The enforceability of interim orders under Indian law

Shreya Jain
Shardul Amarchand Mangaldas & Co, Mumbai
shreya.jain@AMSShardul.com

Sanjana Kattoor
Shardul Amarchand Mangaldas & Co, Mumbai
 

Introduction

Interim measures in international arbitration are an important tool to protect the rights of parties, pending determination of the dispute by the arbitral tribunal. Therefore, the enforceability of interim orders granted by arbitral tribunals is critical. While some parties may comply voluntarily with an interim order, arbitrating parties must have a clear strategy for the enforcement of an interim order in their arsenal.

The enforceability of interim orders depends on the law in the jurisdiction where the enforcement of an interim order is being sought. In India, the issue of interim relief in arbitration has been the subject of substantial jurisprudential development over the last decade and is likely to undergo further changes as a result of the recently proposed amendments to the Indian Arbitration and Conciliation Act, 1996 (the ‘Arbitration Act’). This article examines the key issues in regard to the enforceability of interim orders in arbitral proceedings under Indian law.

Avenues to seek interim relief

Under Indian law, irrespective of the seat of arbitration, parties to an arbitration agreement can apply for interim relief to an arbitral tribunal or the Indian courts (provided that the jurisdiction of Indian courts has not been expressly excluded). Under section 17(1) of the Arbitration Act, an arbitral tribunal (once constituted) can grant interim orders during the period in which the arbitration is pending. Further, under section 9 of the Arbitration Act, Indian courts can grant interim relief before, during or after arbitral proceedings, before an award is enforced. Additionally, most institutional arbitration rules also allow parties recourse to an emergency arbitrator for the granting of urgent interim relief, before an arbitral tribunal has been constituted.

This article deals with the enforceability of interim orders granted by arbitral tribunals and emergency arbitrators.

Enforceability of interim orders issued by a tribunal

As is the case in many jurisdictions, the enforceability of interim orders in India differs based on whether the arbitration is seated within or outside India.  

Under section 17(2) of the Arbitration Act, if the interim order being enforced is passed by an India-seated arbitral tribunal, the order is enforceable in the same manner as a court order. Therefore, the enforceability of interim orders in India-seated arbitrations is statutorily recognised.

However, the enforceability of interim orders granted in arbitration proceedings seated outside India is less clear. The Arbitration Act, enacted in 1996, is based on the United Nations Commission on International Trade Law (UNCITRAL) Model Law on International Commercial Arbitration 1985. While Article 17H of the UNCITRAL Model Law (as amended in 2006) provides for the enforcement of interim measures ‘irrespective of the country in which it was issued’, the Arbitration Act did not incorporate a similar provision.[1] Therefore, there is no mechanism under Indian law to directly enforce an interim order granted by a foreign-seated tribunal.

In October 2024, the Indian government released proposed amendments to the Arbitration Act for public consultation. Unfortunately, these amendments do not contain any provisions allowing the direct enforcement of foreign-seated interim orders. It remains to be seen whether the final version of the proposed amendments will contain a provision to remedy the situation.

Enforceability of emergency arbitrator’s orders

Similar to the enforceability of interim orders granted by tribunals, under Indian law, the enforceability of interim orders granted by emergency arbitrators also depends on the seat of arbitration.

In its current form, the Arbitration Act does not recognise awards passed by an emergency arbitrator (whether seated in or outside India). However, in Amazon.com NV Investment Holdings LLC v Future Retails Ltd. & Ors, (2022) 1 SCC 209, the Indian Supreme Court held that emergency orders in India-seated arbitrations are enforceable under Indian law, in the same manner as interim orders granted by an arbitral tribunal. The Supreme Court interpreted the provisions of the Arbitration Act and held that an emergency arbitrator is subsumed within the definition of an ‘arbitral tribunal’ for the purposes of section 17(1) of the Arbitration Act.[2]

Notably, the Amazon ruling is limited to emergency awards issued in India-seated arbitration proceedings. Thus, as things stand, emergency awards seated outside India are not enforceable under Indian law.

This position has been adopted in the proposed amendments to the Arbitration Act, which contains new provisions recognising an emergency arbitrator and expressly providing for the enforcement of emergency orders seated in India, under section 17(2) of the Arbitration Act.[3] However, there are no proposed provisions allowing the enforcement of emergency orders seated outside India. This gap is in line with the recommendations by the expert committee on arbitration law, led by Dr TK Viswanathan, to examine the current arbitration framework in India and suggest reforms to the Arbitration Act. While this expert committee report recognised that foreign-seated emergency awards are not directly enforceable under the Arbitration Act, it recommended continuing this position, without discussing any reasons for this recommendation.[4]

Alternative avenues for enforcement

In view of this gap, the only avenue available to parties who have obtained interim or emergency orders in foreign-seated arbitrations is to file a fresh application for interim relief before the Indian courts under section 9 of the Arbitration Act, seeking interim relief. While the court will independently determine the application, it will give weight to the tribunal or emergency arbitrator’s order that granted the relief.[5]

A leading authority in this regard is Raffles Design India International Private Limited v Educomp Professional education Limited, 2016 SCC Online Del 5521, where the petitioner had successfully obtained an order from an emergency arbitrator in a Singapore-seated arbitration. As the respondents did not comply with the order, the petitioner applied to the Delhi High Court under section 9 of the Arbitration Act to prevent the respondents from interfering with their rights under a share purchase agreement, in breach of the emergency award.[6] The Delhi High Court granted this relief and observed that while section 9 cannot be used to enforce orders issued by an arbitral tribunal per se, parties may seek interim relief from the court that is similar to that sought before an arbitral tribunal.[7]

More recently, in Ashok Kumar Goel v Ebixcash Ltd, 2024 SCC OnLine Bom 3233, the Bombay High Court also granted the same relief as the emergency arbitrator’s award and noted that the emergency award was well-reasoned and not challenged on its merits.[8] Therefore, the Bombay High Court accepted the findings of the emergency arbitrator and granted interim relief accordingly.

This approach provides an avenue to parties to enforce interim and emergency orders. However, it is not foolproof by any stretch. At the outset, it is only available in cases where the parties have not expressly excluded the applicability of section 9 of the Arbitration Act in their arbitration agreement. Further, it is not efficient as it requires the parties to expend additional time and resources in pursuing a fresh application for interim relief before the Indian courts. This can be particularly challenging when the case involves time sensitive matters, where the interim relief is required urgently.

The way forward

It is imperative that parties keep in mind the enforceability of interim relief when deciding on their strategy and the most suitable jurisdiction to apply for such relief. If the arbitration is seated in India, direct enforcement routes are available. Even if the arbitration is not seated in India, but the respondent has a presence in India, the nuances of Indian law must be considered as part of an enforcement strategy.

In foreign-seated arbitrations, the only avenue available for parties is to apply through a fresh application for interim relief from Indian courts under section 9 of the Arbitration Act. In order to preserve this avenue, parties opting for foreign-seated arbitrations should ensure that they do not exclude the applicability of section 9 of the Arbitration Act. Further, they should file section 9 proceedings swiftly after the interim or emergency order is issued, particularly where the relief sought is time sensitive.

Alternatively, in cases where an arbitral tribunal has not been constituted, it may be more efficient to directly seek interim relief before the Indian courts under section 9, rather than first applying to an emergency arbitrator and then enforcing that order before the Indian courts. This is ultimately a strategic decision to be taken based on the facts and circumstances of the case, the nature and urgency of the interim relief sought and the prospects of compliance by the respondent.

The views expressed in this article are solely of the authors.