NishithDesai-仲裁程序中的临时救济-法院和法庭之间的权力博弈（英）

MUMBAISILICONVALLEYBENGALURUSINGAPORENEWDELHINEWYORKGIFTCITY

Research

InterimReliefsinArbitral

Proceedings

PowerplaybetweenCourtsandTribunals

August2024

©NishithDesaiAssociates2024

Research

InterimReliefsinArbitral

Proceedings

PowerplaybetweenCourtsandTribunals

August2024

DMSCode:30223.1

©NishithDesaiAssociates2024

Rankedasthe‘MostInnovativeIndianLawFirm’intheprestigiousFTInnovativeLawyersAsiaPacificAwardsformultipleyears.Alsorankedamongstthe‘MostInnovativeAsiaPacificLawFirm’intheseeliteFinancialTimesInnovationrankings.

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InterimReliefsinArbitralProceedings—PowerplaybetweenCourtsandTribunals

Disclaimer

ThisreportisacopyrightofNishithDesaiAssociates.Noreadershouldactonthebasisofanystatementcontainedhereinwithoutseekingprofessionaladvice.Theauthorsandthefirmexpresslydisclaimallandanyliabilitytoanypersonwhohasreadthisreport,orotherwise,inrespectofanything,andofconsequencesofanythingdone,oromittedtobedonebyanysuchpersoninrelianceuponthecontentsofthisreport.

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Acknowledgements

AnshDesai

ansh.desai@

ShwetaSahu

shweta.sahu@

AlipakBanerjee

alipak.banerjee@

WeacknowledgeandthankDurgeshwariPaliwal,astudentofInsituteofLaw,NirmaUniversityforherassistanceonthisresearchpaper.

©NishithDesaiAssociates2024Provideduponrequestonly

Contents

2

Background1

WhocanapplyforInterimMeasures?

3

InterimMeasuresinArbitration

1.ReliefsunderSection9oftheArbitrationAct4

2.StandardsApplicabletotheGrantofInterimReliefsbytheCourt

underSection98

3.EnforceabilityofanInterimOrderGrantedbyaCourt14

InterimMeasuresbyanArbitralTribunalunderSection17

oftheArbitrationAct15

1.ReliefsSoughtbyPartiesbeforeArbitralTribunals15

2.StandardsApplicabletotheGrantofInterimReliefs

bytheArbitralTribunalunderSection1716

3.EnforceabilityofanInterimMeasureGrantedbyanArbitralTribunal16

18

EmergencyArbitrator’sOrders/Awards

India,U.K.andSingapore:AComparison19

Conclusion23

—

AnnexureI

ScheduleIIoftheArbitrationAct,194024

AnnexureII

RelevantProvisionsoftheModelLaw25

AnnexureIII

RelevantProvisionsoftheArbitrationActandtheCode26

AnnexureIV

TableofCases29

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InterimReliefsinArbitralProceedings—PowerplaybetweenCourtsandTribunals

Background

Arbitrationhasemergedasthepreferredmechanismfortheresolutionofcommercialdisputesamongstthevariousdisputeresolutionmechanismsavailable.Oneofthereasonsforproliferationofarbitrationhasbeentheflexibilityprovidedtothepartiestoconductarbitralproceedingsasperthelawchosenbythem,alongwitharbitratorsoftheirchoiceandatavenueandplaceconvenienttotheparties,asopposedtoacourtproceeding.Moreover,partyautonomybeingthethumbruleinarbitralproceedings,partiesarealsogenerallypermittedtoagreeupontheproceduregoverningtheresolutionofthedisputes.

Thearbitralprocessisnormallyaccompaniedbycertainproceduralsafeguardssuchasinterlocutoryorinterimmeasuresthatsafeguardpartiesduringthependencyoftheproceedings.

Ithasbeenobservedthatpartiesengageindilatorytacticstodelayproceedingsorprejudicetherightsoftheoppositepartiesbyinteraliadissipatingassetsorinterferingwiththefunctioningofbodies(incaseofacompanywherebothpartiesarestakeholders).Insuchasituation,thefinalreliefgrantedbyatribunalmayberenderednugatoryormeaninglessunlessthearbitraltribunalorcourtisabletosafeguardtherightsofpartiesduringthependencyofthearbitralproceedings.Therefore,intheinterveningperiodbetweenthejunctureatwhichthe‘dispute’arose(incertaincircumstancesevenbeforethecommencementofarbitration)andtilltheexecutionoftheaward,certaininterimmeasuresmaybenecessarytoprotectaparty’srightsandensurethatjusticeisdone.

Thenatureofinterimreliefsoughtbythepartiesmayvarybasedonthefactsandcircumstancesofthedispute.Incertainsituations,theeffectiveprovisionofinterimreliefsmayinvolvedirectionstothirdpartiesalso.Withthechangesintroducedbyvariousamendments1totheArbitrationandConciliationAct,1996(“ArbitrationAct”)andwiderpowersvestedwitharbitraltribunals,interimreliefsaremadeeasyandaccessibletopartiestosecuretheultimatearbitralaward.Inthisbackdrop,itisofparamountimportancetounderstandthenatureofinterimreliefsthatcanbegrantedbycourtsandarbitraltribunalsandtheirrespectivelimitations.

1ArbitrationandConciliationAmendmentAct,2015(“2015AmendmentAct”)andArbitrationandConciliationAmendmentAct,2019(“2019AmendmentAct”).

©NishithDesaiAssociates2024Provideduponrequestonly1

InterimReliefsinArbitralProceedings—PowerplaybetweenCourtsandTribunals

WhocanapplyforInterimMeasures?

Anypartytothearbitrationagreementcanmakeanapplicationforinterimmeasuresinthecourseofthearbitralproceedings.However,aftermakingofthearbitralaward,onlyasuccessfulpartythatisentitledtoseektheenforcementoftheawardcanapplytothecourtunderSection91oftheArbitrationActforprotectionintermsofSection9(ii)oftheArbitrationAct.

ThisemanatesfromtheunderstandingthattheschemeofSection9postulatesanapplicationforthegrantofaninterimmeasureofprotectionafterthemakingofanarbitralawardandbeforeitisenforcedforsecuringthepropertyforthebenefitofthepartywhichseeksenforcementoftheaward.2AswasobservedbytheBombayHighCourt(quotedbelow),anunsuccessfulpartywouldnotbe,inanyevent,entitledtoenforcementforthesimplereasonthatthereisnoawardinitsfavourtobeenforced:

“IfanapplicationismadeattheinstanceofsuchanunsuccessfulpartyunderSection9,therewillnotbeanyoccasiontograntanyinterimmeasurewhichwillbeintheaidoftheexecutionofthearbitralAwardassuchapartywillnotbeentitledtoseekenforcementunderSection36.”3

Consequently,evenontheawardbeingsetaside,thepartywhoseclaimhasbeenrejectedvidethesaidaward,cannotapplyforinterimmeasuresunderSection9oftheArbitrationAct.Thisispremisedonthe

understandingthatthecourt,underSection34oftheArbitrationActdoesnotactasacourtofappeal,anddoesnotreviewthemeritsofthedispute.4

1SeeAnnexureIII.

2DirkIndiaPrivateLimitedv.MaharashtraStateElectricityGenerationCompanyLimited2013(7)Bom.C.R493.

3WindWorld(India)Ltd.v.EnerconGmbHandothers2017SCCOnlineBom1147,at[18].

4DirkIndiaPrivateLimitedv.MaharashtraStateElectricityGenerationCompanyLimited2013(7)Bom.C.R493.

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InterimReliefsinArbitralProceedings—PowerplaybetweenCourtsandTribunals

InterimMeasuresinArbitration

InIndia,theArbitrationActwasformulatedonthebasisofUNCITRALModelLawonInternationalCommercialArbitration,1985(“ModelLaw”),providesforinterimmeasuresunderSections9and17bycourtsandarbitraltribunalsrespectively.

Section9oftheArbitrationActisbroadlybasedonArticle9ofModelLawandprovidesforthegrantofinterimmeasuresbyacourt.UnliketheModelLaw,Section9providesforinterimmeasuresofprotectionnotjustbeforethecommencementofarbitralproceedings1andduringthearbitralproceedingsbutalsopostthearbitralawardhasbeendeliveredbutbeforeitisenforced.Courtshaveinterpreted“beforeitisenforced”tomeantilltheawardisfullysatisfied.2

The2015AmendmentActhasintroducedcertainchangestotheprovisionsoninterimreliefswithrespecttothekindofreliefsavailableandthetime-frameforseekingsuchreliefsbeforecourts.Incaseofarbitrationscommencedonorafter23October2015,ifanorderofinterimreliefshasbeengrantedbyacourtpriortotheconstitutionofthearbitraltribunal,thepartiesarerequiredtoinitiatearbitralproceedingswithinaperiodofninetydays.

Oncearbitralproceedingshavecommenced,thepartieswouldhavetoseekinterimreliefsbeforethearbitraltribunal.Acourtwouldordinarilynotentertainapetitionforinterimreliefsinsuchasituationunlessthepartyisabletoprovetheexistenceofcircumstancesthatmakeareliefgrantedbyanarbitraltribunalinsufficient.

Afteranawardhasbeenrenderedbythearbitraltribunal,thesuccessfulpartymayalsochoosetoapproachcourtsforinterimreliefstosecureandsafeguardtheeffectivenessofthearbitralawardpriortoitsenforcement.Theapplicationwouldgenerallyhavetobemadebeforeacourtpriortotheenforcementoftheawardincaseofbothdomesticandinternationalcommercialarbitrations.ItisalsoacorollarythattheunsuccessfulpartymaynotseektostalltheenforcementoftheawardbyfilinganapplicationunderSection9oftheArbitrationAct.

InterimmeasuresorderedbyarbitraltribunalsetoutinSection17oftheArbitrationAct,arealsoessentiallybasedonArticle17oftheModelLaw.

Previously,therewasadebatewhetherthepowersofanarbitraltribunaltograntinterimreliefswerenarrowercomparedtothepowerofacourtunderSection9oftheArbitrationAct.However,withtheamendmentsinplace,thepowersofanarbitraltribunaltograntinterimreliefshavebeenmadeatparwiththoseofthecourtunderSection9oftheArbitrationAct.

Theoperationofthisprovisionistriggeredonlyattherequestofapartytothearbitralproceedings,onlyaftertheconstitutionofthetribunal.Apartymayseekinterimreliefsuptothepointintimeatwhichanawardismadebythetribunal.3

1SeeSundaramFinanceLtdvNEPCIndiaLtd(1999)2SCC479(TheSupremeCourtheldthatpartieswouldhavetodemonstratetheintentiontocommencearbitralproceedingstobeeligibleforthegrantofinterimreliefs).

2ShanghaiElectricGroupCo.Ltd.v.RelianceInfrastructureLtd.,2024SCCOnLineDel1606.(“ShanghaiElectric”).

3Earlier,apartycouldrequestforaninterimreliefunderSection17oftheArbitrationAct“atanytimeafterthemakingofthearbitralawardbutbeforeitisenforcedinaccordancewithSection36”aswell.However,thesewordswereomittedfromSection17withthe2019AmendmentAct.

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InterimReliefsinArbitralProceedings—PowerplaybetweenCourtsandTribunals

InterimMeasuresinArbitration

1.ReliefsunderSection9oftheArbitrationAct

A.WhichCourttoApply?

‘Court’asdefinedinSection2(1)(e)oftheArbitrationActcaneitherbeadistrictcourtoraHighCourt

having‘originaljurisdiction’,whichwouldhavethejurisdictiontodecidethesubjectmatterofthearbitrationasifthesamewerethesubjectmatterofacivilsuit.Incaseofaninternationalcommercialarbitration,i.e.,anarbitrationrelatingtoacommercialdisputewhereatleastoneofthepartiesisnon-Indian,onlyaHighCourtofastateinIndiawillhavepowersundertheArbitrationAct.Incaseswherethesubject-matterofanarbitrationisacommercialdisputeofaspecifiedvalue,4thecommercialcourtorcommercialdivisionoftheHighCourtconstitutedundertheCommercialCourts2015,asthecasemaybe,wouldhavejurisdiction.5

FollowingtheSupremeCourt’sjudgmentinBharatAluminumCompanyvKaiserAluminum,6thecourtoftheseatofarbitrationwillhavejurisdictionundertheArbitrationAct.Fixationofaseatofarbitrationisequivalenttoassigningexclusivejurisdictiontothecourtsoftheseatforanysupervisoryfunctionsoverthearbitrationproceedings,includingpowerstograntinterimreliefs.Needlesstosay,suchdesignationoftheseatwouldoustthejurisdictionofallothercourts.7Iftheseatisnotmentionedinthearbitrationagreement,orhasnotbeensodeterminedbythearbitraltribunal,anapplicationunderSection9oftheArbitrationActmaybepreferredbeforeacourtinwhichpartofthecauseofactionarises.8

IncaseanapplicationismadetoacourtunderPartIoftheArbitrationActwithrespecttothearbitrationagreement,Section42oftheArbitrationActwillapplytoprecludethemakingofallsubsequentapplicationsunderPartI(includingthoseunderSection9oftheArbitrationAct)toanycourtexceptthecourttowhichsuchapplicationhasbeenmade.Similarly,ifanapplicationforinterimreliefismadetoacourt,allsubsequentapplicationsunderPartIwouldhavetobemadetothatcourttowhichanapplicationhasbeenmadeunderSection9oftheArbitrationAct.

ForassessingthepowersofthecourttograntinterimmeasuresunderSection9oftheArbitrationActvis-à-vispowersofthearbitraltribunalunderSection17oftheArbitrationAct,theintroductionofthefollowingclausetoSection9oftheArbitrationActmeritsdiscussion:

“(3)Oncethearbitraltribunalhasbeenconstituted,theCourtshallnotentertainanapplicationunderSub-section(1),unlesstheCourtfindsthatcircumstancesexistwhichmaynotrendertheremedyprovidedunderSection17efficacious.”

4CommercialCourtsAct2015,s2(1)(i):“SpecifiedValue”,inrelationtoacommercialdispute,shallmeanthevalueofthesubjectmatterinrespectofasuitasdeterminedinaccordancewithSection12whichshallnotbelessthanthreelakhrupeesorsuchhighervalue,asmaybenotifiedbytheCentralGovernment.

5CommercialCourtsAct2015,s10.6(2012)9SCC552.

7IndusMobileDistributionPrivateLtd.v.DatawindInnovationsPrivate&Ors(2017)7SCC678.

8BGSSGSSomaJVvNHPCLtd.,(2020)4SCC234.

©NishithDesaiAssociates2024Provideduponrequestonly4

InterimReliefsinArbitralProceedings—PowerplaybetweenCourtsandTribunals

InterimMeasuresinArbitration

TheDelhiHighCourtinCSRCResearchandDesignInstituteGroupCo.Ltd.vDedicatedFreightCorridorCorporationofIndiaLtd.&Ors.(“CSRCResearch”)underlinedtheimportanceofSection17visavisSection9oftheArbitration:

“WhileexercisingpowerunderSection9,theCourtisrequiredtobemindfulofthefactthatconcurrentpowerisvestedintheArbitralTribunal,bySection17.ThereliefswhichcanbegrantedunderSection17,bythe

ArbitralTribunal,areidenticaltothosewhichcanbegrantedbytheCourtunderSection9.While,therefore,exercisingjurisdictionunderSection9,theCourt,evenatthepre-arbitrationstage,shouldnotusurpthejurisdictionwhich,otherwise,wouldvestinthearbitraltribunal,evenifitisyettobeconstituted.Hence,litigantswouldbeinapositiontomisuseSection9asprovidinganopportunitytoforumshop.”9

Thus,toavoidprejudicetoanypartysubsequenttotheconstitutionofthearbitraltribunal,courtshavebeguntorefrainthemselvesfrommakingordersunderSection9oftheArbitrationActunlessthereisnoefficaciousremedy.

However,subsequenttotheamendmentsinSection9oftheArbitrationAct,thecourtcangrantinterimmeasuresinthefollowingcircumstances:

Priortotheconstitutionofthetribunal

Aftertheawardhasbeenmadeandpriortoitsenforcement.

ADivisionBenchoftheKeralaHighCourtobservedthatwhenanapplicationismadebeforeacourtunderSection9(1)oftheArbitrationActaftertheawardismadebutyettobeenforced,thecourtshallbearinmindthatitisastagewherethearbitraltribunalhasceasedtofunction.Itfurtherheldthat,“Insuchcircumstances,itwouldnotbeproperforthecourttorejecttheapplicationmerelyonthegroundthathehasgotefficaciousremedyunderSection17oftheAct.TheCourthastoadoptaliberalapproachinsuchcircumstances.AmerestatementbytheCourttotheeffectthattheremedyprovidedunderSection17oftheActisefficacious,withoutreferencetothecircumstanceswhichmakeitso,isnotsufficienttorejectanapplicationunderSection9(1)oftheAct.”10

Inthecourseofthearbitralproceedings,aftertheconstitutionofthetribunal,aninterimmeasuregrantedbythetribunalmaynotbeefficacious.Ingrantinginterimreliefsinsuchcases,courtsassesstherelevantfactsandcircumstanceswithprecisionincludinginstanceslikethelethargicmannerof

arbitratorsingrantinginterimreliefsinrespectofassetsrenderingtheremedyinefficacious.11AnotherinstancewherearemedyunderSection17oftheArbitrationActwasdeemedinefficaciouswaswhentheconstitutionofthearbitraltribunalwasunderchallenge.12CertainotherfactorswhichmayrenderaremedyunderSection17oftheArbitrationActinefficaciousevenaftertheconstitutionofthetribunalmaybetemporaryunavailabilityofanyoneofthearbitratorsbyreasonofillness,travel,etc.,whentheindividualarbitratorsarelocatedatfarawayplacesandnotinapositiontoassembleimmediately,13or

whenthereisanimminentthreatofinvocationofabankguaranteeorimminentthreatofdispossession.14

92020SCCOnLine2100,at[22(ii)].

10MAshrafv.KasimVK,2018SCCOnlineKer4913.

11SREIEquipmentFinanceLimited(Sefl)v.RayInfraServicesPrivateLimited&Anr.,2016SCCOnLineCal6765.

12EnergoEngineeringProjectsLtd.vTRFLtd.,2016SCCOnLineDel6560.

13ArcellorMittalNipponSteelIndiaLtd.vEssarBulkTerminalLtd.,(2022)1SCC712(“ArcellorMittal”).

14WelspunEnterprisesLtd.vKasthuriInfraProjectsPvt.Ltd.,Orderdated15July2024inOMP(I)(Comm.)124124/2023andIA19447/2023(DelhiHighCourt)(“Welspun”).

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InterimReliefsinArbitralProceedings—PowerplaybetweenCourtsandTribunals

InterimMeasuresinArbitration

SomecourtshavebeenoftheviewthatcourtswouldberequiredtoadoptastrictapproachinentertainingsuchapplicationsunderSection9oftheArbitrationAct,inthecourseofthearbitralproceedings.15However,oncethecourthasapplieditsmindandentertainedanapplicationunderSection9oftheArbitrationAct,thecourtwilladjudicateonit.16Nevertheless,theburdenisonthepartyresistingthereferraltothearbitraltribunaltodemonstrablyconvincethecourtthatemergentordersontheapplicationunderSection9oftheArbitrationActarenecessaryandthatthemattercannotawaittheapplicationofmindbytheArbitralTribunal.17

InarecentcasebeforetheDelhiHighCourt,itwasdisputedastowhetherthecourtbeforewhichanapplicationforinterimmeasuresispending,wouldhavetorelegatethesametothearbitraltribunaluponitsconstitution.UpholdingthefindingoftheSingleJudge,theDivisionBenchoftheDelhiHighCourtobservedthat:

“Iftheargument…weretobeacceptedthatthemomentanArbitralTribunalisconstituted,theCourtwhichisseizedofa

Section9

application,becomescoramnonjudice,wouldcreateaseriousvacuumasthereis

noprovisionfordealingwithpendingmatters.AllthepowersoftheCourttograntinterimmeasuresbefore,duringthearbitralproceedingsoratanytimeafterthemakingofthearbitralawardbutpriortoitsenforcementinaccordancewith

Section36

areintact(and,havenotbeenalteredbytheamendment)ascontainedin

Section9(1)

ofthesaidAct.Furthermore,itisnotasifupontheveryfactthatanArbitralTribunalhadbeenconstituted,theCourtcannotdealwithanapplicationunderSub-section(1)of

Section9

ofthesaidAct.

Section9(3)

itselfprovidesthattheCourtcanentertainanapplicationunder

Section9(1)

ifitfindsthatcircumstancesexistwhichmaynotrendertheremedyprovidedunder

Section17

efficacious…thereisnoprovisionunderthesaidActwhich,evenasatransitorymeasure,requirestheCourttorelegateortransferapendingSection9(1)applicationtotheArbitralTribunal,themomentanArbitralTribunalhasbeenconstituted.”18

Thus,toavoidasituationwhereapartyisleftwithoutaninterimreliefinrespectofproceedingsforinterimmeasurespendingbeforeacourtwhichhavenotbeentransferredtothetribunalafteritsconstitution,thecourtmaycontinuewiththesameandgrantappropriatereliefs,wherenecessary.

Asmentionedabove,anothersignificantaspectisthatofthetimelinesintroducedvidethe2015Amendment.Section9(2)oftheArbitrationActprovidesthat:

“Where,beforethecommencementofthearbitralproceedings,aCourtpassesanorderforanyinterimmeasureofprotectionunderSub-section(1),thearbitralproceedingsshallbecommencedwithinaperiodofninetydaysfromthedateofsuchorderorwithinsuchfurthertimeastheCourtmaydetermine.”

15See,MAshrafv.KasimVK2018SCCOnlineKer4913.

16ArcellorMittal,at[91].

17Welspun,at[7].

18BenaraBearings&PistonsLtd.v.MahleEngineComponentsIndiaPvt.Ltd.,2017SCCOnLineDel7226at[24,25].

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InterimReliefsinArbitralProceedings—PowerplaybetweenCourtsandTribunals

InterimMeasuresinArbitration

Theinsertionofsuchatime-boundmechanismaimsatregulatingoftheroleofthecourtsingrantinginterimmeasuresoncethearbitraltribunalhasbeenconstitutedasitwasdeemedsuitabletoempowerthetribunaltohearallinterimapplications,uponitsconstitution.Afterall,oncetheTribunalisseizedofthematteritismostappropriatefortheTribunaltohearallinterimapplications.19

B.InterimReliefsinCaseofForeign-seatedArbitrations

Pursuanttoanawardbeingpassed,applicationsunderSection9oftheArbitrationActmaybefiledforseekinginterimmeasuresagainstdissipationoralienationofassetsinIndia,eveniftheplaceorseatof

arbitrationisoutsideIndia,20andifitisdemonstratedthatthereisnoefficaciousremedyavailablebeforethearbitraltribunal.21Insuchcases,thecourthavingjurisdictionoverthesubject-matterofthearbitralaward(assetsofthepartyagainstwhichsuchmeasuresarebeingsought)maybeconsideredastheappropriatecourt.22Subsequently,thisprinciplewassaidtoapplyatthepre-awardstageaswell.23

C.ReliefsGenerallySoughtfromCourts

Areadingofvariousdecisionssuggeststhatpartiesgenerallyapproachcourtsforsecuringtheamountindisputeandpreventingthealienationordissipationofproperty,eveninforeign-seatedarbitrations.24Itcanbeexercisedforthepreservationofthesubject-matterofthedisputeandcannotbeextendedtodirectingspecificperformanceofthecontractitself.25

19LawCommissionofIndia,AmendmentstotheArbitrationandConciliationAct1996(ReportNo.246,August2014)44:

http://lawcommissionofindia.nic.in/reports/report246.pdf,

accessed19December2017.

20ArbitrationAct,s2(2)proviso.

21AshwaniMindaandOrs.vU-shinLtd.andOrs.,2020SCCOnLineDel721.

22TrammoDMCCv.NagarjunaFertilizersandChemicalsLtd.(2018)1AIRBomR1;“…‘Court’asdefinedin‘Explanation’toSection47whichwouldbetheCourthavingjurisdictiontoentertaintheSection9petition…”

23ShanghaiElectr