Authored By- Smriti Sneha Sahu

Symbiosis Law School Pune

The scheme of the UNCITRAL Model Law on International Commercial Arbitration promotes the resolution of arbitral disputes with least interference of the Court. That said, the Model Law also prescribes the option to parties to approach the Court or the Tribunal (based on its constitution) to seek interim measures under Article 9 and 17. The party may apply to appoint a guardian for a minor or person of unsound mind, apply for interim injunctions or seek preservation, sale or inspection of the goods/ property involved in the dispute under Section 9 and 17 of the Indian Arbitration Act. Therefore, the purpose of these sections is intended to protect the interests of the parties in case of any urgency/contingency arising during the pendency of the arbitral process. The present article shall address and analyse the provisions with regards to interim measures in the Indian Arbitration Act. Thereafter, the author intends to analyse the contemporary issues that have arisen with regards to these sections. The author opines that it is the right time to strike the proverbial hammer, as the iron is hot, with regards to making India a hub for international arbitration. This strike should be through moulding the mindset of Courts with regards to their interference in the process concerning interim measures.

§ 9 of the Indian Arbitration Act, analogous to Article 9 of the UNCITRAL Model Law, codifies the right of a party to approach a Court before or during arbitral proceedings (before the enforcement of the award), to seek various remedies pertaining to the arbitration. Essentially, parties choose to apply under § 9, if the tribunal is yet to be appointed and the remedy is necessary, or the Tribunal has been appointed[1] but it may not render the relief sought. Similarly, § 17 of the Act provides for application to the Tribunal seeking interim measures for protection. These remedies have been codified and comprehensively cover the situations that may require the Court’s interference and exercise of jurisdiction.The remedies that are available to the parties are:

                         

With this background, this article shall analyse the provisions pertaining to interim reliefs and protection in the Indian Arbitration Act. This examination will encompass firstly, a description of the reliefs that a party may apply for under Section 9 and 17. Thereafter, this article will address the various criticisms that have imputed to the sections.Lastly, the author will conclude by asserting solutions to the issues that have arisen with respect to its application.

Urgency is a very natural possibility in subject matters concerning arbitration. The entire rationale behind this section is to alleviate situations which require immediate action by the party(s), and hence, the action of the Court.[2] The same is reflected in the Travaux of the UNICTRAL Model Law Drafting Committee.[3]Section 9, hence provides option to parties (the word used is ‘may’) to approach the Court in order to seek certain interim measures as prescribed. The requirement is to file an application specifying the remedy which is sought. The underlying caveat here is that only parties may approach the Court with respect to seeking remedy under this section.[4]Obviously, the Court will not address the substantive questions of the dispute, reserving those for the arbitrator.[5]

Further, the Courts in India, owing to various decisions,were perplexed as to at what stage or what time of the proceedings, can the party approach the Court to seek interim measures. However, this issue has been settled by the Supreme Court in Sundaram Finance Ltd. v. NEPC India,[6] wherein the Court has held that the party may apply to the Court at the following times:

The section mandates a two-pronged requirement: 1)there ought to be existence of an arbitration agreement [the Court need not consider its validity][7] and 2) that the Court must be convinced as to the requirement of interim relief, for justice in the impugned matter.If both these prongs are fulfilled, the Court may grant the interim relief as had been sought by the applicant party. Further considerations are the general principles that are required to be taken care of with regards to injunctive relief: i.e.prima facie case, presence of irreparable injury & balance of convenience are to be fulfilled, for the court to grant injunction to a party. It is also pertinent to note that the party will have to apply to the Courts of the Seat to seek interim reliefs.[8]

The scope of enquiry of the Court under Section 9 is settled; the Court does not have to entertain or consider the merits of the main matter. The Court will only consider whether interim relief is accrued in the matter in favour of the applicant party and refer substantive questions of merits to the arbitral tribunal. By considering merits of the case under Section 9 application, the Court will go against settled law of Patel Engineering[9], Adhunik Steels[10]and several other leading judgements.[11]

As mentioned, this section, in terms of the remedies it provides, is substantially similar to Section 9.A party may apply to the Tribunal to seek the remedies as prescribed, and such application ought to be made during the arbitral proceedings.[12]Herein, once the tribunal makes an order, the party would have to enforce this interim order/award as a decree of the Court under the Code of Civil Procedure.[13] Parties however, may choose to reduce the scope of this section by providing in the arbitration agreement,that interim reliefs shall

not be sought from the Tribunal by parties.[14] Further, it goes without mentioning, that the order of interim nature passed by the Tribunal will be replaced or supplemented by the final order of the Tribunal.

Overall, the broad remedies that may be sought by parties in Section 9 and 17 are similar, they differ in several primary factors;[15] Section 17 orders are made by the Tribunal, and this section does not deal with the enforcement of such orders. In contrast, Section 9 orders are made by the Court and hence, are directly enforceable.[16] Necessarily, another difference between the two provisions is that Section 17 can only be invoked after the constitution of the tribunal, while Section remedies can be claimed before and after commencement of the arbitration, until award is enforced.[17] The power of the Court to grant interim measures cannot be ousted by the parties’ agreement, because unlike Section 17, this provision does not begin with the preambulatory clause ‘unless the parties otherwise agree’.[18]

Essentially, the role of Court to grant interim remedies ceases after the tribunal has been constituted. This is because the tribunal takes up the jurisdiction to adjudicate the disputes between the parties, owing to theprinciple of party autonomy.[19] Hence, the question arises as to whether the Court can entertain Section 9 applications once the tribunal has been constituted. The Court will not entertain an application under Section 9, if the Tribunal has been constituted as the appropriate remedy lies in Section 17. This law has been rightly adopted by various High Courts as well, to ensure limited interference once the tribunal has been appointed.[20] However, the Court may entertain an application under Section 9, after constitution, if the remedy sought will be inefficacious before the Tribunal.[21] The Delhi High Court in Benara Bearings &  Pistons v. Mahle Engine Components[22]has further held that once tribunal has been constituted, and there is a Section 9 application pending, the Court was required to relegate it to the Tribunal instead of deciding upon the same.