# HBA Offshore Pte. Ltd v. Samsung Heavy Indus. India Pvt. Ltd. U.P

- **Citation:** (2022) 11 ILRA 667
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2022-11-14
- **Bench:** Manoj Kumar Gupta, Jayant Banerji
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/hba-offshore-pte-ltd-v-samsung-heavy-indus-india-pvt-ltd-u-p-47847
- **Pages:** 48

## Headnote

A. Civil Law - Arbitration and Conciliation
Act,
1996-Sections
37,
9
&
11(4)-
maintainability of-section 9 application
was rejected-learned court below held
that
the
LOI
was
not
concluded
agreement, and that under a contract
which is determinable at any event
provided in the LOI, the action of the
parties cannot be enforced through the
Court and the same is barred by provisions
of section 14(d) of the Specific Relief Act,
1963 and after the LOI was held to be null
and void the respondents had entered into
a contract with third party which is before
the filing of the application u/s 9 of the
Act-All pleas and contentions are left open
for
being
raised
before
the
arbitral
tribunal as provided in the LOI itself-
668 INDIAN LAW REPORTS ALLAHABAD SERIES
appellant
failed
to
demonstrate
any
plausible ground for grant of an interim
injunction as envisaged in section 9 of the
Act, 1996-as per section 9(2) of the Act,
1996,
there
is
a
mandate
for
commencement of arbitral proceedings
within a period of ninety days from the
date of of an order under sub-section (1)
of Section 9.(Para 1 to 62) (E-6)
List of Cases cited:

## Text

_Characters 0–39,893 of 113,491. This is a partial read: ask again with offset=39893 for what follows._

11 All. HBA Offshore Pte. Ltd. Vs. Samsung Heavy Indus. India Pvt. Ltd. U.P.
667
T.K. v. C.N. Subhadra & another, 2009
SCC OnLine Ker 6397, where it was held:

15. The express language of
Secs. 421(1)(a) and (b) Cr. P.C. is that
either or both of the following ways (ie.,
issue a warrant for attachment of movable
and issue of a warrant to the Collector to
attach the movable and immovable
properties) can be resorted to by the
court. I find the said submission to be
very
impressive.
This
court
in
Nithiyanandan and Kuttappan had no
occasion to consider that question. The
express language employee by the Code
makes it very clear that when it comes to
levy of fines the court is no obliged to
resort to both the methods under Secs.
421(1)(a) and (b) Cr. P.C. Either of the
two or both can be pursued by the court
in its discretion.

26. Here, the plaintiff questions the
jurisdiction of the Magistrate to issue a
warrant to the Collector for the recovery
of the amount of maintenance in default
as arrears of land revenue, because he
says that the Magistrate had no such
power. The said proposition is only stated
to be rejected. The provisions of Section
125(3) and Section 421 read conjointly
are a complete answer to the plaintiff's
denial of jurisdiction with the Magistrate
to issue a warrant to the Collector for
recovering the defaulted maintenance as
arrears of land revenue.

27. The substantial question of law
framed is, accordingly, answered in the
affirmative and it is held that the
Magistrate has power to enforce an
order of maintenance passed under
Section 125 Cr.P.C. by issuing a warrant
to the Collector to recover the same as
arrears of land revenue.

28. No other point was pressed.

29. The appeal fails and is dismissed
with costs.

30. Let a decree be drawn up,
accordingly.
----------
(2022) 11 ILRA 667
APPELLATE JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 14.11.2022

BEFORE

THE HON'BLE MANOJ KUMAR GUPTA, J.
THE HON'BLE JAYANT BANERJI, J.

Appeal U/S 37 OF Arbitration & Conciliation Act
1996 No. 94 of 2022

HBA Offshore Pte. Ltd. ...Appellant
Versus
Samsung Heavy Indus. India Pvt. Ltd. U.P.
 ...Respondent

Counsel for the Appellant:
Sri Vinayak Mithal, Sri Zoeb Cutleruywala, Sri
Manish Goyal(Sr. Counsel).

Counsel for the Respondents:
Sri Kartikeya Saran, Sri Shashi Nandan

A. Civil Law - Arbitration and Conciliation
Act,
1996-Sections
37,
9
&
11(4)-
maintainability of-section 9 application
was rejected-learned court below held
that
the
LOI
was
not
concluded
agreement, and that under a contract
which is determinable at any event
provided in the LOI, the action of the
parties cannot be enforced through the
Court and the same is barred by provisions
of section 14(d) of the Specific Relief Act,
1963 and after the LOI was held to be null
and void the respondents had entered into
a contract with third party which is before
the filing of the application u/s 9 of the
Act-All pleas and contentions are left open
for
being
raised
before
the
arbitral
tribunal as provided in the LOI itself-
668 INDIAN LAW REPORTS ALLAHABAD SERIES
appellant
failed
to
demonstrate
any
plausible ground for grant of an interim
injunction as envisaged in section 9 of the
Act, 1996-as per section 9(2) of the Act,
1996,
there
is
a
mandate
for
commencement of arbitral proceedings
within a period of ninety days from the
date of of an order under sub-section (1)
of Section 9.(Para 1 to 62) (E-6)
List of Cases cited:

1. Bhaurao Dagdu Paaralkar Vs St. of Mah. &
ors. (2005) 7 SCC 605

2. Dresser Rand S.A. Vs Bindal Agro Chem Ltd &
K.G. (2006) 1 SCC 751

3. Sundaram Finance Ltd. Vs NEPC India
Ltd.(1999) 2 SCC 479

4. Firm Ashok Traders & ors. Vs Gurumukh Das
Saluja & ors. (2004) 3 SCC 155

5. Sara Int. Ltd. Vs Arab Shipping Co.(P.)
Ltd.(2009) SCC OnLine Del 122

6. South Eastern Coalfields Ltd & ors. Vs S.
Kumar's Asso. AKM (JV) (2021) 9 SCC 166

7. Rickmers Verwaltung GMBH Vs IOC (1999) 1
SCC 1

(Delivered by Hon'ble Jayant Banerji, J.)

1. This appeal under Section 37 of
the Arbitration and Conciliation Act,
1996 arises out of the order dated
26.8.2022 passed by a learned Judge on
an application filed by the appellant
under Section 9 of the Arbitration and
Conciliation Act, 19961 (Arbitration &
Conciliation Application u/s 11(4) No.-
98 of 2022, HBA Offshore Pte. Ltd. Vs.
Samsung
Heavy
Industries
Limited
India), whereby that application was
dismissed.

BACKGROUND:

2. As it appears in the appellant's
affidavit,
the
respondent
floated
a
tender/RFQ (request for quote) for their
project-provision of Accommodation Work
Barge2, with associate services required
during the Hook-up and commissioning of
RUBY FPSO for Reliance Industries
Limited at MJ Field, in the block KGDWN-98/3 (KG-D6), in the Bay of Bengal,
East Coast of India on 23.2.2022. At the
bidding stage, the appellant, inter alia,
offered a Floatel Vessel called ''Nor
Goliath'3 to the respondent and also
submitted all technical documents and
certificates pertaining to the said vessel to
the respondent. Telford Marine DMCC4 is
the disponent owner of ''Nor Goliath' which
was to provide the said vessel to the
respondent through the appellant. Based on
the request of the respondent, the appellant
also obtained a confirmation letter from
Telford pertaining to the said vessel and
also provided the preliminary mobilization
plan of the said vessel from Walvisbay,
Namibia to UAE and from UAE to
Kakinada, India. The respondent issued a
Letter of Intent5 on 28.4.2022 to the
appellant regarding the work of AWB on
the terms and conditions set out in the LOI.
The LOI authorized the appellant to
commence the work including the detailed
design pedestal and gangway foundation,
including
procurement
of
material,
fabrication of pedestal and gangway
foundation and installation of gangway
pedestal6. The LOI was valid and binding
till 14.5.2022 and was to be superseded by
a full-fledged contract, that is, the General
Conditions of the Contract and all exhibits
thereto7, under which the appellant was
required to continue to perform the work at
the date of execution of GCC, upon the
parties reaching an agreement on the
outstanding terms and conditions.
11 All. HBA Offshore Pte. Ltd. Vs. Samsung Heavy Indus. India Pvt. Ltd. U.P.
669

3. Under the LOI, the appellant was to
make provision for AWB (Nor Goliath)
retrofitted with electric-hydraulic telescopic
personnel transfer gangway from another
vessel namely, Telford 25 to Nor Goliath.
This installation activity was required to be
carried out at UAE. After the installation of
gangway, the respondent was required to
inspect Nor Goliath and any observation
and comments during the inspection were
to be satisfactorily resolved by the
appellant to make the said vessel ''fit for
purpose' before it departed from UAE to
Kakinada, India.

4. The appellant submitted to the
respondent a contracting commitment letter
dated 9.5.2022 from Telford. By this letter,
Telford
acknowledged
that
it
was
committed to provide Nor Goliath for the
duration of the project and operate jointly
in India with the appellant to support the
respondent for AWB with associated
services
during
hook-up
and
commissioning of RUBY FPSO at MJ
Field, in the block KG-DWN-98/3 (KGD6), in the Bay of Bengal, East Coast of
India, subject to the terms of the LOI.

5. The appellant, by an e-mail dated
11.5.2022 sought extension from the
respondent
of
the
timeline/LOI
till
20.5.2022. The appellant was granted the
extension and the binding of the LOI was
extended from 14.5.2022 to 20.5.2022 by
means of a letter dated 13.5.2022 sent by
the
respondent.
The
letter
of
the
respondents recorded that all other terms
and conditions of the LOI would remain
unchanged. A second extension of the
LOI/timeline was sought by the appellant
from the respondent till 31.5.2022. The
respondent issued a letter to the appellant
granting the extension and extending the
binding of the LOI uptil 31.5.2022. This
letter of the respondent also recorded that
all other terms and conditions of the LOI
would remain unchanged.

6. By a letter dated 22.5.2022, the
appellant requested the respondent to issue
a revised LOI duly incorporating the
critical open items as was requested by
Telford. In response, the respondent by a
letter of 25.5.2022 acknowledged the list of
critical open items and offered meeting the
appellant at its Noida office on 26.5.2022
to discuss and conclude the open item and
finalize the contract.

7. The aforesaid meeting took place
on 25.5.2022 and 26.5.2022 at Noida office
of
the
respondent
and
various
activities/items in furtherance of the work
and GCC to be executed were discussed
between the appellant and the respondent
including the scheduled mobilization of
Nor Goliath at Kakinada. As per the
revised plan, Nor Goliath was to be
mobilized from Cape Town to Batam,
Indonesia, where vessel modification works
to be carried out, and, thereafter to arrive at
Kakinada for the project. This schedule was
revised due to change in the schedule of
gangway donor vessel T-25. It is stated in
the application that as per the revised plan,
Nor Goliath was to reach Kakinada around
22.8.2022. The minutes of the meeting held
on 26.5.2022 were exchanged between the
parties which were on the basis of the
discussion held between them on 25.5.2022
and 26.5.2022. It is stated that a detailed
and productive meeting was again held on
30.5.2022 between the appellant and the
respondent
at
Noida
office
of
the
respondent in which majority of the terms
were amicably resolved, that is to say, out
of 18 items activities which was open, the
appellant and the respondent mutually
agreed and closed 15 items. It is further
670 INDIAN LAW REPORTS ALLAHABAD SERIES
stated that at the end of the meeting, the
only open/pending items were (a) increase
in mobilization fee (b) Covid cost and (c)
IGST refund.

8. It is stated that neither during the
joint meeting held on 30.5.2022 nor in the
letter dated 31.5.2022 issued by the
respondent was there any discussion or
reference with respect to the validity of the
LOI expiring on 31.5.2022.

9. The appellant, by letter dated
2.6.2022 did not agree to the proposal
communicated by the respondent regarding
the aforesaid three open/pending items and
submitted,
on
the
request
of
the
respondents, a break down of additional
mobilization cost of USD 1 million. In
response thereto, the respondent issued a
letter on 3.6.2022, expressing its difficulty
to the proposal of the appellant with respect
to the mobilization payment schedule for
mobilization fee. The respondent offered a
corporate
guarantee
as
against
the
appellant's proposal for offering Stand by
Letter of Credit8. By its letter, the
respondent conveyed its commitment on
payment of mobilization fee and again
asked the appellant to review and confirm
its acceptance on the proposal set out by
the respondent in the said letter for taking
steps towards execution of the GCC in
furtherance of the LOI.

10. The appellant and the respondent
had a virtual meeting on 6.6.2022 to
discuss the draft SBLC circulated by the
appellant in furtherance to closing the issue
pertaining
to
mobilization
fee.
The
respondent by e-mail on 6.6.2022 sent the
draft SBLC with its comment on the basis
of the discussion held at the virtual
meeting. By e-mail dated 7.6.2022, the
respondent also sought details of the swift
code of the bank concerned, details of
beneficiaries etc. It is stated that detailed
meetings were held on 8.6.2022 and
9.6.2022 between the representatives of the
appellant and the respondent at Noida
office of the respondent. The appellant sent
e-mails to the respondents on 12.6.2022
and 14.6.2022 and since no response was
forthcoming
from
the
respondents
a
reminder e-mail was sent on 16.6.2022.

11. The appellant received an e-mail
from the respondents on 19.6.2022 stating
that as the validity of the LOI had expired
without any agreement on GCC and all the
exhibits, the LOI stood null and void.
Being aggrieved by the action of the
respondent and declaring LOI null and void
the aforesaid application under Section 9 of
the Act of 1996 was filed seeking the
following reliefs:-

"It
is,
therefore,
MOST
RESPECTFULLY PRAYED that pending
the commencement and completion of the
Arbitral proceedings between the Petitioner
and the Respondent under the Letter of
Intent dated 28 April 2022, as extended
from time to time (either expressly or by
implication and conduct of parties) and for
a period of 90 days thereafter, the Hon'ble
Court may be pleased to:

I. Issue an appropriate order or
direction
of
granting
an
injunction
exercising the powers conferred upon it
under Section 9 of the Arbitration and
Conciliation Act, 1996 restraining the
Respondent by itself or through its group,
parent,
subsidiary,
holding,
affiliate
companies, servants and/or agents from
entering
into,
awarding/executing,
implementing the contract for provision of
Accommodation Work Barge (AWB), with
associate services required during the
Hook-up and Commissioning of RUBY
11 All. HBA Offshore Pte. Ltd. Vs. Samsung Heavy Indus. India Pvt. Ltd. U.P.
671
FPSO for Reliance Industries Limited at
MJ Field, in the block KG-DWN 98/3
(KG-D6), in the Bay of Bengal, East Coast
of India, with a third party, for which the
LOI was awarded in favour of the
Applicant, and/or pass such order and
further order as this Hon'ble Court may
deem fit and proper in the facts and
circumstances of the case, otherwise, the
applicants will suffer an irreparable loss
and injury.

II. Issue an appropriate order or
direction granting an ad interim relief ex
parte and/or otherwise in terms of Prayer
(1) above;

III. Award the costs of the present
petition in favour of the Applicant and
against the Respondent; and

IV. Issue such further appropriate
orders or direction which this Hon'ble
Court may deem fit in the facts and
circumstances of the present case in the
best interest of justice, equity and good
conscience."

12. In its counter affidavit, the
respondent stated that under the terms of
LOI the award of final contract was subject
to agreement of GCC and had to be
discussed and closed before 14.5.2022. In
the meeting of 26.5.2022, the appellant
proposed a total 18 deviations from the
originally agreed terms. The parties tried to
conclude and reach agreement on the
deviations proposed but despite efforts and
substantial opportunities granted to the
appellant, the parties were not able to reach
consensus on all the proposed deviations.
After lapse of extended timeline, the
respondent finally informed the appellant
on 19.6.2022 that LOI has expired without
an agreement on GCC and LOI stands null
and void. The respondent has already
awarded a contract to a third party, namely,
Bhambani Shipping Limited, on 27.6.2022.
The aforesaid application under Section 9
of the Act of 1996 is infructuous and the
remedy for the appellant, if any, lies in
invoking arbitration. No steps have been
taken by the appellant to initiate arbitration
which shows their malafide intent. It is
stated that LOI expired by efflux of time
upon non-fulfillment of the condition
precedent which provided that the LOI to
award work would be binding on the
parties only upon fulfillment of the
condition precedent on or before 14.5.2022
by a formal confirmation letter which was
admittedly never fulfilled. The contract
being determinable in nature, no injunction
can be granted. No injunction can be
granted to prevent breach of a contract, the
performance
of
which
cannot
be
specifically enforced and the contract being
determinable
cannot
be
specifically
enforced. It is stated that the LOI was not a
concluded contract and thus no rights arise
therefrom and, therefore, no injunction can
be sought consequent to its termination. It
is submitted that the appellant belatedly
raised 18 fresh demands/deviations post
issuance of LOI out of which, the
respondent was, bonafide, negotiating to
agree on some, even though they were
substantially different and the main reasons
which were attributed to the non-agreement
on the terms of the GCC were, inter alia, as
follows:

"(a) Increase in the mobilization fee by
USD $ 1,000,000 beyond the agreed
mobilization fee in LOI.

(b) Payment in foreign currency at
Singapore account, which the respondent
could not have made in view of Reserve
Bank of India guidelines.

(c) Issue of SBLC (Stand by letter of
credit) in favour of appellant's bank instead
of the appellant itself so that appellant can
secure loan from his banker and in case of
non-payment by the appellant of the loan
672 INDIAN LAW REPORTS ALLAHABAD SERIES
amount, respondent's SBLC shall be
invoked.
(d) Covid cost shall be paid in addition to
contract value with 15% mark-up.

(e) Cost for refund of Duty Draw back
of the IGST paid on the AWB importation
shall be paid in addition to contract value
with 15% mark-up.

(f) Issue of contract in favour of new
entity, (HBC RUBY PTE LTD. Singapore,
special
purpose
vehicle)
and
parent
company guarantee was not from the
financially sound parent."

13. While considering the application
under Section 9 of the Act of 1996, the
learned Judge, after considering the record
and the arguments raised on behalf of the
parties, observed that there were number of
contentious
issues
which
remained
unresolved between the parties in meetings
held during the extended period, that is, on
26.05.2022 and 30.05.2022. The Court held
that the LOI was not a concluded
agreement, and that under a contract which
is determinable at any event provided in the
LOI, the action of the parties cannot be
enforced through the Court and the same is
barred by provisions of Section 14(d) of the
Specific Relief Act, 19639. The learned
Judge further held that after the LOI was
held to be null and void on 19.06.2022, the
respondents had entered into a contract
with third party on 27.06.2022 which is
before the filing of the application under
Section 9 of the Act of 1996 and,
therefore,
the
application
is
not
maintainable
and
the
only
remedy
available to the applicant-company is for
invocation of the arbitration clause. It was
further held that the applicant (the
appellant) cannnot claim any relief due to
the contract having been made and entered
on 27.06.2022 executed on a stamp paper
dated 06.04.2022.

SUBMISSIONS
OF
THE
LEARNED COUNSEL

14. On behalf of the appellant, it has
been urged that where there is a case of
fraud, injunction can be granted. Learned
counsel has drawn attention of the Court to
e-mails of 7.6.2022 (enclosed with the
supplementary affidavit) sent on behalf of
the appellant to the officials of the
respondent
alongwith
drawings
to
demonstrate that the additional information
regarding AWB was being supplied to the
respondent even after 31.5.2022. Learned
counsel has also referred to a report of
11.6.2022 made by a representative of the
respondent in respect of survey done on
10.6.2022 of AWB, in which the overall
condition of vessel of Nor Goliath was
found to be good. Learned counsel has
further referred to e-mails dated 3.6.2022
and, 11.6.2022, a letter of 11.6.2022 and,
another e-mail of 12.6.2022 in an attempt
to demonstrate that outstanding matters
were attempted to be resolved with all
earnestness.

15. It is stated that malafide conduct
of the respondent and fraud played by it
would vitiate all the acts done by the
respondent towards awarding the contract
dated
27.6.2022
to
a
third
party,
Bhambhani Shipping Limited, thereby
making the said contract null and void. It is
stated that LOI was declared as null and
void on 19.6.2022 arbitrarily, unilaterally
and wrongfully given the fact that the
appellant and respondent were on the verge
of finalizing and executing the GCC in
furtherance of the LOI. Within a week from
declaring the LOI to be null and void, the
respondent discussed, negotiated, finalized
and even executed a full-fledged contract
with Bhambhani Shipping on 27.6.2022.
The RFQ was floated by the respondent in
11 All. HBA Offshore Pte. Ltd. Vs. Samsung Heavy Indus. India Pvt. Ltd. U.P.
673
March 2022 and the discussion between
appellant and the respondent extended for a
period over a month before LOI was
executed on 28.4.2022. Post execution of
LOI and commencement of works as
provided under LOI, the respondent and the
appellant discussed and negotiated other
terms for a month and a half before they
could execute the GCC and all exhibits. It
was submitted that for a contract of such
nature and quantum, it was practically
impossible
for
the
respondent
and
Bhambhani Shipping to negotiate, finalize
and execute the contract in such a short
span of time. The fraud on part of the
respondent is sought to be demonstrated as
follows:-

(i) The contract entered into between
the respondent and Bhambhani Shipping on
27.6.2022 was on e-stamp paper issued on
6.4.2022 which hinges towards the fact that
the respondent was negotiating 'parallelly'
with Bhambhani Shipping and in order to
give contract to Bhambhani Shipping
circumvented the appellant by wrongfully
and without any basis declaring the LOI
null and void. Telford, which was engaged
by and introduced to the respondent by the
appellant, colluded with the respondent to
provide their services and vessel, Nor
Goliath, for the purposes of project,
whereas, the bid of Bhambhani Shipping
for the tender floated by the respondent at
the relevant time was with regard to a
vessel that was non-compliant as it did not
meet the requirements as was desired for
the purposes of performing the works for
the project.

(ii) If the respondent genuinely wanted
to award contract to a third party after
declaring the LOI null and void, the
respondent could have floated a fresh
tender and invited fresh bids which was not
done.

(iii) The appellant was continuing with
its discussion with the respondent even
after 31.5.2022 in good faith, and conduct
of the respondent at that point of time did
not give the appellant any reason for
doubting its intentions. Several actions
were taken by the appellant and the
respondent
even
after
31.5.2022
in
furtherance of their obligations under the
LOI to achieve closure and execution of
GCC.

16. It is contended that place of
installing the gangway on the AWB was
changed from UAE to Batam, Indonesia.
Reference was made to letter issued by
Telford on 29.3.2022 (Annexure-1 to the
affidavit) to show that detailed engineering
was needed to be done on the AWB after
issuance
of
LOI
and
preliminary
mobilization plan was attached giving a
timeline. Further reference is made to the
letter dated 9.5.2022 issued by Telford in
favour of the appellant, committing to
provide the vessel for the duration of
project and operate jointly in India with the
appellant-HBA Offshore Pte. Ltd. to
support the client, the respondent-Samsung
Heavy Industries Pvt. Ltd. To support his
contention that fraud is a ground to grant
injunction, learned counsel has referred the
judgement of the Supreme Court in
Bhaurao Dagdu Paralkar Vs. State of
Maharashtra and others10. To buttress
his argument that LOI was a concluded
contract,
learned
counsel
referred
to
judgement of Supreme Court in Dresser
Rand S.A.Vs. Bindal Agro Chem Ltd
and K.G.11. It has further been urged that
LOI was not determinable in nature.

17. Learned counsel for the appellant in
support of his contention that injunctive
relief would be available where fraud is
present, has referred to an article on
674 INDIAN LAW REPORTS ALLAHABAD SERIES
injunction under the heading of 'Fraud and
Deceit' appearing in Volume 37 of the
Second Edition of American Jurisprudence,
wherein it is stated that equity can enjoin
the
enforcement
of
all
obligations
fraudulently procured, and that equity will
intervene in a proper case to restrain
proceedings at law where, by reason of
fraud, complete and adequate relief would
be had at law. Further, the learned counsel
has referred the Chapter on injunction
(Volume-42, Second Edition of American
Jurisprudence) to contend that equitable
remedy of specific performance, and that
by injunction against breach of a contract
have much in common - the jurisdiction
exercised is in substance the same, and the
same general rule apply in one case as in
the other. Moreover, reference has been to
pages 49 and 51 of a book titled 'Estoppel
by Conduct and Election' published by
Thomson / Sweet & Maxwell ( South Asian
Edition 2013) to contend that, firstly,
silence or inaction conveys a representation
if it involves the breach of a legal duty to
make some disclosure or take some action,
and, secondly, there was a duty cast on the
respondent under the LOI and the ongoing
negotiations to inform the appellant of any
parallel negotiations. It was a case of
misrepresentation and negligence on part of
the respondent in its failure to inform the
appellant about parallel negotiations with a
third party while it was continuing to
negotiate with the appellant under the LOI,
and therefore, the respondent is estopped
from proceeding with the contract entered
into between it and a third party. Under the
circumstances
misrepresentation
itself
would amount to fraud entitling the
appellant to temporary injunction.

18. It is contended by learned counsel
for the respondent, that firm positions of
both the parties were at complete variance
with each other and also at ''deviance post
LOI' as recorded in the minutes of meeting
dated 26.5.2022. Since, there was no final
consensus on all the issues, some being
critical to the finalization of the contract,
the LOI could not be treated as a completed
contract and no injunction could be
granted. The aforesaid newly incorporated
company had no relationship with the
appellant in favour of whom the LOI was
awarded and commitment letter was issued
by the vessel owner. It is stated that the
inspection of vessel held on 10.6.2022 was
an initial inspection before departure of
AWB. As regard the additional deviation
raised by the appellant to issue SBLC by
the respondent in banker's name instead of
appellant's name, the respondent tried to
fulfill this deviation but failed as the
respondent's bank had refused to issue
SBLC in the name of the appellant's
banker.

19. The learned counsel for the
respondent has stated that the LOI was
declared
null
and
void
by
the
communication dated 19.06.2022 and the
application under Section 9 of the Act of
1996 was filed on 28.06.2022 to injunct the
respondent from entering into another
contract with a third party. It was on
27.06.2022 that a new contract was entered
into between the respondent and Bhambani
Shipping and, therefore, it is contended that
the maintainability of the application under
Section 9 of the Act of 1996 is itself
questionable. The learned counsel has
contended that the scheme of the Act of
1996 itself dictates a proximity in point
time between filing of application under
Section 9 and initiation of arbitration
proceedings. It is contended that despite
being well aware of the LOI being declared
null and void on 19.06.2022 and that a new
contract
being
entered
into
by
the
11 All. HBA Offshore Pte. Ltd. Vs. Samsung Heavy Indus. India Pvt. Ltd. U.P.
675
respondent
with
the
third
party
on
27.06.2022, the appellant has chosen only
to seek a relief from this Court under
Section 9 of the Act 1996, rather than
initiate arbitration proceedings as provided
in the LOI itself. It is contended that,
admittedly, though the binding of LOI was
extended twice, all other terms and
conditions as originally contained in the
LOI remained unchanged. The learned
counsel has referred to the judgments of the
Supreme Court in the cases of Sundaram
Finance Ltd. vs. NEPC India Ltd.12 and
Firm
Ashok
Traders
&
Ors.
vs.
Gurumukh Das Saluja & Ors.13 to
contend that when an application under
Section
9
is
filed
before
the
commencement
of
the
arbitration
proceedings, there has to be a manifest
intention on part of the applicant to take
recourse to arbitral proceedings. Viewed in
this light, it is contended, there is no
manifest intention on part of the appellant
to initiate arbitral proceedings. It is stated
that the relief sought in the application filed
under Section 9 is exhausted. It is further
stated that the third party concerned
namely, Bhambani Shipping has acted
upon the contract executed between it and
the respondent; and, after installation of the
gangway at Batam, Indonesia, the vessel
has arrived at Kakinada on 16.09.2022. The
learned counsel has referred in detail to the
provisions of the LOI and the 'condition
precedent'
contained
therein
which
provides that the LOI shall be binding on
the parties only on fulfilment of the
condition precedent of the GCC being
agreeable on or before 14.05.2022 by a
formal confirmation letter. While referring
to Annexure-12 of the affidavit filed in
support of the stay application, the learned
counsel has contended that it is a letter
dated 22.05.2022 sent by the appellant to
the respondent whereby the respondent was
required
to
issue
a
revised
LOI
incorporating
the
'Open
Items'.
A
categorical statement was made by the
appellant in the letter of 22.05.2022 that
pending receipt of the revised LOI
incorporating
the
'Open
Items',
the
appellant regretted that they were unable to
proceed based on the respondent's current
binding offer dated 20.05.2022. It was also
mentioned in the said letter that time is of
essence. The learned counsel has referred
to minutes of the meeting dated 26.05.2022
(that is enclosed as Annexure-14 to the
affidavit) between the appellant and the
respondent which disclosed the firm
position of the respondent.

20. Further reference was made to the
minutes of the meeting dated 30.05.2022
(Annexure-16 to the affidavit) between the
appellant and the respondent to contend that
the issue of increase in mobilization of fee by
which the appellant had demanded one
million US dollars by reason of change in
schedule/route/hike in bunker etc. was open.
It is stated that the dispute arose due to no
agreement regarding the mobilization fees
and the appellant did not seek any further
extension. It is stated that breach of the terms
of the LOI was made by the appellant and as
such the LOI expired. The contention is that
though the letter of 19.06.2022 issued by the
respondent declared the LOI null and void,
the validity of the arbitration clause therein
continues to exist. It is stated that the socalled inspection report that is being referred
to by the appellant is not a report after
installation of the gangway as envisaged in
the LOI, but is a preliminary report regarding
the condition of the AWB.

ANALYSIS:

21. The sole point for determination is
whether the appellant is entitled to an
676 INDIAN LAW REPORTS ALLAHABAD SERIES
injunction under Section 9 of the Act of
1996 in view of the facts and circumstances
of the present case.

22. Section 9 of the Arbitration and
Conciliation Act, as amended by Act No.3
of 2016, reads as follows:-

"9. Interim measures, etc. by Court.
[1] A party 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 purposes 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 subjectmatter 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 authorising 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.

(2) Where, before the commencement
of the arbitral proceedings, a Court passes
an order for any interim measure of
protection under sub-section (1), the
arbitral proceedings shall be commenced
within a period of ninety days from the date
of such order or within such further time as
the Court may determine.

(3) Once the arbitral tribunal has been
constituted, the Court shall not entertain an
application under sub-section (1), unless
the Court finds that circumstances exist
which may not render the remedy provided
under section 17 efficacious."

23. The principles for grant of an
injunction, as provided under the Act of
1963, would apply to the present case.
Sections 9 to 25 fall under Chapter II of the
Act of 1963. Section 10 of the Act of 1963
deals
with
cases
in
which
specific
performance
of
contract
would
be
enforceable and it reads as follows:-

"10. Specific performance in respect
of contracts.- The specific performance of
a contract shall be enforced by the court
subject to the provisions contained in subsection (2) of section 11, section 14 and
section 16."

Section 11 of the Act of 1963 pertains
to
specific
performance
of
contract
connected with trusts. Section 16 pertains
to personal bars to relief, which, in the
present case is not material. Sections 14
reads as follows:-

"14.
Contracts
not
specifically
enforceable.-
The
following
contracts
cannot be specifically enforced, namely:-

(a) where a party to the contract has
obtained substituted performance of contract in
accordance with the provisions of section 20;
11 All. HBA Offshore Pte. Ltd. Vs. Samsung Heavy Indus. India Pvt. Ltd. U.P.
677

(b) a contract, the performance of
which involves the performance of a
continuous duty which the court cannot
supervise;

(c) a contract which is so dependent on
the personal qualifications of the parties
that the court cannot enforce specific
performance of its material terms; and

(d) a contract which is in its nature
determinable."

It is pertinent to refer to the provisions
of Section 17 of the Act of 1963 which are
as follows:-

17. Contract to sell or let property by
one who has no title, not specifically
enforceable.--(1) A contract to sell or let
any
immovable
property
cannot
be
specifically enforced in favour of a vendor
or lessor--

(a) who, knowing himself not to have
any title to the property, has contracted to
sell or let the property;

(b) who, though he entered into the
contract believing that he had a good title
to the property, cannot at the time fixed by
the parties or by the court for the
completion of the sale or letting, give the
purchaser or lessee a title free from
reasonable doubt.

(2) The provisions of sub-section (1)
shall also apply, as far as may be, to
contracts for the sale or hire of movable
property.

Sections 38 and 41 of the Act of 1963
read as follows:-

"38. Perpetual injunction when
granted.-(1) Subject to the other provisions
contained in or referred to by this Chapter,
a perpetual injunction may be granted to
the plaintiff to prevent the breach of an
obligation existing in his favour, whether
expressly or by implication.

(2) When any such obligation arises
from contract, the court shall be guided by
the rules and provisions contained in
Chapter II.

(3) When the defendant invades or
threatens to invade the plaintiff's right to, or
enjoyment of, property, the court may grant
a perpetual injunction in the following
cases, namely:

(a) where the defendant is trustee of
the property for the plaintiff,

(b) where there exists no standard for
ascertaining the actual damage caused, or
likely to be caused, by the invasion;

(c) where the invasion is such that
compensation in money would not afford
adequate relief;

(d) where the injunction is necessary
to prevent a multiplicity of judicial
proceedings.

.....

41. Injunction when refused.--An
injunction cannot be granted--

(a)to
restrain
any
person
from
prosecuting a judicial proceeding pending
at the institution of the suit in which the
injunction is sought, unless such restraint is
necessary to prevent a multiplicity of
proceedings;

(b)to
restrain
any
person
from
instituting or prosecuting any proceeding in
a court not sub-ordinate to that from which
the injunction is sought;

(c)to
restrain
any
person
from
applying to any legislative body;

(d)to
restrain
any
person
from
instituting or prosecuting any proceeding in
a criminal matter;

(e)to prevent the breach of a contract
the performance of which would not be
specifically enforced;

(f)to prevent, on the ground of
nuisance, an act of which it is not
reasonably clear that it will be a nuisance;

(g)to prevent a continuing breach in
which the plaintiff has acquiesced;
678 INDIAN LAW REPORTS ALLAHABAD SERIES

(h)when equally efficacious relief can
certainly be obtained by any other usual
mode of proceeding except in case of
breach of trust;

(ha) if it would impede or delay the
progress
or
completion
of
any
infrastructure project or interfere with the
continued provision of relevant facility
related thereto or services being the subject
matter of such project.

(i)when the conduct of the plaintiff or
his agents has been such as to disentitle
him to the assistance of the court;

(j)when the plaintiff has no personal
interest in the matter."

Clause (a) of the proviso (Uttar
Pradesh Amendment) to sub-rule (2) of
Rule 2 of Order 39 of the Code of Civil
Procedure, 190814 prohibits the grant of
temporary injunction where no perpetual
injunction could be granted in view of the
provisions of Sections 38 and 41 of the Act
of 1963.
24. It is admitted to the parties that by a
communication
dated
19.06.2022,
the
respondent informed the appellant that the
LOI had expired without an agreement of
GCC and the LOI stands null and void. The
LOI dated 28.04.2022 reads as follows:-

"To : HBA Offshore Pte. Ltd.
(Singapore)

Attn. : Mr. Hasan Basma

Date : 28th April 2022

Subject: Letter of Intent to Award
the Work

Dear Sir,

Intent

By this Letter of Intent (LOI),
Samsung Heavy Industries India Pvt. Ltd.,
a company registered under the Companies
Act, 1956 of the Republic of India and
having its registered office at Logix Cyber
Park, Wing-B, 1st Floor, C-28 & 29, Sector
62, Noida 201301, Uttar Pradesh, India
(hereinafter
called
the
"Contractor")
expresses its firm intention to award the
following Work of Accommodation Work
Barge (AWB) to:

HBA Offshore Pte. Ltd. (UEN No.
201502262C), a company incorporated
under the laws of the Singapore and having
its registered office at 77 Science Park
Drive, #02-03 Cintech III Building, 118256
Singapore (hereinafter referred
to as
"Subcontractor").

Contractor and Subcontractor are
hereinafter referred to individually as a
"Party" and collectively as the "Parties."

Work

The Subcontractor's scope of work
("Work") includes, but is not limited to the
following:

(a)
Provision
of
Accommodation
Work Barge (AWB), namely "Nor Goliath"
retrofitted (IMO 9396933) with electrichydraulic telescopic personnel transfer
gangway;
(b) Accommodation Work
Barge shall be a minimum DP-3. The AWB
will normally remain stationed along-side
RUBY FPSO at MJ Field, east coast
offshore India.

(c)
AWB
shall
have
minimum
capacity to provide accommodation for 250
Contractor's personnel apart from Marine
crew and Catering & Housekeeping crew.