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Emergency Arbitration in India: An Overview
Introduction
The definition of Emergency Arbitrator (‘EA’) has not been explicitly mentioned either in Arbitration and Conciliation Act, 1996 (‘Act of 1996’) or in Arbitration and Conciliation (Amendment) Act, 2019. However, it has been mentioned under many Arbitral Institution rules like SIAC, ICC Rules, NPAC, MCIA and DIAC.
EA is a procedure that helps parties to seek temporary redress without having to wait for an arbitral tribunal to be established. An EA is appointed only in urgent cases like interim relief. For instance, if the party has to seek urgent interim relief, the arbitral tribunal is not established yet, and the parties do not have sufficient time to form one. They can apply for interim relief in the respected local courts.
When an emergency order is made, it is binding on the participants. However, it could be revised or reversed by the EA at the behest of one of the parties.
An arbitrator or arbitral tribunal is not constrained by the EA’s judgment or judgments and may determine that the emergency decision or decisions are no longer binding. Furthermore, an emergency order loses its force if an appeal proceeding is not started within 30 days of the date of the emergency decision or if the matter is not assigned to an arbitrator or arbitral tribunal within 90 days.
Status in India
To ensure that Emergency Arbitrator gets recognition in India, two main reports came into existence, i.e. ‘246th Law Commission Report’ and ‘B.N. Srikrishna Report’. These two reports played an important role as they highlighted that the term ‘Emergency Arbitrator’ should be included under the meaning of the arbitral tribunal.
In reality, the Act of 1996 makes no explicit provision for the direct application of international emergency awards. As a result, the parties usually seek exemption from international emergency awards in court under Section 9 of the Act of 1996.
In HSBC PI Holdings (Mauritius) Limited v. Avitel Post Studioz Ltd, the Delhi High Court stated that the appeal for temporary relief before the court would be granted an independent view from the EA proceedings.
In Raffles Design International India Private Limited & Ors. v. Educomp Professional Education Limited & Ors, the dispute concerned an arbitration arrangement that was ruled and construed according to Singaporean law. The parties went to the Singapore-based EA, which issued an interim order that was subsequently upheld in the High Court of Singapore. The group who received the beneficial judgment later submitted an appeal for a temporary remedy under the revised Section 9 of the Act of 1996, arguing that the other party behaves in violation of the Emergency Award’s orders. Although upholding the maintainability of such pleas, the Delhi High Court emphasised the importance of the modified Section 2(2) of the Act. The amended act’s proviso to Section 2(2) also broadened the scope of the Court’s powers to grant temporary reliefs, as Section 9 also applies to foreign contractual arbitrations, except though the arbitration takes place outside India. It’s important to remember that the subject agreements were signed after the BALCO decision by the parties. The Delhi High Court is yet to rule on the validity of this case.
Conclusion
As the name implies, ‘emergency arbitration’ was created to provide temporary relief to parties while maintaining their privacy. However, since India lacks an explicit clause for emergency arbitration, the parties repeatedly file a new application with the court under Section 9 of the Act of 1996. As a result, the whole intention of implementing EA is fulfilled.
Several countries, including Singapore, Hong Kong, and New Zealand, have changed their laws to recognised emergency arbitration. For example, in Hong Kong, Section 22B (1) has been added, which states that an EA may grant relief within or outside Hong Kong with the judge's permission and that the relief would have the same impact as the court’s decree.
Also, Indian scholars in the Law Commission study recommended the same. India can also incorporate EA laws into its regulations and begin pursuing arbitration. This will not only save the court's time, but it would also have clarity in cases involving EA.
However, before India accepts the EA, the parties can proceed with caution when following institutional rules and relying on international emergency awards to protect their interests in court.
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. Further, despite all efforts made to ensure the accuracy and correctness of the information published, White Code VIA Mediation and Arbitration Centre shall not be responsible for any errors caused due to human error or otherwise.
- The article tries to give an overview about Emergency Arbitration In India.
- This concept is new in India and has no mention in the ARBITRATION AND CONCILIATION ACT, 1996
- This article highlights the need of Emergency Arbitration in India along with few case laws.
