What is an Interim Measure by Court Under Section 9 of the Arbitration and Conciliation Act 1996

Ø Interim Measures in Arbitral Proceedings – Section 9

Interim measures in arbitration vary according to the facts, situations, circumstances and commands of huge importance. As discussed earlier, Section 9 of the Arbitration and Conciliation Act, 1996 provides provisions for interim measures in arbitration.

Section 9 is one of the most important provisions which is invoked majorly by the Courts of law in India under the scope and ambit of the Arbitration and Conciliation Act, 1996. The details of the provisions under Section 9 are provided below:

1.     Section 9 (1) of Arbitration and Conciliation Act, 1996 

Section 9 (1) lays down the conditions because of which one can approach the Court for interim measures before, after or during the procedure of arbitration or just after passing the arbitral award. 

Section 9 (1) provides a complete list of situations and conditions when a person may approach the Court for interim measures as well as the protections offered. Section 9 (1) confers the Court or the adjudicating authority with a number of powers to provide interim measures of protection according to its own discretion. Section 9 is further divided into two broad categories under Section 9 (1) (i) and Section 9 (1) (ii).

•       Section 9 (1) (i)

According to Section 9 (1) (i) of the Arbitration and Conciliation Act, 1996, an individual may file an application to appoint a guardian for a minor or for a person of unsound mind for arbitral proceedings. 

•       Section 9 (1) (ii)

Section 9 (1) (ii) provides a broad category of power to grant interim measures of protection to the Court or the adjudicating authority for the following:

•       According to Section 9 (1) (ii) (a), the Court may provide interim relief to preserve, interim custody or sale of goods, being the subject matter of the arbitration agreement under Section 7.

•       Under 9 (1) (ii) (b), the Court may grant an interim relief to secure the amount in dispute.

•       In any property related disputes, subject to arbitration proceedings, under 9 (1) (ii) (c), the Court may grant interim relief through the authorization of any person entering the land or the building in possession to either of the party or to take samples, for making any observations or any experiments whichever is necessary to obtain full information or total evidence.

•       The Court may also grant the relief of interim injunction under Section 9 (1) (ii) (d) provided that the conditions of establishment of prima facie case, balance of convenience in favor and irreparable damages are maintained. Under this clause, the Court may also appoint a receiver, a court officer appointed by the Court to supervise disputed properties or things in question.

•       Apart from these, Section 9 (1) (ii) (e) provides the Court discretionary power to provide any interim protections other than the ones listed above If the court deems it fit, just and convenient. In this regard, the Court has the same power to give orders like any proceedings before it.

2.   Section 9 (2) of Arbitration and Conciliation Act, 1996 

Section 9 (2) of the Arbitration and Conciliation Act, 1996 was incorporated after the 2015 amendment. Under section 9 (2) of the Arbitration and Conciliation Act, 1996, there is a statutory requirement to invoke arbitration and move the Court for the appointment of an arbitrator or if it is to be done through mutual consent, the parties have to take the necessary steps through mutual consent within a period of 90 days.

Under Section 9 (2), the period of 90 days is the basic benchmark in terms of invoking arbitration under Section 21 of the Arbitration and Conciliation Act, 1996.

3.   Section 9 (3) of Arbitration and Conciliation Act, 1996 

Section 9 (3) of the Arbitration and Conciliation Act, 1996 was also incorporated after the 2015 amendment.

Under Section 9 (3) of the Arbitration and Conciliation Act, 1996, there is a clear dictum against the Court entertaining an application under Section 9 once the Tribunal has been constituted unless there are some really exceptional circumstances which may justify a recourse to the Court even when an Arbitral Tribunal is in session. 

The general rule under Section 9 (3) is that if there is an arbitral tribunal in existence, one cannot resort to a Section 9 application in the Court of Law. 

Through the 2015 Amendment Act, the powers of the court to grant interim reliefs after the Constitution of the arbitral tribunal has been curtailed. Section 9 (3) of the Act, as inserted by the 2015 Amendment Act states that an application under Section 9 shall not be entertained by the Court unless the remedy sought from an arbitral tribunal under Section 17 is ‘inefficacious’.

The Supreme Court observed that the term “entertain” under Section 9 (3) of the Act means consideration of the issues raised by the applicant. The Apex Court held that the court entertains a matter when it takes it up for consideration, and such consideration may continue before pronouncing the judgment. 

Section 9 (3) would not be applicable once an application under Section 9 (1) has been “entertained” the main objective of interim relief applications under Section 9 is urgent disposal and ensuring that the arbitration proceedings do not become infructuous.

4.   A comparative discussion of Section 9 with Section 36 and Section 37 after amendment

Section 36 of the Arbitration and Conciliation Act, 1996 states the method of enforcement of an arbitral award. However, under Section 9 one can approach the court just before the enforcement of the arbitral award under Section 36.

On the other hand, if the arbitral award is enforced under Section 36 one cannot approach the court to file an application under Section 9.

Under Section 37 (1) (a) of the Act, one can appeal against an order if the Court refuses to grant any interim relief or the granted interim relief is not suitable under Section 9.

 

References:

1. Characteristics of Alternate Dispute Resolution (ADR) and Advantages and Disadvantages of Alternate Dispute Resolution (ADR)

 2. Legal Education in India: Challenges, Innovations, and a Vision

3. Sources of Law

4. Salient features of Arbitration and Conciliation Act, 1996.

5. Disscuss the Differences between Arbitration and Conciliation

6. What type of Matter Cannot be subject to ADR (Alternative Dispute Resolution)

7. Discuss the historical background and objectives of the Arbitration and Conciliation Act, 1996

 

 

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