Interim measures in arbitration proceedings

Introduction

Interim measures are temporary legal protections granted by a court or arbitral tribunal during arbitration to preserve the rights and interests of parties until the final arbitral award is delivered. These measures prevent situations in which one party may transfer assets, destroy evidence, discontinue essential services or take other actions that could make the final award ineffective.

In India, interim measures are primarily governed by Section 9 and Section 17 of the Arbitration and Conciliation Act, 1996. These provisions balance the need for urgent protection with the principle that arbitration should remain an efficient and independent dispute-resolution mechanism.

Legal framework under the Arbitration and Conciliation Act, 1996

1. Section 9: Interim measures by courts

Section 9 empowers courts to grant interim protection before, during or after arbitral proceedings but before enforcement of the arbitral award under Section 36.

A party may apply for interim relief in circumstances requiring immediate judicial protection. The court may order:

Appointment of a guardian for a minor or person of unsound mind for arbitral proceedings.

Preservation, interim custody or sale of goods involved in the arbitration.

Securing the amount in dispute.

Inspection, preservation or detention of property or things connected with the dispute.

Interim injunctions or appointment of receivers.

Any other interim measure of protection considered just and convenient.

Under Section 9(2), where a court grants an interim measure before commencement of arbitration, arbitral proceedings must ordinarily commence within 90 days or within such further time as the court determines.

Section 9(3) provides that once the arbitral tribunal has been constituted, courts should not entertain an application unless circumstances exist that may render the remedy under Section 17 ineffective.

2. Section 17: Interim measures by arbitral tribunals

Section 17 authorises an arbitral tribunal to grant interim measures during arbitration. These measures may include protection of goods, securing disputed amounts, preservation of property and temporary injunctions.

Following the 2015 amendment, orders passed by an arbitral tribunal under Section 17 are enforceable in the same manner as orders of a court under the Code of Civil Procedure, 1908.

This amendment strengthened the authority of arbitral tribunals and reduced unnecessary dependence on courts.

Principles governing interim relief

Interim measures are discretionary and must satisfy established judicial principles. Courts generally examine:

Prima facie case: Whether the applicant demonstrates a genuine legal claim requiring protection.

Balance of convenience: Whether refusing relief would cause greater hardship than granting it.

Irreparable injury: Whether the applicant may suffer harm that cannot adequately be compensated through monetary damages.

Urgency: Whether immediate protection is necessary to prevent the dispute from becoming ineffective.

Good faith: Whether the applicant has approached the court or tribunal fairly and disclosed relevant facts.

Interim relief should not ordinarily decide the entire dispute before the final award.

Important judicial decisions

1. Sundaram Finance Ltd. v. NEPC India Ltd. (1999)

The Supreme Court held that a party may seek interim relief under Section 9 even before arbitral proceedings formally commence, provided there is a clear intention to initiate arbitration. The judgment established the importance of Section 9 in protecting parties before the tribunal becomes operational.

2. Firm Ashok Traders v. Gurumukh Das Saluja (2004)

The Supreme Court explained that Section 9 provides an interim remedy in support of arbitration and is not an independent cause of action. The applicant must have an existing arbitration agreement and must seek protection connected with the contemplated or ongoing arbitral proceedings.

3. Adhunik Steels Ltd. v. Orissa Manganese and Minerals (P) Ltd. (2007)

The Supreme Court held that courts exercising jurisdiction under Section 9 must apply established principles governing injunctions under the Specific Relief Act and general equitable principles. Interim relief cannot be granted merely because a party has requested it.

4. Arcelor Mittal Nippon Steel India Ltd. v. Essar Bulk Terminal Ltd. (2021)

The Supreme Court clarified the relationship between Sections 9 and 17. It explained that once an arbitral tribunal is constituted, courts should ordinarily refrain from entertaining interim applications unless the remedy under Section 17 would be inefficacious. The decision supports the principle of minimising judicial intervention in arbitration.

5. Amazon.com NV Investment Holdings LLC v. Future Retail Ltd. (2021)

The Supreme Court recognised the enforceability of emergency arbitrator awards under the Indian arbitration framework in the context of an India-seated arbitration. The judgment strengthened the practical importance of urgent interim protection through arbitral institutions and emergency arbitrators.

Types of interim measures

Interim measures may take different forms depending on the nature of the dispute:

Asset protection: Preventing the transfer or disposal of assets to protect a possible monetary award.

Injunctions: Restricting a party from taking specified actions.

Preservation of evidence: Preventing destruction or alteration of documents, electronic records or physical evidence.

Security for claims: Directing a party to secure the disputed amount in appropriate circumstances.

Property protection: Preserving goods, machinery or other disputed property.

Appointment of receivers: Placing property under independent supervision where necessary.

Limitations and challenges

Interim measures must be proportionate and connected with the arbitration. Courts and tribunals should avoid granting relief that effectively provides the final remedy before the dispute is decided.

Unnecessary applications may increase costs and delay proceedings. There may also be jurisdictional disputes concerning the appropriate court, the seat of arbitration and the authority of emergency arbitrators.

Conclusion

Interim measures are essential for protecting parties during arbitration and ensuring that the final award remains effective. Sections 9 and 17 of the Arbitration and Conciliation Act, 1996 establish complementary powers for courts and arbitral tribunals. Judicial decisions such as Sundaram Finance, Adhunik Steels and Amazon v. Future Retail have strengthened the Indian framework. Their effective application promotes fairness, procedural efficiency and confidence in arbitration as a dispute-resolution mechanism.