Interim Relief in Arbitration: Section 9, Section 17 and the Emergency Arbitrator

An arbitration can take a year or more, and a respondent who sees a claim coming may use the time to dispose of assets. The Arbitration and Conciliation Act, 1996 gives the claimant two sources of interim protection, one from the court and one from the tribunal. Knowing which to use, and when, can decide whether an eventual award is worth anything. This note describes them. It is general information, not advice on a particular dispute.

Relief from the court: Section 9

A party may apply to a court for interim measures before the arbitral proceedings, during them, or at any time after the award is made but before it is enforced. The measures include:

• securing the amount in dispute in the arbitration;
• the preservation, interim custody or sale of goods that are the subject of the arbitration agreement;
• an interim injunction or the appointment of a receiver; and
• other interim measures of protection that appear to the court to be just and convenient.

The court has the same power to make orders for these purposes as it has for the purpose of, and in relation to, proceedings before it. In Essar House Pvt. Ltd. v. Arcellor Mittal Nippon Steel India Ltd. (2022) the Supreme Court held that the strict provisions of the Code of Civil Procedure, such as those of Order XXXVIII, are not binding on the court when it considers a Section 9 application, but that the underlying principles guide it. The applicant should therefore show a prima facie case, a risk to its ability to recover, and the balance of convenience, and should be specific about the assets.

Two conditions

1. Start the arbitration. Section 9(2) requires that where a court passes an interim measure before the arbitral proceedings begin, the proceedings must be commenced within ninety days from the date of the order, or within such further time as the court may allow.
2. After the tribunal is constituted. Section 9(3) provides that once the tribunal has been constituted, the court shall not entertain an application unless it finds that circumstances exist which may not render the remedy under Section 17 efficacious. An applicant who files after the tribunal is in place must explain why the tribunal cannot give adequate relief.

Relief from the tribunal: Section 17

Once constituted, the tribunal may order a party to provide interim measures of the same kinds as the court, in respect of the subject matter of the dispute. Since the 2015 amendment, an order under Section 17 is enforceable in the same manner as if it were an order of the court, under Section 17(2). The tribunal may order a party to furnish security, to preserve evidence or to refrain from certain acts. This addresses the earlier weakness, that tribunal orders could not be enforced directly.

The Supreme Court held in Amazon.com NV Investment Holdings LLC v. Future Retail Ltd. (2021) that an emergency arbitrator's order under institutional rules is an order under Section 17 and may be enforced under Section 17(2). Where the rules of the institution provide for an emergency arbitrator, a claimant may obtain relief within days, before the tribunal is formed.

Foreign-seated arbitrations

The proviso to Section 2(2) makes Sections 9, 27 and 37(1)(a) and 37(3) applicable to arbitrations seated outside India, unless the parties have agreed otherwise. An Indian court may therefore grant interim protection over assets in India to support a foreign arbitration.

Choosing between them

• Use Section 9 before the tribunal exists, particularly where assets are at risk now.
• Use Section 17 once the tribunal is formed. It has the benefit of a decision-maker familiar with the dispute.
• Plan the arbitration notice and the court application together, so the ninety-day period is not an issue.
• Describe the assets and the risk precisely, and put evidence on the record.

An award is only as useful as the assets that remain to satisfy it. Interim protection, sought early and specifically, is how a claimant keeps them within reach.