Table of Contents

Table of
Cases. 1

Arbitration
Introduction...........................................................................................................
Meaning & Scope...................................................................................................
Advantages of Arbitration......................................................................................
Disadvantages of Arbitration.................................................................................

Interim Measures
Introduction...........................................................................................................
Interim Measures: The Concept.............................................................................
Interim Relief u/s 9.................................................................................................
Scope of the section.........................................................................................
Factors influencing interim relief......................................................................
Purpose of interim Measures............................................................................
Effect of Interim Measures................................................................................
Drawbacks of the Provision...............................................................................
Interim Relief u/s 17.............................................................................................
Scope of the Section.........................................................................................
Drawbacks of the Provision...............................................................................
Comparison between Both the Sections..............................................................
Conclusion...........................................................................................................

Bibliography
Books & Acts........................................................................................................
Web Links............................................................................................................

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Table of Cases
Collins v. Collins 3
Daulatram v. Shriram 17
Delta Construction Systems Ltd., Hyderabad v. Narmada Cement
Company Ltd., Bombay 17
Dominant Offset (P) Ltd v. Adamovske Strojirny SA.. 11
Firm Ashok Traders v. Gurumukh Das Saluja. 14, 20
Marriott International Inc. v. Ansal Hotels Ltd. 17
Sharma Prathishthanam v. Madhok Construction (P) Ltd. 3
Sundaram Finance v. NEPC India Ltd. 12, 18

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Arbitration
Introduction

Arbitration, a form of alternative dispute resolution

(ADR), is a technique for the resolution of disputes outside the
courts, where the parties to a dispute refer it to one or more
persons by whose decision (the "award") they agree to be bound.
It is a resolution technique in which a third party reviews the
evidence in the case and imposes a decision that is legally
binding for both sides and enforceable. Other forms of ADR
include mediation (a form of settlement negotiation facilitated by
a neutral third party) and non-binding resolution by experts.

Meaning & Scope

Arbitration is a proceeding in which a dispute is resolved

by an impartial adjudicator whose decision the parties to the
dispute have agreed, or legislation has decreed, will be final and
binding. There are limited rights of review and appeal of
arbitration awards. In the terms of section 2(1)(a) of the
Arbitration & Conciliation Act, 1996, arbitration means any

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agreement whether or not administered by permanent arbitral

institution.
Law encourages parties, as far as possible, to settle their
differences privately either by mutual concessions or by the
mediation of the third person. When the parties agree to have
their disputes decided with the mediation of a third person, but
with all the formality of a judicial adjudication, that may be,
speaking broadly, called arbitration. An arbitration, therefore,
means the submission by two or more parties of their dispute to
the judgment of a third person, called the arbitrator and who is to
decide the controversy in a judicial manner.1
Arbitration has been defined by ROMILLY MR in the wellknown case of Collins v. Collins2. It was held that An
arbitration is a reference to the decision of one or more persons,
either with or without an umpire3, of a particular matter in
difference between the parties
1 Dr. Avtar Singh, Law of Arbitration & Conciliation, 10th Ed., Eastern Book
Company, Lucknow, 2013, p. 14.

2 28 LJ Ch 186.

3 The institution of umpire has been replaced by the 1996 Act with that of
presiding arbitrator.

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In the recent case of Sharma Prathishthanam v. Madhok

Construction (P) Ltd.4, Supreme Court held that An
arbitration is the reference of the dispute or difference between
not less than two parties for determination, after hearing both
sides in a judicial manner, by a person or persons other than a
court of competent jurisdiction
Arbitration is often used for the resolution of commercial
disputes, particularly in the context of international commercial
transactions. The use of arbitration is also frequently employed in
consumer and employment matters, where arbitration may be
mandated by the terms of employment or commercial contracts.
The main characteristics of arbitration are as follows:1.
2.
3.
4.
5.

Arbitration is consensual.
The parties choose the arbitrator(s).
Arbitration is neutral.
Arbitration is a confidential procedure.
The decision of the arbitral tribunal is final and easy to
enforce.

Advantages of Arbitration

Parties often seek to resolve their disputes through

arbitration because of a number of perceived potential
4 AIR 2005 SC 214.

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advantages over judicial proceedings. Some of them are given

below:1. When the subject matter of the dispute is highly technical,
arbitrators with an appropriate degree of expertise can be
appointed (as one cannot "choose the judge" in litigation).
2. Arbitration is often faster than litigation in court.
3. Arbitration can be cheaper and more flexible for businesses.
4. Arbitral proceedings and an arbitral award are generally nonpublic, and can be made confidential.
5. In arbitral proceedings the language of arbitration may be
chosen, whereas in judicial proceedings the official language of
the country of the competent court will be automatically
applied.

Disadvantages of Arbitration

1. Arbitration may be subject to pressures from powerful law

firms representing the stronger and wealthier party.
2. If the arbitration is mandatory and binding, the parties waive
their rights to access the courts and to have a judge or jury
decide the case.
3. In some arbitration agreements, the parties are required to
pay for the arbitrators, which add an additional layer of legal

Page | 6

cost that can be prohibitive, especially in small consumer

disputes.
4. There are very limited avenues for appeal, which means that
an erroneous decision cannot be easily overturned.
5. Although usually thought to be speedier, when there are
multiple arbitrators on the panel, juggling their schedules for
hearing dates in long cases can lead to delays.5

Interim Measures
Introduction

In arbitral proceedings, the need often arises for

provisional remedies or other interim measures of reliefs
because, in reality, arbitral proceedings are no less adversarial
than litigation in public courts. When a dispute arises, aggrieved
party is always concerned with protecting his interest either in
movable or immovable properties. Party is always interested in
taking timely action against another party or parties so that his
or her interest in the properties is protected. This prompt and
timely action makes other party or parties unable to play any sort
of mischief by way of tampering with properties. Thus Arbitration
5 http://en.wikipedia.org/wiki/Arbitration#Advantages_and_disadvantages
as accessed on 19/10/2013

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and Conciliation Act, 1996, under Section 9 gives parties power

to approach Courts for seeking interim measures. Often it sounds
against the basic philosophy of Arbitration for allowing Courts
intervention, but for many reasons such judicial interventions are
inevitable.6

Interim Measures: The Concept

Interim Measures are granted during the pendency of

adjudication of a dispute and are usually in the form of
injunctions, specific performance, pre-award attachments etc. By
definition, interim reliefs are temporary or interim in nature and
are granted in advance of the final adjudication of the dispute by
the arbitral tribunal.
Under the Arbitration Act, 1940, a party could commence
proceedings in a court by moving an application under section 20
for appointment of an arbitrator and simultaneously it could move
an application for interim relief under the Second Schedule read
with Section 41(b) of the old Act. Under the New Act of 1996,
Section9 empowers the court to order a party to take interim
measure or protection when an application is made. Besides this

6 http://www.ophiuchus.co.in/global/relief.htm as accessed on 19/10/2013.

Page | 8

section 17 gives power to the Arbitral Tribunal to order interim

measures unless the agreement prohibits such power.7

Interim Relief u/s 9

Section 9 of the Arbitration and Conciliation Act, 1996

reads as follows:
9. Interim measures, etc., by Court .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
7 http://www.caclubindia.com/articles/-analysis-of-interim-measures-u-s-9and-17-of-arbitration-and-conciliation-act-1996-17637.asp#.UmwPtCftuHC
as accessed on 19/10/2013

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arbitration, or as to which any question may arise therein

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, which
may be necessary or expedient for the purpose of obtaining
full information or evidence;
(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.8

This section provides for the making of orders for interim

measures to provide interim relief to the parties in respect of
arbitrations. The power of the court includes an order in respect
of the following matters:
1. The prevention, interim custody or sale of any goods which are
the subject matter of the reference.
2. Securing the amount in dispute in the reference.
3. The detention, preservation or inspection of any property or
thing which is the subject of the reference or as to which any
question may arise therein and authorizing for any of the
aforesaid purposes any person to enter upon or into any land
8 S. 9 of the Arbitration and Conciliation Act, 1996.

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or building in the possession of any party to the reference, 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.
4. Interim injunctions or the appointment of a receiver.
5. The appointment of a guardian for a minor or person of
unsound mind for the purpose of arbitration proceedings.9

Scope of the section

It appears that the scope for application of an interim

measure under section 9 of the Indian Act is as wide as the scope
under Article 9 of the UNCITRAL (United Nations Commissions
International Trade Laws) Model Law. Section 9 allows a party to
seek those interim measure laid down under sub-clause (a) to (d)
as well as any other measures a court deems appropriate under
sub-clause (e). Moreover, section 9 does not limit the grant of
interim measures to the subject matter of the dispute and
secondly, sub-clause (e) grants courts the discretionary power to
grant such interim measures as appears just and convenient. 10
9 Dr. Avtar Singh, Law of Arbitration & Conciliation, 10th Ed., Eastern Book
Company, Lucknow, 2013, p. 96.

10 http://www.ophiuchus.co.in/global/relief.htm as accessed on 19/10/2013

P a g e | 11

Sub section (2) of section 2 of Act of 1996 provides in a

clear and unambiguous language that Part I shall apply where the
place of Arbitration is in India. However, the Delhi High Court, in
Dominant Offset (P) Ltd v. Adamovske Strojirny SA,11 where the
arbitration took place at London, held that Part I also applies to
International Commercial Arbitration conducted outside India. As
far as the position of the Indian Law is concerned, this decision
seeks to clarify the scope of the powers of an Indian court to
grant interim relief in international commercial arbitration. The
rule that seems to emerge is that when the parties have
specifically intended that: (a) the law governing the contract; (b)
the rules governing the arbitration; and (c) the courts jurisdiction
and the place of arbitration are outside India, then it would
signify that the Indian courts jurisdiction and applicability of Part
1 of the Act (which contains the power of the Indian courts to
provide interim measures) are excluded.
One of the controversies that emerged after the passing
of the Indian Act was with regard to the point of time when an
application could be made to a court for granting interim relief.
This controversy was finally settled by the Indian Supreme Court
in its landmark mark judgment of Sundaram Finance Ltd. v.
11 1991 Arb LR 335 (Del).

P a g e | 12

NEPC India Ltd12. The Supreme Court held that Section 9 is

available even before the commencement of the arbitration. It
need not be preceded by the issuing of notice invoking the
arbitration clause. This is in contrast to the power given to the
arbitrators who can exercise the power u/s 17 only during the
currency of the Tribunal. Once the mandate of the arbitral
tribunal terminates, Section 17 cannot be pressed into service.
The period for purpose of appeal against orders granting
of refusing to grant interim relief is 90 days from the date of
decree or order as per article 116(a) of the Limitation Act.

Factors influencing interim relief

A party seeking to obtain an interim measure

(particularly before the arbitral tribunal has been constituted)
must ensure that by taking steps in a court and thereby
submitting to the jurisdiction of the domestic court it does not
waive any rights it has under the arbitration agreement. The
ability to obtain an interim measure will generally depend upon
the procedural law governing the arbitration and the law in the
jurisdiction in which the interim measure is sought to be
12 AIR 1999 SC 565.

P a g e | 13

enforced. Generally, an applicant party needs to establish the

following factors:
1. There is an urgent need for the interim measure.
2. Irreparable harm will result if the measure is not granted.
3. The potential harm if the interim measure is not granted
substantially outweighs the harm that will result to the party
opposing the measure if the measure is granted.
4. There is a substantial possibility that the applicant will
ultimately prevail in the dispute.

Purpose of interim Measures

The purpose of enacting section 9, read in the light of

model law and UNCITRAL rules is to provide a relief in the nature
of an interim measure of protection. The order of the court
should fall in the category of interim measures of protection as
distinguished from an all time or permanent protection. The
purpose is to protect the rights of the parties which are under
adjudication from being frustrated.13

Effect of Interim Measures

13 Firm Ashok Traders v. Gurumukh Das Saluja, (2004) 3 SCC 155.

P a g e | 14

An interim measure does not put to rest the rights of the

parties. The rights of the parties are required to be adjudicated
finally when a reference is made. The court has the authority and
jurisdiction to pass interim orders for protection and preservation
of rights of the parties during the arbitration proceedings but that
does not necessarily mean that if a party has availed of a benefit
under this jurisdiction, the other party cannot put his claim in the
main proceedings which is before the arbitrator. The interim
arrangement made by the court has to e given the interim
status.14

Drawbacks of the Provision

The Law Commission of India in its 176th report

published in 2001 noted a number of loopholes in the provisions
for interim relief in the 1996 Act which were exploited by the
parties after the Act came into force.

Provisions contained in section 9 regarding the

availability of interim relief even before the arbitration
proceedings commence had been misused by parties. It so
14 Dr. Avtar Singh, Law of Arbitration & Conciliation, 10th Ed., Eastern Book
Company, Lucknow, 2013, p. 109.

P a g e | 15

happened that after obtaining an interim order from the court,

parties did not take initiative to have an arbitral tribunal
constituted. This allowed them to reap the benefits of the interim
order without any time limit.

The Law Commission in its 176th report, observed that

very often, in the past, Parties had used underhand means to
destroy evidence which they felt could go against them during
the Arbitral Proceedings or had attempted to concoct witnesses
and tamper with evidence, in the possession of a third party. As a
result, there is an immediate need to change the provisions of
the existing section, so that the Tribunal could get more powers
to deal with such situations.

Interim Relief u/s 17

Section 17 the Arbitration & Conciliation Act, 1996 reads

as follows:
17. Interim measures ordered by arbitral tribunal
.(1) Unless otherwise agreed by the parties, the arbitral
tribunal may, at the request of a party, order a party to
take any interim measure of protection as the arbitral

P a g e | 16

tribunal may consider necessary in respect of the

subject-matter of the dispute.
(2) The arbitral tribunal may require a party to provide
appropriate security in connection with a measure
ordered under sub-section (1).15

Section 17 of the Act has to read along with section 9 of

the Act 1996 to have a clear picture. While section 9 provides for
the taking of interim measures by the court in certain matters,
section 17 provides for taking of interim measures in respect of
the subject-matter of the dispute by the Arbitral Tribunal. The
essence of section 17 is that the interim order u/s 17 must relate
to the protection of subject-matter of dispute and the order may
be addressed only to a party to arbitration. It cannot be
addressed to other parties and no power is conferred u/s 17 of
the Act of 1996 upon the arbitral tribunal to enforce its order nor
does it provide for judicial enforcement thereof.16 This section of
the act deals with the interim measures ordered by the Arbitral

15 S. 17 the Arbitration & Conciliation Act, 1996.

16 Kohli Hari Dev, New Case Law Reference on Arbitration & Conciliation
Act, Universal Law Publication, New Delhi, 2008, p. 175.

P a g e | 17

Tribunal with the consent and agreement of the parties in dispute

within the arbitral jurisdiction of India and not outside India.17

Scope of the Section

In the absence of any power given to the arbitrator under

the arbitration agreement, he had under the statute no power to
pass any interim order by way of injunction.
The M. P. High Court in the case of Daulatram v.
Shriram18 held: .The arbitrators have not been vested by
the Act19 with any powers to grant interim orders for the
protection and safety of the subject-matter of the dispute. Such
powers had, therefore, to be vested in the court under s. 41(b) of
the Act read with Second Schedule
After passing of Act of 1996, it was held in the case of
Delta Construction Systems Ltd., Hyderabad v. Narmada Cement
Company Ltd., Bombay20: apart from the Court, under
section 17, the Tribunal itself at the request of the party, may
17 Marriott International Inc. v. Ansal Hotels Ltd., AIR 2000 Del 377.

18 AIR 1964 MP 219.

19 Arbitration Act, 1940.

P a g e | 18

order a party to take any interim measure of protection as the

Tribunal may consider necessary in respect of the subjectmatter of the dispute and for that purpose, may require the party
to provide appropriate security in connection with a measure
ordered under sub-section (1)
It will be seen that a Court has been given extensive
powers u/s 9 of the Act to give directions by way of interim
measures. A part of that power has been given to the arbitral
tribunal u/s 17. That power is that an arbitral tribunal may order
a party take any interim measure of protection, as it may be
considered necessary, in respect of the subject-matter of the
dispute.21
However it was held that though section 17 gives the
arbitral tribunal the power to pass orders, the same cannot be
enforced as orders of a court. It is for this reason that section 9
admittedly gives the court power to pass interim orders during
the arbitration proceedings.22
20 (2002)2 Arb LR 47 Bom.

21 Chawla S. K., Law of Arbitration & Conciliation, 3rd Ed., Eastern Law
House, New Delhi, 2012, p. 536.

22 Sundaram Finance Ltd. v. NEPC India Ltd., AIR 1999 SC 565.

P a g e | 19

Drawbacks of the Provision

The contractual nature of arbitration gives rise to several

unique difficulties.
1. Non-enforceable nature of interim measures granted by an
arbitral tribunal is an accepted disadvantage that an Arbitral
Tribunal faces when granting interim relief and without any
coercive enforcement powers.
2. A common difficulty in arbitration occurs when resolution of
the dispute involves a third party against whom no order of
the Tribunal shall be valid for the reason of lack of jurisdiction.
3. When interim measures of protection are needed against one
of the parties to the arbitration, issues arise as to the
availability of such remedies when they are sought at early
stages in an arbitral proceeding.
4. Parties to arbitration also face difficulties when one party seeks
interim relief at an early stage of the proceeding. In
arbitration, it is typically difficult to obtain such relief
expeditiously, because the Arbitral Tribunal has not yet been
constituted. Thus, most parties in need of this immediate
assistance seek the aid of national courts for this emergency
relief. If a party seeks to delay the opposing partys request for

P a g e | 20

an injunction or attachment, that party can slow the process

considerably by taking a long time to select an arbitrator.
5. The Tribunals jurisdiction to grant interim measures may be
limited by the governing law of the arbitration.23

Comparison between Both the Sections

Analysis of both the sections would lead us to the
following conclusions:1. The new arbitration act enables the arbitral tribunal to pass
orders for giving interim relief while such power is not vested
under the old act.
2. Powers u/s 17 can be exercised only after the arbitral tribunal
is constituted and it starts functioning.
3. Powers of court u/s 9 are wide as the words before, during or
after indicate so. A party can approach the court to seek
interim measures of protection even before the arbitration
commences. The Supreme Court in the case of Firm Ashok
Traders v. Gurumukh Das Saluja24, held: section 17
would operate only during the existence of the arbitral tribunal
23 http://www.ophiuchus.co.in/global/relief.htm as accessed on
19/10/2013.

24 AIR 2004 SC 1433

P a g e | 21

and its being functional. During that period, the power

conferred on the arbitral tribunal under Section 17 and the
power conferred by the Court under Section 9 may overlap to
some extent but so far as the period pre and post the arbitral
proceedings is concerned the party requiring an interim
measure of protection shall have to approach only the
Court
4. Courts powers are wide and have supremacy in granting
interim relief. However interference of court when Tribunal is
constituted is minimum.
5. The Court can exercise power u/s 9 to grant interim measures
even during the pendency of application u/s 17 before the
Arbitral Tribunal. Remedy available to a party u/s 17 is an
additional remedy and is not in substitution of section 9.

Conclusion
While drafting arbitration clause, one should keep in mind
whether the arbitral tribunal should be given the power to grant
interim relief or not. If arbitration clause provides for such power
to arbitral tribunal, then one need not approach the court for
such relief. The system of dual agency for providing relief needs
to be abolished or otherwise some enforcement mechanism be
provided for enforcement of the interim measures of protections

P a g e | 22

ordered by the Arbitral Tribunal. It would be better that

application of interim measures is put to the Arbitral Tribunals as
they are seized of the subject matter under dispute. Only when a
party is not able to get relief from the Arbitral Tribunal, it should
be allowed to knock the doors of the Court. This will be in line
with the objectives of the Act to minimize the intervention of the
Court in arbitral proceedings.

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Bibliography
Books & Acts: Chawla S. K., Law of Arbitration & Conciliation, 3rd Ed., Eastern
Law House, New Delhi, 2012.
Kohli Hari Dev, New Case Law Reference on Arbitration &
Conciliation Act, Universal Law Publication, New Delhi, 2008.
Dr. Avtar Singh, Law of Arbitration & Conciliation, 10th Ed.,
Eastern Book Company, Lucknow, 2013.
Basu N. D., Law of Arbitration & Conciliation, 12th Ed., Orient
Publishing House, New Delhi, 2013.
The Arbitration and Conciliation Act, 1996

Web Links: http://www.caclubindia.com/articles/-analysis-of-interimmeasures-u-s-9-and-17-of-arbitration-and-conciliation-act1996-17637.asp#.UmwPtCftuHC

http://en.wikipedia.org/wiki/Arbitration

http://www.ophiuchus.co.in/global/relief.htm