Orbit In-Te-Rio's Interim Relief Closure for Fee Non-Payment Not Appealable: Delhi HC

The Delhi High Court, in a significant ruling under the Arbitration and Conciliation Act, 1996, held that an arbitral tribunal’s order closing a party’s interim relief applications and counterclaim for non-payment of arbitral fees is a procedural direction and does not constitute an appealable order under Section 37(2)(b) of the Act.

Justice Om Prakash Shukla dismissed as non-maintainable the appeal filed by Orbit In-Te-Rio against American Epay Services Pvt. Ltd., while granting the appellant liberty to seek recall of the closure order before the arbitral tribunal.

Dispute Over Fit-Out Works Leads to Arbitration

The dispute arose out of a Fit-Out Agreement dated 28 November 2023, under which Orbit was to supply and install fit-outs, fixtures and related works at American Epay’s commercial premises, retaining ownership while receiving monthly lease charges. American Epay terminated the agreement on 15 February 2024, alleging deficiencies and seeking approximately ₹15 crore in reimbursement and damages. Orbit disputed the allegations, contending that substantial work had been completed and its fit-outs remained in use without payment.

After pre-arbitration interim proceedings under Section 9, a sole arbitrator was appointed on 2 September 2024. Orbit then filed two Section 17 applications seeking disclosure and protection of assets and deposit of rent arrears, along with a counterclaim of approximately ₹16.78 crore. American Epay had raised claims of approximately ₹11.71 crore.

Fee Default Leads to Closure of Affirmative Pleas

On 25 September 2025, the sole arbitrator directed Orbit to deposit its entire share of the arbitral fee before its Section 17 applications and counterclaim would be heard. Orbit deposited ₹14 lakh out of the assessed amount of approximately ₹39.03 lakh but failed to pay the balance.

Consequently, on 27 March 2026, the tribunal closed Orbit’s right to pursue the Section 17 applications and counterclaim, stating: “In view of the admitted non-payment/deposit of the requisite arbitral fee despite sufficient opportunity, the right of the Respondent to pursue the said applications and the Counter Claim stands closed.”

Orbit challenged this closure under Section 37(2)(b), arguing that the order effectively refused interim measures and that the arbitrator lacked power to close pending Section 17 applications for non-payment of fees, relying on Sections 38 and 39 of the Act and the DIAC Rules.

Procedural Order Without Substantive Adjudication

The High Court found that the impugned order did not adjudicate the merits of the Section 17 applications. The court observed: “The learned Sole Arbitrator neither granted nor rejected the interim measures. It merely closed Appellant’s right to pursue the applications and counterclaim because of non-compliance with the direction to deposit arbitral fees.”

Drawing on the principle established in H.S. Nag and Ors. v. Asian Hotel (North) , the court noted that an order remains procedural unless it finally determines a substantive component of the reference. Since the tribunal never examined the trinity test for interim relief, the closure order could not be characterised as one “granting or refusing to grant an interim measure” under Section 17.

The court also relied on the Supreme Court’s decision in Harshbir Singh Pannu & Anr. v. Jaswinder Singh , where non-payment of fees led to termination of claims and the apex court held that the appropriate first remedy is to seek recall before the tribunal. The High Court stated: “The proper course, therefore, was to first seek recall or restoration before the Tribunal, rather than invoking this Court’s jurisdiction under Section 37 by erroneously treating a procedural closure as a substantive refusal.”

No Appealable Order Under Section 37(2)(b)

The court clarified that Section 37(2) does not confer a general appellate remedy against every order passed during arbitration. It permits appeals only from an order accepting a plea under Section 16(2)/(3) or an order granting or refusing interim measures under Section 17. The impugned closure, being a consequence of non-compliance with a fee-deposit direction, fell outside this ambit.

The court also addressed the appellant’s reliance on Sections 38 and 39 and the DIAC Rules, holding that those arguments could be raised before the tribunal in a recall application but did not transform the procedural order into an appealable refusal.

Decision and Liberty to Seek Recall

The appeal was dismissed as not maintainable. The court clarified that the closure of Orbit’s counterclaim and Section 17 applications did not prevent it from otherwise participating in the arbitration. It granted liberty to Orbit to file an appropriate application seeking recall of the impugned order before the arbitral tribunal.

The judgment reinforces the principle that procedural defaults in arbitration must first be remedied through the arbitral process, and that judicial intervention under Section 37 is reserved for orders that substantively determine interim relief under Section 17.