Power of Courts and Arbitral Tribunals to issue Interim Measures in India: A Critical Analysis of 2015 Amendment By: Shivam Jasra

The Author, Advocate Shivam Jasra has recently completed his LLM from King's College London in International Dispute Resolution. He is currently practicing in Supreme Court of India and Delhi High Court.

The first comprehensive law on arbitration in India was first passed by the Government of India in the year 1940. After some time, it was observed that the arbitration law of 1940 had various inadequacies and defects. Due to these problems, the Law Commission of India suggested radical amendments to the Arbitration Act. During this period, the UNCITRAL after research and due deliberations accepted the Model Law on arbitration which helped most of the countries to get their arbitration laws to be in uniformity with international norms and standards. After the recommendation of the UN General Assembly that all countries should give due regard to the UNCITRAL Model Law on arbitration, Indian government having an old and outdated act of 1940 decided that it was a better course of action to enact a new comprehensive legislation on arbitration in sync with the international standards in India. This resulted in the eventual enactment of the “Arbitration and Conciliation Act, 1996”.

The “Indian Arbitration and Conciliation Act, 1996” aimed to amend and consolidate Indian laws relating to domestic arbitration, international commercial arbitration and enforcement of foreign arbitral awards. The old “Arbitration Act of 1940” in India faced enormous difficulties because it allowed excessive judicial interference by domestic courts in the arbitral proceedings. The “Arbitration and Conciliation Bill, 1995” under column ‘statements and objects’ emphasized on the object of minimizing the interference of the courts in arbitration proceedings. After the promulgation of the new Arbitration Act of 1996, “Section 5” of the Act defined the scope of interference by courts as:

“Notwithstanding anything contained in any other law for the time being in force, in matters governed by this part, no judicial authority shall intervene except where so provided in this part”.

This provision in the “Indian Arbitration Act” was exactly similar to the “Model Law” and was adopted for the purpose of fulfilling the main purpose of the act which was to minimise the part of courts which was to supervise arbitration in India. On a closer analysis of this provision it became evident that the  domestic courts were not allowed to intervene in the matters where the seat of arbitration was in India (By the virtue of Section 2(2)[1] of the Act). The wordings used in the provision was ‘Judicial Authority’ and not ‘Courts’ which was a wider term and included all the authorities/agencies which were conferred with judicial powers of the government. This provision was designed to further the objective of promoting the “principle of party autonomy” which forms the foundation of arbitration law. It was left with an exception which stated that the judicial authorities were allowed to intervene “if it is provided in ‘Part I’ of the Indian Arbitration Act” during the proceedings.

As similar to the UNCITRAL Model Law, the Indian Arbitration Act 1996 also conferred on the courts the similar ability to order “interim measures” as it was granted to the arbitral tribunals. As per the Indian Arbitration act, 1996, the ability to issue interim measures of protection was vested concurrently on both the domestic courts and the arbitral tribunals under “Section 9”[2] and “Section 17”[3] respectively.

The rules of arbitration were based on the “principles of party autonomy” which is an established principle of law in both common and civil law jurisdictions. The philosophy that outlines this principle is that “the contract between the parties is the fundamental constituent of international arbitration and it is the common intention of the parties through which the arbitrator deciding the dispute derives their powers”.[4] This legal relationship between the individuals by the will of the parties must be given primacy in arbitral proceedings which implies the private and consensual nature of arbitration. However, it is said that the efficiency of this technique would be hampered if concurrent authority is conferred on the judiciary over arbitral proceedings.[5]

In India, the exercise of concurrent authority became obvious when the Supreme court delivered judgements of “Bhatia International v Bulk Trading”[6] and “Venture Global v Satyam Computer Services ltd.”[7] which confirmed the interventionist approach of the Indian judiciary. The law laid down by the Apex court attracted wide criticisms from the global community because it acted in a manner contrary to the spirit of UNCITRAL Model Law.[8] However, subsequently the Indian judiciary started interpreting arbitration agreements giving importance to the “Seat theory” of arbitration as a means of damage control to prevent judicial intervention in arbitral proceedings.

Under “Section 9”[9] of the “Indian Arbitration Act 1996”, the domestic courts were allowed to issue interim relief in support of arbitration whenever a party requests them. The courts were permitted to issue interim measures “before, during and even after the making of the arbitral award but before such award was enforced”. Granting of such wide powers to courts led to the belief of the parties that the arbitrators are not bestowed with any power to grant interim measures at the request of the parties and they were always obliged to apply to domestic court for interim measures at any time of the arbitral process. The only condition which was made necessary for seeking an interim relief from the courts under the Indian Arbitration Act was that when a party wanted an interim measure “there must be a manifest intention on the part of that party to refer the dispute to arbitration” and “it was incumbent upon the applicant of interim measures thereafter to commence the arbitral proceedings within a reasonable time on the failure of which court may recall such measure”.

Under “Section 17” of the 1996 Act, the arbitral tribunal was granted the power to issue interim measures at the request of the party, however, the power was not that wide as of given to the domestic courts, because of which the parties were always reluctant to file an application before the tribunal asking interim measures. [10]

Supreme court of India in “M.D. Army Welfare Housing Organisation v Sumangal Services Pvt. Ltd.”[11] held that “the power which was conferred on the arbitral tribunal under ‘Section 17’ of the Indian Arbitration Act is limited as compared to powers which are bestowed to the court under ‘Section 9’ of the Act”. The court further asserted that a bare perusal of the provision clearly suggests that the tribunal is not empowered to issue any orders which can go beyond the arbitration agreement. The order of the arbitral tribunal in this connection was supposed to relate to the “subject matter of the dispute” and the order can only be addressed to “the parties to the arbitration and cannot be addressed to the third parties”. The court finally stated that, the arbitral tribunal has also not been conferred with the power of enforcement of its order, nor any provision is made for its judicial enforcement, therefore, an order by any arbitral tribunal is being “coram non judice” and was wholly without jurisdiction and thus, of nullity.

The Supreme Court of India while delivering this judgement clearly identified the possible limitations in the Arbitration and Conciliation Act, 1996 regarding the issuance of interim measures at the request of the parties, where the tribunals were not allowed to issue these measures at any time of the arbitral proceedings. The limitations which have been discussed in chapter 1 were clearly seen to be the problems in the Indian Arbitration Act too.

“Section 17” of the Indian Arbitration Act[12] was considered as nothing more than a toothless tiger because the powers granted to the arbitral tribunal under the legislation was very limited. The tribunal was also not competent to enforce its own order, cannot issue orders against third parties, cannot entertain ex-parte applications and as provided under the provision, such power can also be excluded through agreement between the parties. These limitations on their powers always allowed possible forms of judicial intervention, where the parties were obligated to approach the domestic courts for issuance of interim measures under “Section 9”[13] of the Indian Arbitration Act. This defeated the whole purpose of the process of arbitration because the parties never intended to go to the courts while choosing the arbitration process and it was also against the principles of party autonomy.

Until 2015, the arbitral tribunal did not have the ability to order interim measures in India, however, “the Amendment Bill of 2015” was introduced which suggested various far-reaching changes in the “Arbitration and Conciliation Act, 1996”. The amendment was aimed to address the major issue of copious judicial interference in arbitration procedures which was in contradiction to the whole agenda of establishing this regime that is to unburden Indian judiciary and to provide the parties opting arbitration, an alternative and easy means of settlement of disputes.[14]

1. 1. Powers of the arbitral tribunals to issue interim measures ‘Prior to the Amendment Act of 2015’:

As already discussed above, the arbitral tribunals were allowed to issue interim relief only during the ongoing arbitral proceedings under “Section 17” of the Act. The concurrent powers vested in the courts and the arbitral tribunals was mentioned under “Part I of the Arbitration and Conciliation Act, 1996” which only applied to the arbitration which was seated in India. Section 2(2)[15] of the Act expressly provides that “the provisions of Part I of the act will apply where the place of arbitration is in India”. This meant that order for interim measures from courts was subjected to both the parties residing and carrying out their business in India or in the case of international commercial arbitration, the seat of the arbitration in India.

“Section 17 of the Indian Arbitration Act”, gave minimal authority to arbitral tribunals for issuing of interim measures during the pre-amendment era. The article stated that:

1. “Unless otherwise agreed by the parties, the tribunal may, at the request of a party to the dispute, order a party to take any interim measure of protection as the 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 the interim measure ordered.” [16]

A bare reading of the above-mentioned provision of the arbitration act shows that it was quite open-textured in the “scope of reliefs” that the arbitral tribunal was allowed to order during the arbitral proceedings before it. It permitted the arbitral tribunals to issue any kind of interim measures, at the behest of a party to the dispute.[17] The open-textured and vague nature of the above-mentioned section compelled the arbitral tribunals to accept the impression that the scope of interim measures was limited under this section.[18] Consequently, various courts and tribunals developed the incorrect notion that the arbitral tribunals could not grant interim measures such as ‘grant of security’.[19]

Another limitation that could be identified on the reading of the “Section 17”[20] was that it did not provide that at what time a request can be made to the arbitral tribunal for interim relief by the parties. This was in contrast to “Section 9” of the act, where it was expressly stated that a request for interim measure can be made “before, during the arbitral proceedings or even after the rendering of the arbitral award but before its enforcement”.[21] It can only be assumed that the request was to be made during the arbitral proceedings, however, a party has to approach the courts and make an application under “Section 9”, when they seek an interim relief before the formation of the arbitral tribunal or after the award is rendered. Also, there was no clarity on provisions made regarding emergency relief, where until the arbitral tribunal is formed, the parties had to advance to the courts for emergency reliefs.

The other flaw in “Section 17” of the Act was that there was no express provision for the “enforceability of interim measures” rendered by the arbitral tribunals. Despite the arbitral tribunals authority to award interim relief, the fact that the Indian Arbitration Act fails to provide an enforcement mechanism for arbitral tribunals led to the arising of doubts by the parties regarding the efficacy of the arbitral process in India.[22]

The High Court at Delhi in “Sri Krishan v Anand”,[23] held that “a person who fails to comply by the orders of the arbitral tribunal would be considered to be ‘making any other default’ or guilty of any contempt to the arbitral tribunal during the conduct of the proceedings’ under “Section 27(5)”[24] of the Act”. The court asserted that “Section 27(5)” is the only mechanism in the current act for enforcing arbitral tribunals orders. Thus, such party would be liable under contempt of court and will be penalised under the “Contempt of Courts Act”.[25] It was further decided in a successive case by the Delhi High Court that an order which is passed by the arbitral tribunal will be “enforceable as the order of the court” if an appeal is filed against it under “Section 37”[26] of the act and that appeal is upheld by that court.[27]

This difficulty of the enforcement of the order and even provisional measures by the arbitral tribunals was fulfilled by the High Court while deciding the case law mentioned above. Otherwise, there were no specific or express provisions in the act that provided for the enforcement of interim relief passed by the Arbitral tribunals. This lack of specific enforcement provisions made the tribunal arrive at a conclusion that they are not vested with powers to pass orders for interim measures, which ultimately led parties in an arbitration to approach the domestic courts and leading to intervention of courts in the arbitral process.

These limitations and flaws in the Indian Arbitration Act of 1996 attracted huge criticism from the lawyers and even from the Indian courts while deciding the dispute between the parties. The need for the amendment of the old “Arbitration and Conciliation Act, 1996” was felt when the Supreme Court of India gave the decision of Bhatia International v Bulk Trading[28] and rendered the BALCO[29] judgement which restricted the jurisdiction of the Indian courts over the foreign-seated arbitration in 2012. To get the arbitration laws of India in conformity with the global standards, significant changes were made time to time.[30] It was finally in 2014, when the Law Commission of India calling for the substantial amendments to the Indian arbitration law in lights of the problems that “plague the present arbitration regime in India” gave their 246^th report[31] to recommend the law ministry to make changes to the old Arbitration Act.

The Law Commission of India approved to the Ministry of Law in India to make various amendments to the existing “Indian Arbitration Act” with an aim of segregating the arbitral regime from excessive judicial interference. The aim of these amendments were to preserve the sanctity of the arbitral regime and to relieve the overburdened courts of India, which was getting dissolved by cause of excessive judicial interference in the arbitral proceedings.[32] India’s desire to become a major international centre for arbitration disputes led to the introduction of the bill on the amendments to Indian Arbitration Act which closely followed the recommendations of the Law commission of India. The amendments went a long way to reform the Indian arbitration law especially in the case of minimising judicial intervention.[33]

1. 2. Powers of the arbitral tribunals to issue interim measures ‘Post the Amendment Act of 2015’:

To amend the existing Indian Arbitration Act and remove the flaws and anomalies in it, the government promulgated  “Arbitration and Conciliation (Amendment) Ordinance, 2015”.[34] This led to a restriction on the part of judiciary in the matters which was dealt by arbitration. The ordinance was majorly based on the “246^th report” of the “Law Commission of India”, which proposed significant changes in different sections of the Act.

The “Amendment Act of 2015” made significant changes in the matter of “interim measures” where the courts and the arbitral tribunals held coincident authorities to grant them. The amendment recognised the independence of the arbitral tribunals under “Section 17” of the act which it did not had prior to the amendment of 2015. The motive of the amendment was to equate the arbitral tribunals authority with the domestic courts for granting of interim relief under “Section 9” of the Indian Arbitration Act.[35]

Post the Amendment Act of 2015, several insertions were made in “Section 9”[36] which permitted the courts to issue “interim relief” at any time of the arbitral process. These insertions were to be read considering “Section 17”[37] where the concurrent and a limited authority was granted to the arbitral tribunal to issue interim measures.

1. 1. 1. Amendments made to “Section 9” of the Indian Arbitration Act:

Subsection (2)[38] was newly inserted in “Section 9” of the Act which gave authority to the court to provide ‘interim measures’ only before the commencement of the arbitral proceedings and prior to the constitution of arbitral tribunal.[39] It was further added to this provision that once the court has granted a measure exercising its power, the arbitral proceedings should commence “within a period of 90 days” or within a period of time as the court determines.

The addition of this subsection in “Section 9” was a big step towards minimizing the role of courts in arbitral proceedings that is described under “Section 5 of the Act”. However, even after the addition of this section, no provisions were made to reduce the role of courts before the arbitral tribunal is formed. Most of the pro-arbitration jurisdictions and even various arbitral institutions have accepted the provisions relating to “emergency arbitrators” which helps the parties for granting of interim relief until the arbitral tribunal is formed. The other flaw in this subsection was the time period allowed to the parties that is 90 days from the day of giving of interim measures by the court in which the arbitral proceedings should commence. The last line of the subsection is open ended and allows the court to exercise its discretion to determine the time period after they grant interim measures in which the arbitral proceedings should commence. This loophole leaves a window for the intervention of courts when the proceedings does not start in a period of 90 days. The parties in arbitration can approach the courts to extend the time period in which the arbitral proceedings should commence. At the end, it is only on the court to decide and not the arbitral tribunal.

Subsection (3)[40] was also inserted in “Section 9” that “restricted the powers of the courts” to not deal with applications for ‘interim measures’ once the arbitral tribunal has been formed and the arbitral proceedings were commenced. If any application under “Section 9” is filed by the parties, the same should be referred to the arbitral tribunal by the court entertaining the application. It is then the discretion of the tribunal and not the courts to decide that whether the interim relief should be granted or not. However, the last proviso to this sub-section still conferred the power on the court to decide that “If the circumstances are present which may render the remedy under ‘Section 17’ efficacious, the court can entertain the application even during the arbitral proceedings”.

The addition of this sub-section was to restrict the authority of the court to order interim relief as “Section 9(1)”[41] of the Act allows the court to order them “before the beginning of proceedings, during the proceedings and also post the arbitral award has been granted but prior to its enforcement”.[42] After the amendment, once the proceedings have begun, the parties were obligated to take interim relief from the arbitral tribunal. A court would not grant the relief ordinarily until the existence of circumstances is proven by the parties that the relief if granted by the arbitral tribunal will be inefficacious. This introduction of this provision was to avoid prejudice to any party once the arbitral tribunal comes into existence.

The insertion of this subsection was made with an intention to limit judicial intervention by adding that no applications should be considered by the courts, once the arbitral tribunal was constituted. However, a window was left open which provided for judicial intervention where the party approach the court during the arbitral proceedings and convince the court that the remedy which will be provided by the arbitral tribunal under “Section 17” will be insufficient and efficacious. No express provisions were made as to how to deal with the disputes before the arbitral tribunal is formed or after the award is rendered. The only option left with the parties is to approach courts rather than the arbitral tribunals as they can only entertain application for interim relief during the arbitral proceedings.

Another lacuna in this provision was that when an application for interim relief was pending before the court and the arbitral tribunal is constituted, is the court liable to relegate the application to the arbitral tribunal?.[43]

This question was addressed in the recent case by the High Court of Delhi in “Benara Bearings & Pistons Ltd. v Mahle Engine Components India Pvt. Ltd.”[44], the division bench held that “If the argument is accepted that the court is not allowed to entertain the applications under ‘Section 9’ for interim measures once the arbitral tribunal comes into existence, it becomes ‘coram non judice’ and further serious vacuum is created as there are no provisions for handling the pending matters before the court for interim measures. All powers granted to the courts before, during the arbitral proceeding and after the rendering of award in accordance with Section 36[45] are left intact (and even not altered by the amendment) as contained in ‘Section 9(1)’ of the Act. ‘Section 9(3)’ itself provides that if the court finds that circumstances exist which may render the remedy under ‘Section 17’ of the act efficacious, the court can entertain an application under ‘Section 9(1)’. Therefore, there is no provision in the act, even of a transitory measure, that requires the court to assign a pending application to the arbitral tribunal, the moment the tribunal is formed.”[46]

Therefore, to avoid a position where the parties are left without interim relief in the proceedings pending in a court and during which the arbitral tribunal is formed, the court may exercise its discretion and continue with the proceedings before it and grant appropriate reliefs, where necessary.[47] Therefore, this practice allowed the courts to entertain the application prior to the formation of the arbitral tribunal and even when the arbitral tribunal is formed during the pendency of proceedings before the court for interim relief, the court will exercise discretion to decide whether to transfer it to the arbitral tribunal or not. This allows for judicial intervention in arbitral proceedings.

1. 1. 2.  Amendments made to “Section 17” of the Indian Arbitration Act:

The Law Commission of India in its report[48] clearly stated that “Section 17” was an important provision for the smooth and efficient working of the arbitral process, since it ensures that the parties rather than waiting for the court orders, seek measures from the tribunal itself. The report further stated that the efficacy of this provision is seriously compromised because of the lack of a suitable statutory mechanism for the enforcement of such interim measure ordered by the arbitral tribunal.[49] Even the Supreme Court while deciding a case recognized that “though “Section 17” gives tribunal the powers to grant orders, these orders cannot be enforced as the orders of the court and  only because of this reason a concurrent authority has been granted to the courts under section 9 of the Act”.[50]

As already discussed, the High Court of Delhi, while deciding “Sri Krishan v Anand”[51] undertook to find a suitable legislative basis for enforcement of arbitral tribunals orders under “Section 17”, however, the Law Commission of India believed that the solution provided by the Delhi High Court was not complete and it was important to provide a suitable enforcement mechanism for the orders of the arbitral tribunal. The commission, therefore, prescribed various amendments to the section and provided for the statutory enforcement of such orders in the similar manner as they were the orders of the court. The commission prescribed these amendments while keeping in mind that they should be in consistence with the recent 2006 amendments made to the Model Law.

The Amendment Act brought significant changes to the wordings of “Section 17” of the Act and the open-textured nature of the provisions in the old 1996 act were omitted. The wording of subsection (1)[52] which said that “unless and otherwise agreed by the parties”, “the tribunal may” and “in relation to subject-matter of the dispute” was omitted. New wordings were added to sub-section (1) which were exactly similar to “Section 9(1)” of the Act. [53] The arbitral tribunals were now allowed to pass orders of interim measures, “during the ongoing arbitral proceedings” and “after the making of the arbitral award but prior to its enforcement.”

The other major change which was brought in effect by way of amendment was to specify the “scope of reliefs” which the arbitral tribunal was capable to order which were not specified earlier. Now the arbitral tribunal was empowered to grant interim reliefs as specified under “sub-section (1) of Section 17 of the Act”.[54] This amendment brought the powers of the arbitral tribunals to issue interim measures at parity with those of the courts under the other provision of the act. Following were the reliefs that the tribunal was now allowed to order, which was confirmed by the courts in different cases;[55]

1. “Securing the amount of the dispute in arbitration.”[56]
2. “Detention, preservation or inspection of any property or thing which is the subject matter of the dispute in arbitration.”[57]
3. “Interim injunctions and appointment of receiver.”[58]

A special provision was added to grant the arbitral tribunal with the similar authority as of courts for ordering of interim measures in the form of ‘subsection 17(1)(ii)(e)’. This provision gave explicit powers to the arbitral tribunal which was succinctly expressed from the wordings of the section that is “Such other interim measure of protection as may appear to the arbitral tribunal as ‘just and convenient’”. The provision is further followed by the wordings that say “the arbitral tribunal shall have the same powers for making orders, as the court enjoy for the purpose of any proceedings before it.”

The Law commission of India while adding this provision to “Section 17” of the Act gave their opinion by adding a ‘note’ to the amendment that this amendment is made with the special purpose of granting the arbitral tribunal, similar authority as a civil court in relation to granting of interim relief. It was further mentioned that when this provision will be read in conjunction with “Section 9(2)[59] of the Indian Arbitration Act” which provides that “the court can only pass an interim measure before the constitution of the arbitral tribunal,” parties will approach the arbitral tribunals by default for interim relief.[60] The purpose specified by the Law Commission was that the change in this scenario will eventually lead to relieving the court from the burden and excessive workload.

‘Subsection (2)’ was also added to “Section 17”[61] by way of Amendment Act of 2015, which empowered the tribunals order of interim measures “enforceable” as if it was the order of the court. The inclusion of this provision solved a major concern of the law community in India that even when the arbitral tribunal grants an award for interim measure, how it was enforceable and how its compliance is ensured. Eventually, to enforce the order of the arbitral tribunal, the parties still had to approach the courts which in the end will allow judicial interference. The parties to the arbitration, therefore, always considers reaching out to courts rather than requesting the arbitral tribunal for interim measures. This amendment identified this problem and rectified it by making the order of the arbitral tribunals order enforceable as that of the court.

Besides statutory recognition of enforceability of interim measures and making them enforceable as court orders, the Supreme court of India while deciding a case, asserted that “any party found in non-compliance with an arbitral tribunal’s order or conduct will amount to contempt during the course of arbitration proceedings and will be triable under the Contempt of Courts Act”.[62] This view of the courts in the end allows for judicial intervention in arbitration, where if a party was found in non-compliance with the order of the tribunals for interim measures, the other party will approach the court and a proceeding will commence against him before the court under “the Contempt of Court Act.”

1. 3. how far the amendment has succeeded?

The “Amendment Act of 2015” brought some remarkable reforms to the outdated Indian Arbitration Act to achieve the aim which was mentioned in the report of the Law Commission of India, however, it failed to address some issues which will be discussed further.

Even when the main focus of the amendment was to minimise judicial intervention in arbitral proceedings[63] and relieving the overburdened Indian judiciary for excessive workload, the courts have to intervene and clarify the problems in the arbitral regime while concluding disputes between the parties.

The amendment made some far sighted changes to curb excessive judicial interference in India especially in the field of granting of interim relief, which is vested in the courts and tribunals concurrently. However, the amendment has lacked in dealing with some aspects which still allows judicial intervention in arbitral proceedings and there are still no express and clear provisions in the Arbitration Act to address them.

“Section 17(1)”[64] now permit the tribunal to pass orders for interim measures and this power is now at par with the courts. The tribunals now also have the ability to enforce these orders under “Section 17(2)”[65] of the Act, however, it is not specifically provided that what is the procedure when a party denies to follow the orders of the tribunal voluntarily. This problem was addressed by the Supreme Court of India[66] in the case post amendment, where they rendered that “a party found in non-compliance with the orders of the arbitral tribunal will be tried under the Contempt of Court Act, 1971”. This eventually leaves the enforceability of the tribunals orders at the hands of the courts. Thus, allowing for judicial intervention in arbitral proceedings for issuing interim measures.

Addition of “subsection (2)” in “Section 9” of the Act was a great step to limit judicial interference. The provision clearly stated that after the passing of an order for interim relief by the court, the arbitral proceedings should begin in a period 90 days or in accordance to the time court may decide. [67] A weird trend was observed prior to the amendment wherein the party delayed the initiation of the proceedings once it has been granted interim measures, since in most of the cases their motive was achieved. This is why this addition was made to start the proceedings within 90 days, however, the act did not adopt the further suggestions of the Law Commission of India which said “failing which the interim measure of protection will cease to operate”.[68] This can be seen as to what if the party fails to commence the proceedings within 90 days and what effect it will have on the interim measures already issued by the court.[69]

Under the “Indian Arbitration Act”, the courts are allowed to issue interim relief, “before the starting of proceedings, during the arbitral proceedings and after the award is given but before its enforcement”.[70] These powers were much wider than those which were conferred on the arbitral tribunal. “Subsection 9(3)”[71] was added by way of amendment to reduce the powers of the courts once the arbitral proceedings had started. The amendment was supposed to curb the problem of excessive interference by courts while the arbitral proceedings were commenced[72], however, the concluding lines of the provision ended with giving the powers in the hands of the courts to decide that if they find out that the arbitral tribunal is incapable to issue a remedy in any circumstances and such remedy is “inefficacious”, the court can grant interim measures in aid of the arbitral proceedings.

The inclusion of this provision was a good move to stop unnecessary interference by the courts, however, the act fails to clearly state that what matters may be considered in which the order by the tribunal will be “inefficacious”. It may be understood that when the arbitral tribunal finds that the relief sought by the parties before it will not be operative as the orders or the court and will not fall within their power, it would fall within the domain of ‘Section 9’ of the Act where the party has to sought the same relief before the courts during the arbitral proceedings.[73]

One of the possible cases, where the remedy could be left inefficacious before the arbitral tribunal is when the arbitral tribunal was to “pass order for interim measures against third parties” as already discussed in chapter 1. In order to protect the subject matter of dispute, the issue of subjecting a third party to tribunals orders has arisen on several occasions, and courts have always followed a linear approach.[74] It has been repeated by the courts that in “Section 9” of the Indian Arbitration Act, civil courts have fundamental power to grant interim order “against third parties”.[75] While courts enjoy such wide powers, can it be argued that the amendment brought similar powers to the arbitral tribunal?.

In “Wind World (India) Limited and Ors. v Enercon GmbH”,[76] the High court of Bombay refused the recognition of an arbitral tribunals order which allowed for disclosure of third party documents before the arbitral proceedings. This decision was in contradiction to the purpose of amendment which sought to provide similar powers to the arbitral tribunal. Therefore, it can be said that no clear provisions were made regarding what cases would constitute the rendering of the remedy under “Section 17” inefficacious.

The amendment to the Indian Arbitration Act, tried to give exactly similar powers for issuance of interim reliefs to the arbitral tribunal which were vested in the court, however, till now, no provisions are made regarding the issuance of interim measures “prior to the formation of the arbitral tribunal”. It is an old saying that, “there can be no debate that only the courts have the power to issue interim measures prior to the coming into existence of the arbitral tribunal”.[77] The Amendment Act allowed the arbitral tribunals to issue interim measures of protection during and after the award is rendered, but till now, the legislation has failed to provide any express provisions that helps in dealing with judicial intervention before the formation of arbitral tribunal.

An attempt was made to give the statutory recognition to the concept of “emergency arbitrators” which is already introduced under rules of different institutions. While the Law Commission of India report[78] prescribed the inclusion of “emergency arbitrators” to the definition of arbitral tribunal under “Section 2(d)”[79], the legislature failed to implement it. Further, due to weak effective mechanism for enforcement of emergency arbitrators orders, the parties will still prefer to approach the courts.[80]

The Amendment Act also failed to make any provisions that promote institutional arbitration in India, which can surely help in limiting the judicial say in the arbitral proceedings. The Law Commission of India in their report,[81] have themselves recognised the importance of institutional arbitration and mentioned that institution arbitration provides for a structured procedure and an administrative support and has its own benefits, which are not available to the parties opting to go for ad-hoc arbitration. They further mentioned that India, being a third world country, has till now ‘not recognised’ the concept of institutional arbitration and it is still lagging behind from the International standards. The Law Commission showed their intent for promotion of institutional arbitration in India by giving recognition to the arbitral institutions like Delhi International Arbitration Centre (DIAC), however, the vision of the Law Commission of India still looks like a dream and it will take some more time for parties to the dispute to choose institutional arbitration above ad-hoc arbitration.

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