Interim Measures: Tool To Protect Parties Under Arbitration
Author: Vaibhavi Chaturvedi
Introduction
Arbitration is the go-to modern mode of adjudication mechanism on the subject of industrial disputes of domestic and worldwide stature. Honest, fast and cheaper trials by way of an Arbitral Tribunal are the first and paramount precept of arbitration.
Interim measures are such a safeguard stated within the Arbitration and Conciliation Act, 1996 (“The Arbitration Act) that is the governing rules on arbitration in India. Interim Measure has been provided by the Arbitration Act in section 9 and section 17 of the Arbitration Act to the courts and arbitral tribunal respectively. The goal of Interim measures is to offer for certain precursory measures to higher guard the interest of one or both the parties; save you from the misuses and interference pursuant to the property in question.
Section 9 initially had a wider ambit of granting an interim relief compared to that of Arbitral Tribunal. But, The Arbitration and Conciliation modification Act, 2015 (“modification Act 2015”) introduced approximately some principal changes in which section 17 was conferred with a far wider ambit in addition to what was first of all circumscribed via the Indian parliament.
Interim relief from court vs. Arbitral Tribunal
Section 17 of the Arbitration and Conciliation Act, 1996 is the section for applications of interim measures before the Arbitral Tribunal. All types of interim measures are entertained with the aid of the Tribunal. The Arbitration and Conciliation (Amendment) Act of 2015 now gives the Tribunal as many powers as have been furnished to the court earlier under section 9 of the Arbitration and Conciliation Act, 1996. Each interim award passed through the Tribunal in response to section 17 application can now be enforced as an award by itself. The powers of the court under section 9 had been highly curtailed under the amended Act and the Tribunal has been given extra authority to pass interim orders under this section. The Tribunal also can amend and range its interim order in next proceedings consistent with how the state of affairs unfolds.[1]
After the 2015 Amending Act, delivered enormous changes to the purview of section 9 of the Arbitration Act as the same minimised the position of the courts in an arbitral proceeding making it steady with the scheme of section 5 of the Arbitration Act which states that no judicial authority shall intrude in an arbitral intending besides when required under this Act. The Amending Act of 2015 inserted sub-sections (2) and (3) to section 9, which presents that after a court passes an order for any interim degree under section 9, the arbitration proceedings shall begin within a duration of ninety days from the date of such order and as soon as the arbitral tribunal has been constituted, the court shall not entertain an application under section 9 except the court reveals that occasions exist which might not render the remedy provided under section 17 efficacious.
Similarly, where third parties will be affected by the relief asked for and it is inevitable to ask for such a relief; then section 9 should be applied for the duration of the proceeding as opposed to choosing a section 17 application. And the same was stated in Wind international (India) constrained and Ors. v. Enercon GmbH and Anr.[2] 2016 SCC on line Bom 1404(the case was decided after the 2015 Amendment) The Arbitral tribunal has no authority or competency or jurisdiction to skip a meantime comfort against a third birthday party.
Conclusion
As we know, both the provision of section 9 as well as section 17 relate with interim measures of protection however it is relevant to notice that both the provisions do not conflict with each other as section 9 gives the interim relief by means of the court while section 17 provide for the interim relief with the aid of the tribunal. But the powers afforded to the tribunal under section 17 is narrower that what is vested in the Courts under section 9 because the powers of the court are in no way controlled or constrained with the aid of the tribunal while the opposite may true in restricted situations. Similarly, the court can grant interim measure before or during the arbitration proceedings or even after the making of the arbitral award on the other hand the tribunal can grant an interim measure during the pendency of the arbitral proceeding before it. The Delhi High Court in the case of Atul Limited vs. Prakash Industries Ltd.[3], further enhancing the powers of the Court to grant interim measures, held that the recourse under Section 17 is an additional recourse and is not in substitution of Section 9 of the Arbitration Act and the Court can exercise its powers under Section 9 to grant interim measures even during the pendency of the arbitral proceeding.
[1] How to Draft an Application under Sec. 17 of the Arbitration and Conciliation Act, 1996. | Lex Research Hub
[2] Wind World (India) Limited vs Enercon Gmbh and 4 Others on 19 April, 2017
[3] Atul Limited vs Prakash Industries Ltd. on 26 March, 2003
