.12 without prejudice, however, to interim injunctions or enjoining orders granted by such Court.

12. The another important agreement which was executed between the petitioners and the respondents was the Hotel Operating Agreement. Relevant clauses of the said agreement are reproduced hereinunder:

Recital B. Operator has expertise and experience in operating first-class, full-service international Hotels and has agreed, at the request of owner, to perform purchasing, marketing, sales and other technical and professional services in order to operate the Hotel as a first-class full-service international Marriott Hotel for the account of owner on the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, the parties hereto agree as follows:

1.01. Definition.

Hotel Sale shall mean.(ii) any sale, assignment, transfer or other conveyance , In a single transaction or a series of related transactions for value or otherwise.which results in a change of effective control of owner.

2.01. Appointment

In consideration of the mutual covenants contained in this agreement, owner hereby engages operator to render the technical and professional services described in this agreement and appoints operator to supervise, direct and control the operation of the Hotel for the term provided in Article IV. Owner hereby grants to operator the full scope of authority necessary to carry out and perform the terms of this agreement. Operator accepts such engagement and appointment and agrees to perform such services and operate the Hotel during the term in accordance with the terms and conditions set forth herein. The performance of all activities by operator hereunder shall be for the account of owner. Operator shall have only such obligations to owner as are expressly set forth in this agreement.

3.01. Development, Standards, Financing and Construction.

A. Owner at its sole cost and expense shall plan, design, construct, furnish and equip the Hotel on the site in accordance with (i) first-class full-service international standards, (ii) such plans, designs, specifications, fire and life safety standards, and time schedules as incorporate the standards of Marriott as set forth in International Hotel Design Guide (a copy of which has been delivered to owner and which is incorporated herein by reference), and (ii) such other plans, designs, specifications, fire and life safety standards, and time schedules as are agreed between owner and operator. Any change in any of such standards, plans, designs, specifications, fire and life safety standards, or time schedules shall require the joint agreement of owner and operator and shall be accomplished only pursuant to a written change order or other appropriate written evidence executed by owner and operator except as otherwise specifically provided in the Technical Services Agreement or other relevant agreement.

16.03. Other Remedies

B. Nothing contained in this agreement shall bar either partys right to obtain injunctive relief under applicable equity rules (including the applicable rules for obtaining restraining orders and preliminary injunctions) against threatened conduct which may cause it to incur loss or damages.

19.01. Hotel Sale

Owner shall not enter into any Hotel Sale Agreement with any person to which, in operators reasonable opinion, any of the standards of Section 18.01 is applicable and owner shall not enter into or complete any Hotel Sale Agreement if there is an outstanding event of default or default in either case on owners part..

13. In this agreement also the parties have agreed that this agreement is executed pursuant to and shall be construed and governed exclusively by the laws of India. This is indicated in Clause 22.05(B) which reads as under:

B.Notwithstanding anything to the contrary herein, either party may seek injunctive relief (including, for purposes of illustration, restraining orders and preliminary injunctions) in any Court of competent jurisdiction; either party shall be entitled to make an application to the Court requesting that the proceedings be referred to arbitration in accordance with the terms of Section 22.06 without prejudice, however, to interim injunctions or enjoining orders granted by such Court.

14. Clause 22.06 relates to Arbitration where the parties have agreed that the venue of arbitration shall be at Kuala Lumpur, Malaysia.

15. Similarly, in other agreements, it was made clear between the parties that the agreement is executed pursuant to and shall be construed under and governed exclusively by the laws of India.

16. It is alleged by petitioner No. 1 that petitioner No. 2 has performed and has continued to perform and observe, all of its material obligations and requirements under the terms of the TSA. Similarly, regarding other agreements also the case of the petitioners is that they have been discharging their obligations under the agreements. It is further alleged in the petition, that the respondents have continued to deny the petitioners their rights and have refused to comply with their obligations. In these circumstances, the petitioners are left with no choice but to approach this Court for interim relief.

17. Reply to the petition has been filed by the respondents. The respondents have taken a preliminary objection that there is clear embargo of Section 2(2) of the Act which reads as this part shall apply where the place of arbitration is in India. According to the respondents, Section 9 of the Act is in Part 1 of the Act and in this case, admittedly, the venue of arbitration is at Kuala Lumpur, Malaysia and, consequently, this Court has no jurisdiction to entertain this petition.

18. According to the respondents this petition suffers from misjoinder of causes of action.

19. It is incorporated in the reply that the respondents entered into a contract with the petitioners in order to get expertise and information from the professional hoteliers. It was discovered that the petitioners were not familiar with the requirements of the hoteliers in India. They could not give the details necessary for the operation of Hotels in Indian conditions. The petitioners are also ignorant of the laws of India. It is also mentioned in the reply that it is not only the quantitative inputs on the part of the petitioners that has proved to be unsatisfactory and inadequate. It is also mentioned in the reply that petitioner No. 2 has till date not supplied any preliminary evaluation report of the project as required under the terms of the TSA.

20. The respondents have also pointed out that some of the suggestions given by the petitioners were not practical and conducive. It is also mentioned in the reply that the petitioners have behaved in a manner which indeed frustrated the entire purpose of entering into any contract with them. It is also indicated that the petitioners are ignorant of the Indian legal requirements and the suggestions given by them are totally meaningless for the Indian conditions and requirements particularly their advice and suggestion pertaining to fire safety norms, Hotel rooms bed-covers, number of kitchens, the quality of services, etc., etc.

21. The respondents have also submitted an additional affidavit of Mr. Virender S. Datta, Managing Director of respondent No. 1 in which it is mentioned that the respondents have entered into an agreement with ITC on 16.1.1999. The said agreement was signed between the shareholders of Ansals and ITC, wherein 69,32,800 shares have been allotted to ITC for a consideration. ITC paid a sum of Rs. 6,23,95,200 by way of account payee cheque on 25.2.1999. A copy of the allotment letter showing allotment, of shares, dated 25.2.1999 has been placed on record. It is mentioned that the said Mr. Virender S. Datta was inducted as the Managing Director of respondent No. 1 in a meeting held on 20.4.1999 by the Board of Directors. Respondent No. 1 also recorded transfer of 34,80,150 equity shares in favour of ITC Hotels Limited in a meeting held on 20.4.1999.

22. In the rejoinder, the petitioners have denied allegations, averments or contentions incorporated in the reply. It is asserted in the rejoinder that it is misleading to say that the agreements giving rise to the present proceedings were terminated as far back as January, 1999. It is also mentioned that only the Technical Services Agreement was purportedly terminated by the respondents on 13.1.1999, without providing the petitioners with the 30-days notice period as required by the TSA. Petitioner No. 1 sent an interim response to the respondents on 2.2.1999, denying the allegations that petitioner No. 2 breached the TSA. This response also asserted that the TSA contained in full force and effect that the attempted termination had not been undertaken in good faith and was not enforceable against petitioner No. 2. This was followed by a detailed response on 26.2.1999 to the various points raised in the respondents letter of 13.1.1999. Accordingly, the allegation that the petition was hopelessly barred due to delay and laches is untenable. It is also mentioned that the petitioners first became aware that the respondents were negotiating with ITC Hotels Limited through the newspaper reports dated 27.2.1999 and 18.3.1999.

23. In the rejoinder the petitioners denied the allegations that they were ignorant, of requirements of running a Hotel in India or the petitioners have failed to advise and assist the respondent adequately or displayed a lack of understanding. It is mentioned that the petitioners franchise three Hotels in India at Mumbai, Hyderabad and Goa and is about to open the first Marriott managed Hotel in Goa. In addition, three more Marriott managed Hotels are under construction in India. Petitioner No. 2 provided respondent No. 1 with the services specified in their agreement so that the respondents could design and build a first class, full service-international Hotel in accordance with Marriott International Standards that could be operated under the Marriott name.

24. Mr. Ashok Desai, the learned Senior Advocate, who appeared on behalf of the petitioners submitted that the conduct of the respondents has been manifestly dishonest. He submitted that the notice of termination is neither in accordance with the laws nor with the agreement entered into between the parties.

25. Mr. Desai also submitted that Section 9 read with Section 2(2) of the Arbitration and Conciliation Act, 1996 does not restrict the Courts powers and jurisdiction to grant interim orders preserving the legal rights of the petitioners. He submitted that the respondents are located within the jurisdiction of this Court. Mr. Desai also submitted that all Marriott Agreements are governed by the Indian laws. Agreements contain an express provision that either of the parties to the agreements may seek injunctive relief in any Court of competent jurisdiction. He particularly relied on Articles 9 and 10(B) of the Technical Services Agreement. Mr. Desai also submitted , that the Malaysian Arbitration Act, 1952 provides that neither the provisions of the Malaysian law shall apply to any arbitration conducted under the auspices of the Kuala Lumpur Regional Centre for Arbitration (KLCRA) permits the parties to an arbitration agreement to approach the judicial authority for interim measures. This is in concurrence with UNCITRAL Rules. He submitted that in any event the Court has inherent powers and jurisdiction to grant injunction. The ouster of the Courts jurisdiction has to be express and cannot be inferred. He particularly relied on Sections 141 and 151 of Code of Civil Procedure, 1908. I deem it appropriate to deal with the arguments of the learned Counsel for the petitioner at some length.

26. Mr. Desai submitted that it is clear from the language of the Technical Services Agreement that for termination of the agreement a 30 days clear notice is imperative. It is alleged that in this case, the 30 days notice as envisaged was not given. Similarly, in the Hotel Operation Agreement, a 90 days notice is imperative. The agreement was terminated on 4.3.1999.

27. In this view of the matter according to the petitioners it has to be concluded that the respondents failed to give requisite notice of termination of the contract to the petitioners. Mr. Desai also submitted that under the Arbitration and Conciliation Act, 1996, the Court has been invested with the powers to grant them term injunction/relief. He submitted that Section 7(2) of the Arbitration and Conciliation Act, 1996 does not restrict the Court powers and jurisdiction to grant interim orders. It is mentioned in the Act that Part 1 consists of Sections 1 to 43 of the Act shall apply to place of arbitration in India. This does not exclude the arbitration where venue of arbitration is outside India. Mr. Desai further submitted that the intention of the Legislature becomes abundantly clear from the other clauses of this section, i.e., Sections 2(3), 2(4), 2(5). The relevant clauses of the section are reproduced here-in below for the sake of convenience:

2(2) This part shall apply where the place of arbitration is in India.

2(3) This part shall not affect any other law for the time being in force by virtue of which certain disputes may not be submitted to arbitration.

2(4) This part except Sub-section (1) of Section 40, Sections 41 and 43 shall apply to every arbitration under any other enactment for the time being in force, as if the arbitration agreement as if that other enactment were an arbitration agreement, except insofar as the provisions of this part are inconsistent with that other enactment or with any rules made there under.

2(5) Subject to the provisions of Sub-section 940, and save insofar as is otherwise provided by any law for the time being in force or in any agreement in force between India and any other country or countries, this part shall apply to all arbitrations and to all proceedings relating thereto.

28. Section 2(5) clearly mentions that this part shall apply to all the arbitrations and proceedings relating thereto, therefore, on close scrutiny and analysis of Section 2(5), intention behind enacting the legislation becomes abundantly clear. According to Mr. Desai, the application of the section was not intended to be restricted for the arbitration which are held in India. According to Mr. Desai, Section 2(4) is clear that this part except Sub-section (1) of Section 40, Sections 41 and 43 shall apply to every arbitration under any other enactment for the time being in force. Mr. Desai also submitted that the Chief Justice of India and the Chief Justices of the High Courts have been invested with the power to appoint Arbitrator under Section 11, particularly when the venue of the arbitration is outside India. If the interpretation as given by the respondents is accepted, then the Chief Justice of India and Chief Justices of the High Courts shall have no power to appoint an Arbitrator because Section 11 is also within Part I of Act.

29. Mr. Desai submitted that in case para 1 of the Act does not apply to an arbitration with the venue outside India it could lead to an anomalous situation. According to the definition of international arbitration, it is possible that the venue of the arbitration is outside but the properties of one of the parties are located in India, as is the situation in the instant case. The immovable and movable properties of the respondents are in India. The arbitration proceedings are bound to take some time and according to the allegations, are that during the interregnum period, the parties are likely to dispose of/fritter away the assets and by the time, the award is received, the other side may have only a paper award. In such a situation, if the domestic Courts have no powers to grant interim protection then it may not only lead to immense hardship but in some cases the whole purpose of referring the matter for the arbitration may even be defeated.

30. The Arbitration and Conciliation Act, 1996 is based on the United Nations Commissions on International Trade Law (UNCITRAL) adopted in 1985, the model Law on International Commercial Arbitration. The General Assembly of the United Nations has recommended that all countries give due consideration to the said Model Law, in view of the desirability of uniformity of the law of arbitral procedures and the specific needs of International Commercial Arbitration Practice. The UNCITRAL also adopted in 1980 a set of Conciliation Rules. The General Assembly of the United Nations, has recommended the use of these rules in cases where the disputes arise in the context of international commercial transactions and the parties seek amicable settlement of their disputes by recourse to conciliation. In the Statement of Objects and Reasons it is mentioned that an important feature of the said UNCITRAL Model Law and Rules is that they have harmonised concepts on arbitration and conciliation of different legal systems of the world and thus contain provisions which are designed for universal application. The UNCITRAL Model Law and Rules are intended to deal with International Commercial Arbitration and Conciliation, they could, witt1 appropriate modifications, serve as a model for legislation on Domestic Arbiration and Conciliation. The present Act of 1996 is an Act to consolidate and amend the law relating to Domestic Arbitration, International Commercial Arbitration and enforcement of Foreign Arbitral Awards as also to define the law relating to conciliation and for matters connected herewith or incidental thereto.

31. Section 9 of the arbitration is a replica of Section 9 of the UNCITRAL Model Law on International Commercial Arbitration, Article 9 of UNCITRAL Model Law on International Commercial Arbitration reads as under:

It is not incompatible with an arbitration agreement for a party to request, before or during arbitral proceedings, from a Court an interim measure of protection and for a Court to grant the protection.

32. The intention of the Legislature in enacting or incorporating Section 9 is clear and explicit, that the party before arbitral proceedings or at any time after making of the award but before enforcement can apply to the Court for interim relief under Section 9 which reads as under:

9. Interim measures by Court-Aparty 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 a person of unsound mind for the purpose 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 authorise 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 other interim measure of protection as may appear to the Court to be just and convenient, and the Court shall have the same power for making orders as it has for the purpose of, and in relation to, any proceedings before it.

33. Mr. Desai placed reliance on the judgment of this Court, i.e., Dominant Offset Private Limited. v. Adamovske Strojirny A.S.,1997(2) Arbitration Law Reporters 335 where the learned Single Judge of this Court while dealing with somewhat similar facts and circumstances has categorically come to the conclusion that conjoint reading of the different clauses of Section 2 includes an International Commercial Arbitration:

A conjoint reading of all the aforementioned provisions clearly indicate that Sub-section (2) of Section 2 is an inclusive definition and that it does not exclude the applicability of Part I to those arbitrations which are not being held in India. The aforesaid interpretation gets support from the provisions of Sub-section (5) of Section 2 which provides that Part I shall apply to all arbitrations and to all proceedings relating thereto which would also, in my considered opinion, include an International Commercial Arbitration.

34. Mr. Desai submitted that in view of the authoritative pronouncement, which according to him is the correct interpretation of law, Part I also applies to those arbitrations, where the venue of arbitration is outside India.

35. Mr. Desai submitted that in any event, the Court has inherent powers to grant interim relief under the Arbitration Act. He placed reliance on the judgment of the Bombay High Court at Panaji Bench, Goa, i.e.,Prime International Limited v.M.V. Mariner IV & Others.

36. He also placed reliance on the judgment of the Supreme Court, namely, RajniBai (Smt.) @ Mannubaiv. Kamla Devi (Smt.) and Others,(1996) 2 Supreme Court Cases 225 [LQ/SC/1996/93] . Their Lordships of the Supreme Court in this judgment observed as under:

Admittedly, the appellant is in possession of the property. In view of his apprehension that there is a threat to his possessions, his only remedy would be whether he will be entitled to the declaration sought for. When he seeks to protect his possession, if he is otherwise entitled according to law, necessarily the Court has to consider whether protection is to be given to him pending the suit. Merely, because there is no dispute as regards the corporeal right to the property, it does not necessarily follow that he is not entitled to avail of the remedy under Order 39, Rules 1 and 2, CPC. Even otherwise also, it is settled law that under Section 151, CPC, the Court has got inherent power to protect the rights of the parties pending, the suit. Under these circumstances, the view expressed by the High Court that application itself is not maintainable is clearly illegal and erroneous. The application under Order 39, Rules 1 and 2 is maintainable.

37. He also placed reliance on Mohd. Ikram Hussainv.The State of Uttar Pradesh and Others, AIR 1964 Supreme Court 1625. He has particularly drawn my attention to paragraphs 18 and 19 of the said judgment. In this judgment Their Lordships of the Supreme Court observed that:

All procedure is always open to a Court which is not expressly prohibited.

38. We also placed reliance on Manohar Lal Choprav.Rai Bahadur Rao Raja Seth Hiralal, AIR 1962 Supreme Court 527. While interpreting Section 151 of the Code of Civil Procedure, Their Lordships of the Supreme Court laid down:

Section 151 itself says that nothing in the Code shall be deemed to limit or otherwise affect the inherent power of the Court to make orders necessary for the ends of justice. In the face of such a clear statement, it is not possible to hold that the provisions of the Code control the inherent power by limiting it or otherwise affecting it. The inherent power has not been conferred upon the Court, it is a power inherent in the Court by virtue of its duty to do justice between the parties before it. Further, when the Code itself recognizes the existence of the inherent power of the Court, there is no question of implying any powers outside the limits of the Code.

39. He also placed reliance on the judgment of the Supreme Court, Munsi Ram v.Banwari Lal (deceased), AIR 1962 Supreme Court 903. The relevant portion reads as under:

The power to record such an agreement and to make it a part of the decree, whether by including it in the operative portion or in the schedule to the decree, in our opinion, will follow from the application of the Code of Civil Procedure by Section 41 of the Arbitration Act and also Section 141 of the Code.

40. Mr. Desai placed strong reliance on the celebrated case of Channel Tunnel Group Ltd. and Ors. v.Balfour Beatty Construction Ltd. and Others, (1993) 1 All. ER 664. The House of Lords had clearly observed that the Courts have power to grant interim injunction in arbitration matters and the domestic Courts have the jurisdiction even where the venue of the arbitration is outside. The relevant paras are reproduced as under:

(1) The Court had power pursuant to its inherent jurisdiction to grant a stay of an action brought before it in breach of an agreed method of resolving disputes by some other method. Furthermore, a stay of the appellants action ought to be granted because the parties were large commercial enterprises negotiating at arms length in the light of long experience of construction contracts which had clearly decided that the two-stage procedure, despite its potential weaknesses, had a balance of practical advantage over the alternative of bringing proceedings in the national Courts and because, having agreed to take their complaints to experts and if necessary Arbitrators, they should be required to their chosen Tribunal to settle their commercial differences.

Where the Court made an order staying an action pending a foreign arbitration it had no power under Section 12(6) of the 1950 Act to grant an interim injunction since none of the powers conferred on the Court by that Act applied to arbitrations conducted abroad under a law other than English law. Accordingly, the chosen curial law of the arbitration being Belgian law the Court had no power under Section 12(6) to grant an interim injunction requiring the respondents to continue work on the cooling system pending the decision of the panel or the Arbitrators.

(3) The Court had power to grant an interlocutory injunction under Section 37 of the Supreme Court Act, 1981 in support of a cause of action which the parties had agreed should be the subject of a foreign arbitration, notwithstanding that proceedings in England had been stayed under Section 1 of the 1975 Act so that the agreed method of adjudication should take place, since the cause of action remained potentially justiciable before the English Court despite the stay. Accordingly, although the commencement of the action was a breach of the arbitration agreement, so that the respondents were not properly before the Court, the Court had power under Section 37 of the 1981 Act to grant an interlocutory injunction to prevent the respondents stopping work on the cooling system. However, as a matter of discretion the injunction sought by the appellants would not be granted because the injunction sought was the same relief which would be claimed from the panel and the Arbitrators and therefore if the Court were to grant the injunction it would largely pre-empt the decision of the panel and Arbitrators.

41. It is submitted that tile Channel Tunnel (Supra) judgment has been followed in the recent celebrated judgment of the Supreme Court, Sundram Finance Limited of NEPC India Limited.

42. Mr. Desai also submitted that the ouster of jurisdiction has to be strictly construed by the Civil Courts. He placed reliance on Richpal Singh and Others, etc.v. Dalip,AIR 1987 Supreme Court 2205 in support of his contention. In paragraphs 12 and 13 of this judgment, the Court observed as under:

Where there is an express bar of the jurisdiction of the Court, an examination the scheme of the particular Act to find the adequacy or the sufficiency of the remedies provided may be relevant but is not decisive to sustain the jurisdiction of the Civil Court.

Where there is no express exclusion the examination of the remedies and the scheme of the particular Act to find out the intendment becomes necessary and the result of the inquiry may be decisive. In the latter case it is necessary to see if the statute creates a special right or a liability shall be determined by the Tribunals so constituted, and whether remedies normally associated with actions in Civil Courts are prescribed by the said statute or not.

43. He also placed reliance on Smt. Bismillahv. Janeshwar Prasad and Others, (1990) Supreme Court Cases 207 in which the Court observed as under:

It is settled law that the exclusion of the jurisdiction of the Civil Court is not to be readily inferred, but that such exclusion must either be explicitly expressed or clearly implied. The provisions of a law which seek to oust the jurisdiction of Civil Court need to be strictly construed. Section 331 of the Act has been the subject of series of pronouncements of the High Court as to the circumstances and the nature of the suits in which its exclusionary effect operates. Distinction was sought to be drawn between the class of cases where the binding effect of a deed had to be got rid of by an appropriate adjudication on the one hand and the class of cases in which a transaction could be said to be void in law where what the law holds to be void, there is nothing to cancel or set aside on the other. In the former case, it was held, a suit was cognizable by the Civil Court while in the latter, it was not, it being open to the statutory authority to take note of the legal incidents of what was non est.

44. Mr. Desai, the learned Counsel for the petitioners has also placed reliance on Dhulabhai etc. v.State of Madhya Pradesh and Another,AIR 1969 Supreme Court 78. The Court in this judgment observed that:

(1) Where the statute gives a finality to the orders of the special Tribunals the Civil Courts jurisdiction must be held to be excluded if there is adequate remedy to do what the Civil Courts would normally do in a suit. Such provision, however, does not exclude those cases where the provisions of the particular Act have not been complied with or the statutory Tribunal has not acted in conformity with the fundamental principles of judicial procedure.

(2) Where there is an express bar of the jurisdiction of the Court, an examination of the scheme of the particular Act to find the adequacy or the sufficiency of the remedies provided may be relevant but is not decisive to sustain the jurisdiction of the Civil Court.

Where there is no express exclusion the examination of the remedies and the scheme of the particular Act to find out the intendment becomes necessary and the result of the inquiry may be decisive. In the latter case it is necessary to see if the statute creates a special right or a liability and provides for the determination of the right or liability and further lays down that all questions about the said right and liability shall be determined by the Tribunals so constituted, and whether remedies normally associated with actions in Civil Courts are prescribed by the said statute or not.

(3) Challenge to the provision of the particular Act as ultra vires cannot be brought before Tribunals constituted under that Act. Even the High Court cannot go into that question on a revision or reference from the decision of the Tribunals.

(4) When a provision is already declared unconstitutional or the constitutionality of any provision is to be challenged, a suit is open. A writ of certiorari may include a direction for refund if the claim is clearly within the time prescribed by the Limitation Act but it is not a compulsory remedy to replace a suit.

(5) Where the particular Act contains no machinery for refund of tax collected in excess of constitutional limits of illegally collected a suit lies. The questions of the correctness of the assessment apart from its constitutionality are for the decision of the authorities and a civil suit does not lie if the orders of the authorities are declared to be final or there is an express prohibition in the particular Act. In either case the scheme of the particular Act must be examined because it is a relevant inquiry.

(6) An exclusion of the jurisdiction of the Civil Court is not readily to be inferred unless the conditions above set down apply.

45. Reliance has also been placed by Mr. Desai on State of Tamil Naduv. K.L.M. Ramamurthy and Others, (1985) 4 Supreme Court Cases 10 [LQ/SC/1985/164] . The relevant portion of the said judgment reads as under:

Having regard to the principle stated by this Court while enunciating the first proposition in Dhulabhai case it is clear that even where the statute has given finality to the orders of the special Tribunal the Civil Courts jurisdiction can be regarded as having been excluded if there is adequate remedy to do what the Civil Court would normally do in a suit. In other words, even where finality is accorded to the orders passed by the special Tribunal one will have to see whether such special Tribunal has powers to grant reliefs which Civil Court would normally grant in a suit arid if the answer is in the negative it would be difficult to imply or infer exclusion of Civil Courts jurisdiction.

46. Mr. Desai placed reliance on an unreported judgment dated 4.9.1998 of the Madras High Court delivered in O.A. Nos. 653 of 1996 and 654 of 1996 and 104 of 1997 and A. No. 1464 of 1997 in C.S. No. 802 of 1996, Bass Internationalv. Appu Hotels.In this case injunction was granted restraining the defendant from using information provided by Holiday Inn Hotels. Holiday Inn System which includes drawings, Hotel interior fit out information, Hotel operating and management system, computer systems, room reservation technology, etc. for furnishing, completing, furnishing and/or operating the Hotel Mr. Desai submitted that the injunction has been granted by the Madras High Court in the facts which are quite akin and similar to the present case.

47. He also relied on a judgment of this Court in Burlington Home Shopping Pvt. Ltd.v. Rajnish Chibber and Another,61 (1996) Delhi Law Times 6. In this case the Court granted injunction where infringement of confidentiality and copyright was involved.

48. He also submitted Warner Brothers Pictures Inc. v.Nelson, (1936) 3 All. ER 160. In this case also the injunction was granted where infringement of confidentiality clause was involved. He also relied on the English judgment, i.e.,National Broach and Machine Co. v. Churchill Gear Machines Ltd., (1965) 2 AER 961. Reliance has also been placed on American Cynamidv.Ethicon, (1975) 1 All. ER 504. In this case also the infringement of legal rights injunction was issued pending the trial.

49. Mr. Desai also placed reliance on the judgment of the Supreme Court, i.e., Niranjan Shankar Golikari v. Century Spinning and Manufacturing Co. Ltd., AIR 1967 SC 1098 [LQ/SC/1967/10] . In this case Their Lordships of the Supreme Court held that negative covenants that employee would not, during contract period, engage in trade or business or would not get himself employed by any other master for whom he would perform similar or substantially similar duties, is not restraint of trade unless the contract is unconscionable or excessively harsh or one sided. The Court while granting injunction against the appellant, restricted as to time, nature of employment and as to area could not be said to be too wide, or unreasonable or unnecessary for the protection of the interests of the respondent.

50. He placed reliance on another judgment of the Supreme Court, i.e. Gujarat Bottling Co. Limited and Others v. Coca Cola Co. and Others,(1995) 5 Supreme Court Cases 545 [LQ/SC/1995/755] . In this case injunction was granted for enforcing the negative stipulation in the contract. The grant of injunction was justified as it was intended to prevent Pepsi, which came in control of GBC, to gain advantage over Coca Cola.

51. Reliance has also been placed onGrimstonv. Cuningham,(1894) 1 QB 125 in which the Court held that the negative stipulations against acting elsewhere could be enforced by injunction. Mr. Desai submitted that in the instant case the venue of arbitration is in Kuala Lumpur, Malaysia and the Court in Malaysia cannot exercise supervisory functions according to the provisions of the Arbitration Act.

52. Mr. Desai also contended that in the Malaysian Arbitration Act, 1952, there is no provision of interim relief. Therefore, in the instant case, this is the only Court of competent jurisdiction where the plaintiff can pray for interim relief.

53. Mr. Desai placed reliance on a judgment of the High Court of Kuala Lumpur, Malaysia, i.e., Klockner Industries-Analgen Gmbh v. Kien Tat Sdn. Bhd. & Another, 1990(3) MLJ 183 and Silichem Sdn. Bhd. v. Standard-Elektrik Lorenz AG,(1993) 3 MLJ 68. The Court in these cases observed that the policy of the Arbitration Act, 1952 was obvious so as to exclude cases that are before the Regional Centre for Arbitration at Kuala Lumpur.

54. Mr. Desai also placed reliance on Fercometal S.A.R.Lv. Mediterranean. Shipping Co. SA.,1989 AER 788 in which the Court held that where a party wrongfully repudiated his contractual obligations in anticipation of the time for their performance, the other party could either affirm the contract by treating it as still in force or accept the repudiation and treat the contract as discharged.

55. Reliance has been placed on a celebrated book of Law and Practice of International Commercial Arbitration by Alan Redferm and Martin Hunter. In a chapter with the title Court Intervention during the proceedings. The author stated as under:

(a) Generally

Arbitral Tnbunals have no sovereign powers equivalent to those of the State, to enforce their awards; nor do they always have adequate powers to ensure the proper and efficient conduct of arbitral proceedings. For this reason; it has long been recognised that the effectiveness of the arbitral process is dependent upon a certain level of co-operation, sometimes described as a partnership, between arbitration and the Courts. Such a relationship can only be regulated by the national law of the State in which the arbitration is to be conducted, or in which the award is to be enforced.

The most important aspect of this relationship relates directly to the effectiveness of the arbitral proceedings; the role of the Court after an award has been made, in relation to challenge, recognition and enforcement, is reviewed later. However, in this chapter it is the role of the Courts during the course of the arbitral proceedings which is discussed. It is a role which may be divided conveniently into three categories; interim measures of protection; the supportive role; and the supervisory role.

(b) Interim measures of protection:

The laws of many countries give an arbitral Tribunal power to make orders for the preservation or detention of the subject-matter of the dispute, where it is within the possession or control of one of the parties. However, where the property in respect of which protection is sought is not within the possession or control of one of the parties, the arbitral Tribunal is usually powerless. Any effective remedy must be exercised by the Court which has jurisdiction over the relevant property or funds. The laws of most developed jurisdiction over the relevant property of funds. The laws of most developed countries contain provisions to enable their Courts to intervene in such circumstances, in order to enhance the effectiveness of the arbitral process. In the United States, there is some controversy over whether or not pre-arbitration award attachment of assets by a Court is barred on the basis that the New York Convention requires that all matters be referred to the arbitral Tribunal unless the agreement to arbitrate is null and void, inoperative or incapable of being performed. This would not be an impediment in countries whose law specifically empowers the Court to order conservatory relief (such as England); or in countries which have adopted the Model Law, since this expressly provides that it is not inconsistent with the agreement to arbitrate for a Court to order interim measures of protection.

From time-to-time it may be necessary for an arbitral Tribunal to issue mandatory orders and, in particular, to order interim measures of protection. For example, it may be necessary for a party to ask for the suspension of work which is being carried out; or it may be necessary to ask for the preservation, custody or sale of goods which are the subject-matter of the arbitral proceedings. Similarly, it may be necessary to ask for an order for the inspection of any property in dispute. The general rule is that an arbitral Tribunal may only issue mandatory orders directed to the Parties. If the orders are to go beyond this ambit, they must be issued by the competent local or national Court. One classic example is where a claimant wishes to obtain an order freezing or attaching sums held in a Bank account, where the beneficiary is the respondent; such orders may usually only be issued by Courts of competent jurisdiction, vested with the authority of the State.

Concurrent powers of the arbitral Tribunal and of the Courts.

There is a distinction between those powers which the arbitral Tribunal and a Court may exercise concurrently and those which belong exclusively to the Court. An example, drawn from English law, is the power to order inspection of property which is the subject-matter of the reference to arbitration. Arbitral Tribunals sitting in England, have the power to make such orders for inspection. But a party could also make the same application to the Court; indeed it would need to do so if the subject-matter of the proposed inspection had passed out of the hands of either of the parties, since the arbitral Tribunal has no power over third parties.

The position under international or institutional rules of arbitration.

The established international and international rules of arbitration generally contain provisions as to the making of provisional and conservatory measures. The UNCITRAL Arbitration Rules provide:

1. At the request of either party, the arbitral Tribunal may take any interim measures it deems necessary in respect of the subject-matter of the dispute, including measures for the conservation of the goods forming person or the sale or perishable goods.

2. Such interim measures may be established in the form of an interim award. The arbitral Tribunal shall be entitled to require security for the costs of such measures.

3. A request for interim measures addressed by any party to a judicial authority shall not be deemed incompatible with the agreement to arbitrate, or as a waiver of that agreement.

It is suggested, however, that these provisions do not affect what has been stated above. Any interim measures considered necessary in respect of the subject-matter of the dispute, and established in the form of an interim award, could only be directed to the parties to the arbitration. Indeed, the arbitral Tribunal would not have the competence, or jurisdiction, to make an interim award or any other award against persons who were not parties to the arbitration.

The provision that a request for interim measures addressed by one of the parties to a judicial authority shall not be deemed to be incompatible with the agreement to arbitrate, or act as a waiver of that agreement, merely preserves the status of the arbitration. It confirms that, where interim measures of protection are sought, they may have to be sought from the competent judicial authority. A similar position is adopted in the ICC Rules.

56. Reliance has also been placed on the Russell on Arbitration Twenty-First Edition at pages 386 and 387 which deals with Interim injunction in support of arbitral proceedings. The relevant portion reads as under:

7-128. Interim injunctions in support of arbitral proceedings.

The Court has power under Section 44(2)(e) to grant interim injunction in respect of arbitration proceedings whose seat is in England. This provides a party to an arbitration with a speedy and effective means of preserving the status quo pending the outcome of the arbitration.

There are a number of reasons why it may be necessary to seek an injunction from the Court as opposed to the arbitral Tribunal, if indeed it is available at all from that source. An injunction from the Court is backed by the Courts coercive powers of enforcement. The sanctions that can be imposed by an arbitral Tribunal against a party who breaches its injunction are limited, whereas breach of an injunction issued by the Court may be ultimately punishable as a contempt. It is of course possible to make use of the Courts coercive powers by enforcing the award through the Courts, but an interim injunction is often required as a matter of urgency, and the inevitable delay in the enforcement of a peremptory order of the Tribunal means that in those cases it may be necessary to apply direct to the Court for an injunction under Section 44.

Further, an arbitral Tribunal does not have jurisdiction over a third party, even though that third party may hold the money, goods or property in dispute. The Tribunal is, therefore, unlikely to be able to secure compliance by a third party with any order made in the arbitration.

The Court may exercise its power to grant an interim injunction before there has been any request for arbitration or the appointment of Arbitrators, provided that the applicant intends to refer the dispute to arbitration in due course.

The power to grant an interim injunction under Section 44 of the Act extends to the granting of a Mareva injunction in appropriate cases. It may also include granting an interim mandatory injunction, although the Court will be slow to grant an injunction which provides a remedy of essentially the same kind as is ultimately being sought from the arbitral Tribunal.

The power to grant an injunction under Section 44 does not apply to foreign arbitrations, it is limited to arbitral proceedings whose seat is in England, Wales or Northern Ireland. There may nevertheless be power to grant an injunction in an appropriate case under the Courts general power contained in the Supreme Court Act, and this may be so notwithstanding an entitlement to a mandatory stay of the proceedings under Section 9 of the Arbitration Act, 1996.

57. Mr. Desai has also placed reliance on Section 5 Even of judicial intervention page 720, Chapter II of Markandas Law relating to Arbitration and Conciliation, 1998 Edition. It is mentioned that no judicial authority shall intervene except where so provided.

58. Mr. P. Chidambaram, the learned Senior Counsel appearing for the respondents submitted that this petition under Section 9 of the Arbitration and Conciliation Act, 1996 is not maintainable because the place of arbitration is in Kuala Lumpur, Malaysia. He submitted that according to Section 2(1)(2), Part I of the Act applies, where the place of arbitration is in India. Part I of the 1996 Act consists of Section 1 to Section 43. Section 9 falls within Part I, therefore, it is not applicable where the venue of the arbitration is outside India.

59. He placed reliance on the judgment of the learned Single Judge of this Court, i.e.Kitechnology NV & Anr. v. Union Gmbh Rahn Plastmaschinen & Another, 77 (1999) DLT 813 [LQ/DelHC/1999/1109] =1998 (47) DRJ. In this case none of the parties of the agreement were Indian and they were to be governed bythe German Law and the venue of the arbitration was at Frankfurt. Goel, J. ofthis Court who decided this matter observed that where the parties to the agreement are foreigners and the place ofarbitration is not in India and a foreign law is applicable, then provisions ofPart I of this Act are not applicable. The Court further observed in the said case that none of the parties to the agreement are Indians but are foreigners.

60. Mr. Chidambaram placed reliance on EastCoast Shipping Limitedv.M.J. Scrap Private Limited,1997 (1) chn. 444. The Single Bench ofthe Calcutta High Court held that Section 2(2) of the Act lays down that Part I ofthe Act will apply only in cases where the place of arbitration is in India. The provisions of Sub-sections (3), (4) and (5) ofSection 2 will have to be read accordingly.

61. Mr. Chidambaram also placed reliance on Keventer Agro Ltd, Seagram Co. Ltd., CS 502/97 Cal. DB. The Division Bench ofthe Calcutta High Court observed that the Court has no jurisdiction because ofthe embargo ofSection 2(2) ofthe Act.

62. Mr. Chidambaram contended that this petition is hopelessly barred due to delay and laches on the part ofthe petitioner. The Contract was terminated in January, 1999 whereas the petition has been filed in April, 1999 and the petition deserves to be dismissed only on the ground oflaches. He submitted that the steps which have been taken by the respondents are virtually irreversible at this stage.

63. Mr. Chidambaram further submitted that the petition is not maintainable as the respondents have already entered into a contract with other parties before filing the present petition. Therefore, the Court cannot now restrain the respondents from entering into any contracts. He submitted that all commercial contracts are terminable in law and they have been terminated in accordance with law or not, is a matter to be adjudicated upon by the Arbitrator. When the facts ofthe termination are indisputable and the termination has come into effect, the petitioners cannot seek any interim relief as if the termination has not taken place. Mr. Chidambaram also placed reliance on Martin Baker Aircraft Co. Ltd. & Anr.Canadian Flight Equipment Limitedv. Murison, 1995 (2) All. ER 722.

64. He submitted that each ofthe prayer for the interim relief is the prayer which proceeds on the basis that the termination has not taken place, whereas the fact is that the TSA was terminated on 13.1.1999 and other agreements were terminated on 4-5.3.1999.

65. Mr. Chidambaram also submitted that this petition suffers from misjoinder ofcauses ofaction. Each agreement is a distinct and independent contract which respondent No. 1 has entered into with a different person. Each person has, therefore, a different cause ofaction. All these causes cannot be joined in one petition. Mr. Chidambaram contended that Section 14(1) ofthe Specific Relief Act provides that certain contracts cannot be specifically enforced. A contract for non-performance of which compensation is an adequate relief, a contract which is in its nature determinable; or a contract, the performance ofwhich involves the performance ofa continuous duty which the Court cannot supervise, is not specifically enforceable. Besides, Section 41 of the Specific Relief Act provides that an injunction cannot be granted to prevent the breach of the contract, the performance of which would not specifically be enforced.

66. Mr. Chidambaram also submitted that ITC Hotel Limited have become a joint venture partner in the project. It is a third party to these proceedings and is rights have been intervened. Since 25.2.1999, when the new Project Manager took over, the Project has been proceeding apace, it would not be just or equitable to pass interim orders which would dislocate the project or have the effect of reversing all that has happened since 16.1.1999, and in particluar, since 25.2.1999.

67. He also placed reliance on the following judgments to strengthen his submissions (Southern ChemicaI Worksv. Mohamed Hussain Fakruddin Maniar, AIR 1970 Bom. 128 [LQ/BomHC/1969/6] , Indian Oil Corporation Limitedv.Amritsar Gas Service and Others,1991(1) SCC 533, Classic Motors Limited v. Maruti Udyog Limited, 65 (1997) DLT 166 [LQ/DelHC/1996/1089] ).

68. Mr. Chidambaram has also cited a number of cases to demonstrate the kind of cases in which the Court should exercise its inherent powers. He placed reliance on Padam Sen and Another v. The State of Uttar Pradesh, AIR 1961 SC 218 [LQ/SC/1960/220] . In this case the Court observed that the inherent powers of the Courts are in addition to the powers specifically conferred on the Court by the Code. They are complementary to those powers and, therefore, it must be held that the Court is free to exercise them for the purposes mentioned in Section 151 of the Code when the exercise of those powers is not in any way in conflict with what has been expressly provided in the Code or against the intentions of the Legislature. It is also well recogised that the inherent powers are not to be exercised in a manner which will be contrary to or different from the procedure expressly provided in the Code.

69. He also placed reliance on Ram Chand & Sons Sugar Mills Private Limited, Barabanki(U.P.) v.Kanhyalal Bhargava and Others, AIR 1966 SC 1899 [LQ/SC/1966/80] . The Court while following the earlier decision, observed that it is a common ground that the inherent powers of the Court cannot override the express provisions of law. In other words, if the specific provisions of the Code, dealing with a particular topic expressly or by necessary implication exhaust the scope of the powers of the Court. Their Lordships of the Supreme Court in the case of Manohar Lal Choprav. Raja Seth Hiralal, (1962) Supp. 1 SCR 450 at page 461 (AIR 1962 SC 527 [LQ/SC/1961/365] at page 533), considered the question whether a Court had inherent powers under Section 151 of the Code to issue a temporary injunction restraining a party from proceeding with a suit in another State. In that context, Raghubir Dayal, J. after quoting the passage cited above from his earlier judgment, interpreted the said observations thus:

These observations clearly mean that the inherent powers are not in any way controlled by the provisions of the Code as has been specifically stated in Section 151 itself. But those powers are not to be exercised when their exercise may be in conflict with that had been expressly provided in the Code or against the intentions of the Legislature. This restriction, for practical purposes, on the exercise of these powers is not because these powers are controlled by the provisions of the Code but because it should be presumed that the procedure specifically provided by the Legislature for orders in certain circumstances is dictated by the interests of justice.

70. Mr. Chidambaram also placed reliance onArjun Singhv.Mohindra Kumarand Others, AIR 1964 SC 993 [LQ/SC/1963/294] . In the said case the Division Bench of the Allahabad High Court observed as under:

The inherent power of the Court cannot override the express provisions of the law. If there are specific provisions of the Code dealing with a particular topic and they expressly or by necessary implication exhaust the scope of the powers of the Court or the jurisdiction that may be exercised in relation to a matter the inherent power of the Court cannot be invoked in order to cut across the powers conferred by the Code. The prohibition contained in the Code needed not be express but may be implied or be implicit from the very nature of the provisions that it makes for covering the contingencies to which it relates.

71. Reliance has also been placed on Union of India & Others v. N.K. Pvt. Limited and Another,AIR 1972 Delhi 202. The Division Bench of this Court in the said judgment observed that Section 141 of the Code of Civil Procedure could not, therefore, prevail against a contrary provision of the particular Act.

72. Reliance has also been placed on Union of India v. M/s. Ram Nath and Co. and Others,AIR 1974 All 296 [LQ/AllHC/1973/316] . In this case the Court observed as under:

In the instant case the Court was required to pass orders under the Arbitration Act and not under the Code of Civil Procedure and if there was lack of express provision under the Arbitration Act the Court in my opinion, could not substitute a provision and pass the order under its inherent powers under Section 151, Civil Procedure Code as I have pointed out above the order does find support under Section 28 of the Arbitration Act.

73. Mr. Chidambaram cited a number of cases to demonstrate that where a party can be compensated in terms of money then the Court should prefer not to pass an order of specific performance of the contract. Reliance was placed on Indian Oil Corporation Limited v. Amritsar Gas Service and Others,(1991) 1 Supreme Court Cases 533 [LQ/SC/1990/735] . In this case the contract being determinable under Section 14(1)(c)of the Specific Relief Act attracted, the award granting relief of restoration of the distribution for unsustainable and in contravention of Section 14(1)(c) of the Specific Relief Act.

74. Reliance has also been placed on the judgment of the Division Bench of this Court, i.e.Suresh Jindal v.Rizzoli Carriers Della Sera Prodzioni, 43 (1991) DLT 416 [LQ/DelHC/1990/569] , in which it was held that when the plaintiff can adequately be compensated in terms of money injunction need not be granted by the Court. In this case the Court also observed that compensation in terms of money would be adequate relief and the Court should not grant an injunction.

75. The same view has been taken in the case of S.K. Gupta v. Hyderabad Allwyn Limited,AIR 1988 Delhi 324, the Court following the principle that where remedy by way of damages is found to be efficacious the Court should grant injunction only in exceptional cases. In a case of breach of contract, the plaintiff can always be compensated in terms of money, therefore, the Court should not grant an injunction.

76. Reliance has been placed on a judgment of the Single Bench of Rajasthan High Court reported as Ramchandra Tanwarv. M/s. Ram Rakhmal Amichand and Another, AIR 1971 Rajasthan 292. In this judgment the Court observed under Section 41(e)of the Specific Relief Act provides that the injunction cannot be granted to prevent the breach of contract, the performance of which cannot be specifically enforced.

77. Reliance has also been placed on Diwan Chand Sabbarwal v.Union of India & Another,AIR (38) 1951 Punjab 426. In this case, the Court observed that in a building contract if a contractor is lawfully dismissed, he has the remedy of getting compensation by way of damages and in such cases specific performance will not be granted by the Courts. Hence, no injunction can be issued against a building owner at the instance of a building contractor.

78. Mr. Chidambaram has also placed reliance on Ramchandra Lalbhai and Another v. Chinnbhai Lalbhai, AIR 1944 Bombay 76. The Court observed that specific relief is a discretionary power and a party cannot ask for it as a matter of right. While interpreting Section 202 of the Contract Act, the Court observed that:

Under Section 202 where the agent has himself an interest in the property which forms the subject-matter of the agency, the agency cannot, in the absence of an express contract, be terminated to the prejudice of such interest. In English law some specific connection must be shown between the authority and the interest, and there must also be an agreement, express or implied, whereby the authority is given to secure some benefit which the donee is to obtain by reason of the authority. Section 202, the language of which is wider, does not make any departure from the English law on the subject. Even when the authority, e.g., to the plaintiffs by the defendant managing agent of a mill to act as his co-agents is coupled with an interest the Court will refuse to grant an injunction to restrain the managing agent from preventing the plaintiffs from acting as his co-agents because the granting of injunction would in effect amount to granting specific performance of a contract which cannot be specifically enforced.

79. Mr. Chidambaram also placed reliance on Classic Motors Limited v. Maruti Udyog Limited, (supra). In this case also the Court observed that in a case of breach of contract, if the party can be compensated in terms of money then the contract cannot be specifically enforced.

80. Reliance has also been placed on Kumar Jagadish Chandra Sinhav. Commissioner of Income Tax, West Bengal, AIR 1956 Calcutta 48 in which the Division Bench of Calcutta High Court held that the Court may take judicial notice of a publication containing a foreign law, if it is issued under the authority or the foreign Government concerned and may accept the law as set out in such publication as a law in force in the particular foreign country at a relevant time. But such a publication cannot be an evidence of what is contained in it is the whole law. In a foreign country at a particular point of time it cannot, therefore, be proved except by calling in expert, as provided for in Section 45 of the Evidence Act. The foreign law has to be pleaded and proved.

81. Mr. Chidambaram submitted that the petitioners are contractors and not partners and he submitted that the entire purpose of contract by the petitioners were that they would provide expertise and information which they did not provide to the respondent. The petitioners were expected to be familiar with the requirements of setting up a Hotel in India and were also required to give the details necessary for the operation of the Hotel in Indian conditions. However, the petitioners have failed to do this. It was submitted that the petitioners are completely ignorant of the specific requirements of running the Hotel in India. It is mentioned that the petitioners have displayed an intransigence and complete lack of understanding of the Indian market. Petitioner No. 2 has been insisting on compliance with norms that are not only inapplicable in India, but are also infeasible in the Indian context.

82. The principal grievance of the respondents is that till date the petitioners have not supplied any preliminary evaluation report of the project as required under the terms of the Technical Services Agreement (TSA). The report required to be a detailed document analysing, inter alia, the conditions prevailing in the Indian Hotel Industry, the state of the travel industry in India, the expected occupancy, the expected turnover and the expected profits. The petitioners were supposed to advise on how to give the Hotel a unique product positioning by offering certain unique selling propositions or by means of product differentiation. The petitioners were further required to take into account the present and future competition scenario, sensitivity analysis, etc. However, the petitioners have supplied no such document in terms of Clauses 1.01, 4.02, and 5.01 of the Contract.

83. It was submitted that petitioner No. 2 recommended certain design changes which resulted in a reduction of rooms in Hotel. The respondents protested against this needless change which would drastically affect the profitability of the Hotel. It is also mentioned that the way the petitioners have been behaving, frustrates the entire purpose of entering into any agreement with them.

84. It was also submitted that the environmental impact statement has not been supplied by the petitioners to the respondents till date. The suggestions given by the petitioners demonstrated ignorance of applicable laws as suggestions of (i) setting up of administrative officers of the Hotel upon the service floor, (ii) petitioner No. 2s ignorance giving suggestion that there be two separate kitchens, one for the guests and another for staff; (iii) petitioner No. 2 had no knowledge about the fire safety norms and they forwarded a copy of U.S. Fire Safety Norms which has no application in India; (iv) the suggestion of import of bed covers into India also shows that ignorance of the law where it does not permit import of bed covers into this country; (v) the petitioners suggested a bed size of 1.4 metres which had to be reduced to 1.2 metres as the room was simply not functional with the use of the beds as recommended by petitioner No. 2.

85. It is also submitted that the petitioners are guilty of making fraudulent as well as innocent misrepresentations to the respondents. It is also mentioned that the respondents have completely lost confidence in the mode and manner of functioning of the petitioners. It is mentioned that the agreement being essentially to provide services, there can be no question about the petitioners being imposed as a service provider upon the respondents. It is stated that in order to settle the matter with the petitioners, a meeting was fixed at London. A day before the meeting was scheduled to take place, the petitioners filed this present petition under Section 9 of the Arbitration and Conciliation Act, 1996. The petitioners gave an assurance that notwithstanding of filing of the present petition, an attempt would be made to settle the matter. This has gone waste. Three days after the conclusion of the meeting, the petitioners sent a notice to the Kuala Lumpur Regional Centre for Arbiration invoking arbitration. Therefore, it has become impossible for the respondents to deal with the petitioners as the petitioners appear to be litigious and there is a complete breakdown with the petitioners and the respondents.

86. It is mentioned that after termination of agreement with the petitioners, the respondents entered into an agreement with the ITC Hotel Limited on 16.1.1999. On 25.2.1999, a Project Manager was appointed by ITC Hotel Limited to look after the day-to-day affairs of the project. On 31.1.1999, the allotment of shares was concluded and in the meeting of the Board of Directors of respondent No. 1 on 20.4.1999, 34,80,150 shares were transferred in favour of ITC Hotel Limited and ITC itself has become a Joint Venture Partner.

87. In this view of the matter, no case for grant of injunction is made out in case if the award is ultimately given in favour of the petitioners, they can always be compensated in terms of money.

88. In the rejoinder, the petitioners have denied the allegations, averments, contentions and submissions contained in the reply which are not only contrary to or inconsistent with the facts, averments and submissions set forth in the petition but also are Vague, lack in material particulars and are imprecise and, therefore, it is submitted that the same cannot be taken into consideration by this Court.

89. In the rejoinder, it is mentioned that the agreements are governed by Indian Laws as per the terms of the agreement as well as Governmental Approvals. The Arbitration and Conciliation Act, 1996 is based on the United Nations Commission on International Trade Law (UNCITRAL) Model Law and Rules (UNCITRAL Rules). It is mentioned that all agreements between the petitioners and the respondents contain the following clause in relation to the applicable law:

A. This agreement is executed pursuant to, and shall be construed under and governed exclusively by the laws of India.

B. Notwithstanding anything to the contrary herein, either party may seek injunctive relief (including, for purposes of illustration, restraining orders and preliminary injunctions) in any Court of competent jurisdiction

90. The governing law clause is widely worded and has no exceptions or qualifications. Indeed it declares that the laws of India are exclusively applicable to the agreements. The use of the expression laws of India surely includes as the context demands in the case at hand the Arbitration Act and its applicable provisions.

91. It is mentioned in the rejoinder that agreements between the petitioners and the respondents designate the Kuala Lumpur Regional Centre for Arbitration in Kuala Lumpur, Malaysia as the dispute resolution Forum. Section 34 of the Malaysian Arbitration Act, 1952 as amended in 1980 which reads as under:

provides that neither the provisions of the Malaysian Arbitration Act nor those of any other Malaysian law shall apply to an arbitration conducted under the auspices of the Kuala Lumpur Regional Centre for Arbitration, except for awards that are sought to be enforced in Malaysia.

92.1t is also mentioned in the rejoinder that:

Notwithstanding anything to the contrary in this Act or in any other written law but subject to Sub-section (2) insofar as it relates to the enforcement of an award, the provisions of this Act or other written law shall not apply to any arbitration held under the Convention on the Settlement of Investment Disputes between States and Nationals of other States, 1965 or under the United Nations Commission on International Trade Law Rules, 1976 and the Rules of the Regional Centre for Arbitration at Kuala Lumpur.

In interpreting Section 34 of the Arbitration Act the Malaysian High Court held that the function of the Malaysia Courts with respect to arbitration at KLRCA is confined solely to the enforcement of a KLRCA award. Accordingly, the procedural law applicable to the arbitration is the Indian Arbitration Act.

Further Rule 26(3) of Rules of Arbitration of KLRCA provides expressly as follows:

26(3) a request for interim measure addressed by any party to a judicial authority shall not be deemed incompatible with the agreement to arbitrate, or as a waiver of that agreement, and thereby even otherwise a party to an arbitration agreement is permitted to approach a judicial authority for interim measures to preserve the assets and valuable rights which are the subject matter of dispute in arbitration. In view thereof even contractually also the parties have agreed to the jurisdiction of this Honble Court in the matter of grant of interim relief.

93. In view of the aforesaid circumstances, it is mentioned in the rejoinder that it would be highly inequitable if the petitioners are unable to obtain any interim measures of protection to safeguard their rights pending arbitration. It is mentioned that the Courts have inherent powers and jurisdiction to grant interim relief and protective measures and ouster of jurisdiction of Courts cannot be inferred and provisions ousting jurisdiction have to not only be express but must also be strictly construed. Therefore, the Court has powers to grant interim measures under Section 9 of the Act. The respondents are located in Delhi.

94. It is also mentioned in the rejoinder that the Technical Services Agreement was purportedly terminated by the respondents on 13.1.1999, without providing the petitioners even with the 30 days, notice period as required by the TSA.

95. It is mentioned that the notice of termination of 13th January, 1999 is only in respect of TSA. The Hotel Operating Agreement and other service and operating agreements between the petitioners and the respondents continued in operation until they were purportedly terminated on 4th and 5th March, 1999.

96. It is mentioned that in response to the respondents alleged notices of termination of the Hotel Operating Agreement and the Additional Marriott Agreements, petitioner No. 1 rejected the respondents, assertions that the agreements had not come into effect and that no consideration had passed and stated that the petitioners would continue to perform their obligations despite the respondents wrongful attempt to terminate these agreements.

97. It is also mentioned that the petitioners first became aware of the respondents negotiating with ITC Hotels Limited when it learnt of the newspaper reports dated 27.2.1999 and 18.3.1999 describing such negotiations.

98. It is also mentioned that the respondents submissions that the prayer for relief in the petition is infructuous, untenable and misconceived and the same is denied by the petitioners. The petition is in aid of arbitration, seeking interim protection to preserve the status quo until the arbitration Tribunal the Forum chosen by the parties under the agreements decides the merits of the dispute, including whether the purported terminations are wrongful and whether injunctive relief should be granted or not.

99. The petitioners have requested the Courts to ensure that the respondents are prohibited from taking any steps that would prevent the arbitral Tribunal from granting effective relief at the end of the arbitration, including specific performance of the respondents obligations. The allegation that the petition is bad because of misjoinder of causes is denied. The TSA, the Hotel Operating Agreement and Additional Marriott Agreements were entered into pursuant to LOI which stipulate one single transaction with regard to Hotel. The Governmental Approvals were obtained by the respondents pursuant to one application setting out one composite transaction between the petitioners and the respondent No. 1. Therefore, the TSA and all other agreements represent a single transaction pursuant to which respondent No. 1 sought certain technical assistance for the Hotel in connection with its planning, construction, furnishing and equipping of a first class, full service Hotel in accordance with Marriott international standards under the Marriott name. It is clear that the agreements are part of one transaction and are coterminous.

100. It is mentioned in the rejoinder that the purported transaction of TSA and Hotel Operating Agreements and the Additional Marriott Agreements by respondent No. 1 is wholly wrong for the reasons set out in the petition, particularly the letters dated 2nd and 26th February, 1999 and 12.3.1999. The averments regarding inadequate performance by the petitioners of their contractual obligations have been denied. It is mentioned in the rejoinder that Marriott currently franchises 3 Hotels in India (Mumbai, Hyderabad and Goa) and is about to open the first Marriott managed Hotel in Goa. In addition three more Marriott managed Hotels are under construction in India.

101. The allegation that the petitioners do not have requisite expertise and awareness of Indian conditions is also devoid of any merit. It is also denied that there was any indication by Marriott that such report could cover the Indian Hotel industry, travel industry, occupancy, etc. as envisaged by the petitioners who are under obligation to supply to the respondents.

102. It is also mentioned that in any event these matters are and will be the subject matter of the arbitration and will be addressed therein as and when raised in the said proceedings by the respondents.

103. It is submitted in the rejoinder that the respondents have made vague and incorrect allegations seeking to resile from their contractual obligations to design and build the Hotel to Marriott standards. It is mentioned that if those standards are higher or different than other Hotel companies in India that is because those standards are

(i) international-class standards, or

(ii) standards which are specific to a Hotel being a Marriott.

As a matter of fact the petitioners standards are generally higher than other Hotels, and this is one of the reasons that the respondent Ansals chose to appoint the petitioners as the operator. The fact that Marriott safety or other standards may be higher than Indian ones does not in any way make petitioner No. 1 in breach of the TSA or the Additional Marriott Agreements. It is the respondents who would be in breach if it did not comply with its obligation to build Hotel according to those standards.

104. It is mentioned that petitioner No. 2 cannot be adequately compensated by damages. It addition, under Section 19.02 of the Hotel Operating Agreement, Marriott has the right of first refusal to purchase shares in any translation constituting a Hotel Sale and the money damage will not enable Marriott to become shareholders to Ansals or to operate the Hotel under the said agreement. Further, the respondents have been using the Marriott trademarks in violation of the agreements, and money damages will not compensate the petitioners for the damages done to Marriotts marks and reputation. Only injunctive relief will give the petitioners the interim protection pending resolution of matters in arbitration.

105. I have heard the learned Counsels appearing for the parties at length. I have also perused the agreements entered into between the parties and other relevant records.

106. The main issue which arises for consideration is whether the respondents are guilty of breach of contract and, if so, in the facts and circumstances of this case should the respondents be restrained by a Court injunction or order of interim relief from carrying on their further arrangement with the ITC Before deciding this issue, two questions which require urgent reply are: (1) Can the respondents be compelled to take the services from the petitioners particularly when they have lost faith, confidence and trust in each other (2) The other question which also needs to be answered is, can the petitioners be adequately compensated in terms of money when it is ultimately proved that the respondents are guilty of breach of contract

107. I am of the view that it may not be possible to compel the respondents to discharge their obligation of the remaining contract with the petitioners. Distrust and loss of confidence has developed between the parties. In this view of the matter, it would hardly be proper now to compel them to work together.

108. The petitioners have a number of grievances against the respondents, such as: (a) the respondents have entered into agreements with ITC in total contravention of the agreements with the petitioners; (b) the respondents are also guilty of terminating the agreement without giving any requisite notice of termination to the petitioners. According to the petitioners, Marriott Operating Agreement provides that for termination of contract, a minimum 90 days notice is required and termination by letter dated 4.3.1999 with immediate effect with no notice period is illegal.

109. The respondents have also taken the following objections:

(a) That there is a clear embargo of Section 2(2) of the Act which reads as: this part shall apply where the place of arbitration is in India. According to the respondents Section 9 of the Act is in Part 1 of the Act and in this case, admittedly, the venue of the arbitration is at Kuala Lumpur, Malaysia and consequently this Court has no jurisdiction to entertain this petition.

(b) The other grievance of the respondents is that the respondents entered into a contract with the petitioners in order to get expertise and opinion from the professional hoteliers. It was discovered that the petitioners were not familiar with the requirements of the hoteliers in India. They could not give the information, suggestions and advice necessary for the operation of Hotels in Indian conditions. The petitioners are also ignorant of the laws of India.

(c) The respondents also complained that it is not only the quantitative inputs on the part of the petitioners that has proved to be unsatisfactory and inadequate. The respondents also complained that petitioner No. 2 till date has not supplied any preliminary evaluation report of the project as required under the terms of the Termination Service Agreement. According to the respondents the petitioners have not given environmental impact statement till date.

(d) The respondents also indicated that the petitioners are totally ignorant of the Indian legal requirements and the suggestions given by them are totally meaningless for the Indian conditions and requirements particularly their advice and suggestions pertaining to fire safety norms, Hotel rooms, bed covers, number of kitchens, the quality of services, etc., etc.

110. I am also of the considered opinion that even if the learned Arbitrators ultimately arrive at the conclusion that the respondents are guilty of the breach of contract, then also the petitioners can be adequately compensated in terms of money.

111. The petitioners have not made out a case for the grant of interim relief, at this stage, therefore, in this view of the matter it is not necessary to decide the pleas and objections of the respondents.

112. The petitioners are also not entitled to any interim relief because in the instant case, the agreement was terminated on 13.1.1999 and this petition has been filed in April, 1999. Before filing this petition, the respondents have already entered into a contract with other parties. Third party rights have intervened. That party is not before the Court. There is no satisfactory explanation of this delay in filing this petition.

113. According to Section 14(1) of the Specific Relief Act, 1963 it is clear that the contract in following categories cannot be specifically enforced. The Section 14(1) reads as under:

(a) a contract for the non-performance of which compensation in money is an adequate relief;

(b) a contract which runs into such minute or numerous details or which is so dependent on the personal qualifications or violation of the parties or otherwise from its nature is such, that the Court cannot enforce specific performance of its material terms;

(c) a contract which is in its nature determinable;

(d) a contract the performance of which involves the performance of a continuous duty which the Court cannot supervise.

114. Apart from 14(1)(a) of the Specific Relief Act, the petitioners are not entitled to any interim relief because of the embargo of Section 14(1)(b) also. The agreements between the parties run into such minute and numerous details which are so dependent on the personal qualifications or volition of the parties, or otherwise from its nature is such, that the Court cannot enforce its specific performance of its material terms. The petitioners are not entitled to any interim relief because the contract, the performance of which involves the performance of a continuous duty which the Court would find it difficult to supervise.

115. On consideration of the totality of the facts and circumstances the petitioners have not made out a strong prima facie case for the grant of interim relief. The balance of convenience is also not in favour of the petitioners. The grant of any interim relief at this stage may cause irreparable injury to the respondents whereas the petitioners can always be compensated in terms of money. This O.M.P. is accordingly disposed of.