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Supreme Court of India

VALVUE ARMATUREN V.U. BERATUNG GMBH AND CO. KG.versusNATIONAL FERTILIZERS LTD. AND ORS.

Citation
[1998] 3 S.C.R. 916
Decided
27 July 1998
Disposal
Disposed off

Holding

The Supreme Court did not vacate the injunction but ordered the High Court to decide on its vacation or continuation promptly, preferably by 31 December 1998.

Summary

The case involved an international arbitration dispute between V.A.V.U. Beratung GmbH & Co. KG and National Fertilizers Ltd., wherein the respondent had obtained a stay order in 1991 that remained in force for nearly seven years. The petitioner sought relief from the Supreme Court, arguing that such a prolonged interlocutory injunction was inconsistent with the principles of international arbitration. Relying on the precedent set in Dresser Rand, SA v. KG Khosla Compressors Ltd. (1995), the Court emphasized the need for domestic courts to dispose of interim injunctions with utmost despatch. While exercising its jurisdiction under Article 136, the Court refrained from directly vacating the injunction. Instead, it directed the High Court to determine the vacation or continuation of the stay order expeditiously, preferably before 31 December 1998. The Special Leave Petition was consequently disposed of.

Issues considered

  • Whether the Supreme Court should vacate the interim injunction in an international arbitration dispute
  • Whether the High Court should be directed to dispose of the injunction issue with utmost despatch

Legislation cited

Subjects

International arbitrationinterim injunctioninterlocutory interdictspeedy disposalSpecial Leave PetitionArticle 136stay order

Judgment

A      VALVUEARMATUREN V.U. BERATUNG GMBH AND CO. KG.
                                           v.
                   NATIONAL FERTILIZERS LTD. AND ORS.

                                   JULY 27, 1998

B               [DR. A.S. ANAND AND D.P. WHADHWA, JJ.]


          International Arbitration :

        Interim injunction- Operating for seven years-Held, in the nature of
C disputes pending before the Court, issues relating to interlocutory
  interdictions need to be disposed of with utmost despatch-High Court
  would dispose of the issue concerning the vacation or otherwise of the
  injunction expeditiously.

          Dresser Rand, SA. v. KG. Khosla Compressors Ltd. and Ors., [1995]
D Supp. 3 sec 181, relied on.
         CIVIL APPELLATE JURISDICITON: Special Leave Petition (c)
    No. 10640of1998.

        Arun Jaitley, Gopal Jain, R.N. Karanjawala, Ms. Nandini Gore, Ms.
E   Seema Sapra and Mrs. Manik Karanjawala for the Petitioner.

          The following Order of the Court was delivered :

          Mr. Arun Jaitely, learned senior counsel appearing for the petitioner has
    drawn our attention to a judgment of this court in Dresser Rand, SA. v. KG.
p   Khosla Compressors Ltd. & Ors., [1995] Supp. 3 SCC 181 and in particular,
    to paragraph 2, which reads thus:

            "2. In a matter of this nature where questions of amenability of a
            dispute to international arbitration arise it is not proper to let loose
            and keep at large orders of injunction of this kind for unduly long
G           periods. It is inconsistent with the principles governing international
            arbitration. It is of utmost importance for the domestic courts to be
            circumspect in granting such interlocutory interdictiorJ.s. At any rate,
            the court must ensure that the matters are dealt with and disposed of
            with utmost despatch."

H         After hearing Mr. Jaitely and perusing the record, we are of the opinion
                                         916
            V.A.V.U. BERA TUNGGMBHANDCO.KG. v. NATIONAL FERTILIZERS LTD. 917

    ·"-.   that the issue relating to the vacation or continuance of the stay order, which A
           had been obtained by the respondent in Suit No. 3737/91, as early as in
           29.11.1991 and is still in operation requires to be settled expeditiously. The
           issue has not been disposed of although almost sevea years have elapsed.
           In the nature of the dispute pending before the Court, issues relating to
           interlocutory interdictions need to be disposed of with utmost despatch.
                                                                                             B
"                While not being inclined to interfere with an order adjourning the
           decision of issue in exercise of our jurisdiction under Article 136 of the
           Constitution of India, we, however, consider it appropriate to request the High
           Court to dispose of the issue concerning the vacation or otherwise of the
           injunction expeditiously and as far as possible before 31.12.1998.                C
                  With these observations, the special leave petition is disposed of.

           R.P.                                                     Petition disposed of.




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