Interim reliefs are requested from courts and arbitral tribunals so that the disputed amount or subject-matter of the dispute is not destroyed or alienated before the dispute is decided. Interim reliefs can be claimed from the Tribunal under Section 17 of the Arbitration and Conciliation Act, 1996.
Typical examples of interim reliefs are:
- Not to sell the disputed property or assets of a business over which there is an ownership dispute;
- Deposit such sums with a party representative or any neutral representative/bank appointed by the Tribunal;
- Not to operate a specific bank account which contains a disputed sum (where this does not interfere with the everyday affairs), or to block a certain sum which is due from being spent - This is done by sending a copy of the order to the bank so that the bank can act upon it;
- Not to sell shares;
- Possession of disputed goods or machinery;
- Release of a certain amount from the already given security for the claim of damages; and
- Not to invoke a bank guarantee.
Interim relief from Court vs. Arbitral Tribunal
Section 17 of the Arbitration and Conciliation Act, 1996 is the go-to section for applications of interim measures before the Arbitral Tribunal. All kinds of interim measures are entertained by the Tribunal. The Arbitration and Conciliation (Amendment) Act of 2015 now gives the Tribunal as many powers as were provided to the Court earlier under Section 9 of the Arbitration and Conciliation Act, 1996. Every interim award passed by the Tribunal in response to a Section 17 application can now be enforced as an award by itself. The powers of the Court under Section 9 have been hugely curtailed under the amended Act and the Tribunal has been given more authority to pass interim orders under this Section. The Tribunal can also amend and vary its interim order in subsequent proceedings according to how the situation unfolds.
Sections 9 and 17 are identical in nature. However, to move to minimum court intervention, a Section 17 application is given more importance during the ongoing arbitration proceeding.
For any interim measures before and after the arbitration proceeding, Section 9 is still considered relevant. After the 2015 amendment, the Courts have denied granting interim relief under Section 9, if the arbitration tribunal has already been constituted and recommended parties to file a Section 17 application before the arbitral tribunal. This is in accordance with Section 9(3) of the Arbitration and Conciliation Act, inserted by the 2015 Amendment.
In circumstances where one party feels that possession over certain products/goods/machinery outside the purview of the dispute is important in securing the amount to be recovered, a Section 9 petition before the Court is an appropriate remedy.
If in the same situation, a Section 17 application is filed, there are high chances of the Tribunal refusing it because the property concerned is outside the purview of the dispute referred to the Tribunal. Hence, it is safer to approach the Court.
Similarly, where third parties will be affected by the relief asked for and it is inevitable to ask for such a relief; then Section 9 should be utilized during the proceedings rather than opting for a Section 17 application.
Another aspect to consider is that the Tribunal (or even the court) cannot grant the final relief under the pretext of an interim award. During the pendency of proceedings and at the interim stage, the Arbitrator cannot grant the final relief in an interim award and such an award is worth challenging.
Is the drafting of Section 9 applications different from Section 17 applications?
The Court related document drafting and drafting in relation to arbitration proceedings will always have a few differences from drafting of documents for arbitration proceedings.
A major difference worth discussing would be the explanation of facts and the dispute, in general. Since a Section 17 application shall be addressed to the Tribunal during an ongoing proceeding, one doesn’t need to prolong the explanation of the dispute and the background facts. It is to be assumed that the Tribunal is well-versed with the facts of the case.
However, in a Section 9 application to the Court; a holistic explanation of the situation and all-around details have to be provided to the Court to ensure that the Court understands the dispute and then makes their decision accordingly.
The substance and requirements to be satisfied for both a Section 9 and Section 17 application are bound to be similar since both these applications are moved for the same purpose.
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.