Does a Section 9 Court’s View Bind the Arbitral Tribunal?

1. Does a finding made on a section 9 application bind the arbitral tribunal?

Percept D’Mark is the clearest illustration available, because the propositions in it are now cited as settled law on restrictive covenants while the judgment itself was careful about its own status. The Supreme Court recorded that its observations were made on a prima facie basis, that they would not bind the parties at trial, and that the merits were left open. A tribunal asked to treat those observations as concluding the dispute between the same parties would be giving them an effect the Court expressly declined to give them.

The appellate practice is the same. In Indus Powertech Inc v Echjay Industries Pvt Ltd, Commercial Appeal (Lodging) No. 26031 of 2023, decided by the Bombay High Court on 17 October 2024, the Division Bench set aside an order of injunction and, at paragraph 15, expressly left all contentions open for the arbitration. The order disposed of the interim position. It did not dispose of the issue.

This cuts in both directions, which is why it is worth knowing before the application is made rather than after it is lost. A party that wins at the interim stage has not won the point, and should not plead the order as though it had. A party that loses has not lost the point either, and the loss is not a reason to reformulate its case in the reference around the court’s reasoning.

2. Can a court still entertain a section 9 application once the tribunal is constituted?

The controlling decision is ArcelorMittal Nippon Steel India Ltd v Essar Bulk Terminal Ltd, Civil Appeal No. 5700 of 2021, decided by the Supreme Court on 14 September 2021. At paragraphs 65 and 66 the Court held that the bar applies once the tribunal is constituted, subject to the exception where circumstances make the section 17 remedy inefficacious. At paragraph 107 it held that the bar operates where the section 9 application had not been entertained before the tribunal was constituted, and that even for an application already entertained the court retains a discretion to direct the parties to the tribunal through a limited interim order.

At paragraph 88 the Court held that before a tribunal is constituted the court must exercise its power under section 9, although whether relief is granted depends on the facts. The structure is therefore a window that closes rather than a door that is locked: the court’s jurisdiction is full before constitution, constrained afterwards, and the constraint is measured from the moment the court took the application up.

3. What does entertain mean, and why does the timing decide the outcome?

The test at paragraph 95 is whether consideration had begun, or the court had applied its mind to some extent, before the tribunal was constituted. That is a lower threshold than completion and a higher one than filing. An application merely lodged is not entertained. An application argued and reserved plainly is: at paragraphs 95 and 100 the Court held that where a section 9 application had been heard and judgment reserved, the enquiry into the efficacy of section 17 relief does not arise at all.

The practical consequence is a timing problem that parties create for themselves. The section 9 application and the steps to constitute the tribunal are usually running in parallel, and a party that presses hard on the appointment while its interim application sits unheard may find the court’s jurisdiction constrained by its own diligence. The converse is also true: delay in constituting the tribunal does not by itself disqualify a party from section 9 relief, which the Court addressed at paragraph 75.

4. Is the tribunal’s power under section 17 as good as the court’s under section 9?

ArcelorMittal sets out the amended section 17 at paragraph 11, and at paragraph 67 explains that the amendment was meant to discourage applications for interim measures in court under section 9(1). At paragraph 68 it holds that the tribunal now has the same power to grant interim relief as the court, and that the section 17 remedy is as efficacious as the remedy under section 9(1). Courts should therefore ordinarily not take up a section 9 application once the tribunal is constituted, unless there is an impediment or relief cannot be obtained promptly from the tribunal. 

The qualification worth keeping in view is that the equivalence is of power, not of reach. A tribunal’s order binds the parties before it. A court order can be directed more readily at the practical machinery by which an order is given effect. Where the relief needed touches anything outside the two parties to the reference, the equivalence in section 17 does not by itself answer the question, and that is the kind of circumstance paragraph 68 contemplates.

5. Does any of this apply to an arbitration seated outside India?

The proviso provides that, subject to an agreement to the contrary, the provisions of sections 9, 27 and clause (a) of sub-section (1) and sub-section (3) of section 37 shall also apply to international commercial arbitration even if the place of arbitration is outside India, and that an arbitral award made or to be made in such place is enforceable and recognised under the provisions of Part II of the Act. Silence therefore preserves access to the Indian court over Indian assets. An express exclusion removes it, and clauses that exclude Part I in general terms are capable of doing so.

Two features of the drafting are worth noting without more being read into them. First, the proviso extends section 9 but not section 17, so the balance that ArcelorMittal describes between the two does not arise in the same way where the seat is abroad: the tribunal’s interim powers in such a reference come from the chosen rules and the law of the seat, not from section 17. Second, the proviso refers to clause (a) of sub-section (1) of section 37, while clauses (a) to (c) of section 37(1) were substituted by the same Amendment Act, with the result that in the current text clause (a) is an appeal from a refusal to refer under section 8 and the appeal from a section 9 order is in clause (b). The provision does not address that interaction, and the position is better treated as untested rather than settled either way.

How R & D Law Chambers Works on These Matters

R & D Law Chambers LLP is an Ahmedabad law firm. It advises on applications for interim measures under section 9 of the Arbitration and Conciliation Act, 1996, on applications to the tribunal under section 17, and on appeals under section 37, in arbitrations seated in India and abroad.

The sequencing question usually comes first, because where the application is made and when it is taken up decides more than the merits of the relief sought. The second question is what the order will be worth afterwards, since an interim order regulates the position pending the reference and settles nothing in it.

Related services:

• Arbitration in Ahmedabad and across India (domestic and international)
• International arbitration: cross-border disputes, enforcement and institutional references
• Enforcement of foreign arbitral awards in India
• Drafting the cross-border arbitration clause
• Dispute resolution and court representation