Interim Relief in Arbitration: Sections 9 and 17

An arbitration takes time, and in that time the subject matter may be dissipated, the goods sold, the property altered or the assets moved beyond reach. Two provisions answer the problem. Section 9 allows a party to apply to the court for interim measures before the arbitration begins, while it is on foot, and after the award until it is enforced. Section 17 gives the arbitral tribunal the same powers while it has seisin of the reference, and since 2015 makes its order enforceable as an order of the court. The scheme after the amendment of 2015 is that the tribunal is the ordinary forum and the court the exceptional one.

1. Section 9: Interim Measures by the Court

Section 9(1), Arbitration and Conciliation Act, 1996

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, apply to a court:

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

(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, 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; (d) interim injunction or the appointment of a receiver; (e) such other interim measure of protection as may appear to the court to be just and convenient,

and 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.

The window during which each provision operates, and the effect of Section 9(3)

2. When an Application May Be Made

2.1 Before the arbitration

The words before or during arbitral proceedings permit an application in advance of the reference. This is the most valuable use of the section, since the period between the dispute arising and the constitution of the tribunal is precisely when assets are moved.

📖 Sundaram Finance Ltd. v. NEPC India Ltd., (1999) 2 SCC 479

Held: An application under Section 9 may be made before the commencement of arbitral proceedings. The court, when so approached, must be satisfied that the applicant manifests an effective intention to take the dispute to arbitration, and may pass an order on that footing; the notice invoking arbitration need not already have been issued.

Significance: The decision established that Section 9 is not dependent on a pending arbitration, and it remains the leading authority on the pre-arbitral application.

The amendment of 2015 attached a condition. Section 9(2) provides that where the court passes an interim measure before the commencement of arbitral proceedings, the arbitral proceedings must commence within ninety days from the date of that order, or within such further time as the court may determine. The provision prevents a party from obtaining an injunction and then resting on it; the relief is interim in fact as well as in name.

2.2 During the arbitration

Section 9(3), also inserted in 2015, changes the position once the tribunal exists. The court is not to entertain an application under Section 9(1) after the arbitral tribunal has been constituted, unless it finds that circumstances exist which may not render the remedy provided under Section 17 efficacious. The tribunal is thus the ordinary forum, and a party going to the court must explain why the tribunal cannot give the relief. The commonest reasons are that the order must operate against a person who is not a party, that immediate ex parte relief is needed and the tribunal cannot be convened, or that the tribunal's mandate has ended.

📖 Arcelor Mittal Nippon Steel (India) Ltd. v. Essar Bulk Terminal Ltd., (2022) 1 SCC 712

Held: The bar in Section 9(3) applies to the entertaining of an application, and not to the disposal of one already entertained. Where the court has applied its mind and taken up an application before the tribunal was constituted, it may proceed to decide it, and the constitution of the tribunal in the meanwhile does not oblige the court to relegate the party to Section 17. Where the application has not been taken up, the court should ordinarily require the party to approach the tribunal unless the remedy under Section 17 would not be efficacious.

Significance: This is the governing decision on the working of Section 9(3), and it draws the line at the stage the application has reached rather than at the date of the tribunal's constitution.

2.3 After the award

The section remains available after the award is made and until it is enforced under Section 36. The purpose is to protect the fruits of the award during the period when a challenge under Section 34 is pending, since the mere filing of a challenge no longer operates as an automatic stay. Section 17 is not available at this stage, because the mandate of the tribunal terminates with the award under Section 32, subject only to the limited powers under Section 33. The court is therefore the sole forum once the award has been made.

3. The Measures Available

The heads of relief in Section 9(1), and the two forums compared

3.1 Securing the amount in dispute

This is the most frequently invoked head, and it raises the question whether the applicant must satisfy the conditions of Order XXXVIII Rule 5 of the Code of Civil Procedure, 1908, which requires proof that the defendant is about to dispose of or remove property to obstruct or delay execution.

📖 Essar House (P) Ltd. v. Arcellor Mittal Nippon Steel India Ltd., (2022) 9 SCC 468

Held: A court exercising power under Section 9 is not strictly bound by the technical requirements of Order XXXVIII Rule 5 of the Code of Civil Procedure, 1908, though it should not ignore the underlying principles. Where there is a strong prima facie case, and the balance of convenience is clearly in favour of the applicant, an order to secure the amount in dispute may be made to prevent the award from being rendered a paper decree; proof of actual attempts to defeat the award is not indispensable, but the court must be satisfied that security is necessary.

Significance: The decision fixes the standard for the security head, and rests it on the purpose of the power rather than on the form of the Code.

The general position on the relationship with the Code was stated earlier in Adhunik Steels Ltd. v. Orissa Manganese and Minerals (P) Ltd., (2007) 7 SCC 125, where the Court held that the power under Section 9 is not untrammelled and that the principles governing the grant of interim injunctions and attachment before judgment inform its exercise, although the provisions of the Code do not apply as a straitjacket.

3.2 Injunctions, receivers and the custody of property

Interim injunction. The ordinary triad applies: a strong prima facie case, the balance of convenience, and irreparable injury not capable of being compensated in money. An injunction restraining the invocation of a bank guarantee is granted only on the established grounds of egregious fraud or irretrievable injustice, since the guarantee is an independent contract.
Appointment of a receiver. Granted where the property in dispute is at risk of waste or misapplication and no lesser measure will serve; the receiver is an officer of the court and must account to it.
Preservation, custody, inspection and sale of goods. Used where the goods are perishable, where their condition is itself the matter in dispute, or where inspection is needed to preserve evidence; the section expressly permits entry on land, the taking of samples and the conduct of experiments.
Just and convenient measures. The residuary head in clause (e) supports orders such as a direction to maintain a minimum balance, to furnish a bank guarantee, or to disclose assets, which do not fit the earlier clauses.

⚠ A Section 9 application is not a suit

In Firm Ashok Traders v. Gurumukh Das Saluja, (2004) 3 SCC 155 the Supreme Court held that a proceeding under Section 9 is not a suit, and that the right to apply emanates from the Act itself rather than from the ordinary civil jurisdiction. The consequence is procedural: the bar which prevents an unregistered firm from suing does not prevent it from applying under Section 9, and the court is not confined to the reliefs a plaint would have to claim. The substantive principles on which interim relief is granted nevertheless remain those applied by a civil court.

4. Section 9 in a Foreign Seated Arbitration

After Bharat Aluminium Co. v. Kaiser Aluminium Technical Services Inc., (2012) 9 SCC 552, Part I did not apply to an arbitration seated outside India, with the consequence that a party could not obtain interim protection in India over assets situated here. The amendment of 2015 corrected the position by inserting a proviso to Section 2(2): Sections 9, 27 and clause (a) of sub-section (1) and sub-section (3) of Section 37 apply to an international commercial arbitration even where the place of arbitration is outside India, unless the parties have agreed to the contrary, and an award made in such an arbitration is enforceable under Part II.

Three points follow. The proviso applies only to an international commercial arbitration within Section 2(1)(f), so two Indian parties who choose a foreign seat do not get the benefit of it. The parties may exclude the proviso by agreement, and institutional rules or a carefully drafted clause sometimes do so. And Section 17 has no application at all to a foreign seated arbitration, so the court is the only Indian forum; relief from an emergency arbitrator appointed under foreign institutional rules is not enforceable here under Section 17(2).

5. Section 17: Interim Measures by the Tribunal

Section 17, Arbitration and Conciliation Act, 1996

(1) A party may, during the arbitral proceedings, apply to the arbitral tribunal for the appointment of a guardian for a minor or person of unsound mind, or for an interim measure of protection in respect of the matters set out in clauses (a) to (e), which correspond to those in Section 9(1)(ii), 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, 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 in the same manner as if it were an order of the Court.

The provision as it stood before 2015 gave the tribunal the power to order interim measures but supplied no machinery for enforcement, so an order under Section 17 was widely described as toothless; a party who disobeyed it could be met only by an adverse inference or by an application to the court under Section 9. Sub-section (2), inserted in 2015, cured the defect by deeming the order to be an order of the court and making it enforceable under the Code. The amendment also brought the words during the arbitral proceedings or at any time after the making of the arbitral award but before it is enforced, though the tribunal's practical ability to act after the award is limited by the termination of its mandate under Section 32.

📖 Amazon.com NV Investment Holdings LLC v. Future Retail Ltd., (2022) 1 SCC 209

Held: Where an arbitration is seated in India and the parties have adopted institutional rules providing for an emergency arbitrator, an order of that arbitrator is an order under Section 17(1) and is enforceable under Section 17(2). Party autonomy permits the parties to agree to such rules, and no appeal lies under Section 37 against an order enforcing the emergency award.

Significance: Emergency relief was brought within Section 17 by construction. The reasoning is confined to arbitrations seated in India; for a foreign seated arbitration the remedy in India remains Section 9 under the proviso to Section 2(2).

6. Section 9 Compared with Section 17

Basis	Section 9	Section 17
Forum	The court as defined in Section 2(1)(e)	The arbitral tribunal
Window	Before, during and after the arbitration until enforcement under Section 36	During the arbitral proceedings; in practice until the mandate ends with the award
Availability once the tribunal exists	Only where the remedy under Section 17 would not be efficacious, Section 9(3)	The ordinary forum
Persons bound	Parties and, where the law permits, third parties such as banks and custodians	Only the parties to the reference; the tribunal has no power over strangers
Enforcement	As an order of the court in the ordinary way	Deemed an order of the court and enforceable under the Code, Section 17(2)
Appeal	Section 37(1)(b), against an order granting or refusing a measure	Section 37(2)(b), against an order granting or refusing a measure
Foreign seated arbitration	Available for international commercial arbitration under the proviso to Section 2(2), unless excluded	Not available
Ex parte relief	Available in a proper case	Not ordinarily, since the tribunal must hear both parties under Section 18

7. Practical Points

Where relief is needed before the tribunal exists, apply under Section 9, and be prepared to commence the arbitration within ninety days of the order as Section 9(2) requires.
Once the tribunal is constituted, go to it under Section 17 unless a specific reason can be shown why that remedy would not be efficacious, and state the reason in the application.
Where the order must bind a bank, a depository or another stranger to the reference, the court is the only forum, because the tribunal's authority comes from the agreement.
After the award, only Section 9 is available, and it is the means by which the successful party protects the award while a challenge under Section 34 is pending.
An order under either provision is appealable, and an appeal under Section 37 is the only recourse; there is no second appeal, though special leave lies under Article 136.

8. Related Topics and Provisions

Topic or provision	Connection
General Provisions of Part I: Sections 3 to 6	Minimal intervention, and the occasions on which the court may act
Definitions under Section 2 and Kinds of Arbitration	The court under Section 2(1)(e), the seat and emergency arbitration
Sections 2(2), 32, 33 and 36, A&C Act, 1996	Territorial reach, termination of the mandate and enforcement
Section 37, A&C Act, 1996	Appeals against orders under Sections 9 and 17
Order XXXVIII Rule 5 and Order XXXIX, CPC, 1908	The principles that inform attachment and injunction