section 9 of arbitration and conciliation act 1996 pdf

Section 9 Of Arbitration And Conciliation Act 1996 Pdf

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The Arbitration and Conciliation Act, Disclaimer: Updating and uploading of all Central Acts available on this web page is the proprietary of the Legislative Department in the Ministry of Law and Justice.

The main objective of the Arbitration Act is to make provision for an arbitral procedure which is fair, efficient and capable of meeting the needs of the specific arbitration and to minimize the supervisory role of the courts in the arbitral process and to permit an arbitral tribunal to use mediation, conciliation or other procedures during the arbitral proceedings in settlement of the disputes. In furtherance of the aforesaid objective, the Arbitration Act underwent two major amendments in the year and , respectively, in order to bring forth pertinent changes in the arbitration landscape of the country with the sole motive of making India an arbitration friendly nation. This compilation seeks to identify the significant developments in arbitration law by the courts of India after the advent of the COVID pandemic i. Section 2 1 f. Which would be the relevant court to entertain a Section 9 application, arising out of a foreign seated arbitration proceeding, where both the parties to the dispute are Indian entities?

Sundaram Finance Ltd. v. Nepc India Ltd. .

Know more. Harish Salve, Senior Advocate K. Swami, Advocate, with him for the Appellant;. Chaudhary, R. Karanjawala and Ms M. Karanjawala, Advocates, with him for the Respondent. Nor is Section 9 or Section 17 similar to Section 41 b. The relevant facts which are necessary for the consideration of the point in issue are that the respondent had entered into a hire-purchase agreement with the appellant herein in respect of supply of two wind turbine generators along with all accessories.

The terms of the agreement contemplated payments being made in instalments by the respondent. The first instalment was payable on and the last was due by In all, the payment was to be made by 36 instalments. According to the appellant, the respondent paid the first fifteen instalments and thereafter committed default and payment was not made in spite of several demands being made by the appellant.

The hire-purchase agreement contained an arbitration clause which reads as follows:. The award given by such an arbitrator shall be final and binding on all the parties to this agreement.

It is a term of this agreement that in the event of such an arbitrator to whom the matter has been originally referred doing or being unable to act for any reason, the Managing Director of the owner, at the time of such death of the arbitrator or his inability to act as arbitrator, shall appoint another person to sit as arbitrator. Such a person shall be entitled to proceed with the reference from the stage at which it was left by his predecessor. This application was taken up for hearing on and the trial court passed an interim order appointing a Commissioner to take possession of the turbines with the help of the police.

The aforesaid order of the trial court was challenged with the respondent filing a petition under Article of the Constitution before the High Court at Madras. One of the main contentions urged on behalf of the respondent was that as no arbitration proceedings were pending and even the arbitrator had not been appointed, an application under Section 9 of the Act for getting interim relief alone was not maintainable.

On merits, it was contended that the ex parte order which was passed by the trial court was uncalled for. While supporting the order of the trial court, the appellant herein had submitted before the High Court that interim orders could be passed even before the commencement of the arbitral proceedings. By its judgment dated , the High Court allowed the respondent's petition. In its judgment, after referring to the provisions of Section 41 of the Arbitration Act, and the relevant provisions of the Act, the High Court observed as follows:.

Therefore, there is no virtual difference between Section 41 read with Schedule 2 and the present Section 9 of the Arbitration Act. Moreover, if an interpretation such as the one contended by the learned counsel for the appellant is to be given to Section 9, the very object of the Act would be defeated. Any party who has an agreement for arbitration with another can rush to the civil court and straightaway get an order under Section 9 and thereafter keep quiet without referring the matter to arbitration.

That will have a very serious consequence on the provisions of the Act. It could not have been the intention of the legislature in enacting the present Arbitration Act. Further, the very fact that Section 9 comes after Section 8 which deals with the reference of disputes to arbitration, the only interpretation that could be given to Section 9 is that it could be availed of when an arbitration proceeding is pending before the Arbitral Tribunal or is at the reference stage before the court or after the arbitral award has been made.

While coming to the conclusion that the application under Section 9 of the Act before the trial court was misconceived, as no effort had at the time of filing of such an application been made by the appellant to have an arbitrator appointed, the High Court chose not to consider the merits of the trial court's order as in its opinion, the trial court had no jurisdiction to entertain such an application.

Hence these appeals by special leave. Under the provisions of the Arbitration Act, , the powers of the Court to pass interim orders were derived from Section 41 b read with the 2nd Schedule to the Arbitration Act, State of Rajasthan 1 SCC , wherein at p. Even if this be the position under the Act, we still have to examine whether there has been any change in the law with the promulgation of the Arbitration and Conciliation Act, Prior to the promulgation of the Act, the law on arbitration in India was substantially contained in three enactments, namely, the Arbitration Act, , the Arbitration Protocol and Convention Act, and the Foreign Awards Recognition and Enforcement Act, In the Statement of Objects and Reasons appended to the Bill, it was stated that the Act which contained the general law of arbitration had become outdated.

The General Assembly had recommended that all countries give due consideration to the said Model Law which, along with the Rules, was stated to have harmonised concepts on arbitration and conciliation of different legal systems of the world and thus contained provisions which were designed for universal application.

The abovesaid Statement of Objects and Reasons in para 3 states that:. Though the said UNCITRAL Model Law and Rules are intended to deal with international commercial arbitration and conciliation, they could, with appropriate modifications, serve as a model for legislation on domestic arbitration and conciliation. The present Bill seeks to consolidate and amend the law relating to domestic arbitration, international commercial arbitration, enforcement of foreign arbitral awards and to define the law relating to conciliation, taking into account the said UNCITRAL Model Law and Rules.

The Act is very different from the Arbitration Act, The provisions of this Act have, therefore, to be interpreted and construed independently and in fact reference to the Act may actually lead to misconstruction.

In other words, the provisions of the act have to be interpreted being uninfluenced by the principles underlying the Act. Some of the provisions of the act which are relevant in the present case are Sections 2 d , 9, 17 and Section Section 2 d defines an Arbitral Tribunal to mean a sole arbitrator or a panel of arbitrators.

Section 9 of the Act , which gives power to the court to pass interim orders and with the interpretation of which we are concerned in the present case, reads thus:. Interim measures etc. Commencement of arbitral proceedings. The Arbitral Tribunal has also been given jurisdiction to pass interim orders by Section 17 of the said Act which reads as follows:.

Interim measures ordered by Arbitral Tribunal. The reading of Section 21 clearly shows that the arbitral proceedings commence on the date on which a request for a dispute to be referred to arbitration is received by the respondent.

We may here observe that though Section 17 gives the Arbitral Tribunal the power to pass orders, the same cannot be enforced as orders of a court. It is for this reason that Section 9 admittedly gives the court power to pass interim orders during the arbitration proceedings.

The position under the Arbitration Act, was that a party could commence proceedings in court by moving an application under Section 20 for appointment of an arbitrator and simultaneously it could move an application for interim relief under the Second Schedule read with Section 41 b of the Act. The Act does not contain a provision similar to Section 20 of the Act. Section 8 of the new Act is not in pari materia with section 20 of the act.

It is only if in an action which is pending before the court that a party applies that the matter is the subject of an arbitration agreement does the court get jurisdiction to refer the parties to arbitration.

The said provision does not contemplate, unlike Section 20 of the Act, a party applying to a court for appointing an arbitrator when no matter is pending before the court.

The High Court was, therefore, wrong in referring to these provisions of the Act while interpreting Section 9 of the new Act. Under the Act, the court can pass interim orders under Section 9. Arbitral proceedings, as we have seen, commence only when the request to refer the dispute is received by the respondent as per Section 21 of the Act. This clearly contemplates two stages when the court can pass interim orders, i.

There is no reason as to why Section 9 of the Act should not be literally construed. The only interpretation that can be given is that the court can pass interim orders before the commencement of arbitral proceedings. This is clearly not permissible.

Not only does the language warrants such an interpretation but it was necessary to have such a provision in the interest of justice. But for such a provision, no party would have a right to apply for interim measure before notice under Section 21 is received by the respondent.

It is not unknown when it becomes difficult to serve the respondents. It was, therefore, necessary that provision was made in the Act which could enable a party to get interim relief urgently in order to protect its interest.

Reading the section as a whole it appears to us that the court has jurisdiction to entertain an application under Section 9 either before arbitral proceedings or during arbitral proceedings or after the making of the arbitral award but before it is enforced in accordance with Section 36 of the Act. This article recognises, just like Section 9 of the Act , a request being made before a court for an interim measure of protection before arbitral proceedings.

It is possible that in some countries, if a party went to the court seeking interim measure of protection, that might be construed under the local law as meaning that the said party had waived its right to take recourse to arbitration. To put it differently, the arbitration proceedings can commence and continue notwithstanding a party to the arbitration agreement having approached the court for an order for interim protection.

It is clear, therefore, that a party to an arbitration agreement can approach the court for interim relief not only during the arbitral proceedings but even before the arbitral proceedings. It will also be useful to refer to a somewhat similar provision in the Arbitration Act, of England. Section 44 of this Act gives the court powers which are exercisable in support of the arbitral proceedings.

A proposed party to the arbitral proceedings would, therefore, be one who is party to an arbitration agreement and where disputes have arisen but the arbitral proceedings have not commenced. While referring to Section 44 of the English Act, in dealing with the question of grant of interim injunctions in support of arbitral proceedings Russell on Arbitration 21st Edn. The power to grant an interim injunction under Section 44 of the Act extends to the granting of a Mareva injunction in appropriate cases.

It may also include granting an interim mandatory injunction, although the court will be slow to grant an injunction which provides a remedy of essentially the same kind as is ultimately being sought from the Arbitral Tribunal. In our opinion, this view correctly represents the position in law, namely, that even before the commencement of arbitral proceedings, the court can grant interim relief.

The said provision contains the same principle which underlies Section 9 of the Act. Our attention was also drawn to the case of Channel Tunnel Group Ltd. Balfour Beatty Construction Ltd. The court of appeal referred to Section 12 6 of the Arbitration Act, which provided as follows:. We are in respectful agreement with the aforesaid observations which are in conformity with the view which we have taken in construing Section 9 of the Act. It was submitted by Mr Subramanium that even if the court can exercise jurisdiction under Section 9 before the arbitral proceedings have commenced, the party seeking to invoke Section 9 must express a manifest intention to arbitrate.

The learned counsel submitted that this intention can take the following forms:. It was contended that mere filing of an application under Section 9 was not sufficient to establish manifest intention to this extent.

When a party applies under Section 9 of the Act , it is implicit that it accepts that there is a final and binding arbitration agreement in existence. It is also implicit that a dispute must have arisen which is referable to the Arbitral Tribunal.

Section 9 further contemplates arbitration proceedings taking place between the parties. Mr Subramanium is, therefore, right in submitting that when an application under Section 9 is filed before the commencement of the arbitral proceedings, there has to be manifest intention on the part of the applicant to take recourse to the arbitral proceedings if, at the time when the application under Section 9 is filed, the proceedings have not commenced under Section 21 of the Act.

The issuance of a notice may, in a given case, be sufficient to establish the manifest intention to have the dispute referred to an Arbitral Tribunal. But a situation may so demand that a party may choose to apply under Section 9 for an interim measure even before issuing a notice contemplated by Section 21 of the said Act.

If an application is so made, the court will first have to be satisfied that there exists a valid arbitration agreement and the applicant intends to take the dispute to arbitration. Once it is so satisfied, the court will have the jurisdiction to pass orders under Section 9 giving such interim protection as the facts and circumstances warrant. While passing such an order and in order to ensure that effective steps are taken to commence the arbitral proceedings, the court while exercising jurisdiction under Section 9 can pass a conditional order to put the applicant to such terms as it may deem fit with a view to see that effective steps are taken by the applicant for commencing the arbitral proceedings.

What is apparent, however, is that the court is not debarred from dealing with an application under Section 9 merely because no notice has been issued under Section 21 of the Act.

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Know more. Harish Salve, Senior Advocate K. Swami, Advocate, with him for the Appellant;. Chaudhary, R. Karanjawala and Ms M. Karanjawala, Advocates, with him for the Respondent. Nor is Section 9 or Section 17 similar to Section 41 b.

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One of the most sought after remedies under the Arbitration and Conciliation Act, [1] the Act is the grant of interim relief under Section 9 of the Act which allows the parties to apply to the court for interim relief before or during the arbitral proceedings, or after an award is passed but before it is enforced. The Act accordingly allows the parties, before executing the award, to apply to the court for securing the proceeds of the arbitral award to protect the decretal amount, so that the award debtor cannot evade the obligations under the award and make the realisation of the award illusory. The importance of a post award Section The grant of interim reliefs under Section 9 of the Act, especially in a scenario where the award has been delivered, assumes significance primarily because the Act provides for a statutory period of three months for the award debtor to file a challenge to the award.

Arbitration and Conciliation is a mode of alternative dispute resolution method. It is very effective and popular method that helps in easy delivery of justice. The person who resolves the dispute between the parties is known as an arbitrator or conciliator whatever the case may be. This article is an analysis of all the amendments made by the Government of India in the Arbitration and Conciliation Act, till now, and how the Arbitration and Conciliation Act, have evolved since the British era. The origin of arbitration may be traced back to the old age system of village panchayats prevalent in ancient India.

U-shin Limited and Ors. In arriving at its decision, the Division Bench held that even when an application for interim relief before Indian courts under Section 9 of the Act in a foreign-seated arbitration is maintainable, such application would not lie after the constitution of the arbitral tribunal, unless it can be proven that there is no efficacious remedy before the tribunal. On the facts of the case before it, the Division Bench held that there is nothing to show that remedy before the arbitral tribunal is inefficacious and that the arbitral tribunal had been constituted.

Interim Relief in Foreign-Seated Arbitrations – Efficacious Remedy and Implied Exclusion

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