Domestic Arbitration and its Interim Reliefs

Domestic Arbitration is one of the types of Arbitration, it takes place when the arbitration proceedings, the subject matter of the contract and the merits of the merits of the dispute are all governed by Indian law, or when the cause of action for the dispute arises wholly in India or where the parties are otherwise subject to Indian jurisdiction. In Domestic arbitration, the cause of action for the dispute should have arisen wholly in India or the parties are otherwise subject to Indian jurisdiction. Domestic arbitration is an attractive option for the settlement of disputes.

In some cases, it is seen that one of the parties deliberately prolong the time for the arbitration proceedings to prejudice the rights of the other party or for some other reason beneficial to them or to delay the pronouncement of the arbitral award against them and thereby delay the enforcement of the award. Such tactics by one party may render meaningless the final arbitral award of the aggrieved party before, during and after the arbitral proceedings till the award is enforce. Interim relief is like an urgent remedy granted in exceptional occurrences. Therefore, in order to protect the rights to the aggrieved party it is vital that some interim measures or interim relief be granted by the arbitral tribunal or the court. Yet in some circumstances, the interim relief may involve directives to some third parties also.

Mostly, the interim relief is granted when:-

In Section 9 and Section 17 of the Arbitration and Conciliation Act, 1996 are given as the provision which safeguard the interest of one party over the other. These sections enable any party to any arbitration agreement to file an application for interim relief from the court or arbitral tribunal respectively.

Interim relief under Section 9 of the Act

The section mentions that a party may put up an application for interim relief to the court before the commencement of arbitration proceedings, during arbitration proceedings or at any point of time before the enforcement of the arbitral award. Still, the power to grant interim relief to the aggrieved party before the arbitral tribunal is constituted and after the arbitral award is passed lies with the courts only.

Section 9 also states that in case the court passes an order for interim relief before the commencement of arbitral proceedings, then the arbitral proceedings shall have to be commenced within 90 days from the date of the interim relief order or within such further time that the court may grant. The section describes the type of interim relief that may be sought by a party; Application for interim relief may include the following:
   1. Appointment of guardian for a minor or person of unsound mind;
   2. Preservation, interim custody or sale of goods (if the goods are of perishable nature) for any goods related to the arbitration agreement;
   3. Securing the amount of claims;
   4. Allowing the detention, preservation or inspection of any property or thing, authorizing any person to enter upon any land or building, authorizing any samples to be taken or observations to be made or experiments to be tried in order to expedite the process and obtain accurate & complete information or evidence;
   5. Allowing interim injunction or appointment of receiver;
   6. Any other reliefs which the court considers proper taking into account the facts and circumstances of the case.

Under Section 9, any party to the arbitration agreement may file an application to the concerned court before or during the course of the arbitration. In any event an application for interim relief is pending before any court and the arbitral tribunal is constituted in meantime, it does not imply that the court cannot deal with the pending application.

Any wilful non-compliance or disobedience of the interim relief order may be treated as contempt of the court and dealt with according to the existing laws of the land. This interim relief granted by the court has to be enforced like any other order of the court

Interim relief under section 17 of the Act

The section gives the arbitral tribunal the power to ass an order for interim measures if a party applies to the tribunal for such interim relief. Only after the tribunal has been constituted till the arbitral award is passed, a party can apply for interim relief. The courts generally don’t allow any interim relief under section 8 in meantime. The arbitral tribunal cannot pass an interim relief order containing directives to same third party.

The interim relief that can be sought under this section is the same as that can be sought under section 9 which are mentioned in above-mentioned content. Any party to the arbitration agreement may file an application to the arbitral tribunal under this section during the course of the arbitration, i.e. after the arbitral tribunal has been constituted and up to the time the arbitral award has been made.

The enforceability of this section is as same as under section 9, the interim relief shall have the same force and shall be deemed to be an order of the court for all purpose. The order shall also be enforceable as if it were an order of the court. Any wilful non-compliance or disobedience of the interim relief order may be treated as contempt of the court and dealt with according to the existing laws of the land.

Conclusion

In the light of the above, it can be concluded that the power of the court to grant the interim measures under section 9 should extend to both the parties. And the evolution Section 17 makes it evident that the arbitral tribunals are now empowered to deal with interim measures independently without any intervention of the courts. Thus, even before the commencement of arbitration, during the arbitration proceedings and even after the passing of the arbitral ward, the aggrieved party is protected. The interim relief orders granted with the aid of the court or the arbitral tribunal are enforceable. The provisions of section 9 and section 17 are the paramount significance and are the integral component of the arbitration mechanism.