The court clarified that once an application for interim relief under Section 9 of the Arbitration Act is entertained, it can proceed despite the constitution of an Arbitral Tribunal, unless the remedy under Section 17 is deemed ineffectual.

JUDGMENT (Oral)

(Video-Conferencing)

1. Ad interim orders already stand passed in favour of the petitioner.

2. Subsequently, applications have been filed in these petitions before this Court, inter alia, for modification of the ad interim order in OMP (I) (COMM) 130/2021.

3. An arbitrator already stands appointed in both these matters and the next date of hearing before the learned Arbitrator is stated to be 30th September, 2021.

4. In these circumstances, Section 9 (3) of the Arbitration and Conciliation Act, 1996 ("1996 Act", in short) would ordinarily proscribe this Court from continuing with these proceedings, which ought to be relegated for decision by the learned Arbitrator as proceedings under Section 17 of the 1996 Act. The only exception is if "circumstances exist, which may not render the remedy provided under Section 17 efficacious".

5. The law in this regard stands authoritatively expounded in the recent decision of the Supreme Court in Arcelor Mittal Nippon Steel India v Essar Bulk Terminal, 2021 SCC OnLine SC 718. That was a case in which, after judgement was reserved on the applications of the petitioner under Section 9 by the District Court, the Arbitral Tribunal came to be constituted, and, in view thereof, petitioner had moved an application before the District Court for referral of both applications under Section 9 . On dismissal of the said applications, the High Court, on being approached under Article 227 of the Constitution of India, expressed the view that the Commercial Court had the power to consider whether the remedy under Section 17 of the Arbitration Act was inefficacious and pass necessary orders under Section 9 . The said order was challenged before the Supreme Court. The following passages from the report (of the Supreme Court) illumine the legal position:

"68. With the law as it stands today, the Arbitral Tribunal has the same power to grant interim relief as the Court and the remedy under Section 17 is as efficacious as the remedy under Section 9 (1). There is, therefore, no reason why the Court should 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.

****

83. Even after enforcement of the 2015 Amendment Act, an application for interim relief may be filed in Court under Section 9 of the 1996 Act, before the commencement of arbitration proceedings, during arbitration proceedings or at any time after an award is made, but before such award is enforced in accordance with Section 36 of the 1996 Act. The Court has to examine whether the remedy available to the Applicant under Section 17 is efficacious. In Energo Engineering Projects Ltd. v. TRF Limited, 2016 SCC OnLine Del 6560, the remedy of interim relief under Section 17 was found to be inefficacious in view of an interim order passed by this Court in a Special Leave Petition.

84. In Benara Bearings & Pistons Ltd. v Mahle Engine Components India Pvt Ltd., 2017 SCC OnLine Del 7226 cited by Mr. Sibal a Division Bench of the Delhi High Court, speaking through Badar Durrez Ahmed J. Held:

"24......We are of the view that Section 9 (3) does not operate as an ouster clause insofar as the courts' powers are concerned. It is a well-known principle that whenever the Legislature intents an ouster, it makes it clear. We may also note that if the argument of the appellant were to be accepted that the moment an Arbitral Tribunal is constituted, the Court which is seized of