Introduction

Interim reliefs play a critical role in protecting those parties’ rights who seek to resolve their disputes through arbitration. Section 9 of the Arbitration and Conciliation Act, 1996 (“the Act”) empowers the courts to grant interim reliefs at three stages, i.e., before the commencement of arbitration, during its pendency, and after the award is passed but before its enforcement under Section 36 of the Act. Section 9 of the Act gives the Court wide powers to grant interim reliefs, including orders to secure the amount in dispute, appoint a receiver, grant an injunction, direct the interim sale or custody of goods, or pass any other order deemed just and convenient. However, the 2015 Amendment (“Amendment”) substantially revised these provisions to reduce judicial intervention and strengthen arbitral Tribunal autonomy. This article addresses some practical issues faced by the parties:

A. In which situations can the Court grant interim relief under Section 9 of the Act, after the arbitral Tribunal has been constituted?

B. What happens to Section 9 order after the 90-Day time period: Consequences of non-invocation of Arbitration and the proper remedy after constitution of the Tribunal?

C. If the Court denies an ex parte interim relief under Section 9 of the Act, can a party seeking quick relief, file a petition under Article 227 of the Constitution of India?

A. In which situations can the Court grant interim relief under Section 9 of the Act, after the arbitral Tribunal has been constituted?

Section 9(3) of the Act has two parts, the first part precludes the Court from entertaining an application under Section 9 of the Act after the arbitral Tribunal has been constituted and the second part is an exception to the first part, i.e., cases where the remedy provided by the arbitral Tribunal which are inefficacious, can be entertained by the Court. Now a question arises, when can a relief granted by an arbitral Tribunal be termed as “inefficacious”? Broadly speaking there can be three situations when the relief granted by the arbitral Tribunal can be termed as “inefficacious”:-

  1. When the relief affects third-party rights;
  2. When the arbitral Tribunal cannot convene immediately to deal with time-sensitive issues;
  3. When the arbitration is foreign-seated, but the assets are located in India.

1. Reliefs affecting third-party rights: A primary instance of ineffectiveness arises when interim relief affects parties not bound by the arbitration agreement. In Blue Coast Infrastructure v. Blue Coast Hotels [1], the Delhi High Court (“Delhi HC”), after considering relevant precedents, held that an arbitrator, being a creature of contract, could not issue directions to third parties. However, the Court, under Section 9 of the Act, could venture beyond the arbitration agreement and issue such directions. The rationale behind this is that Section 9 of the Act does not restrict the Court’s powers.

2. When the arbitral Tribunal cannot convene immediately to deal with time-sensitive issues: Interim reliefs often pertain to issues which need to be dealt urgently. However, the arbitral Tribunal, may not always be available, especially on short notice, to grant such reliefs, as arbitrators may be travelling, unwell or residing in faraway places. In such situations, a party can approach the Court for immediate relief. [2] In Energo Engineering Projects Ltd. vs. TRF Ltd. [3] a Division Bench of the Delhi HC considered a situation where the arbitral Tribunal had been constituted, but its functioning was stayed due to an SLP before the Supreme Court (“SC”). The Court held that, under these circumstances, an efficacious relief could only be granted by a court under Section 9 of the Act, and therefore, the exception given under Section 9(3) would apply.

3. Foreign-seated arbitrations where the assets are located in India: The court’s intervention may also be required when the arbitration is seated outside India, but the parties’ assets are located within India. Orders under Section 17 of the Act issued by foreign-seated tribunals are not automatically enforceable in India and the only option available is to file a civil suit to obtain a decree under the Civil Procedure Code using the foreign tribunal’s order as evidence. However, this can be time-consuming and can frustrate the arbitral proceedings. [4] Therefore, in cases where a party's assets are located in India, the most efficacious remedy for securing assets in India is to file a Section 9 petition before Indian courts.

B. What happens to Section 9 order after the 90-Day time period: Consequences of non-invocation of Arbitration and the proper remedy after constitution of the Tribunal?

The objective of interim reliefs is to secure the subject matter of arbitration proceedings. However, some parties, after receiving an interim order in their favour, choose to sit over the order and delay the arbitration proceedings. To discourage parties from obtaining interim relief and sit over it and indefinitely delay arbitral proceedings, the 2015 Amendment introduced Section 9(2) to the Act, which provides for a 90-day time limit to commence arbitration after obtaining interim relief. There has been a varied interpretation of Section 9(2) of the Arbitration Act, particularly regarding whether this provision must be followed mandatorily or not.

1. Strict Interpretation: The Karnataka HC by making its own rules has consistently given effect to the intention of Parliament in its decisions and held that, upon breach of the 90-day time limit, the interim order would stand automatically vacated. [5] Similarly, the Calcutta High Court, [6] and the Hyderabad High Court, [7] have also issued orders for automatic vacation when arbitration was not commenced within 90 days. A ruling of the Kerala High Court has also postulated that the time period given under Section 9(2) of the Act strictly applies to interim reliefs given under Section 9(1) of the Act. [8]

2. Liberal Interpretation: In stark contrast, Bombay High Court, have adopted a more flexible stance. These courts have liberally construed Section 9(2) of the Arbitration Act, focusing on the second part of the provision which grants courts the power to extend the 90-day time limit. This extension has been granted on various grounds, for instance, in the interests of justice or when proper and genuine reason for delay has been explained by the party who has succeeded in obtaining interim relief. [9]

Additionally, it is pertinent to mention that in cases where arbitral Tribunal is constituted after the courts have passed interim orders under Section 9 of the Act, the aggrieved party should challenge the Section 9 order by filing an appeal under Section 37 of the Act. The Supreme Court in Arcelor Mittal Nippon Steel India Ltd. vs. Essar Bulk Terminal [10] noted that once a court had reserved orders under Section 9 of the Act, the arbitral Tribunal could not re-examine the issue in its entirety, as doing so would rewind the clock on the interim relief. A similar view was expressed by a Division Bench of the Gujarat High Court [11], where the Court held that once an issue is decided under Section 9, it cannot be considered again under Section 17 of the Act by the arbitral Tribunal. Further, Section 37 states that any appeal from a Section 9 order shall only lie before the “court authorised by law”, thereby excluding the arbitral Tribunal. These rulings affirm that once a court has ruled under Section 9, the only remedy is an appeal under Section 37 of the Act.

C. If a court denies an ex parte interim measure under Section 9 of the Act, can a party seeking quick relief consider invoking Article 227 of the Constitution of India?

In Jindal Steel & Power Ltd. v. Bansal Infra Projects Pvt. Ltd. [12], SC upheld Orissa High Court’s status quo order restraining invocation of a bank guarantee while a Section 9 petition was pending. The SC held that interim protection was justified to prevent the petition from becoming infructuous and found no prejudice to either party. Though criticised for diluting minimal judicial interference and bypassing the Section 37 appeal route, the judgment of SC in the aforesaid matter effectively allows recourse to Article 227 for interim relief during pendency of the Section 9 proceedings before the court.

What does the future look like for Section 9 of the Act?

The proposed amendments to the Act under the Draft Arbitration Amendment Bill, 2024, introduce several notable changes. First, the power of courts to entertain applications for interim relief during the pendency of arbitral proceedings, under Section 9(1), has been omitted. Second, under the amended Section 9(2) of the Act, arbitration is required to commence within 90 days from the filing of the application for interim relief before the court, as opposed to 90 days from the passing of an order under Section 9(1) of the Act. Third, since the court’s power to entertain interim applications after the constitution of the arbitral Tribunal or during arbitral proceedings has been withdrawn, Section 9(3) has been omitted as redundant. Lastly, a new provision, Section 17(1)(ii)(da), has been proposed, empowering the arbitral Tribunal to confirm, modify, or vacate any interim order passed by the court under Section 9 of the Act, subject to such conditions as it may deem appropriate and after hearing both parties. These amendments eliminate the jurisdictional overlap between courts and arbitral Tribunals, pertaining to interim relief.

Conclusion

Interim relief is often the first crucial step in protecting a party’s interests before or during arbitration.

For practitioners and parties, some clear principles emerge:

  • Section 9 of the Act may be invoked even after the arbitral Tribunal is constituted, but in limited circumstances, such as affecting third-party rights, in time sensitive matters or where the arbitration is seated abroad but assets are located in India.
  • The 90-day period under Section 9(2) of the Act for initiating arbitration after receiving interim relief should be strictly adhered to. While some courts have shown flexibility, parties should not rely on extensions without having a sufficient cause for delay.
  • Once a court has granted relief under Section 9 of the Act, that decision cannot be revisited by the arbitral Tribunal under Section 17 of the Act. The appropriate remedy for aggrieved party would be to file an appeal before the relevant court under Section 37 of the Act.
  • In case relief under Section 9 of the Act is kept pending by the Court, the aggrieved party may consider invoking Article 227 of the Constitution of India.

By understanding how courts have interpreted and applied these provisions, parties can refine their strategy while seeking interim reliefs. A well-timed and properly structured application, backed by a clear understanding of the legal framework, can go a long way in safeguarding commercial interests and ensuring a smooth arbitration process.

References

  1. 2020 SCC OnLine Del 1897.
  2. Arcelor Mittal Nippon Steel India Ltd. v. Essar Bulk Terminal Ltd., (2022)1 SCC 712.
  3. 2016 SCC OnLine Del 6560.
  4. Law Commission of India, 246th Report on Amendments to the Arbitration and Conciliation Act, 1996, ¶ 41, pg. 24 (2014 ); Shanghai Electric Group Co. Ltd. v. Reliance Infrastructure Ltd., 2024 SCC OnLine Del 1606.
  5. M. Rajesh v. Metro Cash and Carry India Private Limited, M.F.A.No.7207/2017 (AA), Karnataka High Court, Bengaluru Bench (July 14, 2021); Janardhana Enterprises v. Fine Serve Hospitality Services (India) Pvt. Ltd., M.F.A.No.668/2019 (AA), Karnataka High Court, Bengaluru Bench (September 5, 2024).
  6. Hinduja Leyland Finance Ltd. v. Avinandan Mukherjee, A.P. 165 of 2017, Calcutta High Court (November 8, 2017).
  7. Velugubanti Hari Babu v. Parvathini Narasimha Rao and another, 2017 SCC OnLine Hyd 469.
  8. Manosh Elias Constructions Pvt. Ltd. v. Manuel John, 2018 SCC OnLine Ker 6383.
  9. Epimoney Private Limited v. Manidhari Oils Private Limited, 2019 SCC OnLine Bom 4861.
  10. Supra Note 2.
  11. Kirtikumar Futarmal Jain v. Valencia Corporation, 2019 SCC OnLine Guj 3972.
  12. Jindal Steel & Power Ltd. v. Bansal Infra Projects (P) Ltd., (2025) 10 SCC 176.

Authors:

Ravi Varma, Senior Partner

Ayush Srivastava, Senior Associate

Disclaimer:

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.