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Changes brought forth by the Arbitration and Conciliation (Amendment) Act, 2019 for Interim relief

Changes brought forth by the Arbitration and Conciliation (Amendment) Act, 2019

The 2015 amendment to the Arbitration and Conciliation Act, 1996, has ensured that the powers granted to a Court under Section 9 and an Arbitral tribunal under Section 17 are identical in nature.

However, great confusion was caused since the amendment also gave the arbitral tribunal the power to pass interim measures after making the arbitral award (but prior to its enforcement). These wordings were similar to that of Section 9 of the Act. However, the said addition to the provision caused great confusion since an arbitral tribunal would be “functus officio” (would not have the mandate to hear the matter) after passing such a final award.

This was clarified by the 2019 amendment which removed the words “or at any time after the making of the arbitral award but before it is enforced in accordance with section 36”, thereby giving the power to the arbitral tribunal to grant interim reliefs only during the course of arbitration proceedings and not thereafter.

 

In short

  • Section 17 of the Arbitration & Conciliation Act, 1996 gives the arbitral tribunal the powers to grant interim reliefs during arbitral proceedings.
  • The powers of the court under Section 9 and the powers of the arbitral tribunal under Section 17 of the Act are identical after the 2015 amendment.
  • While drafting a Section 17 application, one does not need to re-explain in detail the background facts of the dispute since the Tribunal is well-versed with the facts of the case.
  • The substance and requirements to be satisfied for both a Section 9 and Section 17 application are similar.

 

Statutory Reference Material

Section 17 of the Arbitration and Conciliation Act, 1996 Act (As amended in 2019): Interim measures ordered by the arbitral tribunal —

(1) A party may, during the arbitral proceedings of the the Arbitration and Conciliation Act, 1996, apply to the arbitral tribunal—

  1. for the appointment of a guardian for a minor or person of unsound mind for the purposes of arbitral proceedings; or
  2. ii) for an interim measure of protection in respect of any of the following matters, namely —

(a) the preservation, interim custody or sale of any goods which are the subject matter of the arbitration agreement;

(b) securing the amount in dispute in the arbitration;

(c) the detention, preservation or inspection of any property or thing which is the subject matter of the dispute in arbitration, or as to which any question may arise therein and authorising for any of the aforesaid purposes any person to enter upon any land or building in the possession of any party, or authorising any samples to be taken, or any observation to be made, or experiment to be tried, which may be necessary or expedient for the purpose of obtaining full information or evidence;

(d) interim injunction or the appointment of a receiver;

(e) such other interim measures of protection as may appear to the arbitral tribunal to be just and convenient and the arbitral tribunal shall have the same power for making orders, as the court has for the purpose of, and in relation to, any proceedings before it.

(2) Subject to any orders passed in an appeal under Section 37 of the the Arbitration and Conciliation Act, 1996, any order issued by the arbitral tribunal under this section shall be deemed to be an order of the court for all purposes and shall be enforceable under the Code of Civil Procedure, 1908 (5 of 1908), in the same manner as if it were an order of the court.]

 

Section 17 from the unamended 1996 Act:

Interim Measures by the Arbitral Tribunal —

(1) Unless otherwise agreed by the parties, the arbitral tribunal may, at the request

of a party, order a party to take any interim measure of protection as the arbitral tribunal may consider necessary in respect of the subject matter of the dispute.

(2) The arbitral tribunal may require a party to provide appropriate security in connection with a measure ordered under sub-section (1).

One can visibly see the difference between the amended and the previous version of the Section. The Tribunal has been empowered with the amendment taking place.

 

This Article Does Not Intend To Hurt The Sentiments Of Any Individual Community, Sect, Or Religion Etcetera. This Article Is Based Purely On The Authors Personal Views And Opinions In The Exercise Of The Fundamental Right Guaranteed Under Article 19(1)(A) And Other Related Laws Being Force In India, For The Time Being.

  • Changes brought forth by the Arbitration and Conciliation (Amendment) Act, 2019 for Interim relief
  • Statutory Reference Material
  • Concise

BY : mr. kartikeya Awasthi

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