The Interplay Between Section 9 and 17 of the Arbitration Act in Granting Interim Relief

The Arbitration and Conciliation Act, 1996, serves as a cornerstone for dispute resolution in India, granting courts the power to provide critical interim relief under Section 9. This provision safeguards the subject matter of arbitration throughout its various stages, from pre-arbitration to post-award enforcement. The 2015 amendments, particularly the introduction of Subsections (2) and (3) to Section 9, fundamentally altered the terrain of interim relief, demanding a thorough analysis of their practical effects.

Section 9(2), which mandates that arbitration must commence within 90 days of granting interim protection under Section 9(1), which allows a court to grant interim measures such as preservation of goods, securing the amount in dispute, or granting an injunction. While courts retain discretion to extend this period, the aim is to prevent interim relief from becoming a delaying tactic, ensuring it acts as a genuine precursor to arbitration. This reflects a legislative drive to streamline the process and curb abuse. 

Prior to the 2015 amendment, the approach was more flexible. Parties seeking interim protection were primarily required to demonstrate a manifest intention to arbitrate and take active steps to initiate proceedings, often through a Section 21 notice. However, the post-amendment jurisprudence reveals a shift towards a more stringent interpretation, with courts increasingly enforcing the 90-day timeline from the date of any interim order, potentially leading to the revocation of relief for non-compliance.

This evolving landscape has created a divergence in judicial interpretations across various High Courts, influenced by case-specific nuances and the perceived nature of the 90-day timeline. Given this inconsistency, a definitive ruling from the Supreme Court is crucial to establish uniformity and provide clarity. However, before the Supreme Court weighs in, it’s essential to examine another critical aspect of the 2015 amendments: the introduction of Section 9(3) and its intricate interplay with Section 17.  

When an arbitration tribunal is already established, Section 9(3) places a significant limitation on a court’s power to grant interim relief. While Section 9(1) generally empowers courts to issue temporary measures to protect parties’ interests, Section 9(3) interposes, stating that the court cannot entertain such applications unless it concludes that the arbitration tribunal’s own authority to provide interim relief, as outlined in Section 17, is fundamentally inadequate. In essence, the court must be persuaded that the remedies available within the arbitration process itself are demonstrably ineffective before it can exercise its jurisdiction to grant interim measures. This provision prioritizes the tribunal’s authority, ensuring that courts only intervene when the tribunal’s power to provide effective relief is clearly compromised.

However, an exception arises when a court has already substantially engaged with a Section 9(1) application on its merits. This exception acknowledges that continued judicial involvement is warranted when the court has already applied its mind to the matter, as clarified by the Supreme Court in Arcelor Mittal Nippon Steel India Limited Versus Essar Bulk Terminal Limited.

In Arcelor Mittal, the Court underscored that Section 9(3) has two distinct aspects: the prohibition on entertaining new Section 9(1) applications post-tribunal formation, and the exception for situations where Section 17 remedies are inadequate. The Court clarified that “entertain” signifies “to consider by application of mind to the issues raised.” Consequently, once a court has taken up a matter for consideration and applied its mind, it retains the authority to adjudicate, irrespective of the tribunal’s constitution. This interpretation effectively prevents the need to reassess the efficacy of Section 17 remedies when the court has already initiated substantive consideration of the Section 9(1) application. Thus, Section 9(3) promotes a clear division of responsibility: the court handles interim relief before tribunal formation, and the tribunal takes over thereafter

Recently the Telangana High Court in M/s. Corvine Chemicals and Pharmaceuticals Private Limited vs. Srinivasulu Kanday, while relying on the principle laid in ArcelorMittal, reiterated that the 2015 amendments to the Arbitration and Conciliation Act significantly strengthened the protections afforded to parties involved in arbitration. Specifically, the court highlighted the impact of Section 9(3), which now prevents parties from seeking interim relief from a court once an arbitration tribunal is formed. Instead, the amended legislation directs parties to utilize Section 17, empowering the tribunal itself to grant such interim measures. 

Conclusion 

The 2015 amendments to the Arbitration and Conciliation Act, particularly Section 9, reveal a clear intent to fortify arbitral autonomy and efficiency by imposing a 90-day arbitration initiation timeline post-interim relief and prioritizing tribunal-granted measures through Section 17. Arcelor Mittal clarifies judicial involvement, ensuring courts only retain jurisdiction when they’ve substantively engaged pre-tribunal formation, promoting a robust arbitral framework. However, the inconsistent application of the 90-day rule necessitates Supreme Court guidance, raising the open question: how can legislative and judicial practices ensure equitable access to interim relief, especially for resource-limited parties, without undermining arbitral efficiency?

1. Arcelor Mittal Nippon Steel India Limited Versus Essar Bulk Terminal Limited (2022) 1 SCC 712
2. M/s. Corvine Chemicals and Pharmaceuticals Private Limited vs. Srinivasulu Kanday COMCA.No.40 of 2024