Interim Measures under the Indian Arbitration Act


Arbitration is most important mode of dispute resolution in commercial world. However, before or after the parties go to invoke arbitration clause, they resort to interim relief, most of the time. The arbitration law in India and other UNCITRAL model law provide for interim relief measures. Indian law on arbitration also provides that in cases where the dispute is arbitrable, a party may, before or during arbitral proceedings or at any time after the making of the arbitral award but before it is enforced in accordance with section 36,can apply to a court for interim measures.This is what makes section 9,a most popular section under the Arbitration Act, 1996 “Act”. The scope of this article is deliberation on section 9 of the Act.

Grounds for seeking Interim Measures

The Act expressly provides the grounds for seeking interim relief, which are as follows:

(i) The appointment of a guardian: for a minor or a person of unsound mind for the purposes of arbitral proceedings; or
(ii) 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 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:

  • Subject-matter of the dispute in arbitration, or
  • As to which,any question may arise therein and
  • Authorizing for any of the aforesaid purposes to any person to enter upon any land or building in the possession of any party, or
  • Authorizing 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

(e) The appointment of a receiver;

(f) Such other interim measure of protection as may appear to the court to be just and convenient.

The Court shall have the same power for making orders,as it has for the purpose of, and in relation to, any proceedings before it. It is important to understand that the power provided under section-9 of the Act is not meant to frustrate the proceedings before arbitral tribunal.

Jurisdiction in Court to File an Interim measures Applications

The seat of arbitration decides the jurisdiction.If the parties to arbitration have conferred the jurisdiction to a particular court, only that court would have jurisdiction to entertain the application under section 9 of the Act.The party thereafter is not permitted to enforce the theory of cause of action by invoking Code of Civil Procedure, 1908.While deciding the jurisdiction for an application under section-9 of the Act, the court may not go into the merits of the matter.

Appeal under Section 9 Petition

The Bombay High Court in its recent judgment in Mrs. Perin Hoshang Davierwalla & Anr. v. Mr. Kobad Dorabji Davierwalla & Ors[1].has resolved the question pertaining to the appealability of an ad-interim order [an order which is operative either till the final disposal of the interim application or till the next hearing] passed under Section 9 of the Act. It has held that the appeal provisions under Section 37 of the Act include within their ambit not only an appeal, which maybe filed against an interim order passed under Section 9 of the Act but also an ad-interim order, which maybe passed by a trial court under the same provision.

Recent Judgment

Harmony Innovations Shipping Ltd. Vs. Gupta Coal India Ltd. Anr. [2]

Interim relief play very important role to contain the damage or provide relief before main relief can come.Under the Act, the application under interim relief can be provided under section 9 of the Act from the court depending upon seat of arbitration. This judgment is crucial for pre-BALCO agreements.In this matter of International Commercial Arbitration, Hon’ble Supreme Court concurred with the conclusion of the High Court on the issue but differs on the reasoning. In this case, the arbitration clause of the agreement states that the laws in England would govern the arbitration proceedings and in case the dispute exceeds the amount of USD 50,000, the arbitration would be conducted as per the small claim London Maritime Arbitration Procedure.The arbitration agreement was executed in 2010 for voyages of coal shipment belonging to the Appellant.The agreement was executed pre-BALCO and addendum to this agreement was done post BALCO. However, this addendum has not modified the agreement clause. The seat of arbitration was in London. The two issues under the consideration of the Hon’ble Court were:

(a)  Whether on the basis of construction placed on the said clause in the agreement, it can be stated that the ratio laid down by Bhatia International could not be attracted but what was laid down in Reliance Industries would be applicable?

The issue was to be tested on the parameter of the law laid down in Videocon Industries Pvt. Limited; Dozco matter; Reliance Industries Supra.The Hon’ble Court found that the arbitration would happen in London and there were ample indication to that effect. The terms of the agreement stipulated in the contract clearly states about the procedure to be followed to the extent of claim amount. In such a scenario, the doctrine of presumed intention is crystal clear that the juridical seat in this matter was London.

(b) Whether the execution of addendum would attract the principles laid down in BALCO case?

1. The Hon’ble court held that since the implied exclusion principal of Bhatia International is applicable to the said case there is no requirement of any interpretation of addendum.

Applicability of BALCO or Bhatia International in present case: The BALCO case judgment pronounced in 2012 clarified that the Bhatia International rendered in 2002 and the Venture Global Engineering passed in 2008, which repeated its ratio, has been repeatedly followed by all the High Courts as well as that the law declared by the Court under the BALCO judgment has come into force prospectively vis-à-vis agreements executed hereinafter. The cut of date to apply the ratio of the judgment is September 6, 2012.For an application under section 9 for seeking interim measures under the agreement either BALCO or Bhatia International would be applied to a matter depending upon, the date of the arbitration agreement, which is relevant to adjudicate any matter. In this matter, the arbitration agreement was of prior date and it governs both by the addendum and the principal agreement, which was executed prior to BALCO judgment. Hence, Bhatia International which states part 1 of the Act does not apply to International Commercial Arbitration would govern the agreement.

2. The very fact that the Bhatia International judgment holds that it would be open to the parties to exclude the application of the provisions of Part I by express or implied agreement,would mean that otherwise the whole of Part I would.The Supreme Court held that the implied exclusion principle as stated in Bhatia International would be applicable to the present case as the party’s intention was to have London as the juridical seat of arbitration, evidenced the parties intention to exclude the applicability of Part 1 of the Act. Thus, the ultimate finding of the Supreme Court was that though the High Court erred in applying BALCO to the facts of the instant case, it’s conclusion that ADJ had no jurisdiction, was correct.

BALCO judgment has prospectively overruled the Bhatia International judgment.

[1] Arbitration Appeal 42 of 2013
[2] SLP (C) No. 36643 of 2014
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