RESEARCH

 Research on the consequences of a third party violating an interim order passed by an

arbitral tribunal under Section 17 of the Arbitration and Conciliation Act 1966
 How such an order (passed under Section 17 of the Act) is executed?

INTRODUCTION:
Arbitration revolves around the agreement entered into between the parties and the process
of arbitration commences from the agreement to arbitrate and ends with the award passed
by the arbitral tribunal. All the disputes that are arising out of contracts are referred to the
arbitration.
Recently in the case of Centrotrade Minerals & Metal Inc. v. Hindustan Copper
Ltd1, the Supreme Court underlined the importance of party autonomy in assessing the
validity of arbitration agreements and it was noted that “party autonomy is virtually the
backbone of arbitrations” and that in its opinion “parties to the arbitration agreement have
the autonomy to decide not only on the procedural law to be followed but also the
substantive law. Thus so as to protect the interest of the disputing parties, interim measures
of protection may be sought either from the arbitral tribunal or a court of law under section 9
and section 17 of the arbitration and conciliation act, 1996, the protection may be sought
before or during arbitration and even after the completion of the arbitral proceedings.
POWER OF AN ARBITRAL TRIBUNAL TO ORDER INTERIM MEASURES UNDER
SECTION 17:
Section 17 of the act grants the arbitral tribunal the authority to grant contractual parties
with interim relief for all those arbitrations seated in India. Prior to the 2015 Amendment
Act, the types of interim reliefs that the arbitral tribunal can grant were not prescribed
instead it was simply stated that the arbitral tribunal could at its discretion order a party to
take any interim measure of protection that the arbitral tribunal considered necessary in
respect to the subject matter of the dispute. As it was held in the case of Gulmali Amrullah
Babul v. Shabbir Salebhai Mahimwala 2 that the party who seeks the enforcement of the order
made under section 17 would have to subsequently file a petition under Section 9 for the
same relief as per the order made by the arbitral tribunal. Therefore, a proceeding under
Section 9 is not an arbitral tribunals enforcement proceeding. This does not imply that an
order passed by the arbitral tribunal cannot be enforced in any way and the court may adopt
the same stance in accordance to Section 9 proceeding.
The 2015 amendment mandates the powers of the arbitral tribunal provided under Section
17 to be consistent with the powers of the court granted under Section 9 of the act, then the
tribunal is empowered to grant all measures which is granted under Section 9(1) of the act.
As per subsection (3) has been inserted under Section 9 which states that once an arbitral
tribunal has been constituted, which specifies that once an arbitral tribunal has been
established, a court shall not consider an application for interim measures, which may make
Section 17's remedy ineffective. The 2015 amendment allowed the arbitral tribunal to grant
interim measures under Section 17 at any time after the award was made but before it was
enforced, in addition to during the arbitral procedures. The words “any time after making

1
(2017) 2 SCC 228
2
MANU/MH/2926/2015
the arbitral award but before it is enforced” have not been included under the 2019
amendment act as it was said to be inconsistent as per the Section 32 of the Arbitration Act
that provided that the mandate of the arbitral tribunal shall be terminated with the
termination of the arbitral proceedings. As per the order made under Section 17 passed by
the arbitral tribunal granting or refusing to grant interim measure may be appealed under
Section 37(2)(b) of the act. In case the second appeal is not allowed, but the parties can still
invoke the Supreme Courts extraordinary jurisdiction under Article 136 of the constitution of
India making a second leave to appeal. Following the 2015 amendment, the courts have
emphasised from time to time that an arbitral tribunal cannot make all the orders that a
court can ordinarily issue which has been discussed in the case of Pradeep K.N. v. The
Station House Officer3, that an arbitral tribunal, ordered repossession of a vehicle as an
interim measure under section 17 of the act, the court held that the order of repossession
can only be made through a civil court. Conferring the power of a civil court to an arbitral
tribunal for passing an interim order does not mean that the arbitral tribunal is conferred
with the power of enforcement and the powers vested under Section 17 cannot override the
legislative meaning of Section 17.

ENFORCEMENT OF INTERIM ARBITRAL AWARDS IN INDIA:

The definition of the term “award” has not been provided under the Act. But it can be viewed
as it is analogous to a decree, judgement or order of Court of Law. An award is said to be a
determination reached by the Arbitral Tribunal or Sole Arbitrator on merits in an arbitration
proceeding that is referred to by parties to an Arbitration agreement for resolution of
dispute. An interim award, on the other hand, refers to a determination of some part of the
dispute referred to Arbitration. Interim awards are to be made in the same manner as an
award, as held in Tamil Nadu Water Supply and Drainage Board, Chennai v.
Abhan Constructions4.
Interim measures may be granted by the Arbitral Tribunal on an application made by a party
to the Arbitration during the arbitral proceedings as per Section 17 of the Act. Section 17(1)
(ii) of the Act enables the party to make an application to the tribunal for an interim measure
of protection for the following matters:
1. Prevention, interim custody or sale of any goods being subject matter of the
Arbitration Agreement
2. Securing the amount in dispute in the Arbitration
3. Detention, preservation or inspection of any property or thing which is the subject
matter of the dispute in Arbitration
4. Authorising any person for the aforesaid purpose to enter upon any land or building
in possession of any party, or authorising samples to be taken, observation to be
made, experiment to be tried, which may be necessary or expedient for obtaining full
information or evidence
5. Interim injunction or appointment of receiver
6. And Other interim measure of protection deemed just and convenient by the Arbitral
Tribunal
As per Section 17(1) of the Act, the Arbitral Tribunal may exercise the power to grant interim
measures only after its constitution, and not before its constitution. But as an exception to
the above mentioned condition if in case the parties by agreement prefer the proceedings to

3
2016 SCC OnLine Ker 8995.
4
2002 (4) RAJ 575 (Mad)
be conducted as per the rules of specific institutional Arbitral Tribunal and if such
institutional rules allow for the conduct of Emergency Arbitration before the constitution of
Arbitral Tribunal, then the Institution may allow the appointment of an Emergency
Arbitrator for interim measure(s) before the constitution of the Tribunal. A similar view was
taken by the Supreme Court, in the case of Amazon.Com NV Investment Holdings
LLC v. Future Retail Ltd5., wherein the Supreme Court held that the interim measures
passed by the Emergency Arbitrator under the Singapore International Arbitration Centre
Rules (“SIAC Rules”) would be covered by Section 17 of the Act.
As per Section 36 of the Act, an interim award passed by an Arbitral Tribunal under Section
17 of the Act has the same legal value as an interim award passed under section 9 of the Act
as per the court. Section 27(5) of the Act further enables the court to impose certain
disadvantages, penalties and punishments on any person for the contempt of Arbitral
Tribunal during the conduct of Arbitral proceeding.
VIOLATION OF AN INTERIM ORDER PASSED BY THE ARBITRATOR CONSTITUTES
CONTEMPT OF COURT:
In the event that any party refuses to comply with the interim award passed by an Arbitral
Tribunal under Section 17 of the Act, such person would be deemed “guilty of contempt
to the Arbitral Tribunal” under Section 27(5) of the Act, as held by the Delhi High Court
in Sri Krishan v. Anand6. In this case, the Delhi High Court observed that:
“Anyone who fails to comply with the arbitral tribunal’s order is considered “making any
other default” or “guilty of any disrespect to the arbitral tribunal during the proceedings.”
As a result, the opposing party’s remedy is to seek to the arbitral tribunal for a
representation to the court to meet out such punishment, penalty to the guilty party as
would have been incurred for default in or contempt of the court.”
A similar view was given by the Supreme Court in the case Alka Chandewar v. Shamshul
Ishrar Khan7 where it was held that any person refusing to comply with the Arbitral
Tribunal’s interim award passed under Section 17 of the Act would be considered as
contempt during the course of Arbitration proceedings, and an action for civil contempt
could be initiated against such person under the Contempt of Courts Act, 1971.
In this case it was held that, if any party fails to comply with the orders of the Arbitral
Tribunal under section 17 of the Arbitration & Conciliation Act, 1996 then that party would
be deemed guilty of contempt of the Arbitral Tribunal. The remedy available to an aggrieved
party, is to then apply to the Arbitral Tribunal under section 27(5) of the Act, to make a
representation to the Court, for taking appropriate steps against the party who is guilty of
contempt. In this case the Supreme Court while allowing the appeal took note of the
observations made by the Delhi High Court in Sri. Krishna v. Anand, where the Delhi
High Court held that any person failing to comply with an order of the arbitral tribunal
under section 17 would be deemed to be "making any other default" or "guilty" of any
contempt of the arbitral tribunal during the conduct of proceedings under section 27(5) of
Act.
INTERIM RELIEF AGAINST THIRD PARTIES UNDER THE ARBITRATION ACT:

5
(2022) 1 SCC 209
6
(2009) 3 Arb LR 447 (Del)
7
2017 SCC OnLine SC 758
The Delhi High court in the case Arun Kapoor v Vikram Kapoor8, came to the
conclusion that the application under Section 9 and 17 of the act are distinct from each other
as under Section 17 application before the arbitrator is concerned with only the party to the
proceedings while under Section 9 application does not necessarily need to be against a party
to the proceedings and can concern a third party.
In the case of Blue Coast Infrastructure Development Pvt Ltd v Blue Coast Hotels
Ltd9, where it was found that while the powers of the tribunal under section 17 are limited,
the court under section 9 has broad powers and is empowered to grant interim reliefs against
third parties as well. Here the court held that under the ambit of section 17 the tribunal is
bound within the four corners of an arbitration agreement and it cannot issue any direction
to the parties outside the purview of the contract but the same is not in the case of Section 9
of the Act. There are no such limitations on Section 9 and hence the courts have such powers
that enable them to issue directions against third parties.
The supreme court in the case of MD Army Welfare Housing Organisation v
Sumangal Service Pvt Ltd10 observed that the powers of the tribunal under Section 17 is
not to go beyond the arbitration agreement. An interim measure as per section 17 must
address the subject matter of the dispute and should be addressed only to the parties of the
arbitration. While discussing the ambit of the courts power to issue interim reliefs against
the third party as per section 9 and in Gatx India v. Arshiya Rail Infrastructure 11, it
was noted that section 17 specifically allows the direction to be issued only against the parties
to the agreement. It is necessary to note that the judgments in MD Army and Gatx India
cases were delivered before the 2015 Amendment, which made significant changes in section
17 of the Act by adding the words “the arbitral tribunal shall have the same power for
making orders, as the court has for the purpose of, and in relation to, any proceedings
before it.” After the 2015 amendment came into play it widened the scope of the tribunal’s
authority under Section 17 with a view to equalise that of the power of the court before any
proceedings. And it is clear that after the 2015 Amendment the drafters intended for both the
tribunal and court to have the same authority while granting relief.

8
2002 IAD Delhi 742, 96 (2002) DLT 757, 2002 (61) DRJ 495, 2003 44 SCL 47 Delhi
9
O.M.P.(I), 35 of 2020
10
2004 9 SCC 619
11
2015 216 DLT 20