Section 17 of the Arbitration and Conciliation Act, 1996, vests wide-ranging powers in Arbitral Tribunals to grant interim measures. To appraise the reach and ambit of this section, experienced legal practitioners at SimranLaw Firm have dissected its application and implications in a comprehensive manner. It remains vital to comprehend the power of Arbitral Tribunals to grant interim measures to ensure the effectiveness of the arbitral process.
Understanding Section 17:
Section 17 of the Arbitration and Conciliation Act empowers arbitrators to order interim measures of protection. This section is modelled on Article 17 of the UNCITRAL Model Law on International Commercial Arbitration and addresses a significant aspect of the authority conferred upon arbitrators. The need for this provision is born out of practical necessity, as it sometimes becomes essential during arbitration proceedings, to preserve the goods or property which is a subject matter of dispute, to provide security for costs or to prevent a change in the status quo.
1. Sundaram Finance Ltd Vs NEPC India Ltd (1999):
In this case, it was clarified that any interim measure ordered by an arbitral tribunal would have the same effect as if it were an order of the court for all purposes and intents. This grounds an arbitral tribunal with equivalent authority as court when it comes to provision of interim measures.
2. M.D., Army Welfare Housing Organisation vs Sumangal Services Pvt. Ltd (2004):
The Supreme Court held that an arbitral tribunal has the same power for making orders as the court has for the purpose of, and in relation to, any proceedings before it.
3. Raffles Design International India Pvt. Ltd. & Ors. v. Educomp Professional Education Ltd. & Ors. (2016):
This case clarified that the power of the arbitral tribunal to grant interim relief under Section 17 is not restricted by the provisions of the Code of Civil Procedure. The arbitral tribunal has the inherent power to implement its mandate effectively.
4. Sri Krishan Vs Anand (2009):
The Supreme Court held that the Arbitral Tribunal has complete jurisdiction to pass orders under Section 17, and the legitimacy of such orders cannot be challenged under Articles 226 and 227 of the Indian Constitution.
Analyzing the Scope of Section 17:
The amendments made to Section 17 in 2015 further broadened its applicability. The provision now empowers the arbitral tribunals to grant any interim measure that it considers appropriate, not unlike a court, ensuring the safety or preservation of goods, property, or a relevant amount in dispute.
However, enforcing these interim measures outside India still proves to be a challenge due to variations in legal systems across different jurisdictions. As arbitration becomes increasingly global, this is an area that calls for further reform.
Section 17 of the Arbitration and Conciliation Act, 1996, represents a crucial advancement towards making arbitration a standalone mechanism for dispute resolution. Despite the challenges, it is a step towards ensuring that the arbitral tribunal’s authority is respected, and its decisions are enforceable – paving the way for a robust arbitration framework. At SimranLaw, we believe that understanding these mechanisms is key to navigating the legal landscape efficiently and effectively.