IMPORTANT POINT
Arbitration – Interim relief – Grant of – Language of section 9(3) of Arbitration and Conciliation Act, 1996 is mandatory in use of words “......shall not entertain an application....” and would have been sufficient in itself to stop Court from entertaining application for interim measures under section 9(1) subject to qualification of efficacy of section 17 application before arbitral tribunal.

JUDGMENT

Moushumi Bhattacharya, J.—The petitioner has filed the present application for interim relief under section 9 of The Arbitration and Conciliation Act, 1996. The only question which arises is whether the Court should continue to entertain the application after constitution of the Arbitral Tribunal.

2. The application was filed on 10th February, 2023 and the Arbitral Tribunal was constituted by an order of a learned Single Judge of this Court on 17th May, 2023. The particulars of the orders passed in between are as follows.

3. After filing of the application on 10th February, 2023, a Co-ordinate Bench passed an order on 15th March, 2023 directing the respondents to show-cause as to why the respondents should not be directed to deposit a sum of Rs.5,95,40,498.60/- before the Registrar, Original Side of this Court for securing the claim of the petitioner. The respondents were represented on the returnable date i.e. on 30th March, 2023 when the matter was adjourned on the request of counsel appearing for the respondents. Affidavits were exchanged between the parties and recorded in the orders passed by the Court on 10th April, 2023, 1st May, 2023 and 14th June, 2023. The respondents took an adjournment on 13th June, 2023. Learned counsel appearing for the parties were thereafter heard on the question of whether the section 9 application should continue as recorded in the order dated 22nd June, 2023.

4. Counsel appearing for the petitioner wants this Court to continue to hear the petition for interim relief while counsel appearing for the respondents relies on section 9(3) of the Act to put emphasis on the bar on the Court from entertaining an application under section 9(1) of the Act subject to the efficacy of the remedy under section 17 before the arbitral tribunal.

5. Section 9(1) permits a party before or during arbitral proceedings or at any time after making of the arbitral award but before enforcement of the award to apply to a Court for interim measures. The width of the Court’s powers to grant interim relief to a party under section 9(1) and the right of a party to seek for such relief is almost boundless but is reined-in by section 9(3) - which is reproduced below.

“9(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.”

6. The constitution of the arbitral tribunal hence becomes a fetter on the Court from passing interim orders under section 9(1) or even entertaining an application under section 9(1) subject to the Court being of the view that circumstances are not conducive for the party seeking such interim relief before the arbitral tribunal under section 17 of the Act. Section 17 provides for interim measures by the arbitral tribunal and grants equal leeway to an arbitral tribunal to pass orders for interim relief.

7. The language of section 9(3) is mandatory in the use of the words “......shall not entertain an application....” and would have been sufficient in itself to stop the Court from entertaining an application for interim measures under section 9(1) subject to the qualification of the efficacy of section 17 application before the arbitral tribunal. The decision of the Supreme Court in Arcelor Mittal Nippon Steel India Limited vs. Essar Bulk Terminal Limited; (2022) 1 SCC 712 has however softens the stiffness of section 9(3) with a purposive construction. The Supreme Court considered the expression “entertain” and held that if the Court had already applied its mind to the issues raised, then the Court can proceed to adjudicate the application under section 9(1) notwithstanding the bar of section 9(3).

8. In light of the dictum in Arcelor Mittal, the Court has to determine whether the present application can continue to be entertained despite the arbitral tribunal being constituted on 17th May, 2023. This would depen