Introduction
Arbitration, as an alternative dispute resolution mechanism, has gained significant popularity due to its efficiency and flexibility. One of the key features of arbitration is the power of the arbitral tribunal to grant interim measures. These measures are crucial in preserving the rights of the parties during the pendency of the arbitration proceedings. In India, the Arbitration and Conciliation Act, 1996 (“the Act”) governs the process of arbitration and provides for interim measures under Sections 9 and 17.
Principles of Granting Interim Measures
The principles of granting interim measures in arbitration are akin to those followed under the Code of Civil Procedure, 1908 (“CPC”). The case of DLF Ltd. v. Leighton India Contractors Private Ltd., (2021) 1 2 elucidated on this aspect. The court, while passing an interim order concerning the furnishing of security under Section 9 of the Act, considered the principles enunciated in Order XVIII Rule 5 of the CPC 3. This rule deals with the furnishing of security where there is an apprehension that the defendant may harm the subject matter.
Tribunal’s Power to Pass Interim Order
An interesting question arose in the case of Evergreen Land Mark (P) Ltd. v. John Tinson & Co. (P) Ltd., 2022 4 5. The issue was whether the Tribunal can pass an interim order under Section 17 of the Act regarding the deposit of security before adjudicating the applicability of a force majeure clause in the contract. The Supreme Court held that such an order cannot be passed by the Tribunal as it is one of the major issues in the case and it would be erroneous to pass such an order before adjudication of the issue on its merits 4.
Objective Behind Granting Interim Relief
The main objective behind granting interim relief is to restore the status quo. If there has been an act done by a party that could not have been done legally, the court can remedy the situation by passing interim orders. The court has to ensure that the party who has suffered any loss is restored to his original position. This principle was upheld in the case of Dorab Cawasji Warden v. Coomi Sorab Warden, (1990) 6 7.
Conclusion
The power to grant interim measures is a crucial aspect of arbitration proceedings. It ensures that the rights of the parties are preserved during the pendency of the proceedings. While the principles of granting interim measures in arbitration are similar to those under the CPC, the arbitral tribunal must exercise caution in granting such measures, especially when major issues in the case are yet to be adjudicated.
Relevant Provisions of Law
| Law | Provision |
|---|---|
| Arbitration and Conciliation Act, 1996 | Section 9: Interim measures, etc. by Court 8 |
| Arbitration and Conciliation Act, 1996 | Section 17: Interim measures ordered by arbitral tribunal9 |
| Code of Civil Procedure, 1908 | Order XVIII Rule 5: How evidence shall be taken in appealable cases3 |
