Section 9 of the Arbitration and Conciliation Act, 1996 confers on the competent court to grant interim relief to a party before or during arbitral proceedings or at any time after the making of the arbitral award but before it is enforced. The powers conferred on the court under Section 9 are of the widest amplitude for preservation of the subject matter of the arbitration, securing the amount in dispute and such other alike interim measures of protection as may appear to the court to be just and convenient.
The Hon’ble Supreme Court of India has in a catena of decisions laid down the law not only on the width of the powers conferred on the court akin to order 39 of the Code of Civil Procedure but also the purpose and the rationale behind the wide powers conferred on the court. The scope of Section 9 not only limits itself to preservation but even where a positive relief is thought to be just and proper to be granted to a party the same ought to be granted. The judgement of the Hon’ble Apex Court in the case of Adhunik Steels Ltd. vs. Orissa Mangnese and Minerals Pvt. Ltd. (2007) is one good example of grant of positive relief in favour of a party. This case also establishes the width and purpose of the powers conferred on the court where the court is satisfied of the fulfilment of ingredients i.e. existence of a prima facie case; balance of convenience and irreparable injury; the same yardsticks which are tested while considering an application under order 13 of the CPC. In the case of Arcelor Mittal Nippon Steel India Ltd. vs. Essar Bulk Terminal Ltd. (2022) the Hon’ble Apex Court was primarily concerned with the powers also vested with the court even after the constitution of an Arbitral Tribunal, yet however this judgement also throws significant light on the purpose and importance of relief to be granted by the court under Section 9 to the applicant keeping in mind that the arbitral proceedings are not rendered otiose. The Apex Court clearly holds that “the object is to ensure protection of the property being the subject matter of arbitration and / or otherwise ensure that the arbitration proceedings do not become infructuous and the arbitral award does not become an award on paper, of no real value”. Further, in the case of Essar House Pvt. Ltd. vs Arcelor Mittal Nippon Steel India Ltd. (2022) the Hon’ble Apex Court while discussing the width and broad interpretation to be given to the mandate of Section 9 holds “proof of actual attempts to deal with, remove or dispose of the property with a view to defeat or delay the realization of an impending arbitral award is not imperative for grant of relief under Section 9 of the Arbitration Act. A strong possibility of diminution of assets would suffice. To access the balance of convenience, court is required to examine and weigh the consequences of refusal of interim relief to the applicant for interim relief in case of success in the proceedings, against the consequence of grant of the interim relief to the opponent in case the proceedings should ultimately fail.”
It goes without saying that commercial courts are special courts constituted by the legislature to restore commercial confidence and therefore economic growth depends upon certainty, predictability and enforceability in commercial contract. Hence inspiring of confidence that contractual rights will receive timely and effective protection is a very important aspect to be kept in mind by a commercial court exercising powers under Section 9. Timely intervention is most needed in as much as often judicial hesitation may result in irreversible commercial damage and may become meaningless. The natural corollary is that how a power is exercised by a court under Section 9 of the act makes a direct impact on arbitration effectiveness and business continuity. I would also like to add that efficient commercial adjudication is a crucial component for ease of doing business. It is no doubt true that restraint is necessary but quite often excessive reluctance is seen in the manner in which commercial courts show hesitation when dealing with Section 9 applications which obviously must never defeat the very purpose of statutory protection and the mandate of Section 9 of the Arbitration and Conciliation Act, 1996.