Section 17 of the Arbitration and Conciliation Act, 1996, empowers an arbitral tribunal to grant interim measures of protection during the course of arbitration proceedings. This is an important provision as it allows parties to arbitration to obtain interim relief, for example, the freezing of assets, protection of claims, or even interim injunctions, pending the final determination of the dispute. The section makes sure that the arbitration process is effective and that the rights of parties are safeguarded pending the determination of the arbitration.
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Sub-Section 1: Application for Interim Measures
Under Section 17(1), a party may apply to the arbitral tribunal for interim measures. These include
(i) Appointment of Guardian
The tribunal may appoint a guardian for a minor or a person of unsound mind who is a party to arbitration. This ensures fair representation of vulnerable parties.
(ii) Interim Measures of Protection
Section 17(1)(ii) lists specific interim reliefs that tribunals may grant
(a) Preservation, interim custody, or sale of goods – To prevent loss or damage to goods forming the subject matter of the dispute.
(b) Securing the amount in dispute – Ensures that money remains available to satisfy the final award.
(c) Detention, preservation or inspection of property – Allows inspection, sampling or experiments where property/evidence is involved.
(d) Interim injunction or appointment of receiver – Prevents harmful actions by a party or ensures management of disputed assets.
(e) Other interim measures of protection – A residuary clause giving flexibility to order just and convenient measures.
Sub-Section 2: Enforceability of Orders
The second subsection of Section 17 establishes the enforceability of interim orders issued by the arbitral tribunal. It makes it clear that any interim order passed by the tribunal is deemed to be an order of the Court for all purposes and can be enforced under the Code of Civil Procedure, 1908 (CPC), in the same manner as an order issued by a court.
This is an important provision since it makes the interim orders of the arbitral tribunal as legally binding as a court order. Hence, the parties can seek the enforcement of the interim orders of the tribunal from the court in case the other party does not comply. The mention of the CPC ensures that there is a clear, standardized, and enforceable procedure for seeking compliance with such orders.
Key Features of Section 17
According to Section 17 of the Arbitration and Conciliation Act an arbitral tribunal gains authority to offer interim measures which enables the efficient implementation of its issued orders. The following are the salient features:
Arbitral Tribunal's Powers: Section 17 empowers arbitral tribunals with identical powers as those of courts to grant interim relief, ensuring arbitration as a workable and efficient mechanism for dispute resolution. The tribunal has great powers in ensuring that the status quo is preserved and that assets or evidence are not destroyed or concealed during the arbitral process.
Flexibility and Discretion: The provision is flexible in that it enables the tribunal to order interim measures that are convenient and just, suitable for a variety of circumstances. This is necessary since every arbitration case can have special circumstances necessitating varying interim measures.
Enforceability: The enforceability of the orders of the tribunal under the CPC is important to ensure that interim measures are not only awarded but also enforced. Through such steps arbitration parties can reduce the risk of members failing to follow tribunal directives thereby preventing disruption of the arbitration process.
Amendments to Section 17
Section 17 of the Arbitration and Conciliation Act has been significantly amended to make it more effective in granting interim relief in arbitration. The amendments are in line with the changing face of arbitration:
2015 Amendment (Act 3 of 2016): The 2015 amendment significantly enhanced the powers of the arbitral tribunal by allowing it to grant interim measures during arbitration proceedings. This was a major development that aligned India’s arbitration laws with global best practices.
2019 Amendment (Act 33 of 2019): The 2019 amendment further refined the application of Section 17 by excluding the possibility of seeking interim measures after the arbitral award has been made but before it is enforced. This change reflects the growing recognition of the need to ensure timely relief during the arbitration process.
Summing Up
The Section 17 of the Arbitration and Conciliation Act, 1996 serves as a defining provision by allowing arbitration parties to get interim relief which protects their rights during arbitration. By giving the arbitral tribunal the power to order a variety of measures, from the protection of goods to interim injunctions, and by making such orders executable as court orders, Section 17 enhances the arbitration process in India. The provision reflects the growing importance of arbitration as a preferred mode of dispute resolution and ensures that arbitration remains effective and efficient in resolving disputes.
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Section 17 of Arbitration and Conciliation Act: FAQs
Q1. What is Section 17 of the Arbitration and Conciliation Act, 1996?
It empowers an arbitral tribunal to grant interim measures like injunctions, preservation of property or securing disputed amounts.
Q2. Are interim orders of the arbitral tribunal enforceable?
Yes. Section 17(2) makes tribunal orders enforceable as if they were court orders under the Code of Civil Procedure (CPC).
Q3. Can an arbitral tribunal issue interim injunctions?
Yes. Under Section 17(1)(ii)(d), tribunals can grant interim injunctions or appoint receivers to protect parties’ rights during arbitration.
Q4. Can a party seek interim relief before arbitration starts?
No. Before tribunal constitution, interim relief must be sought from courts under Section 9 of the Act.
Q5. What was the impact of the 2015 amendment on Section 17?
The 2015 amendment made tribunal orders legally binding and enforceable, strengthening arbitration in India.
