Interim Measures by Arbitral Tribunal

[leaglesamiksha]

Ques: What is the difference between the power to order interim measures of a civil court and that of an arbitral tribunal under Section 9 and Section 17, respectively, of the Arbitration and Conciliation Act 1996?

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[Intern]

Section 9 of the Arbitration and Conciliation Act 1996 deals with the power of a civil court to grant interim measures. Similarly, Section 17 of the Act deals with the power of an arbitral tribunal to order interim measures. These interim measures are:
a) Appointment of a guardian for a minor or a person of unsound mind for the purpose of arbitral proceedings
b) Obtain custody, preservation and sale of any goods which are the subject matter of an arbitration agreement
c) Securing the amount in dispute in the arbitration
d) Obtaining interim injunction
e) Appointment of a receiver
f) To detain, preserve and inspect any property or thing which is the subject matter of an arbitration agreement
g) Such other interim measure of protection as may appear to be just and convenient

The difference between the two sections is that in Section 9, an application for interim measures can be filed at three stages i.e.,
1. Before arbitral proceedings.
2. During arbitral proceedings.
3. At any time after the making of the arbitral award but before it is enforced.
But under Section 17, an application for interim measures may be filed only during the arbitral proceedings.
It is to be noted that once the arbitral tribunal has been constituted, no application for interim measure under Section 9 is entertainable by the court unless the court finds that circumstances exist which may not render the remedy provided under Section 17 efficacious.
Also, in case the court passes an order for interim measure of protection before commencement of arbitration, the arbitral proceedings shall be commenced within a period of 90 days from the date of such order.

[leaglesamiksha]

The parties who have an arbitration agreement or an arbitration clause in their contract have an option to get their dispute resolved by either the appointed sole arbitrator or an arbitral tribunal or by the courts which have original jurisdiction for the given case, i.e. civil district court of given area for either of the parties and High court for international arbitration agreement. Section 9 of the given act has provisions for passing interim measures by the court of law. The application for such measures has to be submitted
1.Before the commencement of arbitral proceedings
2.During the proceedings
3.After the award is declared but before it’s commencement
Sec 9 has the power to pass injunctions, select a receiver for the preservation of the claim so made. With the introduction of an amendment in the act which came in 2015, If the application is placed prior to arbitral proceedings, it is bound to commence within 90 days of such order passed by the court.
Under section 17 of the act gives the arbitral tribunal the power to pass interim measures as well. The application for such an interim measure has to be filed during the proceedings of the arbitration. The award passed by the tribunal is as good as an order passed by the court and is binding to the said parties. Defiance of the award will have consequences same as that of civil court for contempt under CPC. The basic difference between both the sections is the ambit of jurisdiction. Section 9 is a wider provision which can control the actions of the third party as well, for the protection of the suit whereas the tribunal is limited to 2 parties present in the dispute. If the court feels the award passed under sec. 17 is efficacious it can take on the matter and order a stay on such an award. The orders and awards passed by both court and the arbitral tribunal respectively, are eligible for appeals in the High Court or the Supreme Court of India.

[leaglesamiksha]

Section 9 of Arbitration and Conciliation act provides for the interim relief provided by a civil court in suits and Section 17 of the act provides for the interim relief by arbitration tribunal.
Whereas Section 9 provides for interim relief to any party in arbitration agreement by the way of interim measure application, the period to file application for interim relief is before the commencement and before the pronouncement and enforcement of award. Any relief granted by Section 9 of the act will be enforced same as if it is any other order or statute.
Section 17 of the act also provides for interim measures and any party in the arbitration agreement can file for interim measure through the application within a required time period which is before the commencement and pronouncement of the award. The act also states that any order passed by arbitral tribunal is equivalent to any other order passed by any civil court. The orders of section 17 are only appealable under section 37 of the act.
Though the major difference between section 9 and section 17 of the Arbitration and Conciliation act is that the provider of interim measure is civil court and arbitration tribunal respectively. Also, to invoke interim measure under section 9 an application for interim measure should be filed before constitution of Arbitral Tribunal or before the commencement of arbitral proceedings.

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