SUBJECT: alternate dispute resolution

Project topic:
Interim relief in arbitration

Submitted By
Shekhar singh
Roll no. 1377
3 Year, 6 Semester, B.A.LL.B(Hons.)
rd th

Submitted to
Mr. Hrishikesh Manu
Faculty of alternate dispute resolution

Chanakya national Law University, Patna

october, 2017
ACKNOWLEDGEMENT

I am feeling highly elated to work on under the guidance of my ADR Faculty. I am

very grateful to him for the exemplary guidance. I would like to enlighten my readers
regarding this topic and I hope I have tried my best to bring more luminosity to this
topic.

I am very thankful to the librarian who provided me several books on this topic which
proved beneficial in completing this project.

I acknowledge my friends who gave their valuable and meticulous advice which was
very useful and could not be ignored in writing the project. I want to convey most
sincere thanks to my friends, for helping me throughout the project.

Last but not the least, I am very much thankful to my parents and family, who always
stand aside me and helped me a lot in accessing all sorts of resources.

I thank all of them!

Shekhar Singh

1
Index

Chapter 1 Introduction................................................................................................3-5

Chapter 2 Interim Measures.....................................................................................6-15

Chapter-3 Comparison Between Section 9 and Section 17 ...................................16

Chapter-4 Effect of 2015 Amendment .................................................................18-20

Conclusion................................................................................................................21

Bibliography.................................................................................................................22

2
 Introduction

Arbitration, a form of alternative dispute resolution (ADR), is a

technique for the resolution of disputes outside the courts, where the parties to a
dispute refer it to one or more persons by whose decision (the "award") they agree
to be bound. It is a resolution technique in which a third party reviews the evidence
in the case and imposes a decision that is legally binding for both sides and
enforceable. Other forms of ADR include mediation (a form of settlement
negotiation facilitated by a neutral third party) and non-binding resolution by
experts.

Meaning & Scope

Arbitration is a proceeding in which a dispute is resolved by an impartial

adjudicator whose decision the parties to the dispute have agreed, or legislation has
decreed, will be final and binding. There are limited rights of review and appeal of
arbitration awards. In the terms of section 2(1)(a) of the Arbitration & Conciliation
Act, 1996, “arbitration means any agreement whether or not administered by
permanent arbitral institution.”

Law encourages parties, as far as possible, to settle their differences

privately either by mutual concessions or by the mediation of the third person.
When the parties agree to have their disputes decided with the mediation of a third
person, but with all the formality of a judicial adjudication, that may be, speaking
broadly, called arbitration. An arbitration, therefore, means the submission by two
or more parties of their dispute to the judgment of a third person, called the
arbitrator and who is to decide the controversy in a judicial manner.1

1
Dr. Avtar Singh, Law of Arbitration & Conciliation, 10th Ed., Eastern Book Company, Lucknow, 2013, p. 14.

3
 Arbitration has been defined by ROMILLY MR in the well-known case
of Collins v. Collins2. It was held that “………An arbitration is a reference to the
decision of one or more persons, either with or without an umpire 3, of a particular
matter in difference between the parties………”

In the recent case of Sharma Prathishthanam v. Madhok Construction

(P) Ltd.4, Supreme Court held that “………An arbitration is the reference of the
dispute or difference between not less than two parties for determination, after
hearing both sides in a judicial manner, by a person or persons other than a court
of competent jurisdiction………”

Arbitration is often used for the resolution of commercial disputes,

particularly in the context of international commercial transactions. The use of
arbitration is also frequently employed in consumer and employment matters,
where arbitration may be mandated by the terms of employment or commercial
contracts. The main characteristics of arbitration are as follows:-

1. Arbitration is consensual.
2. The parties choose the arbitrator(s).
3. Arbitration is neutral.
4. Arbitration is a confidential procedure.
5. The decision of the arbitral tribunal is final and easy to enforce.

Advantages of Arbitration

Parties often seek to resolve their disputes through arbitration because of

a number of perceived potential advantages over judicial proceedings. Some of
them are given below:-

2
28 LJ Ch 186.
3
The institution of umpire has been replaced by the 1996 Act with that of presiding arbitrator.
4
AIR 2005 SC 214.

4
1. When the subject matter of the dispute is highly technical, arbitrators with an
appropriate degree of expertise can be appointed (as one cannot "choose the
judge" in litigation).

2. Arbitration is often faster than litigation in court.

3. Arbitration can be cheaper and more flexible for businesses.

4. Arbitral proceedings and an arbitral award are generally non-public, and can be
made confidential.

5. In arbitral proceedings the language of arbitration may be chosen, whereas in

judicial proceedings the official language of the country of the competent court
will be automatically applied.

Disadvantages of Arbitration

1. Arbitration may be subject to pressures from powerful law firms representing

the stronger and wealthier party.

2. If the arbitration is mandatory and binding, the parties waive their rights to
access the courts and to have a judge or jury decide the case.
3. In some arbitration agreements, the parties are required to pay for the
arbitrators, which add an additional layer of legal cost that can be prohibitive,
especially in small consumer disputes.

4. There are very limited avenues for appeal, which means that an erroneous
decision cannot be easily overturned.

5. Although usually thought to be speedier, when there are multiple arbitrators on

the panel, juggling their schedules for hearing dates in long cases can lead to
delays.5

5
http://en.wikipedia.org/wiki/Arbitration#Advantages_and_disadvantages as accessed on 19/10/2013

5
 Chapter-2

Interim Measures

Introduction

In arbitral proceedings, the need often arises for provisional remedies or

other interim measures of reliefs because, in reality, arbitral proceedings are no
less adversarial than litigation in public courts. When a dispute arises, aggrieved
party is always concerned with protecting his interest either in movable or
immovable properties. Party is always interested in taking timely action against
another party or parties so that his or her interest in the properties is protected. This
prompt and timely action makes other party or parties unable to play any sort of
mischief by way of tampering with properties. Thus Arbitration and Conciliation
Act, 1996, under Section 9 gives parties power to approach Courts for seeking
interim measures. Often it sounds against the basic philosophy of Arbitration for
allowing Court’s intervention, but for many reasons such judicial interventions are
inevitable.6

Interim Measures: The Concept

Interim Measures are granted during the pendency of adjudication of a

dispute and are usually in the form of injunctions, specific performance, pre-award
attachments etc. By definition, ‘interim reliefs’ are temporary or interim in nature
and are granted in advance of the final adjudication of the dispute by the arbitral
tribunal.

Under the Arbitration Act, 1940, a party could commence proceedings

in a court by moving an application under section 20 for appointment of an
arbitrator and simultaneously it could move an application for interim relief under

6
http://www.ophiuchus.co.in/global/relief.htm as accessed on 19/10/2013.

6
the Second Schedule read with Section 41(b) of the old Act. Under the New Act of
1996, Section9 empowers the court to order a party to take interim measure or
protection when an application is made. Besides this section 17 gives power to the
Arbitral Tribunal to order interim measures unless the agreement prohibits such
power.7

Interim Relief u/s Sec 9

Section 9 of the Arbitration and Conciliation Act, 1996 reads as follows:

“9. Interim measures, etc., by Court .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
subject-matter 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;
7
http://www.caclubindia.com/articles/-analysis-of-interim-measures-u-s-9-and-17-of-arbitration-and-
conciliation-act-1996-17637.asp#.UmwPtCftuHC as accessed on 19/10/2013

7
 (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”.8

This section provides for the making of orders for interim measures to
provide interim relief to the parties in respect of arbitrations. The power of the
court includes an order in respect of the following matters:

1. The prevention, interim custody or sale of any goods which are the subject
matter of the reference.

2. Securing the amount in dispute in the reference.

3. The detention, preservation or inspection of any property or thing which is the

subject of the reference or as to which any question may arise therein and
authorizing for any of the aforesaid purposes any person to enter upon or into
any land or building in the possession of any party to the reference, or
authorizing 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.

4. Interim injunctions or the appointment of a receiver.

5. The appointment of a guardian for a minor or person of unsound mind for the
purpose of arbitration proceedings.9

Scope of the section

It appears that the scope for application of an interim measure under

section 9 of the Indian Act is as wide as the scope under Article 9 of the

8
S. 9 of the Arbitration and Conciliation Act, 1996.
9
Dr. Avtar Singh, Law of Arbitration & Conciliation, 10th Ed., Eastern Book Company, Lucknow, 2013, p. 96.

8
UNCITRAL (United Nations Commissions International Trade Laws) Model Law.
Section 9 allows a party to seek those interim measure laid down under sub-clause
(a) to (d) as well as ‘any other measures’ a court deems appropriate under sub-
clause (e). Moreover, section 9 does not limit the grant of interim measures to the
subject matter of the dispute and secondly, sub-clause (e) grants courts the
discretionary power to grant such interim measures as appears just and
convenient.10

Sub section (2) of section 2 of Act of 1996 provides in a clear and

unambiguous language that Part I shall apply where the place of Arbitration is in
India. However, the Delhi High Court, in Dominant Offset (P) Ltd v. Adamovske
Strojirny SA,11 where the arbitration took place at London, held that Part I also
applies to International Commercial Arbitration conducted outside India. As far as
the position of the Indian Law is concerned, this decision seeks to clarify the scope
of the powers of an Indian court to grant interim relief in international commercial
arbitration. The rule that seems to emerge is that when the parties have specifically
intended that: (a) the law governing the contract; (b) the rules governing the
arbitration; and (c) the court’s jurisdiction and the place of arbitration are outside
India, then it would signify that the Indian court’s jurisdiction and applicability of
Part 1 of the Act (which contains the power of the Indian courts to provide interim
measures) are excluded.

One of the controversies that emerged after the passing of the Indian Act
was with regard to the point of time when an application could be made to a court
for granting interim relief. This controversy was finally settled by the Indian
Supreme Court in its landmark mark judgment of Sundaram Finance Ltd. v. NEPC
India Ltd12. The Supreme Court held that Section 9 is available even before the
commencement of the arbitration. It need not be preceded by the issuing of notice
invoking the arbitration clause. This is in contrast to the power given to the
arbitrators who can exercise the power u/s 17 only during the currency of the

10
http://www.ophiuchus.co.in/global/relief.htm as accessed on 19/10/2013
11
1991 Arb LR 335 (Del).
12
AIR 1999 SC 565.

9
Tribunal. Once the mandate of the arbitral tribunal terminates, Section 17 cannot
be pressed into service.

The period for purpose of appeal against orders granting of refusing to

grant interim relief is 90 days from the date of decree or order as per article 116(a)
of the Limitation Act.

Factors influencing interim relief

A party seeking to obtain an interim measure (particularly before the

arbitral tribunal has been constituted) must ensure that by taking steps in a court
and thereby submitting to the jurisdiction of the domestic court it does not waive
any rights it has under the arbitration agreement. The ability to obtain an interim
measure will generally depend upon the procedural law governing the arbitration
and the law in the jurisdiction in which the interim measure is sought to be
enforced. Generally, an applicant party needs to establish the following factors:

1. There is an “urgent need” for the interim measure.

2. Irreparable harm will result if the measure is not granted.

3. The potential harm if the interim measure is not granted substantially

outweighs the harm that will result to the party opposing the measure if the
measure is granted.

4. There is a substantial possibility that the applicant will ultimately prevail in the
dispute.

Purpose of interim Measures

The purpose of enacting section 9, read in the light of model law and
UNCITRAL rules is to provide a relief in the nature of an interim measure of
protection. The order of the court should fall in the category of interim measures of
protection as distinguished from an all time or permanent protection. The purpose

10
is to protect the rights of the parties which are under adjudication from being
frustrated.13

Effect of Interim Measures

An interim measure does not put to rest the rights of the parties. The
rights of the parties are required to be adjudicated finally when a reference is
made. The court has the authority and jurisdiction to pass interim orders for
protection and preservation of rights of the parties during the arbitration
proceedings but that does not necessarily mean that if a party has availed of a
benefit under this jurisdiction, the other party cannot put his claim in the main
proceedings which is before the arbitrator. The interim arrangement made by the
court has to e given the interim status.14

Drawbacks of the Provision

The Law Commission of India in its 176th report published in 2001

noted a number of loopholes in the provisions for interim relief in the 1996 Act
which were exploited by the parties after the Act came into force.

Provisions contained in section 9 regarding the availability of interim

relief even before the arbitration proceedings commence had been misused by
parties. It so happened that after obtaining an interim order from the court, parties
did not take initiative to have an arbitral tribunal constituted. This allowed them to
reap the benefits of the interim order without any time limit.

The Law Commission in its 176th report, observed that very often, in
the past, Parties had used underhand means to destroy evidence which they felt

13
Firm Ashok Traders v. Gurumukh Das Saluja, (2004) 3 SCC 155.
14
Dr. Avtar Singh, Law of Arbitration & Conciliation, 10th Ed., Eastern Book Company, Lucknow, 2013, p.
109.

11
could go against them during the Arbitral Proceedings or had attempted to concoct
witnesses and tamper with evidence, in the possession of a third party. As a result,
there is an immediate need to change the provisions of the existing section, so that
the Tribunal could get more powers to deal with such situations.

Interim Relief u/s 17

Section 17 the Arbitration & Conciliation Act, 1996 reads as follows:

“17. Interim measures ordered by arbitral tribunal .(1) Unless

otherwise agreed by the parties, the arbitral tribunal may, at the request
of a party, order a party to take any interim measure of protection as the
arbitral tribunal may consider necessary in respect of the subject-matter
of the dispute.

(2) The arbitral tribunal may require a party to provide appropriate

security in connection with a measure ordered under sub-section (1)”.15

Section 17 of the Act has to read along with section 9 of the Act 1996 to
have a clear picture. While section 9 provides for the taking of interim measures
by the court in certain matters, section 17 provides for taking of interim measures
in respect of the subject-matter of the dispute by the Arbitral Tribunal. The essence
of section 17 is that the interim order u/s 17 must relate to the protection of
subject-matter of dispute and the order may be addressed only to a party to
arbitration. It cannot be addressed to other parties and no power is conferred u/s 17
of the Act of 1996 upon the arbitral tribunal to enforce its order nor does it provide
for judicial enforcement thereof.16 This section of the act deals with the interim

15
S. 17 the Arbitration & Conciliation Act, 1996.
16
Kohli Hari Dev, New Case Law Reference on Arbitration & Conciliation Act, Universal Law Publication,
New Delhi, 2008, p. 175.

12
measures ordered by the Arbitral Tribunal with the consent and agreement of the
parties in dispute within the arbitral jurisdiction of India and not outside India.17

Scope of the Section

In the absence of any power given to the arbitrator under the arbitration
agreement, he had under the statute no power to pass any interim order by way of
injunction.

The M. P. High Court in the case of Daulatram v. Shriram18 held:

“…….…The arbitrators have not been vested by the Act19 with any powers to grant
interim orders for the protection and safety of the subject-matter of the dispute.
Such powers had, therefore, to be vested in the court under s. 41(b) of the Act read
with Second Schedule…………”

After passing of Act of 1996, it was held in the case of Delta

Construction Systems Ltd., Hyderabad v. Narmada Cement Company Ltd.,
Bombay20: “…………apart from the Court, under section 17, the Tribunal itself at
the request of the party, may order a party to take any interim measure of
protection as the Tribunal may consider necessary in respect of the subject- matter
of the dispute and for that purpose, may require the party to provide appropriate
security in connection with a measure ordered under sub-section (1)………”

It will be seen that a Court has been given extensive powers u/s 9 of the
Act to give directions by way of interim measures. A part of that power has been
given to the arbitral tribunal u/s 17. That power is that an arbitral tribunal may
order a party take any interim measure of protection, as it may be considered
necessary, in respect of the subject-matter of the dispute.21

17
Marriott International Inc. v. Ansal Hotels Ltd., AIR 2000 Del 377.
18
AIR 1964 MP 219.
19
Arbitration Act, 1940.
20
(2002)2 Arb LR 47 Bom.
21
Chawla S. K., Law of Arbitration & Conciliation, 3rd Ed., Eastern Law House, New Delhi, 2012, p. 536.

13
 However it was held that though section 17 gives the arbitral tribunal the
power to pass orders, the same cannot be enforced as orders of a court. It is for this
reason that section 9 admittedly gives the court power to pass interim orders
during the arbitration proceedings.22

Drawbacks of the Provision

The contractual nature of arbitration gives rise to several unique

difficulties.

1. Non-enforceable nature of interim measures granted by an arbitral tribunal is

an accepted disadvantage that an Arbitral Tribunal faces when granting interim
relief and without any coercive enforcement powers.

2. A common difficulty in arbitration occurs when resolution of the dispute

involves a third party against whom no order of the Tribunal shall be valid for
the reason of lack of jurisdiction.

3. When interim measures of protection are needed against one of the parties to
the arbitration, issues arise as to the availability of such remedies when they are
sought at early stages in an arbitral proceeding.

4. Parties to arbitration also face difficulties when one party seeks interim relief at
an early stage of the proceeding. In arbitration, it is typically difficult to obtain
such relief expeditiously, because the Arbitral Tribunal has not yet been
constituted. Thus, most parties in need of this immediate assistance seek the aid
of national courts for this emergency relief. If a party seeks to delay the
opposing party’s request for an injunction or attachment, that party can slow
the process considerably by taking a long time to select an arbitrator.

22
Sundaram Finance Ltd. v. NEPC India Ltd., AIR 1999 SC 565.

14
5. The Tribunal’s jurisdiction to grant interim measures may be limited by the
governing law of the arbitration.23

23
http://www.ophiuchus.co.in/global/relief.htm as accessed on 19/10/2013.

15
 CHAPTER 3

COMPARISON BETWEEN BOTH THE SECTIONS

Analysis of both the sections would lead us to the following

conclusions:-

1. The new arbitration act enables the arbitral tribunal to pass orders for giving
interim relief while such power is not vested under the old act.

2. Powers u/s 17 can be exercised only after the arbitral tribunal is constituted and
it starts functioning.

3. Powers of court u/s 9 are wide as the words “before, during or after” indicate
so. A party can approach the court to seek interim measures of protection even
before the arbitration commences. The Supreme Court in the case of Firm
Ashok Traders v. Gurumukh Das Saluja24, held: “…………section 17 would
operate only during the existence of the arbitral tribunal and its being
functional. During that period, the power conferred on the arbitral tribunal
under Section 17 and the power conferred by the Court under Section 9 may
overlap to some extent but so far as the period pre and post the arbitral
proceedings is concerned the party requiring an interim measure of protection
shall have to approach only the Court…………”

4. Court’s powers are wide and have supremacy in granting interim relief.
However interference of court when Tribunal is constituted is minimum.

5. The Court can exercise power u/s 9 to grant interim measures even during the
pendency of application u/s 17 before the Arbitral Tribunal. Remedy available
to a party u/s 17 is an additional remedy and is not in substitution of section 9.

24
AIR 2004 SC 1433

16
 CHAPTER4

EFFECT OF 2015 AMENDMENT ON INTERIM MEASURES

There are four major changes with respect to the interim reliefs made to the Arbitration Act
after the promulgation of the Arbitration and Conciliation (Amendment) Ordinance, 2015
(the, “Amendment Ordinance”). Interim reliefs are one of the first provisions where changes
made by the Amendment Ordinance will be caused to parties initiating arbitrations. Interim
reliefs are contained under Sections 9 and 17 of the Arbitration and Conciliation Act, 1996
(the, “Arbitration Act”). Both are contained in Part – I of the Arbitration Act and were
applicable to domestic arbitrations, i.e. arbitrations seated in India. While Section 9 contains
the power of a court to grant interim measures, Section 17 is a similar power conferred to an
arbitral tribunal. Interim measures are generally granted to preserve the status of the property
in dispute, or to prevent prejudice to any party before the commencement or during the
pendency of the arbitration. Several defects were noticed in the practical implementation of
these remedies that resulted in several amendments being made to them. The changes to these
provisions include, (1) extension of interim measures under Section 9 to international
commercial arbitrations; (2) fixed timelines for initiating an arbitration after obtaining an
interim relief under Section 9; (3) bar on parties to approach a court for interim reliefs during
the pendency of the arbitration; (4) interim reliefs are now enforceable as decrees of courts.

Interim Measures under Section 9 now extend to International Commercial

Arbitrations:

A proviso has been added to section 2 of the Principal Act, which now makes Section 9 of the
Arbitration applicable to international commercial arbitration even if the place of arbitration
is not in India.

Reasoning: Section 2(2) of the Arbitration and Conciliation Act, 1996 mentioned in Part I of
the Act, earlier used to state that, “[t]his Part shall apply where the place of arbitration is in
India.” In comparison, article 1(2) of the UNCITRAL Model Law, which had been
mentioned in the preamble of the Act, stated that “the provisions of this Law…apply only if
the place of arbitration is in the territory of this State.” The preamble of the Act mentions that
it is expedient to frame laws regarding arbitration and conciliation keeping the Model Law in

17
regard. The fact that the word “only” was not included in the Indian statute despite being
mentioned in the Model Law, which the Indian statute seeks to implement, has raised some
confusion whether this leads to a conclusion that the Indian Act is applicable for even those
arbitration proceedings for which the seat is not India. This issue has been dealt with in two
significant Supreme Court cases. These are Bhatia International vs. Interbulk Trading SA25
26
and Bharat Aluminum and Co. vs. Kaiser Aluminium and Co. (BALCO) . The Supreme
Court in Bhatia, held that Part I mandatorily applied to all arbitrations held in India. In
addition, Part I applied to arbitrations conducted outside India unless it was expressly or
impliedly excluded. This position was followed in several cases until the BALCO judgment.
The Supreme Court in BALCO decided that Parts I and II of the Act are mutually exclusive
of each other and the intention of Parliament was that the Act is territorial in nature and
sections 9 and 34 will apply only when the seat of arbitration is in India. Though the BALCO
judgment was although for the favorable purpose of reducing judicial interference but it also
led to certain unwanted results. The Law Commission has provided certain instances to
illustrate this point. For example, when the assets of a party are located in India, and there is
likelihood that that party will dissipate its assets in the near future, the other party will lack an
efficacious remedy if the seat of the arbitration is abroad. It is a possibility that a foreign
party would obtain an arbitral award in its favor only to realize that the entity against which it
has to enforce the award has been stripped of its assets and has been converted into a shell
company. Due to this the Amendment Ordinance has made changes and now parties to
arbitration proceedings taking place outside of India will be able to approach Indian courts
for interim measures even before the commencement of arbitration proceedings.

Fixed timelines for initiating arbitration after interim measures under Section 9:

The amendment has inserted sub-sections (2) and (3) to the original section 9 which has been
renumbered as section 9(1) now. Section 9(2) states that if a court passes an interim order
under section 9(1) before the commencement of arbitral proceedings, the arbitral proceedings
shall commence within a period of 90 days of the passing of such order.

Reasoning: Prior to the amendment there was no express duty on a party approaching a court
for interim relief (usually prior to the commencement of the arbitration) to initiate arbitration.
This resulted in a situation that a party would obtain interim reliefs and would prolong

25
[(2002) 4 SCC 105]
26
[(2012) 9 SCC 552].

18
intiating the arbitration given that its interests were protected. This would not only pose risks
of abuse of process but also delay the initiation and the determination of the dispute through
arbitration. The insertion of timelines is a positive change made overall in the scheme of the
act to ensure discipline and speedy resolution of disputes through arbitration.

Section 9 cannot be availed during the conduct of the Arbitration

The insertion of Section 9(3) reduces the amount of intervention by the judiciary in terms of
interim measures. It states that the after the arbitral tribunal has been constituted, the court
shall not entertain any application under section 9(1) unless there are circumstances which
can render remedy provided under section 17 ineffective.

Reasoning: The position in the amended statute was largely being followed by courts
however there still remained a fear of forum shopping by parties. This danger was given the
powers under Section 9 and 17 could be exercised concurrently. Given an express change
ordinarily Section 9 proceedings now will not be available to parties during the pendency of
the arbitration. Such measures though may be resorted to when Section 17 proceedings are
ineffective. This will now be required to be specifically pleaded by a party which prefers such
an application seeking interim measures from the Court under Section 9. One instance where
such an application can be made, and such an exemption may be availed is when the interim
measure concerns a third party which is not before the Arbitral Tribunal. Given that the
Arbitral Tribunal is a creature of specific agreement between parties, it can only pass interim
orders under Section 17, which bind persons before it. This limitation of jurisdiction does not
apply to interim measures that can be granted by Courts under Section 9.

Interim Measures under Section 17 now enforceable as decrees

Section 17 of the principal Act has been replaced with a new section that gives more teeth to
interim measures by arbitral tribunals. Under the old section, the tribunal could pass interim
measures but such measures could not be implemented, as they were not treated at par with
an order of court. The new section lays down that any order passed by the arbitral tribunal
under section 17 will be deemed to be an order of the court for all purposes and be
enforceable under CPC as if it were a on order of the court.

19
Reasoning: Under section 17, the arbitral tribunal has the power to order interim measures of
protection, unless the parties have excluded such power by agreement. But section 17 of the
principal Act lacked effectiveness due to the absence of statutory mechanism for the
enforcement of interim orders of the arbitral tribunal.

In Sundaram Finance Ltd v. NEPC India Ltd.27, the Supreme Court held that though section
17 gives the arbitral tribunal the power to pass orders, the same cannot be enforced as orders
of a court. In M.D. Army Welfare Housing Organisation v. Sumangal Services Pvt. Ltd. 28the
Court had held that under section 17 of the Act no power is conferred on the arbitral tribunal
to enforce its order nor does it provide for its judicial enforcement.

The Delhi High Court tried to find a solution to this problem in the case of Sri Krishan v.
Anand The Court held that any person failing to comply with the order of the arbitral tribunal
under section 17 would be deemed to be “making any other default” or “guilty of any
contempt to the arbitral tribunal during the conduct of the proceedings” under section 27 (5)
of Act. The remedy of the aggrieved party would then be to apply to the arbitral tribunal for
making a representation to the Court to mete out appropriate punishment. Once such a
representation is received by the Court from the arbitral tribunal, the Court would be
competent to deal with such party in default as if it is in contempt of an order of the Court,
i.e., either under the provisions of the Contempt of Courts Act or under the provisions of
Order 39 Rule 2A Code of Civil Procedure, 1908.

The Law Commission in its report felt that the judgment of the Delhi High Court in Sri
Krishan v. Anand is not a complete solution and recommended amendments to section 17 of
the Act which would make orders of the Arbitral Tribunal enforceable in the same manner as
the Orders of a Court. Keeping these suggestions in mind the Arbitration Ordinance remedies
the enforceability of interim measures under Section 17.

27
[(1999) 2 SCC 479
28
[(2004) 9 SCC 619],

20
 Conclusion

While drafting arbitration clause, one should keep in mind whether the arbitral
tribunal should be given the power to grant interim relief or not. If arbitration clause
provides for such power to arbitral tribunal, then one need not approach the court for such
relief. The system of dual agency for providing relief needs to be abolished or otherwise
some enforcement mechanism be provided for enforcement of the interim measures of
protections ordered by the Arbitral Tribunal. It would be better that application of interim
measures is put to the Arbitral Tribunals as they are seized of the subject matter under
dispute. Only when a party is not able to get relief from the Arbitral Tribunal, it should be
allowed to knock the doors of the Court. This will be in line with the objectives of the Act
to minimize the intervention of the Court in arbitral proceedings.

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 Bibliography

Books & Acts:-

 Chawla S. K., Law of Arbitration & Conciliation, 3rd Ed., Eastern Law House,
New Delhi, 2012.

 Kohli Hari Dev, New Case Law Reference on Arbitration & Conciliation Act,
Universal Law Publication, New Delhi, 2008.

 Dr. Avtar Singh, Law of Arbitration & Conciliation, 10th Ed., Eastern Book
Company, Lucknow, 2013.

 Basu N. D., Law of Arbitration & Conciliation, 12th Ed., Orient Publishing
House, New Delhi, 2013.

 The Arbitration and Conciliation Act, 1996

Web Links:-

 http://www.caclubindia.com/articles/-analysis-of-interim-measures-u-s-9-and-
17-of-arbitration-and-conciliation-act-1996-17637.asp#.UmwPtCftuHC

 http://en.wikipedia.org/wiki/Arbitration

 http://www.ophiuchus.co.in/global/relief.htm

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