In the realm of Jurisprudence it has been said that Possession is 9/10 of the
. It can be said that similar is the case of Interim Relief's in the case
of Arbitration, both before the National Courts and before the Arbitral Tribunal
the above mentioned quotation holds all the more true as in the 21st Century
arena of minimum interference in the Arbitral Process
, with the role of the
National Courts becoming vapid , it is the seeking of interim relief's which the
National Courts have found themselves circumscribed to in today's era.
The seeking of Interim Relief's in the case of determinable contracts containing
an arbitral clause is commonplace, even though the chances of success are
limited due to the obstacles placed by The Specific Relief Act 1963 and other
The General Law with regard to the seeking of Interim Relief's in a determinable
contract was settled in the case of Indian Oil Corporation vs Amritsar Gas
 wherein the Apex Court held that a distributorship agreement
which had a clause which entitled either party to terminate the contract with 30
days prior notice and without assigning any reason was determinable
in nature and
could not be specifically enforced .
This short Article will attempt to elucidate the bars to seeking interim relief
through the prism of The Arbitration and Conciliation Act, 1996 in cases of
determinable contracts and will also endeavour to understand if there are any
exceptions to this rule as the seeking of Interim reliefs in case of
determinable contracts is usually stymied by the provisions of The Specific
Relief Act 1963.
II. The meaning of Determinable Contract:
Determinable Contracts derive their existence from the termination clause
envisaged therein. The word determinable used in Clause c to sub-section 1 of
Section 14 of The Specific Relief Act, 1963 means that which can be put an end
to. Literally the word determinable means to put an end to.
III. The approach of the National Courts when dealing with a Section 9
application under The Arbitration and Conciliation Act, 1996 in case of
We shall analyze the approach of the National Courts in Section 9 Petitions
preferred under The Arbitration and Conciliation Act, 1996 in case of
determinable contracts through Judgements of the Delhi High Court and Apex Court
as enumerated below.
M/S Inter ADS Exhibition Pvt Ltd v/s Busworld International:
In this the Petitioner and the Respondent had entered into a Joint Venture
Agreement to jointly organize an event known as Busworld in Bangalore .
The Respondent after the successful completion of the event terminated the JVA
with the Petitioner herein. The Petitioner filed an application for Interim
Relief in the Delhi High Court under Section 9 of The Arbitration and
Conciliation Act, 1996 praying that the Respondents be restrained from
terminating the Joint Venture Agreement with the Petitioners herein. The Court
concluded that as per Article 7.3 of the Joint Venture Agreement either party
can terminate the agreement, hence the contract is of determinable nature.
The Delhi High Court referred to the case of RPS Educational Society vs Stroh
Brewary where the Apex Court had remarked that in cases of determinable
contracts, specific performance of determinable contract is statutorily barred
under Section 14(1) d of The Specific Relief Act 1963 and also under Section
41(h) which says that injunction will be refused when there is an equally
efficacious relief available to the parties. On the basis of this decision the
Court declined to give relief to the Petitioner and dismissed the application
for Interim relief preferred by them.
Parasoli Motors v/s BMW India Pvt Ltd:
The Respondent entered into an agreement with the Petitioner for the sale of its
cars in Gujarat. The Petitioner claimed before the Court there was a mutual
understanding with the Respondent that the dealership would be renewed on a
yearly basis. The Respondent due to the Petitioners inability to meet their
yearly targets terminated the said dealership in the year 2018.
The Petitioner filed an application under Section 9 of The Arbitration and
Conciliation Act, 1996( due to the arbitration clause in the dealership
agreement) seeking to restrain the Respondents from terminating the said
dealership as it was their contention that huge expenditure had been made by the
Petitioner to promote BMW in Gujarat , and unilaterally ending the contract
would cause huge hardship to them, which cannot be monetarily compensated.
The Delhi Court referred to the case of Planet M. Retail vs Select
Infrastructure Pvt Ltd wherein a Division Bench of the Delhi High Court
refused to restrain the termination of a License Deed on the grounds that the
License Deed entered into between the parties was terminable in nature and hence
Injunction could not be granted due to the statutory bar under Section 14 and
Section 41 of The Specific Relief Act, 1963. Thus the Court declined to give
relief to Parasoli Motors and did not restrain BMW India from terminating the
The above two Case Laws illustrated elucidate the approach of the National
Courts in dealing with Interim Reliefs in case of determinable contracts. Thus
it is quite lucid that the National Courts are loathe to grant Interim Relief in
case of determinable contracts . We shall endeavour to understand through the
next Case Law whether there is a possible exception to this rule and if so in
what kind of circumstances does it arise?
- Danieli Corus Bv v/s Steel Authority Of India(An Exception to the
rule?)-The Petitioner and the Respondent entered into an contract for setting up
an Blast Furnance at Rourkela Steel Plant. The Petitioner shared
technical drawings related to the Blast Furnance with the Respondent. The
drawings where in the nature of confidential information and where only to be
used for the purpose of the execution of the project.
The Petitioner claimed that the Respondent had uploaded the confidential
drawings of the Petitioner on a 3rd party website . The Petitioner also filed an
additional affidavit before the Court wherein it was affirmed that the
Respondent had floated a tender for Operational Tyres and the drawings of the
Petitioner where copied. In the light of these circumstances the Petitioner
preferred an application under Section 9 of The Arbitration and Conciliation
Act, 1996 to restrain the Respondents from further disclosing or disseminating
confidential information to 3rd parties.
The Respondent in reply to the said application contended that this was a
determinable contract for which no injunction could be granted and damages where
sufficient to compensate for the breach in contract.
The Court referred to the case of John Richard Brady vs Chemical Process
 where the Court invoked General Equity of Breach of
Confidence and restrained the Respondents from disclosing technical drawings as
the Court was of the opinion that such conduct was a breach of confidence and
amounted to unauthorized use of labour.
The Court also referred to the case of Zee Telefilms vs Sundilal
 where the Bombay High Court had restrained the
Respondents from disclosing confidential information even though the Contract
between the parties was determinable in nature, as the Court was of the opinion
that monetary compensation would not be sufficient to remedy the breach, and
hence Injunction was granted to the Petitioner.
Finally the Court made a reference to the case of Daljeet Titus vs Adebar
 where it was remarked Court will step in and grant Injunction
even in case of determinable contracts to prevent a breach of confidence.
After analysing all the above Case Laws the Court restrained the Respondents
from disclosing the drawings to 3rd parties, and opined that damages would not
be sufficient to remedy this breach of confidence. Furthermore the Court said
that once a party has obtained information on the basis of contractual terms it
cannot turn around and question the confidentiality of this information. It is estopped from
The above mentioned Case Laws help us understand the Judicial intricacies which
the Courts grapple with in regard to granting of Interim Relief in Determinable
Contracts. The Courts usually do not interfere on account of the statutory bars
provided under the Specific Relief Act, 1963 however if there are extenuating
circumstances like monetary compensation not being sufficient for the breach as
also provided in Section 38 of The Specific Relief Act, 1963 and to prevent
a breach of confidential information obtained through a contractual
relationship as enumerated through the above Case Laws the Courts will grant
Injunction in case of Determinable Contracts also.
- 2013 9 SCC 32
- 2012 (DLT) 552
- AIR 2002 SCC 2598
- 2018 (DLT) 753
- 2004 (DLT) 321
- 2017 (DLT) 423
- 2016 EWCA CIV 14444
- 2003(27) PTC 457(BOM)(DB)
- 2006 SCC ONLINE DEL 551