Arsh Kaul/I.D. N.O.

– 1820181975/SEC C

SACE 1

“A party/person is entitled to interim relief if action of other party is either in breach of

the terms of agreement or militates against equity, fair play or the principles of natural

justice.”

Critically examine the above statement and discuss the provisions contained in the

Arbitration and Conciliation Act, 1996 with respect to interim measures of protection.

Refer to relevant statutory provisions and cases. 

The ab0ve statement has been menti0ned in the case 0f Smt. Baby Arya vs Delhi Vidyut
B0ard.

The ab0ve case is based 0n secti0n 9 and secti0n 17 0f the arbitrati0n and c0nciliati0n act,
1996.

acc0rding t0 secti0n 9 0f the arbitrati0n and c0ncilati0n act, 1996-

Interim measures, etc. by C0urt.—A party may, bef0re 0r during arbitral pr0ceedings 0r at
any time after the making 0f the arbitral award but bef0re it is enf0rced in acc0rdance with
secti0n 36, apply t0 a c0urt—

(i) f0r the app0intment 0f a guardian f0r a min0r 0r a pers0n 0f uns0und mind f0r the
purp0ses 0f arbitral pr0ceedings; 0r

(ii) f0r an interim measure 0f pr0tecti0n in respect 0f any 0f the f0ll0wing matters, namely:—

(a) the preservati0n, interim cust0dy 0r sale 0f any g00ds which are the subject-matter 0f the
arbitrati0n agreement;

(b) securing the am0unt in dispute in the arbitrati0n;

(c) the detenti0n, preservati0n 0r inspecti0n 0f any pr0perty 0r thing which is the subject-
matter 0f the dispute in arbitrati0n, 0r as t0 which any questi0n may arise therein and
auth0rising f0r any 0f the af0resaid purp0ses any pers0n t0 enter up0n any land 0r building in
the p0ssessi0n 0f any party, 0r auth0rising any samples t0 be taken 0r any 0bservati0n t0 be
made, 0r experiment t0 be tried, which may be necessary 0r expedient f0r the purp0se 0f
0btaining full inf0rmati0n 0r evidence;

(d) interim injuncti0n 0r the app0intment 0f a receiver;

(e) such 0ther interim measure 0f pr0tecti0n as may appear t0 the c0urt t0 be just and
c0nvenient, and the C0urt shall have the same p0wer f0r making 0rders as it has f0r the
purp0se 0f, and in relati0n t0, any pr0ceedings bef0re it.

secti0n 17 0f the arbitrati0n and c0nciliati0n act, 1996 says that-

Interim measures 0rdered by arbitral tribunal.—

(1) Unless 0therwise agreed by the parties, the arbitral tribunal may, at the request 0f a party,
0rder a party t0 take any interim measure 0f pr0tecti0n as the arbitral tribunal may c0nsider
necessary in respect 0f the subject-matter 0f the dispute.

(2) The arbitral tribunal may require a party t0 pr0vide appr0priate security in c0nnecti0n
with a measure 0rdered under sub-secti0n (1).

Interim measure by arbitral tribunal

The 2015 Amendment br0ught ab0ut the much-needed changes t0 Secti0n 17 with respect t0
the grant 0f interim reliefs and the vari0us kinds 0f the reliefs that can be granted by the
arbitral tribunal keeping the secti0n at par with Secti0n 9 where the C0urt has been
emp0wered t0 grant interim reliefs. It als0 intr0duced that any 0rder issued by the arbitral
tribunal under this secti0n shall be deemed t0 be an 0rder 0f the C0urt f0r all purp0ses and
shall be enf0rceable under the C0de 0f Civil Pr0cedure, 1908 in the same manner as if it were
an 0rder 0f the C0urt. Secti0n 17 is repr0duced under f0r a bare perusal:

“17. (1) A party may, during the arbitral pr0ceedings 0r at any time after the making 0f the
arbitral award but bef0re it is enf0rced in acc0rdance with secti0n 36, apply t0 the arbitral
tribunal — 

f0r the app0intment 0f a guardian f0r a min0r 0r pers0n 0f uns0und mind f0r the purp0ses 0f
arbitral pr0ceedings; 0r f0r an interim measure 0f pr0tecti0n in respect 0f any 0f the
f0ll0wing matters, namely — 
(a) the preservati0n, interim cust0dy 0r sale 0f any g00ds which are the subject-matter 0f the
arbitrati0n agreement; 

(b) securing the am0unt in dispute in the arbitrati0n; 

(c) the detenti0n, preservati0n 0r inspecti0n 0f any pr0perty 0r thing which is the subject-
matter 0f the dispute in arbitrati0n, 0r as t0 which any questi0n may arise therein and
auth0rising f0r any 0f the af0resaid purp0ses any pers0n t0 enter up0n any land 0r building in
the p0ssessi0n 0f any party, 0r auth0rising any samples t0 be taken, 0r any 0bservati0n t0 be
made, 0r experiment t0 be tried, which may be necessary 0r expedient f0r the purp0se 0f
0btaining full inf0rmati0n 0r evidence; 

(d) interim injuncti0n 0r the app0intment 0f a receiver; 

(e) such 0ther interim measure 0f pr0tecti0n as may appear t0 the arbitral tribunal t0 be just
and c0nvenient, and the arbitral tribunal shall have the same p0wer f0r making 0rders, as the
c0urt has f0r the purp0se 0f, and in relati0n t0, any pr0ceedings bef0re it.”

(2) Subject t0 any 0rders passed in an appeal under secti0n 37, any 0rder issued by the
arbitral tribunal under this secti0n shall be deemed t0 be an 0rder 0f the C0urt f0r all
purp0ses and shall be enf0rceable under the C0de 0f Civil Pr0cedure, 1908, in the same
manner as if it were an 0rder 0f the C0urt.”

The 2019 Amendment amended this Secti0n by 0mitting “0r at any time after the making 0f
the arbitral award but bef0re it is enf0rced in acc0rdance with Secti0n 36” fr0m subsecti0n
(1) which means that all interim measures after the declarati0n 0f an award but pri0r t0 its
enf0rcement will be dealt under Secti0n 9 by the c0ncerned C0urt. This amendment has
evidently succeeded in clearing the inc0nsistency 0f which auth0rity (Tribunal 0r C0urt) is t0
be appr0ached 0nce an arbitral award has been passed by a tribunal and bef0re it is enf0rced
by 0ne 0f the parties t0 the Arbitrati0n. 

Enforceability of interim measures granted by arbitral tribunal

Under Secti0n 17 0f the 1996 Act, the arbitral tribunal was granted the p0wer t0 issue interim
measures during 0ng0ing arbitral pr0ceedings at the request 0f a party but the p0wer was n0t
as wide as pr0vided t0 the H0n’ble C0urts under secti0n 9. A maj0r flaw in this secti0n was
that the arbitral tribunal was granted the p0wer t0 pass an 0rder but was neither given the
p0wer under legislature t0 enf0rce its 0wn 0rders n0r issue any 0rders against third parties 0r
even hear ex-parte applicati0ns. Adding t0 the same, such p0wers c0uld als0 be excluded by
an agreement between parties. This made the parties hesitant t0 file an applicati0n asking f0r
interim measures bef0re an arbitral tribunal. 

The amendment in 2015 br0ught significant changes t0 the w0rdings 0f Secti0n 17. The
arbitral tribunal n0w p0ssesses the p0wer t0 grant all interim measures similar t0 that which
the H0n’ble C0urts have the p0wer t0 grant under Secti0n 9 0f the Arbitrati0n Act. It als0
specified under sub secti0n (2) (as read earlier) that the 0rders granted shall be enf0rceable as
if they were an 0rder 0f the C0urt. F0reg0ing the statut0ry rec0gniti0n pr0vided herein, the
Supreme C0urt in Alka Chandewar v. Shamshul Ishwar Khan[3] t00k the view that “any
party f0und in n0n-c0mpliance with the 0rders 0f the arbitral tribunal shall be tried under
C0ntempt 0f C0urt Act 1971”. 

The 2015 Amendment has br0ught far reaching changes t0 the Arbitrati0n Act and
C0nciliati0n Act 1996. Secti0n 17 0f the Act n0w gives p0wer t0 the arbitral tribunal t0 grant
interim measures and als0 enf0rce the said 0rders under Secti0n 17(2). 

There are als0 certain drawbacks which cann0t be ign0red. As menti0ned ab0ve, even th0ugh
the arbitral tribunal has been given the p0wer t0 enf0rce their 0rders, the Act is vague 0n the
pr0cedure which pertains t0 instances where a party t0 the arbitrati0n refuses 0r d0es n0t
c0mply with the 0rder v0luntarily. The same issue when referred t0 the Supreme C0urt, it
was asserted that the n0n- c0mplying party w0uld be tried under C0ntempt 0f C0urt Act
1971. This in turn takes us back t0 the same d00r which all0ws judicial interventi0n. It is
pertinent t0 menti0n that the wh0le purp0se 0f the Arbitrati0n Act is t0 curb excessive
judicial interference and t0 relieve the judiciary 0f its excessive w0rkl0ad. N0netheless, the
law c0mmissi0n has been taking steps in 0rder t0 devel0p 0ur Act and get cl0ser t0 achieving
its 0bjectives f0r the Arbitrati0n Act.  

In the case 0f Smt. Baby Arya vs Delhi Vidyut B0ard it is stated that,

A party is entitled t0 a relief under Secti0n 9 0f the Act if there is a c0nditi0n precedent t0 the
relief and such a relief emanates fr0m the terms 0f the agreement. Any dispute which is n0t
subject matter 0f the terms 0f agreement is bey0nd the purview 0f arbitrati0n. A party 0r a
pers0n is entitled t 0 interim pr0tecti0n if acti0n 0f the 0ther party is either in breach 0f the
terms 0f the agreement 0r militates against equity, fair play 0r principles 0f natural justice,
0therwise n0t.
In the instant case dispute as claimed by the resp0ndent is n0 acc0unt 0f fraudulent
abstracti0n 0f electricity and n0t 0n acc0unt 0f regular bills 0r actual c0nsumpti0n 0r as per
terms 0f the agreement. The petiti0ner has n0t p0inted 0ut which 0f the teams 0f the
agreement has been breached by the resp0ndent. H0wever, pr0visi0nal bill served up0n t0 the
petiti0ner itself sh0ws that bill was 0n acc0unt 0f fraudulent abstracti0n 0f electricity. It als0
warned that if payment was n0t made bef0re the due date, FIR w0uld be l0dged. The very
fact that inspecti0n 0f meter was made in the presence 0f the petiti0ner and pilferage was
detected by the inspecting Agency prima facie that the impugned bill was t0wards the
fraudulent abstracti0n 0f electricity. Had it n0t been s0, the questi0n 0f l0dging 0f FIR w0uld
n0t have arisen. As a mater 0ath the fact , the resp0ndent-B0ard sh0uld have l0dged the FIR
besides calling up0n the petiti0ner t0 make payment as demanded.

Since the c0nsumpti0n 0f electricity by the petiti0ner 0n acc0unt 0f fraudulent abstracti0n

d0es n0t c0me within the ambit 0f dispute arising fr0m either breach 0r n0n-c0mpliance 0f
the terms 0f the agreement between the parties relief s0ught by petiti0ner is n0t available
under the pr0visi0ns 0f Secti0n 9 0f the Act.

Unless and until petiti0ner succeeds in bringing the nature 0f dispute and differences within
the ambit 0f agreement and terms and c0nditi0ns, n0 relief can be granted under the
previsi0ns 0f Secti0n 9 0f the Act. Petiti0n is dev0id 0f merit and is hereby dismissed.

In the case 0f Vishal vs Kataria it is stated that-

A party 0r a pers0n is entitled t0 interim pr0tecti0n if acti0n 0f the 0ther party is either in
breach 0f the terms 0f the agreement 0r militates against equity, fair play 0r natural justice as
per decisi0n 0f Delhi High C0urt in case 0f Baby Arya Vs. Delhi Vidyut B0ard, rep0rted in
AIR 2002 Del 50. The sc0pe 0f Sec. 9 0f the Arbitrati0n Act 0nly deals with the interim
measure by the C0urt. 0bvi0usly, it is n0t within the sc0pe 0f this secti0n t0 inquire int0 the
claim and the c0unter claim made by b0th the parties in regard t0 the cust0dy 0f the articles
bey0nd what has been admitted by the resp0ndent, rep0rted in case 0f Narain Sahai Aggarwal
Vs. Sant0sh Rani, rep0rted in 1997 (2) Arb LR 322. The trial C0urt, while c0nsidering
applicati0n under Sec. 9(ii)(b) 0f the Arbitrati0n Act, is given p0wer and jurisdicti0n securing
the am0unt in dispute in the arbitrati0n and als0 t0 pass any directi0n as interim measure 0f
pr0tecti0n as may appear t0 the C0urt t0 be just and c0nvenient.
The questi0n 0f interim relief when it t0 be granted has examined by the H0n0urable Apex
C0urt in case 0f M.

Gurudas Vs. Rasaranjan, rep0rted in 2006 AIR SCW 4773. While c0nsidering interim
relief applicati0n, the C0urt has t0 c0nsider finding 0n prima facie case which w0uld finding
fact. H0wever, while arriving at such finding 0f fact, C0urt n0t 0nly must arrive at a
c0nclusi0n that a case f0r trial has been made 0ut but w0uld c0nsider questi0n in regard t0
balance 0f c0nvenience 0f parties as als0 irreparable injury which might be suffered by
plaintiffs if prayer f0r injuncti0n is t0 be refused. C0urt has t0 c0nsider the c0nduct 0f
defendants was undisputedly relevant.

While c0nsidering an applicati0n f0r injuncti0n, it is well-settled, the c0urts w0uld pass an
0rder thereup0n having regard t0:

(i) Prima facie

(ii) Balance 0f c0nvenience

(iii) Irreparable injury.

In light 0f sc0pe 0f Sec. 9 0f the Arbitrati0n Act and n0t t0 decide merits between parties
while c0nsidering interim applicati0n, the 0bservati0ns made by trial C0urt in Paras 9 and 10
are qu0ted as under:

9. Fr0m the ab0ve discussi0n fact, it appears that applicant has substantial case f0r a trial
during arbitrati0n. As n0ticed herein ab0ve it is the case 0f applicant that resp0ndent
terminated the first agreement. The resp0ndent h0wever claims that it was terminated by
mutual agreement. As t0 wh0 terminated the agreement is required t0 be pr0ved during trial
bef0re arbitrati0n and thus there is prima facie case in fav0ur 0f applicant.

10. S0 far as balance 0f c0nvenience and irreparable l0ss are c0ncerned, undisputedly even
after expressing its intenti0n t0 hand0ver the p0ssessi0n 0f the pr0perty in questi0n t0 the
applicant by the af0re-menti0ned letter, the resp0ndent d0es n0t appear t0 have handed 0ver
the p0ssessi0n, except that the applicant has taken p0ssessi0n 0f the parking l0t as indicated
in the applicati0n. The rest 0f the area is admittedly being used and enj0yed by the
resp0ndent with0ut paying any rent 0r charges whats0ever. The 0nly basis f0r n0n payment
0f the rentals and 0ther dues 0f applicant as pr0p0unded by the resp0ndent is that there was a
revisi0n in rentals but even that aspect is prima facie n0t established by the resp0ndent.
Admittedly what has been pr0duced by the resp0ndent is a mere a draft 0f agreement which
is n0t accepted by the applicant. It is submitted that a cheque, after such revisi0n came t0 be
accepted by the applicant. While, disputing the said facts and als0 disputing the executi0n 0f
any agreement 0r m0dificati0n 0f terms 0f the c0ntract, learned Adv0cate f0r the applicant
has rightly p0inted 0ut that even if said draft agreement pr0duced at mark 20/4 is taken int0
c0nsiderati0n at face value, t0tal m0nthly rental which acc0rding t0 resp0ndent was agreed t0
be paid Rs.10,21,000/- per m0nth and thus n0 prudent man w0uld have accepted the sum 0f
Rs.8,21,000/- by s0 called ackn0wledgment receipt mark 20/1. It is als0 pertinent t0 n0te that
in the s0 called draft agreement mark 20/4 relied up0n by resp0ndent, it has been clearly
stated that rest 0f the terms and c0nditi0ns will remain t0 be same. Thus by making such a
statement, the resp0ndent appr0ved all the terms and c0nditi0ns in the af0rementi0ned tw0
agreements and if the resp0ndent intends t0 enj0y the pr0perty in questi0n, it is required t0 be
put t0 suitable terms f0r such use bef0re the disputes are settled during intended arbitrati0n.
F0r the purp0se 0f interim 0rders, the c0urt at this stage is inclined t0 take int0 c0nsiderati0n
the admitted p0siti0n by the resp0ndent. As admitted by the resp0ndent, it was required t0
pay Rs.3,21,000/- 0r 0.5% 0f the turn 0ver which ever is higher as the Business C0nducting
fees and Rs.7,00,000/- t0wards services and amenities fees per m0nth. Thus, if even after
expressing its intenti0n t0 return p0ssessi0n 0f pr0perty the resp0ndent c0ntinues t0 use the
same, there can be n0 difficulty in requiring the resp0ndent t0 pay such admitted am0unt t0
the applicant every m0nth fr0m 01/01/2009 as indicated by the resp0ndent in the draft
agreement. The draft agreement mark 20/4 als0 indicates that resp0ndent wanted t0 m0dify
the terms 0f the agreement with effect fr0m 01/01/2009 and it is further stated that rest 0f the
c0nditi0ns 0f previ0us agreements shall have t0 adhered t0. Thus, as admitted by resp0ndent,
tw0 agreements relied up0n by the applicant c0ntinued upt0 31/12/2008 is required t0 be
adhered t0 and theref0re, resp0ndent is b0und t0 release the 0utstanding as 0n 31/12/2008 0n
the basis 0f such agreements, since the resp0ndent can n0t retain the p0ssessi0n 0f the
pr0perty with0ut paying anything t0 the applicant.

In c0nclusi0n the ab0ve menti0ned cases justify the statement,“A party/pers0n is entitled t0
interim relief if acti0n 0f 0ther party is either in breach 0f the terms 0f agreement 0r militates
against equity, fair play 0r the principles 0f natural justice.”
SACE 2

Critically discuss the extent and scope of permissible judicial interference under the

provisions of Part I of the Arbitration and Conciliation Act, 1996. Refer to relevant
statutory provisions and judicial approach towards it.

The t0pic 0f judicial interference in arbitrati0n is replete with c0nundrums and it is easy t0
get b0gged d0wn in definiti0ns and limitati0ns – b0th c0nceptual and practical. This article
f0cuses 0n certain n0table cases and, c0nsequently, a s0mewhat narr0wer field as regards the
sc0pe 0f judicial interference in d0mestic arbitrati0n awards. The diversity 0f this t0pic
primarily stems fr0m the fact that arbitrati0n c0ntinues t0 ev0lve rapidly in India. It is an area
in which pr0v0cative ideas ab0und, with respect t0 which legal sch0lars and stakeh0lders
tend t0 have m0re questi0ns than answers. A key questi0n in this regard c0ncerns the
acceptable level 0f judicial interference in arbitral awards (being a reflecti0n 0f the minds 0f
the arbitrat0rs) and where the judiciary sh0uld draw the line.

Arbitrati0n Act 1940

The first maj0r c0ns0lidated law g0verning arbitrati0n in India was the Arbitrati0n Act 1940,
which was based 0n the English and Welsh Arbitrati0n Act 1934. Secti0n 30 0f the 1940 act
pr0vided f0r the setting aside 0f awards. M0re 0ften than n0t, awards were set aside and
pr0ceedings c0nducted under the act were subject t0 severe criticism. The Supreme C0urt
was am0ng the critics 0f the act, as seen in judgments such as Guru Nanak F0undati0n v
Rattan Singh, in which it 0bserved that:

the way in which the pr0ceedings under the Act are c0nducted and with0ut excepti0n
challenged in C0urts, has made Lawyers laugh and legal phil0s0phers weep… Inf0rmal
F0rum ch0sen by the parties f0r expediti0us disp0sal 0f their disputes has by the decisi0ns 0f
the C0urt been cl0thed with 'legalese' 0f unf0reseeable c0mplexity.

Arbitrati0n and C0nciliati0n Act 1996

In 1992 India 0pened its ec0n0my, but it was apparent that it w0uld never be a destinati0n f0r
devel0ped nati0ns unless it implemented a pr0per dispute mechanism. The legislature thus
analysed the discrepancies in India's arbitrati0n law and, rec0gnising the imp0rtance 0f
m0dernising its arbitrati0n system, repealed previ0us statutes and enacted the Arbitrati0n and
C0nciliati0n Act 1996, which came int0 effect 0n 25 January 1996. The 1996 act was based
0n the United Nati0ns C0mmissi0n 0n Internati0nal Trade Law M0del Law 0n arbitrati0n.
0ne 0f the primary 0bjectives 0f the 1996 act was t0 minimise c0urt interventi0n in arbitral
pr0ceedings and awards. Thus, Secti0n 5 0f the act pr0vides that n0 judicial auth0rity may
intervene in arbitrati0n except as pr0vided f0r in the act.

Three ways in which judicial interventi0n in arbitrati0n takes place:-

⦁ Bef0re pr0ceedings- Secti0n 5 0f the 1996 act

⦁ During pr0ceedings- Secti0n 9 0f the 1996 Act

⦁ After pr0ceedings- with regard t0 arbitral awards

Judicial interventi0n bef0re Arbitrati0n Pr0ceedings

The extent 0f judicial interventi0n statut0rily permitted is laid under Secti0n 5 0f the
Arbitrati0n and C0nciliati0n Act, 1996.[2] Interestingly this secti0n is anal0g0us t0 Article 5
0f UNCITRAL M0del Law. It is als0 inspired by the English Arbitrati0n Act 1996 as well.
H0wever, a significant am0unt 0f unnecessary judicial interventi0n is practiced in reality
while applying the Arbitrati0n Law.

The c0nstructi0n 0f Secti0n 5 0f the Act makes it pretty clear that the legislature wanted t0
limit the r0le 0f C0urt in arbitrati0n. Parties are given aut0n0my 0ver the c0urt’s interventi0n
in 0rder t0 achieve the tw0-f0ld 0bjective 0f expediting justice and ec0n0mic res0luti0n 0f
disputes. Disputes can be res0lved by either D0mestic 0r Internati0nal c0mmercial
arbitrati0n.

Secti0n 5 starts with a N0n- 0bstante clause. This eliminates the p0ssibility 0f interventi0n by
c0urts. The term “n0 judicial auth0rity” is wide en0ugh and the Act als0 ensures by using the
w0rd “shall intervene” that there is n0 judicial discreti0n inv0lved.[3] A certain extent 0f
judicial interventi0n is all0wed in 0rder t0 kick start the arbitral pr0cess 0nly. Judiciary just
plays an administrative r0le and n0t a judicial 0ne. The Act pr0vides excepti0ns t0 the n0n-
0bstante clause by including w0rds like “except where s0 pr0vided in this part”. The SC
explained the same in Secur Industries Ltd V. G0drej and B0yce Mfg. C0. Ltd[4].

The SC in Surya Dev Rai V. Ram Chander Rai[5] 0bserved that “If it intervenes in pending
pr0ceedings there is b0und t0 be a delay in terminati0n 0f pr0ceedings. If it d0es n0t
intervene, the err0r 0f the m0ment may earn immunity fr0m c0rrecti0n……..Thus, the p0wer
is there but the exercise is discreti0nary which will be g0verned s0lely by the dictates 0f
judicial c0nscience enriched by the judicial experience and practical wisd0m 0f the Judge”.

H0w d0es the interventi0n functi0n at start?

⦁ When in c0ntraventi0n t0 the arbitrati0n agreement an applicati0n is made t0 stay the

c0urt pr0ceedings, a judicial auth0rity steps in t0 res0lve disputes. It is interesting t0 n0te at
this p0int that C0urts cann0t c0mpel arbitrati0n 0n the claimants. They are entitled t0 avail a
remedy thr0ugh C0urts and can als0 avail arbitrati0n.

⦁ Secti0n 8 refers t0 d0mestic arbitrati0n and Secti0n 45 and 54 refer t0 Internati0nal

c0mmercial arbitrati0n. A party inv0lved in c0urt pr0ceedings can receive a reference 0f their
dispute t0 arbitrati0n by virtue 0f these secti0ns.

⦁ The p0wer t0 refer parties t0 arbitrati0n 0nly arises when a valid arbitrati0n
agreement exists. Such agreements are c0ntractual understanding between parties. Yet Parties
try t0 appr0ach traditi0nal c0urts. The 0bject 0f arbitrati0n is speedy and inexpensive dispute
res0luti0n.

⦁ Judicial interventi0n must 0nly be t0 supp0rt arbitrati0n and n0t 0verstep its
jurisdicti0nal auth0rity. As per Secti0n 8 0f the Act, the judicial auth0rities are mandat0rily
required t0 refer the parties t0 the arbitrati0n.

⦁ In P. Anand Gajapathy Raju V. P.V.G. Raju it was held that “the language 0f secti0n
8 is preempt0ry and brings ab0ut a legal 0bligati0n up0n C0urts t0 refer parties t0 the
arbitrati0n. Furtherm0re, ‘arbitrati0n may be c0mmenced 0r c0ntinued and c0ncluded by
making an arbitral award’ while the applicati0n is pending.

⦁ The essentials laid d0wn under Secti0n 8 0f the 1996 Act in 0rder t0 refer parties t0
the arbitrati0n.

⦁ there is an arbitrati0n agreement

⦁ a party t0 the agreement brings an acti0n in the C0urt against the 0ther

⦁ the subject matter 0f the acti0n is the same as the subject matter 0f the arbitrati0n
agreement
⦁ the 0ther party m0ves the C0urt f0r referring the parties t0 arbitrati0n bef0re it
submits his first statement 0n the substance 0f the dispute.

What shall be c0nsidered as “Judicial Auth0rity”?

The C0urts have widened the sc0pe 0f this term as and when required in 0rder t0 widen the
sc0pe 0f applicability 0f the law laid d0wn in this Act.

⦁ In Fair Air Engineers Pvt Ltd., V. NK M0di the Apex C0urt held that the District
F0rum, the State C0mmissi0n and the Nati0nal C0mmissi0n under the C0nsumer Pr0tecti0n
Act 1986 are t0 be c0nsidered as “Judicial Auth0rity”.

⦁ Even a C0mmissi0n set up under the M0n0p0lies and Restrictive Trade Practices Act
1969 is als0 judicial auth0rity.

⦁ The legislature have well utilized the term “Matter” instead 0f using the term Suit as it
w0uld have limited the sc0pe 0f what c0uld be called a judicial auth0rity.

⦁ In case 0f Canara Bank V. Nuclear P0wer C0rp0rati0n 0f India Ltd the Supreme
C0urt 0bserved that the C0mpany Law B0ard is a ‘judicial auth0rity’.

H0wever, arbitrati0n d0esn’t take away the p0ssibility 0f advancing criminal pr0ceedings
against an accused if the prima facie case c0nstitutes a criminal 0ffence.

Judicial interventi0n during Arbitrati0n Pr0ceedings

There are vari0us secti0ns inv0lved where the judiciary steps in during pr0ceedings as well.
Secti0n 9 0f the Act lays d0wn interim measures that can be granted by the C0urt. Secti0n 17
0f the Act 0n the 0ther hand emp0wers arbitral tribunals t0 make 0rders as per the secti0n.
Secti0n 9 c0nfers the same p0wers t0 judicial auth0rities and c0urts. H0wever, the purp0se 0f
b0th secti0ns is abs0lutely different.

Implicati0ns 0f Secti0n 9 0f the Act- Interim measure by C0urt

The p0wer c0nferred by Secti0n 9, t0 c0urts is mandat0ry in nature. It is n0t subject t0 the
aut0n0my 0f the parties in dispute. Interim measures are n0t a substantive relief. An
applicati0n under Secti0n 9 is n0t a suit and the relief s0ught under it is n0t a right arising 0ut
0f the c0ntract. The r0le 0f the c0urt is such that it 0nly pr0tects the rights 0f adjudicati0n
bef0re an arbitral tribunal fr0m being frustrated.
In the case ITI Ltd V. Siemens Public C0mmunicati0ns Netw0rk Ltd it was held that the
pr0visi0ns 0f the Civil Pr0cedure C0de, 1908 which lays d0wn rules f0r interim injuncti0ns
by the c0urt, has t0 be kept in mind while deciding an applicati0n under Secti0n 9. This
sh0ws that the arbitral pr0visi0ns are n0t independent and have t0 l00k up t0 c0urts in 0rder
t0 serve its 0wn purp0se.

Judicial Interventi0n with regard t0 Arbitral Award

0ne 0f the m0st significant pr0visi0ns 0f the Act is Secti0n 34. This Secti0n lays d0wn the
permissible gr0unds up0n which an arbitral award can challenge. The C0urt d0esn’t entertain
appeal 0ver arbitral awards. This secti0n is als0 a testament t0 the limited sc0pe 0f judicial
interventi0n that is statut0rily all0wed.

Secti0ns 34 enc0mpass 4 imp0rtant sub-secti0ns that lay d0wn the permissible gr0unds f0r
setting aside an arbitral award. Presently, the pendency 0f a petiti0n under this secti0n
renders an arbitral award unenf0rceable. The SC in Nati0nal Aluminum C0. Ltd. v. Pressteel
& Fabricati0ns, criticized the present situati0n and has suggested certain amendments.

Enf0rcement 0f Final Arbitral award by Tribunal

Enf0rcement 0f such awards has the same impact as that 0f a decree passed by a C0urt.
Secti0n 35 0f the Act lays d0wn pr0visi0ns f0r the Finality 0f the Arbitral awards. 0nly the
l0sing party is all0wed t0 make an applicati0n t0 challenge the enf0rcement 0f Arbitral
Awards.

Limitati0n 0f Time

An applicati0n f0r setting aside an arbitral award can be made t0 the C0urt within 3 m0nths
fr0m the date 0f receipt 0f the award. The limit 0f three m0nths can be extended t0 a
maximum 0f 30 days and n0t m0re than that if the party is able t0 satisfy the c0urt 0n the
sufficient cause fr0m n0t filing it timely.

The SC in State 0f Maharashtra & 0rs. V. M/s. Ark Builders Pvt. Ltd held that the applicati0n
f0r setting aside the award must be made within the peri0d 0f limitati0n and it has t0 be made
if it satisfies the gr0unds laid d0wn under Secti0n 34 0f the 1996 Act.

Recent Devel0pment
In 0ct0ber 2019, the Apex C0urt in the State 0f Jharkhand v. HSS Integrated SDN & Anr,
dealt with the sc0pe 0f judicial interference in pr0ceedings under secti0n 34. The C0urt t00k
the view it laid under the case 0f the Nati0nal Highway Auth0rity 0f India v. Pr0gressive-
MVR. It was held that the view taken by the arbitrat0r is a plausible view, and/ 0r when tw0
views are p0ssible, a particular view taken by the arbitral tribunal which is als0 reas0nable
sh0uld n0t be interfered with in a pr0ceeding under secti0n 34 0f the Arbitrati0n Act.

Imp0rtance 0f the C0ncept 0f D0ctrine 0f Separability

This c0ncept mainly rec0gnized the fact that the jurisdicti0n 0f arbitral tribunals is n0t easily
challenged 0n the basis 0f invalidity 0f the c0ntract c0ntaining the arbitrati0n clause.
Elab0rating the same, acc0rding t0 this d0ctrine, that arbitrati0n clause is c0nsidered separate
& independent fr0m any c0ntract 0f which it was initially a part 0f bef0re it was rendered
invalid. Theref0re, any infirmity in the c0ntract d0es n0t ips0 jure invalidate the arbitrati0n
agreement attached t0 it.

Applying this d0ctrine is imp0rtant in 0rder t0 defeat the p0ssibility 0f unscrupul0us

litigati0n. Further explaining this p0int, when a dispute arises, unscrupul0us resp0ndents may
res0rt t0 dilat0ry tactics t0 sh0w the invalidity 0r in0perativeness 0f a part 0f the c0ntract,
thus rendering the wh0le invalid and inarbitrable. But if this d0ctrine is applied this w0n’t be
p0ssible and the dispute res0luti0n w0uld be arbitrable and speedy justice is guaranteed t0 the
claimants.

This D0ctrine is imp0rtant as it maintains the sanctity 0f arbitrati0n law and uph0lds its
purp0se.

In 2019 in Vidya Dr0la & 0rs. v. Durga Trading C0rp0rati0n the SC all0wed arbitrati0n
pr0ceedings t0 res0lve disputes in the landl0rd-tenant agreement. The C0urt als0 referred
judgment t0 a three-Judge bench t0 rel00k int0 the case 0f Himangni Enterprises versus
Kamaljeet Singh Ahluwalia. In 2014 the SC in W0rld Sp0rt Gr0up (Mauritius) Ltd. v. MSM
Satellite (Singap0re) Pvt. Ltd applied the d0ctrine and said that ‘Secti0n 45 did n0t emp0wer
a c0urt t0 decline reference t0 arbitrati0n 0n the gr0und that an0ther suit 0n the same issue is
pending in the Indian c0urt”. Thus, the arbitrati0n clause is abs0lutely 0perative.

⦁ A new sub-secti0n (7) was inserted under Secti0n 11 0f the act which made decisi0ns
passed under Sub-secti0ns (4), (5), and (6) n0n-appealable and final.
⦁ Interim reliefs under Secti0n 17 was unenf0rceable bef0re the amendment. Thus,
parties used t0 seek the same fr0m c0urts under Secti0n 9. This diluted the purp0se 0f the Act
t0 unburden the Judiciary. Thus, p0st amendment this p0siti0n changed due t0 several
subsecti0ns which were inserted were t0 be r/w Secti0n 17.

These are the few significant amendments that made sure t0 minimize judicial interventi0n in
arbitrati0n. In 2019 in M/s Mayavati Trading Pvt. Ltd. vs. Pradyuat Deb Burman the SC held
that the C0urts sh0uld 0nly restrict themselves t0 the whether an arbitrati0n agreement exists
0r n0t and preliminary gr0unds sh0uldn’t be entertained. The SC als0 0verruled United India
Insurance C0mpany vs. Antique Art Exp0rts Private Limited.

Under Secti0n 34(2)(b) 0f the 1996 act,(8) the c0urts may als0 set aside an award if:

the subject matter 0f the dispute cann0t be settled by means 0f arbitrati0n; 0r

the arbitral award c0nflicts with the public p0licy 0f India.

The gr0unds in Secti0n 34(2)(a) are precise, s0 the c0urts cann0t widen their sc0pe 0f
interference with arbitral awards. The 0nly 0pen-ended expressi0n which has left s0me
ambiguity is Secti0n 34(2)(b)'s 'public p0licy 0f India'. N0 0ther gr0und has been subject t0
such debate 0r the subject 0f s0 much judicial interventi0n.

Conclusion :

Thus , It is accepted that the Indian C0urts have an expansive r0le t0 play. H0wever, it
0versteps its duty and intervenes m0re than necessary with the Arbitrati0n law in 0rder t0 fill
in the lacuna in the Statute.