National Agricultural Cooperative Marketing Federation Of INDIA Nafed vs. Ms Chaman Cold Storage And Ice Factory & Ors.

Facts

The petitioner, National Agricultural Cooperative Marketing Federation of India (NAFED), filed a petition under Section 9 of the Arbitration and Conciliation Act, 1996, seeking interim relief against the respondents, MS Chaman Cold Storage and Ice Factory and its partners. The dispute arose from a Lease Agreement dated September 14, 2017, for operating a Multi Commodity Pack House/Cold Storage. The petitioner alleged that the respondents failed to pay license fees, electricity, and road tax expenses, leading to the termination of the Lease Agreement on August 19, 2018. Arbitration proceedings were initiated, and a Sole Arbitrator was appointed by the Delhi High Court on March 4, 2021. However, the Supreme Court stayed these arbitration proceedings on September 24, 2021, via a Special Leave Petition filed by the respondents. The petitioner sought directions for the deposit of outstanding sums and other reliefs.

Held

The Court held that since arbitration proceedings had already been initiated by its coordinate bench and subsequently stayed by the Supreme Court, it found no cogent reason to intervene in the dispute. The Court reasoned that the matters were already under consideration before the learned Sole Arbitrator and the concerned courts (Supreme Court). Therefore, the present petition was dismissed for being devoid of merit. The Court did not decide on the merits of the petitioner's claims regarding outstanding sums or other reliefs sought under Section 9 of the Arbitration Act, as the primary reason for dismissal was the pendency of proceedings before higher forums and the arbitrator.

Key Issues

1. Whether the High Court should intervene in the dispute when arbitration proceedings have been initiated and subsequently stayed by the Supreme Court. Petitioner's arguments: The petitioner contended that the respondents violated the terms of the Lease Agreement by reneging on payments for license fees, electricity, and road tax. They argued that a significant sum of Rs. 78,34,338.10 along with interest and damages remained outstanding. The petitioner further submitted that the respondents repeatedly defaulted and continued to hold the property despite the termination of the Lease Agreement. They prayed for the outstanding sum to be deposited and for other interim directions. Revenue/State's arguments: The judgment records no specific arguments from the revenue or state. The respondents were noted as 'Nemo' (absent).