Section 8

Power to refer parties to arbitration where there is an arbitration agreement.

This section outlines the authority of the Supreme Court or other courts to refer parties to arbitration. If a party wishes to refer a dispute to arbitration, they must make this request before submitting their first statement on the substance of the dispute.

Once the court confirms that a valid arbitration clause exists in the agreement, it must refer the parties to arbitration. However, this does not apply if the court finds the agreement to be null, void, inoperative, or unenforceable.

The party seeking arbitration must provide the court with the original Arbitration Agreement or a certified copy of it along with their application. If they do not have the original or a certified copy, they can submit the available copy and petition the court to obtain the original agreement from the other party.

The Hon’ble Supreme Court in the case of Hindustan Petroleum Corporation Ltd. V. Pinkcity Midway Petroleums (2003) held that if a valid arbitration agreement exists, the court must refer the dispute to arbitration without examining the merits of the case.

The Hon’ble Supreme Court in the case of Booz Allen and Hamilton Inc. V. SBI Home Finance Ltd. (2011) has distinguished between arbitrable and non-arbitrable disputes, holding that certain disputes (e.g., matters involving rights in rem) cannot be referred to arbitration.

Section 9

Interim measures, etc., by Court.

This section grants power to the courts to grant interim measures for protecting the rights of parties before, during, or after arbitration proceedings but before the enforcement of an arbitral award.

Any party may apply to the court for interim measures of protection before, during, or after arbitration proceedings, but prior to the enforcement of an arbitral award. Such measures may include:

1. Appointing a guardian for a minor or a person of unsound mind for arbitral proceedings.
2. Preserving, holding custody of, or selling goods subject to arbitration.
3. Securing the amount in dispute in arbitration.
4. Detaining, preserving, or inspecting property or documents relevant to arbitration.
5. Granting interim injunctions or appointing a receiver.
6. Implementing any other measures necessary to protect the rights of the parties.

The court has the same authority to issue these orders as it does in relation to any other legal proceedings before it.

If a party seeks interim relief before arbitration begins, they must initiate arbitration proceedings within 90 days (or within a timeframe specified by the court) from the date of the order granting the relief.

Once the arbitral tribunal is constituted, the courts will not consider applications for interim measures unless they determine that the remedies available under Section 17 of the Arbitration & Conciliation Act, 1996, would be ineffective in the specific circumstances.

The Hon’ble Supreme Court in the case of Sundaram Finance Ltd. v. NEPC India Ltd. (1999) held that interim relief under Section 9 is maintainable even before arbitration commences.

The Hon’ble Supreme Court in the case of BCCI v. Kochi Cricket Pvt. Ltd. (2018) has clarified that interim measures can be sought even after an arbitral award, but before its enforcement.

 

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.