Section 17

Interim Measures by the Arbitral Tribunal

17. Interim measures ordered by arbitral tribunal.— (1) A party may, during the arbitral proceedings, apply to the arbitral tribunal—
(i) for the appointment of a guardian for a minor or 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 authorising 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 arbitral tribunal to be just and convenient, and 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.

(2) Subject to any orders passed in an appeal under section 37, any order issued by the arbitral tribunal under this section shall be deemed to be an order of the Court for all purposes and shall be enforceable under the Code of Civil Procedure,1908 (5 of 1908), in the same manner as if it were an order
of the Court.

Section 17 of the Arbitration and Conciliation Act, 1996 provisions empower the tribunal to protect the parties’ rights and ensure the effective resolution of disputes during the arbitration process. The arbitral tribunal has the authority to grant interim relief in a variety of scenarios to protect the subject matter of the dispute.

Sub-section (1)(i): Parties involved in arbitration can request the tribunal to appoint a guardian for a minor or a person of unsound mind to ensure their representation during the arbitration process.

Sub-section (1)(ii)(a): The tribunal can direct the preservation, temporary custody, or sale of goods that form part of the dispute under the arbitration agreement.

Sub-section (1)(ii)(b): To secure the amount in question, the tribunal can issue orders to safeguard the monetary interests of the parties.

Sub-section (1)(ii)(c): The tribunal has the authority to order inspection, preservation, or detention of property involved in the dispute, including granting permission to enter premises, take samples, conduct experiments, or make observations necessary for evidence collection.

Sub-section (1)(ii)(d): The tribunal may grant interim relief through injunctions or by appointing a receiver to manage property or interests in question.

Sub-section (1)(ii)(e): The tribunal is empowered to issue any other interim measures of protection deemed fair and necessary, having the same authority as a court in granting such relief.

The tribunal’s powers are expansive, allowing it to address urgent needs that may arise during the arbitration process. Section 17 aims to ensure that parties are not left without recourse to protect their rights while the arbitration proceedings are ongoing. Before the 2015 amendment, the power of the arbitral tribunal to grant interim measures was limited, as parties often had to approach courts under Section 9 for effective relief. The amendment brought Section 17 on par with Section 9, empowering the tribunal to grant interim measures with the same authority as a civil court, thereby reducing court interference and fostering the autonomy of arbitral proceedings.

Another significant aspect of Section 17(2) of the Act is the binding nature of orders passed by the arbitral tribunal. As clarified by the Supreme Court in Alka Chandewar v. Shamshul Ishrar Khan (2017) 16 SCC 119, such orders are enforceable for all purposes in the same manner as court orders, ensuring that parties comply with them without the need to approach judicial authorities. This enhancement bolsters the effectiveness of arbitration as a dispute resolution mechanism, providing parties with timely and enforceable relief.

However, the powers of the tribunal under Section 17 are not without limitations. The tribunal must operate within the scope of the arbitration agreement and adhere to the procedural rules agreed upon by the parties. Additionally, while Section 17 aims to reduce court intervention, parties may still seek interim measures under Section 9 in circumstances where the tribunal is not yet constituted or is unable to act effectively. This ensures that urgent relief remains accessible, balancing the autonomy of arbitral proceedings with the need for judicial support in exceptional cases.

In conclusion, Section 17 of the Arbitration and Conciliation Act 1996 plays a pivotal role in ensuring the smooth conduct of the arbitration proceedings by empowering the arbitral tribunal to grant interim measures. By providing remedies to protect the subject matter of disputes and the interests of parties, it reduces dependency on courts, promoting efficiency and party autonomy. This provision enhances the credibility of arbitration as a viable alternative to litigation, striking a balance between judicial support and tribunal authority to achieve fair and effective dispute resolution.

 

Disclaimer: This blog is for informational purposes only and does not constitute any legal advice. Readers should seek expert legal counsel before taking any action based on the content.