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The Transitional Difference Between the Interim Measures of Court and Arbitral Court under the Indian Arbitration and Conciliation Act,1996

INTRODUCTION

Arbitration is a form of alternate dispute resolution, where parties come together for their dispute under a specific subject matter with respect to a valid arbitration agreement under section 7 i.e.  (validity of arbitration agreement) of arbitration and conciliation act, with the help of arbitrator appointed by the parties or the respective authority under section 11 i.e. (appointment of arbitrators) of arbitration and conciliation act 1996.

As the process of arbitration encompasses parties which elect their arbitrator under arbitration and conciliation act, which could involve inequity between the parties, which could also prejudice the rights of the parties as well as the arbitration proceedings. Which could be explained through an Illustration : “ A  and B party to an arbitration against a specific subject matter , A move towards the preserving the subject matter which could be vital towards the arbitral proceeding of the party , but A does not have vague idea about where to proceed for interim proceeding .“

What would a party who is an (A) do and grounds to seek interim measure from the court and arbitration court during the proceeding or after the proceeding? Well, the parties could seek interim protection from the court, as well as arbitrational court under section 9 and section 17 of arbitration and conciliation act, 1996, it creates a certain ambiguity whether which section to apply section 9 or 17 of the act. while clearing this ambiguity first we need to understand the respective sections.

 

SECTION 9:  LIFEGUARD OF A PARTY IN ARBITRATION

The literal interpretation of section 9 can equivocally be elucidated as any parties or party to arbitration “before” , “during the arbitrational proceeding”, “while making an arbitration award”, but “before enforcing that particular award”[1] can seek interim measures for appointment of guardian for a minor or not competent party who is unable to represent himself in a proceeding, detention of possessions which subject matter about the arbitration which includes items for possession of taking sample for the proceeding under section 9(3), where the power lies to the court for making any order for respective of the court.

Illustration: “A and B party to an arbitration against a specific subject matter, A move towards the preserving the subject matter before an arbitral proceeding which could be vital towards the arbitral proceeding of the party. “

From the above illustration: A can approach the court with the respect to section 9 but only when prima facie noticed and before an establishment of constituent arbitral tribunal or unless its prima facie noticed, satisfy the court”.

It shall also have been observed that only a ‘party to an arbitration ‘can approach and file a suit under a judicial authority, not anyone else can file suit against the party with respect to the authority.

The power of section 9 under arbitration is an imminent and influential which is enormously imperative under the proceeding of the arbitration it saves the party from the prejudice as well as invulnerable strong sustenance to the parties during the arbitration which includes (pre arbitration, during arbitration and post arbitration). In a judgement of a hon’ble Delhi high court where the court retaliated the scope of section 9 which is very broad and extensive which does not diminish the power of the court.[2]while the order given by the court can be implemented like any other decree of any court.

 

SECTION 17: HELPING HAND IN THE PROCESS OF ARBITRATION

The object of the enactment of the amended section 17 can be understood by an illustration “A and B party to an arbitration, during the arbitral proceeding after arbitral tribunal has been constituted, A seeks interim relief of a subject matter relating to the dispute approaches the court under 9.

From the above stated illustration, the court cannot entertain a suit filed under section 9 due to the fact presence of section 17 of arbitration and conciliation act, which the elaboration is given below.

The section 17 of the arbitration and conciliation act can be interpreted equivocally as interim measure ordered by the arbitral tribunal, where the power is shifted from the court to the arbitrational tribunal. The shifting of powers to arbitral tribunal only can take place when the arbitral tribunal is “constituted” but whilst the award is not enforced and enforced under the arbitral clause for invoking the interim measure towards the court. During the 2015 amendment the scope of section 17 became comprehensive while granting the powers to the arbitral tribunal for providing interim measures. The power of section 17 is still narrowed compared to section 9 of the arbitration and conciliation act, the main objective of enactment and amendment of section 17 was to curtail the limit of court intervention in arbitrational tribunal, the power of section 9 is still imperative even if there is consistent arbitral tribunal.

 

TRANSIT DIFFERENCE BETWEEN THE SECTION 9 AND 17 OF ARBITRATION AND CONCILLITION ACT,1996:

The distinction between section 17 and section 9 can be explained can be explained by given illustration- “A party to arbitration proceeds to the court for seeking interim measure a of subject matter to arbitration before the process of arbitration.

From the above illustration A can simply approach the court under section 9 of the arbitration, if  A proceeds towards court when there is arbitral tribunal and in the arbitration clause also states that the power to invoke interim measure is with arbitral tribunal, Court cannot grant him interim measures during the arbitration  under section 9 of the Arbitration and Conciliation act. Hence the section 17 comes alive during or when there is an established arbitral tribunal.[3]

Even if the subject-matter ranges through the sole arbitrator or arbitral proceeding the court during the sole arbitrator even before the commencing of the arbitrational proceedings the court cannot inhibit interim measure under section 9 of the act. [4]

If an arbitral tribunal is constituted and the co-arbitrators had forfeiture himself, a party moves for seeking interim measure under section 17 will be declared invalid, hence a party can move under section 9 of the arbitration act for interim measure [5]

Under section 9 of the arbitration act the interim measure can be passed by the court directing towards the third party but under 17 there is an ambiguity for passing the award towards the third party hence third-party direction cannot be approached under the section 17.

But if there is a competent arbitral tribunal then the party cannot approach towards the court under section 9 for seeking interim measures but only can approach the court under section 9 if the award is passed and is not enforced by the party to an arbitration.

The power and enactment of section 9 is very imminent, imperative under the arbitration and conciliation act which provides  a party a sustenance, durability and does not curtail his rights and prejudices the party ,while the section 17 is gives the power towards the arbitral tribunal and bound the judicial intervention in the process of arbitration, it also shall be noticeable that the parties can appeal the order passed by the arbitral tribunal under section 37 of the arbitration act which was ambiguous earlier, but the 2015 amendment cleared the ambiguity of section 17 also made it clear that the scope of section 9 and 17 of the arbitration act.

 

CONCLUSION

To conclude the article, as arbitration is a process which involves parties who appoints an arbitrator under the act, as stated that during the arbitral proceeding if a party needs to seek interim relief against the party for the grounds stated under section 9, the section 9 is an imperative and decisive power given to the judicial court towards the parties to an arbitration, which could prevent prejudice and preserve the rights of the party to an arbitration. Even though the enactment of arbitration and conciliation act,1996 was to curtail the inference of judicial intervention on the process of arbitration, as well as the amendment of section 17 ,which transits the power from court towards the arbitral tribunal constituted which also was the main the object was to limit the judicial intervention in the process of arbitration, it has been observed that given amendment towards section 17 conceding the power to constituted arbitral tribunal for limiting of judicial intervention but perceiving that the power towards judicial court does not defuses towards the party but certainly gets suspended when the arbitral tribunal is constituted. Hence the section 9 of the arbitration act is watchman lifeguard, remedial section in the process of arbitration which has a decisive role to play towards an arbitral proceeding although there is an enactment amendment of section 17 which does not give limit the power to judicial but limits the judicial intervention during the arbitral proceeding.

[1] Section 9 of arbitration and conciliation act,1996

[2] Leighton India Contractors v. DLF Ltd. & Ors. on 13 May, 2020

[3] Firm Asok Traders v. Gurumukhdas Saluja AIR2004 SC 1433

[4] National Highways Authority of India (NHAI) v. China Coal Construction Group Co.

[5] Bhubaneshwar Expressways Pvt. Ltd. v. NHAI


 

ABOUT THE AUTHOR

 

 

 

Kushagra Gahlot is currently in 4th year pursuing B.A. LL.B (Hons.)  from CMR University School of Legal Studies

 

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