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CS Professional · Arbitration, Mediation and Conciliation · Arbitration Procedure, Appointment of an Arbitrator and Other Aspects

Sundaram Textiles and Kaveri Exports are parties to an arbitration seated in Chennai. The tribunal has been constituted and is hearing the matter. Sundaram fears Kaveri will dispose of a consignment of cotton bales that is the subject-matter of the agreement. Before which forum should Sundaram ordinarily seek an order for the preservation or sale of the goods?

Sundaram should apply to the arbitral tribunal. Section 17 empowers the tribunal to order preservation, interim custody or sale of goods that are the subject-matter of the arbitration agreement, and once the tribunal is constituted the Court will not ordinarily entertain such applications.

  1. AThe arbitral tribunal, which can order preservation, interim custody or sale of the goods under Section 17Correct
  2. BThe Court only, because a tribunal has no power over goods
  3. CThe Registrar of Companies, as the goods belong to a company
  4. DNo forum, until the final award has been made

Explanation

Section 17(1)(ii)(a) lets a party apply to the tribunal during the arbitral proceedings for preservation, interim custody or sale of goods that are the subject-matter of the arbitration agreement. Section 9(3) also bars the Court from entertaining such an application once the tribunal is constituted, unless the Section 17 remedy would not be efficacious. The Court-only option is therefore wrong.

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