Interim Relief Arbitration

INTERIM RELIEF UNDER SECTION 9 OF THE ARBITRATION
AND CONCILIATION ACT, 1996
SEMINAR PAPER ON ARBITRATION LAWS
SUBMITTED BY
Seminar on Interim Measures under Section 9 of the Arbitration and Conciliation Act, 1996
VIKAS KUMAR
BLI 976
NATIONAL LAW SCHOOL OF INDIA UNIVERSITY

BANGALORE
TRIMESTER XII
Submitted by Vikas Kumar

Page 2 of 42
TABLE OF CASES..............................................................................................3
Introduction........................................................................................................ 5
Methodology.......................................................................................................7
Chapter I: Interim Orders under section 9 of the Act.......................................8
Chapter II........................................................................................................... 11
Chapter III
THE NATURE OF RELIEF AS PROVIDED UNDER SECTION

9 OF THE ACT
20
Chapter IV: Interim Orders in Foreign Arbitration......................................34

CHAPTER V:
CONCLUSION.........................................................................42
BIBLIOGRAPHY...............................................................................................44

Page 3 of 42
TABLE OF CASES
Alpine Industries v. Union of India, (1988) 1 Arb LR 363 Delhi.
Anton Piller K.G. v. Manufacturing Processes Ltd., (1976) Ch 55.
Ashok Chazvia v. Rakesh Gupta, (1996) 2 Arb LR 255 (Delhi).
Banwari Ial Radhey.Mohan v. Punjab State Co-op Supply and Mktg Fedn.
Ltd., AIR 1983 Delhi 402.
Bhatia International v. Bulk Trading S.A. and Anr., MANU/SC/0185/2002.
Binny Ltd. v. Nizam sugars Ltd, (1997) 88 Comp Case 741 at 746 (AP).
Chandu Lot v. Brit-over Ltd., 52 CWN 451.
Channel Tunnel Group Ltd. v. Balfour Beatty Construction Ltd., 1993 1 All ER
664 at 683
Coppee-Lavalin SA/NV v. Ken-Ren Chemicals and Fertilizers Ltd. (in

Liquidiation) (1994) 2 All E.R. 449 at 466 HL.
Coppie-Levalin SA/NV v. Ken-Ren Chemicals and Fertilizers Ltd, [1994] 2 All

E.R. 449.
East Coast Shipping Ltd. v. M.J. Scrap Pvt. Ltd., AIR 1997 Cal 168.
Food Corporation of India v. P. A. Ahammed lbrahim, (1989) 1 Ker LT 251.
Global Co. v. National Fertilizers Ltd, AIR 1998 Delhi 397 at 400.
Gokuldas v. Union of India, Al R 198:3 Ker 169.
H.M. Kamatuddin Ansari & Co. v. Union of India., AIR 1984 SC 29.
Harbhajan Singh Kaur v. Unimode Finance, (1997) 2 Cal LT 414.
Hindustan Steel Works Construction Lid. v. Tarapore & Co., (1996) 87 Comp
Case 344.
I.M. D. Syndicate v. L T Commr. New Delhi, AIR 1977 SC 1348.
Keventer Agro Ltd. v. Seagram Co. Ltd, AIR 1997 Cal 200.
Marriott
International
Inc.
&
Ors.v.
Ansal
Hotels
Limited
&
Anr,
MANU/DE/0013/2000.
Page 4 of 42
Mohinder Singh & Co. v. Executive Engineer, AIR 1971, J&K 130.
MVR Industries Ltd. v. Tribal Coop Mkg Development Federation of India

Ltd., (1996) 1 Arb 1,R 393 (Delhi).
MVR Industries Ltd. v. Tribal Coop Mkg Development Federation of India

Ltd., (1996) 1 Arb LR 393 (Delhi).
N.C. Bhall v. R.C. Bhalla (1990) 2 Arb.L.J. Delhi.
Narain Sahai Agrawal v. Santosh Rani, AIR 1998 Delhi 144.
National Building Construction Corpn. Ltd. v. IRCON Intl Ltd., (I998) 1 Raj
500
National Thermal Power Corpn Ltd. v. Flowmore P Ltd., AIR 1996 SC 445.
NEPC India Ltd v. Sundaram Finance Ltd, (1998) 2 Arb. LR 446 (Mad).
Newabgani Sugar Mills Co. lid. v. Union of India, AIR 1976 SC 1152.
R. K. Associates v. V Channappa, AIR 1993 Kant 247.
Ranjit Chandra Mitter v. Union of India, AIR 1963 Cal 594.
Rawla Constructions v. Union of India, AIR 1977 Delhi 205.
Roussel-Uclaf v. CD. Searle C5 Co. Ltd and G. D. Searle & Co. [1978] 1
Lloyd's Rep. 225
Sha Vaktavarmal Sheshmull v. Nainmull Umaji & Co., AIR 1962 Mad 436.
Subhash Chander Kakkar v. D. S. I. D. C., (1990) 2 DLT 21.
Sundaram Finance Ltd. v. NEPC India Ltd., (1999) 1 SLT 179 (SC)(1999).
Sundarlal Haveliwala v. Bhagwati Devi, AIR 1967 All, 400.
Taj Builders v. Indore Development Authority, AIR 1985 MP 146.
Tudor Accumulator Co. v. China Mutual, etc. Co., (1930) WN 201.
Union of India v. Om Construction and Supply Co., AIR 1994 All 334.
Union of India v. Raman Iron Foundry, (1974) Supp SCC 556 at pp. 561.
Vashdev Bheroomal Pamnani v. M. Bipin Kumar, AIR 1987 Bom 226.

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Introduction
An arbitration agreement is a contractual undertaking by which the parties
agree to settle certain disputes by way of arbitration rather than by proceedings in
court. When a dispute arises however one of the parties may nevertheless
commence court proceedings either because he challenges the existence or validity
of the arbitration agreement or because he means to breach it.
This paper dwells therefore on the issues arising when a party approaches the
courts for interim measures.
Article 9 relates to the recognition and effect of the arbitration agreement by
laying down the principle, disputed in some jurisdictions, that resort to a court and
subsequent court action with regard to interim measures of protection are compatible
with an arbitration agreement. It must be accepted that negative effect of an arbitration
agreement, which is to exclude court jurisdiction, does not operate with regard to such
interim measures. The main reason being that the availability of such measures is not
contrary to the intentions of parties agreeing to submit a dispute to arbitration and the
measures themselves are conducive to making arbitration efficient and to securing its
expected results.
The critical question with regard to interim relief in arbitration is Who provides
interim measures of protection? Shall it be the courts, the arbitrators or both?
The answers given in national arbitration legislation and in arbitration rules have
changed over the years. Some time ago it seemed to be a common understanding that
only courts provide any provisional relief. This was reflected in international instruments
such as the 1961 European Convention on International Commercial Arbitration which
in Article VI, paragraph 4 stated that a request for interim measures to the courts is not a
waiver of the arbitration agreement. Similar provisions are found in arbitration rules.
They ensure that a party can have recourse to the courts without fearing to chance the
track of dispute settlement by making such an application. No mention was made of an
arbitrator's competence to grant interim measures of protection. However, later, a trend
in favor of such an arbitrator's competence emerged. This was first reflected in
arbitration rules such as the 1976 UNCITRAL Arbitration Rules for International
Commercial Arbitration (henceforth UNCITRAL Rules), which provide for a choice of
application. Article 26, paragraph 3 of the UNCITRAL Rules refers to court applications
Page 7 of 42
and deems them to be compatible with the arbitration agreement. This reiterates the
established view. But in paragraphs 1 and 2 of the article, the UNCITRAL Rules go
further when making clear that arbitrators have contractual power to order certain special
kinds of interim measures such as the sale of perishable goods.
However, it is unfortunate that neither the New York Convention of 10 June 1958
on the Recognition and Enforcement of Foreign Arbitral Awards (henceforth New York
Convention) nor any other international instrument deals with interim measures of
protection granted by the arbitrator or their enforcement. Probably the solution might be
concretely provided suitably only by national legislation by providing decisive provisional
remedies namely within the framework of court assistance, fall-back statutory
provisions and laying down the preconditions for the enforcement of arbitrator-granted
interim measures of protection.
The issue in interim order further gets complicated when the interim measures
are sought against International arbitrations or when the seat of arbitration falls outside
the country where interim relief is sought. This issue is of considerable importance in
India due to the conflicting judgements by various High Courts. Though the Supreme
Court in India has decided this question finally yet it raises quite interesting propositions
and is worth examining.

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METHODOLOGY
The topic of this seminar paper is Interim Relief under Section 9 of the
Arbitration and Conciliation Act, 1996 (henceforth referred to as the Act) and
accordingly dwells upon some of the various issues raised in the context of grant of
interim orders by the courts with regard to the contractual disputes wherein the
agreement also provides for a settlement through arbitration proceeding.
The introduction to the paper provides the background to the concept of
arbitration as has evolved in the jurisprudential framework, with regard to the specific
needs of the commercial world.
This seminar paper then broadly discusses the general law regarding interim
orders given by the national courts, as contemplated under the Act. This section is
illustrative in nature and brings out the various instances gleaned from the case laws.
This paper also compares the position of English law in this regard. The scope
and the ambit of the English law are of considered significance, since both the Indian
and the English laws of arbitration are based on the UNCITRAL model law on arbitration.
The last important section dwells upon the existing controversy in the Indian
courts, on the point whether the national courts in India have the jurisdiction to grant
interim orders with regard to foreign arbitral proceedings.

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Chapter I: Interim Orders under section 9 of the Act.

The Arbitration and Conciliation Act, 1996 (Act) has provisions enabling a party to
the arbitral proceeding to approach the court to request for interim measures.
S.9. Interim measures, etc. by court - A party may before, or during arbitral
proceedings or at any time after the make 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 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 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;
(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.
The analogous provision on the court's power to grant interim measures of
protection is contained in Article 9 of the Model Law which provides that
Article 9.
Arbitration agreement and interim measures by court.

Page 10 of 42
10
It is not incompatible with the arbitration agreement for a party to

request before or during arbitral proceedings, from a court an
interim measure of protection and for a court to grant such
measure.
Article 9 lays down the principle, which has been contested in some national
jurisdictions, that resort to a court and a subsequent court action in respect of
interim measures of protection are compatible with an arbitration agreement.
Thereby, clarifying that effect of an arbitration agreement, which is to exclude court
jurisdiction, does not operate negatively in respect to such interim measures. The
chief reason is that the availability of such measures is not contrary to the intentions
of parties agreeing to submit a dispute to arbitration and that the measures
themselves are conducive to making the arbitration efficient and to securing its
expected results.1
The range of interim measures of protection covered by article 9 is of
considerable wider ambit than provided under article 17 2 of the Model Law, that
deals with the limited power of the arbitral tribunal to order any party to take an
interim measure of protection in respect of the subject matter of the dispute without
dealing with issues of the enforcement of such orders. It is to be observed that the
model law is silent about the possible conflict between an order by the arbitral
tribunal under article 17 and a court decision under article 9 relating to the same
object or measure of protection. However, it is submitted that there is little potential
for such conflict in view of the disparity of the range of measures covered by the two
articles.
The UNCITRAL commentary on Model law provides that article 9 itself does
not regulate which interim measures of protection were available to a party. It
merely expresses the principle that a request for any court measure available under
1It has been commented by authorities like Russell that,
Article 9 expresses the principle of compatibility in two directions with different scope of
application. According to the first part of the provision, a request by a party for any such court
measures is not incompatible with the arbitration agreement, i.e., neither prohibited nor to be
regarded as a waiver of the agreement. This part of the rule applies irrespective of whether
the request is made to a court of State X or of any other country. Wherever it may be made, it
may not be invoked or created as an objection against or disregard of, a valid arbitration
agreement under this Law, i.e., in arbitration cases falling within its territorial scope of
application or in the context of articles 8 and 36.
However, the second part of the provision is addressed only to the courts of State X and declares their
measures to be compatible with the arbitration agreement irrespective of the place of arbitration.
Assuming wide adherence to the model law, these two parts of the provision would supplement each
other and go a long way towards global recognition of the principle of compatibility, which, in the
context of the 1958 New York Convention, has not been uniformly accepted.
2Article 17. Power of arbitral tribunal to order interim measures

Unless otherwise agreed by the parties, the arbitral tribunal may, at the request of a party, order any party to
take such interim measure of protection as the arbitral tribunal may consider necessary in respect of the
subject-matter of the dispute. The arbitral tribunal may require any party to provide appropriate security in
connection with such measure.
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11
a given legal system the granting of such measure by a court of this State was
compatible with the fact that the parties had agreed to settle their dispute by
arbitration.

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12
Chapter II
PART A:SCOPE OF SECTION 9 OF THE ACT
The scope of the section was examined in a vast survey of cases and
authorities by the Madras High Court in NEPC India Ltd v. Sundaram Finance Ltd.3
This case arose out of a hire-purchase transaction, which carried an arbitration
clause and the buyer defaulted with an installment. The owner moved the court and
obtained an order under S. 9, without resort to the arbitration clause, for direct
seizure of the machinery with the help of police. The order was set-aside in an
appeal against it.
The Madras High Court was of the view that a request for
arbitration for substantive relief should be there before S. 9 could be used for interim
relief whether or not an arbitrator has been appointed or proceedings commenced
and not before that.
In another case, Harbhajan Singh Kaur v. Unimode Finance, (1997) 2 Cal LT
414, the Court observed as follows
Clause (ii) to section 9(a) of the said Act begins with a prefix, namely, for an
interim measure of protection in respect of the measures that may be
taken by the court and the same are catalogued in Clauses (a) to (d) of
section 9(ii) of the Act. The court is made to ponder over the proposition
used in the expression 'interim measure' by insertion of 'an' and, at the same
time, a catena of matters has been elicited thereunder. The expression used
is in the midst of pendency of an arbitral proceeding in between making of
the arbitral award and enforcement in accordance with section 36.
Therefore, the expression an is one of the alternative; and it has to be rated
as in the midst of possibility of many during the pendency of an arbitral
proceeding as indicated in section 9 itself.
This decision of the Madras High Court was reversed by the Supreme Court
on appeal Sundaram Finance Ltd. v. NEPC India Ltd., 4 where the Supreme Court
held that the court has jurisdiction under Section 9 to pass interim orders even
3 (1998) 2 Arb. LR 446 (Mad) To the same effect was National Building Construction Corpn.
Ltd. v.
IRCON Intl Ltd., (I998) 1 Raj 500, 543 that foundation for arbitration must be laid before claiming relief
under S.2. An interim measure cannot be provided where there is no prayer for some substantive relief,
4(1999) 1 SLT 179 (SC)1999) 1 JT 49 (SC)
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13
before the commencement of arbitration proceedings and appointment of arbitrator.

All that sufficed was that there must be satisfaction on the part of the court that the
applicant will take effective steps for commencing arbitral proceedings. This was
reflected in the following passage in the judgment5 When a party applies under Section 9 of the 1996 Act it is implicit that it
accepts that there is a final and binding arbitration agreement in existence. It
is also implicit the a dispute must have arisen which is referable to the
Arbitral Tribunal Section 9 further contemplates arbitration proceedings
taking place between the parties when an application under Section 9 is filed
before the commencement of the arbitral proceedings there has to be
manifest intention on the part of the applicant to rake recourse to the arbitral
proceedings if, at the time when the application under Section 9 is filed, the
proceedings have not commenced under section 21 of the 1996 Act. In
order to give full effect to the words before or during arbitral proceedings
occurring in Section 9 it would not be necessary that a notice invoking the
arbitration clause must be issued to the opposite party before an application
under Section 9 can be filed. The issuance of a given case of a notice may
be sufficient to establish the manifest intention to have the dispute referred to
arbitral Tribunal but a situation may so demand that a party may choose to
apply under Section 9 for an interim measure even before issuing a notice
contemplated by Section 21 of the said Act. If an application is so made the
Court will first have to be satisfied that there exists a valid arbitration
agreement and the applicant intends to take the dispute to arbitration. Once
it is so satisfied the Court will have the jurisdiction to pass orders under
Section 9 giving such interim protection as the facts and circumstances
warrant. While passing such an order and in order to ensure that effective
steps are taken to commence the arbitral proceedings, the Court while
exercising jurisdiction under Section 9 can pass conditional order to put the
applicant to such terms as it may deem fit with a few to see that effective
steps are taken by the applicant for commencing the arbitral proceedings.
What is apparent, however, is that the Court is not debarred from dealing
with an application under Section 9 merely because no notice has been
issued under Section 21 of the 1996 Act.
Referring to the support, which the Madras High Court in NEPC India Ltd v.
Sundaram Finance Ltd.6 had drawn from the 1940 Act in interpreting the 1996 Act,
the Supreme Court said7-
5 (1999) 1 SLT at p. 180 (SC).

6 (1998) 2 Arb. LR 446 (Mad) To the same effect was National Building Construction Corpn.
Ltd. v.
IRCON Intl Ltd., (I998) 1 Raj 500, 543 that foundation for arbitration must be laid before claiming relief
under S.2. An interim measure cannot be provided where there is no prayer for some substantive relief,
(1991) 1 SLT at pp. 185, 188-189 (SC).

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14
The 1996 Act is very different from the Arbitration Act, 1940. The provisions
of this Act have; therefore, to be interpreted and construed independently
and in fact reference to 1940 Act may actually lead to misconstruction. In
other words, the provisions of 1996 Act have to be interpreted being
uninfluenced by the principles underlying the 1940 Act. In order to get help
in construing these provisions it is more relevant to refer to the UNCITRAL
Model Law rather than the 1940 Act.
Section 9 of the said Act corresponds to article 9 of the UNCITRAL model
Law, this article recognizes, just like Section 9 of the 1996 Act, a request
being made before a Court for an interim measure of protection before
arbitral proceedings. It is possible that in some countries if a party went to
the Court seeking interim measure of protection that might be construed
under the local law as meaning that the said party had waived its right to take
recourse to arbitration. Article 9 of the UNCITRAL Model law seeks to clarify
that merely because a party to an arbitration agreement requests the Court
for an interim measure before or during arbitral proceedings such recourse
would not be regarded as being incompatible with an arbitration agreement.
To put it differently the arbitration proceedings can commence and continue
not with standing one party to the arbitration agreement having approached
the Court for an order for interim protection. The language of Section 9 of
the 1996 Act is not identical to Article 9 of the UNCITRAL Model Law but the
expression before or during arbitral proceedings used in Section 9 of the
1996 Act seems to have been inserted with a view to give it the same
meaning as these words have in Article 9 of the UNCITRAL Model Law. It is
clear, therefore, that a Party to an arbitration agreement can approach the
Court for interim relief not only during the arbitral proceedings but even
before the arbitral proceedings. To that extent Section 9 of the 1996 Act is
similar to Article 9 of the UNCITRAL Model Law.
It will also be useful to refer to a somewhat similar provision in the Arbitration
Act, 1996 of England. Section 44 of this Act gives the Court powers, which
are exercisable in support of the arbitral proceedings. Sub-section (3) of
Section 44 permits, in the case of urgency, the Court to make an order
contemplated by Sub-section (2) even on an application by a proposed party
to the arbitral proceedings. The expression used in this Sub-section party
or proposed party to the arbitral proceedings shows that where arbitral
proceedings have commenced then the application will obviously be of a
party to the said proceedings but where the arbitral proceedings have not
commenced a "proposed party' has been given the right to approach the
Court. A proposed party to the arbitral proceedings would, therefore, be one
who is party to an arbitration agreement and where disputes have arisen but
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15
the arbitral proceedings have not commenced. While referring to Section 44

of the English Act in dealing with the question of grant of interim injunctions
in support of arbitral proceedings Russell On Arbitration 8, has stated as
under:
The Court may exercise its power to grant an interim injunction before there has
been any request for arbitration or the appointment of arbitrators, provided that
the applicant intends to refer the dispute to arbitration in due course.
The power to grant an interim injunction under Section 44 of the Act extends
to the granting of a Mareva injunction in appropriate cases. It may also
include granting an interim mandatory injunction, although the Court will be
slow to grant an injunction which provides a remedy of essentially the same
kind as is ultimately being sought from the Arbitral Tribunal.
The Supreme Court opined that this view correctly represents the position in
law, namely, that even before the commencement of arbitral proceedings the Court
can grant interim relief. The said provision contains the same principle, which
underlies Section 9 of the 1996 Act.9
Thus, under the 1940 act there was a difference of opinion as to whether
relief could be granted under the section before reference had been made to
arbitration. One view was that relief would not be given unless arbitration
proceedings were pending before the arbitrator.10 The other view was that relief
under the section could be granted before and in anticipation of any reference, and
before an order of reference was made, 11 there reason why the word pending
should be added before the words arbitration proceedings" in section 41(b), 1940
Act.12 Now S. 9 of the Arbitration and Conciliation Act, 1996 makes it very clear that
reliefs under the section can be granted either before or during arbitral
proceedings.
8 [21st Edition] at page 380

9
The Court also considered the decision in Channel Tunnel Group and France Manche SA v.
Balfour Beatty Construction Ltd., (1992) WLR 741 (CA), on appeal, 1993(2) WLR 262 (H12)
wherein construing section 12 (6) of the UK Arbitration Act 1950, STRAUGHTON, LJ observed as
under:
In my view this power can be exercised before there has been any request for arbitration or the
appointment of Arbitrators, provided that the applicant intends to take the dispute to arbitration in due
course. Whatever the meaning of reference to Section 12(6)(h) (and it is not always easy to
determine the precise meaning of the word in arbitration statutes). I would hold that the power of the
Court in such a case would be exercised for the purpose of and in relation to a reference.
10 Ranjit Chandra Mitter v. Union of India, AIR 1963 Cal 594.
11 Gokuldas v. Union of India, Al R 198:3 Ker 169.

12 Chandu Lot v. Brit-over Ltd., 52 CWN 451.
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16

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17
PART B:POSITION UNDER ENGLISH LAW

The general principle is stated in Part 1 of the English Arbitration Act 1996 as
follows:
in matters governed by this Part [of the Act] the court should not intervene
except as provided by this part.
This statement of principle in the very first section of the Arbitration Act 1996
is clear recognition of the need to limit and define the court's role in arbitration. The
House of Lords has stated in this regard as under Whatever view is taken regarding the correct balance of the relationship
between international arbitration and national courts, it is impossible to doubt
that at least in some instances the intervention of the court may be not only
permissible but highly beneficial.13
The English courts could easily justify their role where the parties are English
and the arbitration is to follow the normal English rules of procedure. It is less easy
to justify in a case, conducted under the rules of an international arbitration body.
(for example the ICC), where the parties ,are foreign, and the only connection with
England being the parties' choice, directly or indirectly, to hold their arbitration there.
In Coppie-Levalin SA/NV v. Ken-Ren Chemicals and Fertilizers Ltd, 14 which
was decided prior to the enactment of the English Arbitration Act 1996, a distinction
was drawn between three groups of measures that involve the court in arbitration;
the first being purely procedural steps which an arbitral tribunal cannot order or
cannot enforce (eg. issuing subpoenas), the second being designed to maintain the
status quo the granting of interlocutory injunctions) and the third being designed to
ensure the award has its intended practical effect by providing a means of
enforcement if the award is not voluntarily complied with. It was pointed out that the
three groups entail differing degrees of encroachment on the tribunal's task of
deciding the merits of' the dispute and that the extent of such intrusion should
condition to an important extent the court's approach. Despite the changes made
by the Arbitration Act 1996, the distinction remains valid.
13 Per Lord Mustill in Coppee-Lavalin SA/NV v. Ken-Ren Chemicals and Fertilizers Ltd. (in
Liquidiation) (1994) 2 All E.R. 449 at 466 HL.
14 [1994] 2 All E.R. 449.
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18
The English Courts may intervene while arbitration proceedings are pending
and its powers to do so. They include power to extend time limits for commencing
the arbitral proceedings and for making the award, power to appoint arbitrators, to
decide disputes about the arbitrator's jurisdiction and to determine points of law. The
court also has power to remove an arbitrator and to appoint a replacement. The
court may also make other orders during the reference, and these are also
examined.
Under section 9 of the English Act, a stay must be granted unless the court is
satisfied that the arbitration agreement is null and void, inoperative, or incapable of
being performed. The court also has an inherent jurisdiction to grant a stay in
certain circumstances like stay proceedings brought in breach of an agreement to
decide disputes by arbitration.15 It is rarely necessary to invoke this power in view of
the statutory jurisdiction. The inherent jurisdiction may be appropriate though where
there is no arbitration agreement within the meaning of section 6 of the Arbitration
Act 1996 or where the arbitration clause is not immediately effective 16 or for some
other reason the Application falls short of the requirements for a stay under the
Arbitration Act 1996.
A stay based on the inherent jurisdiction may also be appropriate where there
are two defendants to the court proceedings, one of whom is not a party to the
arbitration agreement but claims through or under the other defendant by virtue of a
contract of agency.17 This touches on a particularly difficult issue in relation to
arbitration agreements. It most frequently arises in the context of groups of
companies, where for example one in the group has signed a contract containing an
arbitration clause or Group Company has performed the contract.
Under the English Law there is no requirement that the reference to
arbitration must have been started. Indeed, the fact that the dispute cannot
15 Channel Tunnel Group Ltd and Others v. Balfour Bveaty Construction Ltd and Others, [1993] 1
Lloyds Rep.291.
16 Id.
17
Roussel-Uclaf v. CD. Searle C5 Co. Ltd and G. D. Searle & Co. [1978] 1 Lloyd's Rep. 225 at 229
30. The court in that case was prepared to grant a stay based both on its inherent jurisdiction and on its
finding that one of the group companies was claimine through or under the other Rithin the mcaning
of s.1 of the Arbitration Act 1975. The words quoted do not appear in the Arbitration Act 1996 and the
decision has been criticised.
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19
immediately be referred to arbitration, because the matter is to be referred to

arbitration only after the exhaustion of other dispute resolution procedures will not
prevent the court from ordering a stay.18
18 Arbitration Act 1996, s.9(2) which followed the decision in Channel Tunnel Group Ltd and Olhers v.
Balfour Beatty Construction Ltd and Others [19931 1 Lloyds 1 Rep. 291, HL.
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20
Chapter IIITHE NATURE OF RELIEF AS PROVIDED UNDER SECTION 9 OF THE

ACT
The present chapter discusses threadbare the various kinds of relief
contemplated under section 9 of the Act which the Courts are empowered to give to the
applicant. As discussed earlier, there existed a difference of opinion as to whether relief
could be given under this section before reference had been made to arbitration. Once
view was that relief could not be given unless arbitration proceedings were pending
before the arbitrator. The other view was that relief under the section could be granted
before and in anticipation of any reference, and before an order of reference was made,
there being no reason why the word pending should be added before the words
arbitration proceedings in section 41(b), 1940 Act. Now the present section 9 of the Act
makes it very clear that relief under the section can be granted either before or during
arbitral proceedings.
PART A:
ORDER FOR SALE OF GOODS [SECTION 9(ii)(a)]
Under this heading the Courts are empowered to order sale of goods, the
goods being defined under section 2 of the Sale of Goods Act, 1930 and moreover
so, in case where the goods are of a perishable nature.
PART B:
ORDER FOR PROTECTION OF FINANCIAL INTEREST [SECTION

9(ii)(b)]
In Global Co. v. National Fertilizers Ltd., the Delhi High Court held that a petitioner
cannot seek an interim order or the sole ground of protection of his financial
interests. The awardee has to prove the respondent's intention to effect, delay or
obstruct execution of the award. The court said19 It is true that the said Arbitration Act, 1940 stands repealed by the Act of
1996 and the provisions contained in the Code of Civil Procedure are not
applicable to the proceedings under the Act. Still, in the absence of
guidelines how the power for grant of relief under section 9(ii)(b) is to be
exercised by, the Court, the principles underlying the aforesaid sections are
to be applied. It is only on adequate material being supplied by the petitioner
that the Court can form opinion that unless the jurisdiction is exercised under
the said Section 9(ii) there is real danger of the respondent defeating,
delaying or obstructing the execution of the award made against it. On the
basis of the only ground of protection of financial interest of the petitioner, the
19 AIR 1998 Delhi 397 at 400.

Page 21 of 42
21
respondent, a Govt. of India Undertaking, cannot be legally directed to

furnish security for the amount of US$ 88,250 together with interest @ 9%
p.a.
It must be noted that the court has no power to direct an arbitrator to pass an
interim award and that too for a specified amount. 20 However, the court is competent
to pass an order of attachment before judgment by invoking the provisions of S. 9 of
the 1996 Act.
In case of security for costs, the courts will usually require a claimant, if it is a
foreign company out of India or a person out of India who does not possess
sufficient immovable property in India, to furnish security for all the costs incurred or
likely to be incurred by the respondent.21
The arbitral tribunal may ask for deposit by way of security for costs. The
deposit in advance may be supplemented afterwards according to exigencies. A
separate cost may be fixed linking it with the claim and counter claim. The deposit
has to be paid by the parties in equal share, though one party may pay the share of
the other in case of default. Where deposit is not made by a party in respect of a
particular claim or counter-claim, the tribunal may suspend or terminate the arbitral
process in respect thereof. At the end of the proceedings, the tribunal has to give an
account of the money in deposit and return the unused amount to the parties.
On of the effects of the provision is that the power of the court to order
security for costs becomes vested in the arbitral tribunal to the exclusion of the
court. This reform has been effectuated by the English Arbitration Act, 1996 also.
There also earlier the power was vested in the court. 22 The English Arbitration Act,
1996 does not specify the basis on which the security for costs should or should not
be granted. The tribunal has a broad discretion.
20 Union of India v. Om Construction and Supply Co., AIR 1994 All 334.
Such an order, if passed, mill
not be an interlocutory order, it would amount to case decided.

21 See, Order 25, Rule 1 of the Code of Civil Procedure.
22 For example, see Coppee-Lavalin SA v. Ken-Ren Chemicals & Fertilizers Ltd
(1994) 2 All ER 449.

Where a party was directed to give a security for the other parties costs though the only connection
with the English law was that the seat of arbitration was in England.
Page 22 of 42
22
There is no express or implicit provision in section 9 for payment of an interim

amount on account of damages, debt etc. If the parties have so agreed, the arbitral
tribunal will have the power to order a provisional payment under section 17.
PART C:INJUNCTION RESTRAINING ALIENATION OF PROPERTY [Sec. 9 (ii)

(c)]
While an arbitration proceedings was pending before the court, a temporary
injunction was granted preventing the defendant from alienating property.
An
application for the same was filled under S. 41(1)(b) read with Sch II, 1940 Act.
Section 41, 1940 Act stated that the court had the same power of making orders in
respect of any of the matters set out in Sch II as it would have in all civil
proceedings. One of the matters set out in Sch II was interim injunction. Thus it
was abundantly clear that the court had the power under S. 41(1)(b) read with Sch
II, 1940 Act to issue interim Injunctions with only this restriction that such injunctions
could be issued for the purpose and in relation to arbitration proceedings.
The
injunction was held to be rightly granted. 23 No injunction was allowed to prevent sale
of stock at the instance of a party who had failed to take off the stock and pay for it
in time.24
The word property is not defined in the Act. But in other relevant statutory
provisions, it is defined broadly to include any land, chattel or other corporeal
property of any description. The concept of property would appear to be wider than
goods.. An order under this section was refused where the applicant sought
inspection of an industrial process. The court said that such process could not be
regarded as a property.25
INJUNCTION TO PREVENT SALE OF SEIZED PROPERTY
23 R. K. Associates v. V Channappa, AIR 1993 Kant 247.

24 MVR Industries Ltd. v. Tribal Coop Mkg Development Federation of India Ltd., (1996) 1 Arb LR 393
(Delhi).
25 Tudor Accumulator Co. v. China Mutual, etc. Co., (1930) WN 201.
Page 23 of 42
23
Where a contract for sale of timber was cancelled and trees already felled were
seized by the collector, an injunction was issued to prevent sale of such timber and
to preserve status quo.26 The court referred to Mustill and Boyd, Commercial
Arbitration27 and the decision in Food Corporation of India v. P. A. Ahammed
lbrahim28 to find support for the proposition that the censor of the jurisdiction of the
court on reference of the dispute to arbitration is only provisional and until a valid
award is passed the court retains its underlying jurisdiction which in certain
circumstances it will be entitled to assume. The court also had inherent power in the
matter,29 which can be exercised in the absence of any express or implied
prohibition in the underlying enactment.30 Hence the courts which are seized of
applications under the Arbitration Act can in the exercise of inherent jurisdiction pass
appropriate orders consistent with the procedural rules of CPC as may be necessary
for the ends of justice.
The court cited the following passage from Russell on Arbitrartion
Quite apart from these express powers (ie. Statutory powers similar to those
under the Arbitration Act) the court has always been willing to assist in this
way in proper cases.
The court, in order to preserve the status quo, in a case where one of the
parties to a contract had given a notice, purporting to dismiss the contractor,
restrained the party from acting on the notice until judgment or further order, or until
a references to arbitration provided for by the contract had been made.31
PART D:ORDERS FOR PRESERVATION OF EVIDENCE [Sec. 9 (ii) (c)] or

ANTON PILLER ORDERS
26 Brahamagiri B. Estate v. Thoman Joseph Kalathur, (1990) 2 Arb LR (Ker).

27 P. 123 (1982).
28 (1989) 1 Ker LT 251.
29 Newabgani Sugar Mills Co. lid. v. Union of India, AIR 1976 SC 1152.
30 I.M. D. Syndicate v. L T Commr. New Delhi, AIR 1977 SC 1348.
31 Foster v. Hastings Corporation, (1903) 87 LT 736.
Page 24 of 42
24
Section 9(ii)(c) permits the court to make orders for preservation of evidence.
Such orders are frequently made for protection of intellectual property rights. Such
an order is commonly known as Anton Piller order.32 This order is a type of search
and seize order. It became necessary in the context of intellectual property rights
because the offending material was often destroyed by the infringing parties in order
to defeat the plaintiffs claim.
PRODUCTION OF DOCUMENTS
In a dispute between partners regarding partnership business, there were
claims and counter-claims between them about the custody of the documents. A
partner applied to the court under S. 9 of the Arbitration and Conciliation Act, 1996
for an order for production of documents. The court refused to pass any such order
because such an application is not maintainable under S. 9.33
PRODUCTION OF DOCUMENTS FROM THIRD PARTY

Section 12(4) of the English Arbitration Act, 1950 [replaced by the Arbitration
Act, 1996] empowered courts to issue summons for production of documents. It has
been observed that when this power is being exercised for production of documents
from the custody of a third party, the court should be vigilant to ensure that the
power is exercised for a legitimate purpose. Where the cargo was found to be
contaminated on discharge and the question as to the fitness of the ship for the
cargo arose, the aggrieved party obtained an order for discovery of documents
relating to the condition of the vessel from the association of ship owners. The order
of production was set aside. The order of production was found to be too wide and
not confined to legitimate purposes.
As to third parties, although the concluding words of section 44(2)(c) of the
1996 Act [UK] limit the court's power to authorize entry of premises to those
instances where the premises are in the possession or control of a party to the
32 Anton Piller K.G. v. Manufacturing Processes Ltd., (1976) Ch 55.

33 Narain Sahai Agrawal v. Santosh Rani, AIR 1998 Delhi 144.
Page 25 of 42
25
arbitration, there would seem to be no reason to read the preceding elements of that
sub-section as necessarily requiring that the properly of which detention or
inspection, etc., is sought must be in the possession or control of a party. The DAC
Report refers to the possibility of orders under section 44 of the Act having an effect
on third parties, and so supports an extended construction of section 44(2)(c). As
far as it may be relevant, it appears to have been assumed that the parallel
provisions of the 1950 Act permitted orders to be made directed at third parties. But
the position is not entirely clear, since in legal proceedings the power to make orders
for the detention and inspection, etc., of property in the hands of third parties is
exercisable only if the claim relates to personal injury or death; [see section 34(3) of
the Supreme Court Act 1981 and RSC Order 29, r.7(A)(2)]. The power in relation to
arbitration proceedings may be similarly confined.
PART E:INTERIM INJUNCTIONS [SECTION 9 (ii)(d)]

This section merely enables the court to grant interim relief by way of
injunction in a fit case.
There is nothing in the said section to warrant the
assumption that the well established principles governing the grant of temporary
injunctions, like prima facie case, balance of convenience and irreparable injury are
not applicable to the exercise of the power of under this section. In Binny Ltd. v.
Nizam sugars Ltd34 on the facts and circumstances of this case, the High Court
refused to grant an injunction in respect of bank guarantees.
The court in this
regard, relied upon the well established principles as reiterated by the Supreme
Court in Hindustan Steel Works Construction Lid. v. Tarapore & Co.35 An injunction
restraining encashment of bank guarantees can be granted by the court only in case
of fraud or in case where irretrievable injustice would be done if the bank guarantee
is allowed to be en-cashed. The apex court further held that the existence of a
serious dispute on the question who had committed breach of the contract or that
the contractor had a counterclaim against the beneficiary or that the disputes
between the parties had been referred to the arbitrators, etc., are not valid grounds
for granting an injunction restraining the enforcement of bank guarantees. It was
also held that the contract of bank guarantee between the bank and the beneficiary
34 (1997) 88 Comp Case 741 at 746 (AP).

35 (1996) 87 Comp Case 344.
Page 26 of 42
26
is independent of the primary contract between the party furnishing the bank
guarantee and the beneficiary and, therefore, encashment of an unconditional bank
guarantee does not depend upon adjudication of the dispute between the parties to
the primary contract.36
Where claims and counter-claims of the appellant and the respondent for
damages arising out of a contract were referred to arbitration, the court could during
the pendency of the arbitration proceedings grant an injunction restraining the
appellant from effecting recovery of the amounts claimed in the arbitration
proceedings from pending bills for amounts due from the appellants to the
respondent under other contracts. Such an order is negative not only in form but in
substance. It has no positive content. 37 Following this ruling, the M P High Court
held that even if an authority has terminated the contract wrongfully, it can not be
prevented from inviting fresh tenders for the same project.
Its liability to
compensation for breach of contract is the appropriate remedy to be perused by the

aggrieved contractor.38 The Supreme Court refused to issue an injunction to restrain
the Government from withholding payments due to the contractor under other
contracts. The court said that the injunctive power under the section is confined to
matters, which are for the purpose of and in relation to arbitration proceedings. In
this case, the matter complained of was not concerned with the contract under
dispute.39 The court could not direct the appellant to pay the amounts due to the
respondent under the other contracts, for such an order would not be for the
purpose of and in relation to the arbitration proceedings. 40 The court may direct the
detention of moneys lying in court 41 and other moneys42 pending the arbitration
proceedings.
36 See also National Thermal Power Corpn Ltd. v. Flowmore P Ltd., AIR 1996 SC 445, effect upon the
right of encashment where invocation has certain conditions to fulfill.
37 Union of India v. Raman Iron Foundry, (1974) Supp SCC 556 at pp. 561, 562.
38Taj Builders v. Indore Development Authority, AIR 1985 MP 146.

39 C Raghava Reddy v. Superintending Engineer, AIR 1988 AP 53.
The court considered Union of

India V. Raman Iron Foundry, AIR 1974 SC 1265, [order for maintenance of status quo] and H.M.K.
Ansari & Co. v. Union Of India, AIR 1984 SC 29: 1983 All LJ 1004.
40 Rawla Constructions v. Union of India, AIR 1977 Delhi 205.
41 Sundarlal Haveliwala v. Bhagwati Devi, AIR 1967 All, 400.

42 Sha Vaktavarmal Sheshmull v. Nainmull Umaji & Co., AIR 1962 Mad 436.
Page 27 of 42
27
The relief by way of injunction cannot be claimed as of right. A builder of

roads claimed that the Government should be prevented from allotting other works
on the roads built by him to other contractors because that would confuse
measurement of the work done by him. The court granted him the relief of ordering
the measurement of the work done by him but did not grant any further injunction.
The court said that good roads are a matter of public convenience and to hold up
the work on roads till the arbitrator's decision would be against canons of justice. 43
43 Mohinder Singh & Co. v. Executive Engineer, AIR 1971, J&K 130.
See also Alpine Industries v.

Union of India, (1988) 1 Arb LR 363 Delhi, the court did not interfere in the matter of reduction of rates
in the future while the claim was pending before the arbitrator, the court found that the contractor had
himself quoted reduced rates in other contracts.
Page 28 of 42
28
INJUNCTION TO PREVENT REVOCATION OF CONTRACT

Where during the pendency of the arbitration proceedings one of the parties
revoked the contract itself and other obtained an injunction against it revision
against the injunction was not allowed.44
INJUNCTION TO PREVENT BREACH OF CONTRACT
Injunction to prevent breach of contract or to order specific performance of

the contract are generally not allowed.45 Where the agreement provided for renewal
on mutually agreed terms, the termination or non-extension of the licence after the
expiry of the agreement was not a matter for arbitration. The only remedy was to
seek an order of specific performance for renewal. 46
PART F:APPOINTMENT OF RECEIVER [Sec. 9 (ii) (d)]

A receiver can be appointed in all cases in which it would appear to the court
to be just and convenient to do so.
A receiver may be appointed prior to the
commencement of legal proceedings and also prior to the commencement of arbitral

proceedings
Section 9 of the Arbitration and Conciliation, Act, 1996, only deals with the
interim measure by die court. Obviously, it is not within the scope of the section to
inquire into the claim and the counterclaim made by both the parties in regard to the
custody of the articles beyond what has been admitted by the respondent. Although
the petitioner had failed to make out a case for appointment of a receiver of the
articles in possession of the respondent, still they need be protected being
44 Dashmesh Academy Trust v. V.K. Consttruction Works P. Ltd. (1988) 1 Arb LR 172 P&H.
The court
showed its agreeemnt with the rulling of the Allahabad High Court in Sunderlal Haveliwala v. Bhawati
Devi, AIR 1987 All 400 to the effect that a proceeding under S.20, 1940 Act (deleted from the 1996 Act)
was a part of arbitration proceedings.
45 Vinit Manchandra v. Rishi Co-op Group Housing Society (1987) 2 Arb LR 10 Delhi, the allotment of
contract was concelled on the allegation that it was a collusive affair
46 Indian Tourism Development Corpn. Ltd. v. Airport Authority of India (1997) 2 Arb LR 609, 620
(Delhi).
Page 29 of 42
29
partnership property.
The respondent was, therefore, restrained from selling,
transferring or in any other way disposing them off pending dispute between the
parties in regard to them.47
Under Section 41(b), 1940 Act [as now in Sec. 9(ii)(d) of 1996 Act], the court
had power to pass an interim order of injunction or appointment of receiver. Where
a suit was pending before the court the court had power to appoint a receiver or
issue an interim injunction apart from the section.48 The power of appointing receiver
could be exercised even in a case where references to arbitration had been made
without the intervention of the court and no proceedings were pending in any court.
The court said that it would not seem proper that the court after being satisfied on
Prima facie evidence should be powerless in the matter of preservation or safety of
the property in dispute. The court could simultaneously appoint a receiver and stay
the suit under Section 34, 1940 Act [S. 8 of the 1996 Act].49
The fact that the arbitrator had no power to grant an injunction was a matter
which the court could take into account in exercising its discretion to stay the suit
under Section 34, 1940 Act.50 A car parking lot contractor whose term had expired
wanted to remain in possession for recouping losses caused by the conduct of the
owner.
He applied for references to arbitration and interim injunction for
maintenance of status quo. The court said that such injunction could not be allowed
to him. The effect of such an injunction would be that the owner would be prevented
from handing over the lot to the successful bidder, the contractor would enjoy quiet
possession without having to pay anything, though his period had expired.51
PART G:ANY OTHER MEASURE: JUST AND CONVENIENT [S. 9 (ii) (e)]
47 Narain Sahai Agarwal v. Santosh Rani, (I 997) 2 Arb LR 322 (Delhi).

48 Sharma Ice Factory v. jewel Ice Factory, AIR 1975 JK 25. It was held in, Goodudll India Ltd v. Tonu
Construction (1996) 2 Arb LR 602 (Delhi) appointment of receiver in a matter of hire-purchase
agreement for seizure of property was refused where the parties had revised the terms of the original
agreement and the right of seizure did not exist
49 Pini v. Ranocoroni, (1892) 1 Ch 633.
50 Willesford v. Watson, (1873) LR 8 Ch App 473.

51 Union of India v. Kishan Chand, (1990) 2 Arb LR 264 Delhi.
Page 30 of 42
30
The words 'just and convenient" employed in sub-clause (ii)(e) of section 9

of the Act, have been taken from sub-section (8) of Section 25 of the judicature Act
1873. The words in that Act are Just or convenient but they have been construed
to mean just and convenient The words 'just and convenient' do not mean that the
Court is to pass orders in respect of interim measures simply because the court
thinks it convenient they mean that the court should pass the orders for the
protection of rights or for the prevention of the injury according to legal principles.
The order is discretionary and the discretion must be exercised in accordance with
the principles on which the judicial discretion is exercised. These words were not
the part of section 41 of the Arbitration Act, 1940. Therefore, a wider discretion has
been given to the court under section 9 of the Act to pass interim orders. 52
There was a dispute between the parties to a joint venture about the
appointment of the managing director of their company. The appointment was going
to be confirmed at the next meeting of the shareholders. One party to the joint
venture contended that this meeting should be stayed because once the
appointment was confirmed it would become unimpeachable. The party had already
referred the matter for decision by arbitration in a foreign country. The court did not
consider it necessary to stay the meeting because even if the appointment was
confirmed, it would be subject to the decision of the arbitrator in the foreign
country.53 Where a company was developing the facility of cellular mobile telephone
service in a particular area, the court did not restrain, at the instance of the
company, the Union of India from interfering with the project on the ground that the
area belonged to the Punjab Telecom Circle. The mere fact of huge investment did
not turn the balance of convenience in favour of the company. The court could not
decide in such an application as to which telecom centre the area in question
belonged.54
DIRECTION FOR PAYMENT
52 State of Rajasthan v. Bharat Construction Co-, 1998 3 RAJ 7 at p. 11. The court refused in this case
to interfere in two orders, namely, that the State shall withhold the security deposit but shall not
withhold payment of running bills.
53 Suzuki Motor Corp. v. Union of India (1997) 2 Arb LR 477 (Delhi).
54 Escotel Mobile Communications Ltd. v. Union of India, (IM) 3 RAJ 307 Delhi: (1998) 2 Arb LR 384.
Page 31 of 42
31
An injunction against the Union of India directing it not to withhold an amount

due to the contractor under some other pending bills amounts to a direction to make
payment to the contractor. Such an order was beyond the purview of Section 41(b)
of the Arbitration Act, 1940.55 USHA MEHRA J said:To arrive at this conclusion support can be had from the observations of the
Supreme Court in the case of H.M. Kamatuddin Ansari & Co. v. Union of
India.56 While dealing with the power of the court to grant interim relief under
Section 41 la) and (b) of the (1940) Act, the Apex Court observed that an
injunction order restraining the Union of India from withholding the amount
due to the contractor under other pending bills virtually amounts to a direction
to pay the amount to the contractor/appellant. Such an order is beyond the
purview of clause (b) of Section 41 of the (1940) Act.
INJUNCTION AND STAY OF SUIT

Where an interim temporary injunction was considered necessary and was
granted, it was held that while staying the suit, the ad interim temporary injunction
should not have been stayed. A court can deal with an application for a temporary
injunction though it stays the suit.57
Appeals
A Letters Patent Appeal did not lie against an injunction granted under S.
41(b) and Sch II of the Arbitration Act, 1940. Chances of appeal had to be probed
under S. 39 of the 1940 Act. But there was no such provision under that section. 58
The court noted a decision of its own Bench 59 which rejected the argument that
orders passed by a single judge are orders under CPC and that would make the
55 Mahanagar Telephone Nigam Ltd. v. Vichitra Construction Pvt. Ltd., (1995) 2 Arb LR 479 (Delhi).
56 AIR 1984 SC 29. Followed in Sant Ram & Co. v. State of Rajasthan, AIR 1997 SC 2557 (1997) 1
Arb LR 209. The applicant here was seeking to restrain the Government from adjusting amounts due
to him under other contracts, relief not allowed.
57 Vashdev Bheroomal Pamnani v. M. Bipin Kumar, AIR 1987 Bom 226.
58 N.C. Bhall v. R.C. Bhalla (1990) 2 Arb.L.J. Delhi.

59
Subhash Chander Kakkar v. D. S. I. D. C., (1990) 2 DLT 21.

Page 32 of 42
32
appeal maintainable. Bench observed that when the court passes an order under
39 of CPC during the pendency of any proceedings commenced under any of the
provisions of the arbitration Act, 1940, the court was in effect exercising jurisdiction
under S. 41 of t e Arbitration Act 1940 read with the Second Schedule, of that Act.
Section 39 of the Arbitration Act 1940 clearly specified what were appealable orders.
An order passed under S. 41 of the Arbitration Act, 1940 read with the Second
Schedule and Order 29, Rules I and 2, CPC was not an appeal able order. 60
Revision was also not maintainable because interim orders did not finally adjudicate
or dispose of any claim or dispute between the parties.
The Arbitration and Conciliation Act, 1996 expressly provides in S.37 that
interim orders under S. 9 shall be appeal able.
60 The Bench relied on Banwari Ial Radhey.Mohan v. Punjab State Co-op Supply and Mktg Fedn. Ltd.,
AIR 1983 Delhi 402.
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33
Chapter IV: Interim Orders in Foreign Arbitration
PART A: THE SCHEME UNDER THE INDIAN ACT

It is an interesting proposition to examine whether the Indian Courts have the
power under the Arbitration Conciliation Act, 1996 to order interim measures in a case
where the place of arbitration is outside India. The answer is of great importance to
Indian businessmen, who in the wake of liberalization have entered into Joint Ventures
with foreign Companies. More often than not, these agreements provide for arbitration
at a venue outside India.
When disputes arise, the Indian businessman thinks of
approaching Indian Courts for interim relief. Do our Courts have this power under the
new Act of 1996?
This apparently simple question on has given rise to conflicting judgments of
various High Courts.61
This article proposes to examine such decisions in the
background of the UNCITRAL Model Law and the Law in various other countries. First,
though, it would be necessary to refer to the relevant provisions in the Arbitration &
Conciliation Act, 1996.
Under the English Law an application for a stay of legal proceedings is made
under section 9 of the English Arbitration Act 1996, whose provisions are
mandatory.62 Section 9 will apply even if the seat of the arbitration is abroad or no
seat has been designated or determined.63
At this juncture, attention should be adverted to Section 2, contained in Part I of the Act
and particularly to sub-section 1(f) that defines international commercial arbitration as
an arbitration relating to disputes arising out of legal relationships, whether contractual,
or not, considered as under the law in force in India when at least one of the parties is
61 Though the issue has now been settled by the Supreme Court, yet the propositions are indeed worth
examining.
62 See section 4 if the Arbitration Act 1996 and Sch. 1 to the Act for the mandatory provisions.
63
Arbitration Act 1996, s.2(2)

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34
an individual who is a national of, or habitually resident, any country other than
India; or
a body corporate which is incorporated in any country other than India; or
a company or an association or a body of individuals whose central management

and control is exercised in any country other than India; or
the Government of a foreign country.
Section 2(5) defines the scope of Part I of the Act. In view of the particular relevance of
Sections 2(2) and 2(5), they are set out below: -
"2 (12) This Part shall apply where the place of arbitration is in India.
2 (5) Subject to the provisions of sub-section (4), and save in so far as is

otherwise provided by any law for the time being in force or in any agreement in
force between India and any other country or countries, this Part shall apply to all
arbitrations and to all proceedings relating thereto."
Section 2(7), which is also relevant, reads as follows
"2(7) An arbitral award made under this part shall be considered as a

domestic award."
It may be noticed that Section 9 titled 'Interim Measures etc. by Court' finds place
in Part I of the Act. No such provision is to be found in any other Part of the Act. The
question, which, therefore, arises, is whether or not Part I of the Act applies where the
place of arbitration is outside India.
The answer to such a question would, in the
ultimate analysis, depend on the true construction of the provisions extracted above.
However, before doing so, it is instructive to look at how the UNCITRAL Model Law, as
also other countries, have tackled the issue.
PART B:THE UNCITRAL MODEL LAW

The UNCITRAL Model Law on International Commercial Arbitration has 36 Articles.
Article 1 is titled "Scope of Application". Article 1(2) reads as follows: Submitted by Vikas Kumar
Page 35 of 42
35
"The provisions of this Law, except articles 8, 9, 35 and 36, apply only if the
place of arbitration is in the territory of this State".
Article 9, which is referred to in Article 1.2, is also set out below:
"Arbitration agreement and interim measures by court - It is not incompatible with
an arbitration agreement for a party to request, before or during arbitral
proceedings, from a court an interim measures of protection and for a court to
grant such measures.
As a matter of history, it is interesting to note that Article 1.2 did not find place in the draft
Model Law.64 There was wide support for the so-called strict territorial criterion,
according to which the Law would apply where the place of arbitration was in that
State.65 Even while so deciding, the Commission was clear that the Court functions
envisaged in Articles 8, 9, 35 and 36 were to be entrusted to the Courts of the particular
State adopting the Model Law irrespective of where the place of arbitration was located
or under which law the arbitration was to be conducted. In view of this, Article 1(2) was
adopted in its final shape.
Thus, under the Model Law, i-n view of the specific exceptions to the principle of strict
territoriality, a Court would have the power under Article 9 to give interim directions,
irrespective of the place of arbitration.
64 The report of UNCITRAL on the adoption of the Model Law (paragraphs 72 to 81 of the Report) is set out
in The Arbitration and Conciliation Act, 1996 - A Commentary by P. Chandrasekhara Rao at pages 349351
65 This also appears to be the genesis of Section 2(2) of the Indian Arbitration and Conciliation Act Act,
1996.
Page 36 of 42
36
PART C:THE POSITION IN ENGLISH LAW

In English Law, prior to the Arbitration Act, 19967 the House of Lords had held
that an arbitration held abroad and governed by some other curial law was completely
outside the legislation (Channel Tunnel Group Ltd. v. Balfour Beatty Construction Ltd. ,
1993 1 All ER 664 at 683). However, later, Section 2 was enacted, along the lines of
Article 1(12) of the Model Law and it reads as below
2. Scope of application of provisions
(1) The provision of this part applies where the seat of the arbitration is in
England and Wales or Northern Ireland.
(2) The following sections apply even if the seat of the arbitration is outside
England and Wales or Northern Ireland or no seat has been designated or
determined
(3) sections 9 to 11 (stay of legal proceedings, &c.), and

(4) section 66 (enforcement or arbitral awards).
The powers conferred by the following sections apply even if the seat of the
arbitration is outside England and Wales or Northern Ireland or no seat has been
designated or determined. But the court may refuse to exercise any such power if, in the
opinion of the court, the fact that the seat of the arbitration is outside England and Wales
or Northern Ireland, or that when designated or determined the seat is likely to be
outside England and Wales or Northern Ireland, makes it inappropriate to do so.
PART D:
JUDGMENTS OF VARIOUS COURTS IN INDIA
In a decision by Calcutta High Court in East Coast Shipping Ltd. v. M.J. Scrap Pvt.
Ltd.,66 the Applicants moved the Calcutta High Court for Interim protection and other
relief under section 8 and 9 of the 1996 Act.
The respondents took a preliminary
objection on the question of maintainability of the application in view of Section 2(2) of

the Act, mentioned above.The Applicants submitted that the Court had jurisdiction to
66 AIR 1997 Cal 168.

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37
hear the matter, placing particular emphasis on Section 2(5) of the Act. In reply, the
Respondents urged that if such an interpretation were to be accepted, it would render
section 2(2) otiose. Reference was made to the UNCITRAL Model Law to show that the
legislature had thought it fit to deviate there from and exclude Sections 8 and 9 from
operation of the Part I of the Act. The Learned Judge held that the interpretation as
urged by the Applicants would render section 2(2) otiose and it was well settled that the
Courts must always presume that the legislature in its wisdom intended that every part of
statute should be given effect. The Learned Single Judge also noticed that the global
scope of the relevant provision of the UNCITRAL Model Law was consciously omitted
from the 1996 Act. It was held that deviation from the Model Law revealed the intention
of the legislature to limit the scope of Part I of the Act to arbitration proceedings where
the place of arbitration was in India. It was, therefore, held that as the place of arbitration
was admittedly in London, the application was not maintainable in the Calcutta High
Court.
A similar conclusion was reached by a Division Bench of the Calcutta High Court
in titled Keventer Agro Ltd. v. Seagram Co. Ltd67. That matter concerned a dispute
between the parties arising out of a joint-venture agreement. The Court framed three
issues. Issue No.3 related to the power of the Court to pass interim orders. The Court
observed that power to pass in interim order in connection with a special Act must be
derived from that statute itself. It was held that there was no provision in Part II, chapter
I or any other portion of the 1996 Act applicable to foreign arbitration under the New York
convention which gave the Court such a power. Sections 9 and 17 of the Act were held
to be applicable to domestic arbitrations only, in view of Section 2(2). The Court justified
such exclusion on the policy ground that the main objectives of the 1996 Act were to
minimize the supervisory role of the Courts in arbitral proceedings.. The reliance by
Keventer on Article 8(5) of the International Chamber of Commerce Rules was held to
be- misplaced, since such rules had no statutory force and, in any case, jurisdiction
could not be conferred by consent. In the circumstances, the Court was of the view that
it did not have the power to pass any interim order in cases of foreign arbitration.
A notable decision of the Delhi High Court that was later overruled by the Supreme
Court, the latter decision being the current running view, is nevertheless discussed here.
67 AIR 1997 Cal 200.

Page 38 of 42
38
In Marriott International Inc. & Ors.v. Ansal Hotels Limited & Anr68, the Delhi High Court
upheld the contention of the respondents that as the arbitration proceedings were being
held before the Kuala Lumpur Regional Centre for Arbitration in Malaysia, section 9 of
the Act had no applicability and the petition of the apaplicant therefore was therefore, not
maintainable.
This decision was upheld by the Supreme Court in Bhatia International v. Bulk Trading
S.A. and Anr.69, wherein the SC held that in case of International commercial arbitration 70
an ouster of jurisdiction cannot be implied but expressed and that the Provisions of Part I
of the Arbitration and Conciliation Act, 1996 are applicable also to international
commercial arbitration which take place outside India unless the parties by agreement
express or impliedly excluded it or any of its provisions. Such an interpretation does not
lead to any conflict between any of the provisions of the Act- Thus Article 23 of the ICC
Rules permits parties to apply to a competent judicial authority for an interim and
conservatory measures and therefore in such cases an application can be made under
Section 9 of the said Act.
68 MANU/DE/0013/2000.
69 MANU/SC/0185/2002.
70 The seat of arbitration in the present case was to be decided in accordance with the rules of International
Chamber of Commerce and Paris was finally agreed upon the Parties as the seat.
Page 39 of 42
39
CHAPTER V: CONCLUSION
Towards the end it can be surmised that the powers of the Indian Courts with
regard to providing interim relief under Section 9 of the Act are fairly wide and welldefined. The recourse to Courts for obtaining interim injunctions does not in any way
undermine the arbitration provision contained in contractual agreements.
The decision of the Supreme Court in Bhatia International case has also
been quite relieving as it takes care of a lot of exigencies that might have made
impossible for an aggrieved party to obtain interim relief. Mentioned below are some
of the circumstances that might have created confounding situations.
The absence of an interim protection in cases of foreign arbitration gives rise to

severe injustice for example, such provisions come into play at the initial stages
of an arbitration (e.g. a Mareva injunction to protect assets). For instance, it may
sometimes take a few months under ICC Rules for arbitrators to enter into the
which of course, the arbitrators may have powers to pass interim directions. By
such time it may be too late for the party who seeks interim protection.
Another problem, which may arise, is that the agreement may not specify the
places of arbitration but leave it to an institutional body such as the ICC to specify
the venue. in such a situation, the party seeking interim protection is left helpless
since it is unclear whether he can proceed under Section 9 which only applies
where the place of arbitration is within India. It is for these reasons that the model
law provided for interim protection irrespective of the venue. This is also the
position in English Law.
The non-applicability of Part I of the 1996 Act to foreign arbitration gives rise to
other piquant situations.
Part II of the Act only deals with Certain Foreign
Awards i.e. New York and Geneva Convention awards.
It is unclear what
happens to arbitration proceedings in foreign countries not party to those

conventions.
In such a case, a Plaintiff may file a Suit raising a dispute, which is covered by an
arbitration clause (which specifies the place of arbitration as being in such a
foreign country). As matters stand, there is no provision in the Arbitration Act
whereby the Court can direct the parties to refer the matter to arbitration. Section
8 would be unavailable, being restricted to domestic arbitration, whereas
Sections 45 and 54 would be restricted to convention countries.
Page 40 of 42
40
A highly anomalous situation may arise where an arbitration proceeding goes on

in a foreign country and the Suit proceeds in India. The only solution in such a
situation would he for the Court to exercise its powers under Section 151 of the
Code of Civil Procedure.
Under the Model Law, Article 8 (corresponding to Section 8) is applicable

regardless of the place of arbitration. Had the Model Law been adopted in its
entirety, this problem would not have arisen.
Hence in light of the mentioned provisions, the decision in Bhatia International case is
indeed a relieving one and needs to be welcomed.

Page 41 of 42
41
BIBLIOGRAPHY
Bachawat, R.S, Law of Arbitration and Conciliation, 3rd Ed.,Wadhwa and Co.,
Agra, 1997.
Carbonneau, T.E, Resolving Transnational Disputes Through International

Arbitration, University Press of Virginia, Charlottesville, 1984.
David, Rene, Arbitration in International Trade, Kluwer Publications,

Netherlands, 1985.
Lew, J.D.M, Applicable Law in International Commercial Arbitration, Oceeana

Pub. Inc., New York, 1978.
Markanda P.C, Law Relating to Arbitration and Conciliation, 2nd Ed.,Wadhwa

and Co., New Delhi, 1997.
Rao, P.C, Alternative Dispute Resolution, Universal Law Publishing Co., New
Delhi, 1997.
Redfern, A. and M. Hunter, Law and Practice in International Commercial

Arbitration, 2nd Ed., London, 1991.

Page 42 of 42
42

Interim Relief Arbitration

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Interim Relief Arbitration

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INTERIM RELIEF UNDER SECTION 9 OF THE ARBITRATION

AND CONCILIATION ACT, 1996

SEMINAR PAPER ON ARBITRATION LAWS

NATIONAL LAW SCHOOL OF INDIA UNIVERSITY

Submitted by Vikas Kumar

THE NATURE OF RELIEF AS PROVIDED UNDER SECTION

Chapter IV: Interim Orders in Foreign Arbitration......................................34

Submitted by Vikas Kumar

Alpine Industries v. Union of India, (1988) 1 Arb LR 363 Delhi.

Anton Piller K.G. v. Manufacturing Processes Ltd., (1976) Ch 55.

Ashok Chazvia v. Rakesh Gupta, (1996) 2 Arb LR 255 (Delhi).

Bhatia International v. Bulk Trading S.A. and Anr., MANU/SC/0185/2002.

Chandu Lot v. Brit-over Ltd., 52 CWN 451.

Coppee-Lavalin SA/NV v. Ken-Ren Chemicals and Fertilizers Ltd. (in

Coppie-Levalin SA/NV v. Ken-Ren Chemicals and Fertilizers Ltd, [1994] 2 All

Food Corporation of India v. P. A. Ahammed lbrahim, (1989) 1 Ker LT 251.

Gokuldas v. Union of India, Al R 198:3 Ker 169.

Harbhajan Singh Kaur v. Unimode Finance, (1997) 2 Cal LT 414.

I.M. D. Syndicate v. L T Commr. New Delhi, AIR 1977 SC 1348.

MVR Industries Ltd. v. Tribal Coop Mkg Development Federation of India

MVR Industries Ltd. v. Tribal Coop Mkg Development Federation of India

N.C. Bhall v. R.C. Bhalla (1990) 2 Arb.L.J. Delhi.

Narain Sahai Agrawal v. Santosh Rani, AIR 1998 Delhi 144.

R. K. Associates v. V Channappa, AIR 1993 Kant 247.

Ranjit Chandra Mitter v. Union of India, AIR 1963 Cal 594.

Rawla Constructions v. Union of India, AIR 1977 Delhi 205.

Subhash Chander Kakkar v. D. S. I. D. C., (1990) 2 DLT 21.

Sundarlal Haveliwala v. Bhagwati Devi, AIR 1967 All, 400.

Taj Builders v. Indore Development Authority, AIR 1985 MP 146.

Tudor Accumulator Co. v. China Mutual, etc. Co., (1930) WN 201.

Vashdev Bheroomal Pamnani v. M. Bipin Kumar, AIR 1987 Bom 226.

Submitted by Vikas Kumar

Submitted by Vikas Kumar

Submitted by Vikas Kumar

Chapter I: Interim Orders under section 9 of the Act.

for the appointment of a guardian for a minor or a person of unsound mind

for an interim measure of protection in respect of any of the following

(b) securing the amount in dispute in the arbitration;

(d) interim injunction or the appointment of a receiver;

Arbitration agreement and interim measures by court.

Submitted by Vikas Kumar

It is not incompatible with the arbitration agreement for a party to

2Article 17. Power of arbitral tribunal to order interim measures

Submitted by Vikas Kumar

before the commencement of arbitration proceedings and appointment of arbitrator.

5 (1999) 1 SLT at p. 180 (SC).

(1991) 1 SLT at pp. 185, 188-189 (SC).

the arbitral proceedings have not commenced. While referring to Section 44

8 [21st Edition] at page 380

11 Gokuldas v. Union of India, Al R 198:3 Ker 169.

Submitted by Vikas Kumar

PART B:POSITION UNDER ENGLISH LAW

immediately be referred to arbitration, because the matter is to be referred to

Chapter IIITHE NATURE OF RELIEF AS PROVIDED UNDER SECTION 9 OF THE

ORDER FOR SALE OF GOODS [SECTION 9(ii)(a)]

ORDER FOR PROTECTION OF FINANCIAL INTEREST [SECTION

19 AIR 1998 Delhi 397 at 400.

respondent, a Govt. of India Undertaking, cannot be legally directed to

Such an order, if passed, mill

not be an interlocutory order, it would amount to case decided.

22 For example, see Coppee-Lavalin SA v. Ken-Ren Chemicals & Fertilizers Ltd

(1994) 2 All ER 449.

There is no express or implicit provision in section 9 for payment of an interim

PART C:INJUNCTION RESTRAINING ALIENATION OF PROPERTY [Sec. 9 (ii)