What is Section 9 of Arbitration and Conciliation Act

Section 9. Interim measures, etc., by Court

[(1)] A party may, before or during arbitral proceedings or at any time after the making of the arbitral award but before it is enforced in accordance with section 36, apply to a Court:

(i) for the appointment of a guardian for a minor or a 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 Court to be just and convenient,

and the Court shall have the same power for making orders as it has for the purpose of, and in relation to, any proceedings before it.

[(2) Where, before the commencement of the arbitral proceedings, a Court passes an order for any interim measure of protection under sub-section (1), the arbitral proceedings shall be commenced within a period of ninety days from the date of such order or within such further time as the Court may determine.

(3) Once the arbitral tribunal has been constituted, the Court shall not entertain an application under sub-section (1), unless the Court finds that circumstances exist which may not render the remedy provided under section 17 efficacious.]

What is the difference between Section 9 and 17 of the Arbitration Act?

Scheme of Section 9 and Section 17

Supreme Court of India has observed that Section 9(1) of the Act enables a party to an arbitration to apply to a Court for interim measures for protection before/during the arbitral proceedings or any time after the making and publishing of the award but before the enforcement of the final arbitral award under Section 36 of the Act.

This is qualified by Section 9(3), which has two limbs:

• the Court cannot entertain an application after the constitution of the Arbitral Tribunal
• unless the Court finds that circumstances exist which may render the remedy under Section 17 inefficacious.

To discourage the filing of applications for interim measures in Courts, the Arbitral Tribunal has been clothed with the same powers as the Court to grant interim measures under Section 17 under Section 9(1).

An order of the Arbitral Tribunal is deemed to be an order of the Court for all purposes and is enforceable as an order of the Court. Therefore, there is no reason for the Court to continue to take up applications for interim relief once the Arbitral Tribunal is constituted and is in seisin of the dispute between the parties, unless there is some impediment in approaching the Arbitral Tribunal or the interim relief sought cannot expeditiously be obtained from the Arbitral Tribunal. This is the backdrop for the prescriptions contained in Section 9(3).

Meaning of the term ‘entertain’ in Section 9(3)

The Supreme Court observed that the word ‘entertain’ means to “consider by application of mind to the issues raised.” A Court entertains a case when it takes a matter up for consideration. Once an application is entertained in the sense it is taken up for consideration, and the Court has applied its mind to the matter, it can certainly proceed to adjudicate the application. The process of consideration could continue till the pronouncement of judgment. However, that would make no difference – the question is whether the process of consideration has commenced, and/or whether the Court has applied its mind to some extent before the constitution of the Arbitral Tribunal. If so, the application can be said to have been entertained before constitution of the Arbitral Tribunal.

A combined reading of Section 9 with Section 17 of the Act suggests that  once an Arbitral Tribunal is constituted, the Court would not entertain and/or in other words take up for consideration and apply its mind to an application for interim measure, unless the remedy under Section 17 is inefficacious, even though the application may have been filed before the constitution of the Arbitral Tribunal. However, the bar of Section 9(3) would not operate once an application has been entertained, as in the instant case, where hearing was concluded and judgment had been reserved. It could never have been the legislative intent behind Section 9(3) to turn back the clock and require a matter already reserved for orders to be considered in entirety by the Arbitral Tribunal under Section 17.

Even if an application under Section 9 has been entertained prior to the constitution of the Arbitral Tribunal, the Court has the discretion to direct the parties to approach the Arbitral Tribunal, if necessary by passing a limited order to interim protection. The Court may pass such an order particularly when there has been a long gap between hearings and the application, for all practical purposes, deserves to be heard afresh, or if the hearing has just commenced and is likely to consume a lot of time.