14 September 2021 | Arcelor Mittal Nippon Steel India Ltd. v. Essar Bulk Terminal Ltd. | Civil Appeal No. 5700 of 2021 | Indira Banerjee and JK Maheshwari | High Court of Bombay | 2021 SCC OnLine SC 718

Section 9 (3) ACA provides that once the tribunal has been constituted, the Court shall not entertain an application for interim relief unless it finds that circumstances exist which may not render the remedy under Section 17 ACA (tribunal’s power to give interim relief) efficacious.

The Supreme Court has examined this provision and the meaning of “entertained” vis-à-vis the power of the Section 9 court and the tribunal's power.

It has ruled that:

1. On a combined reading of Section 9 with Section 17 of the Arbitration Act, once an Arbitral Tribunal is constituted, the Court would not entertain and/or in other words take up for consideration and apply its mind to an application for an interim measure, unless the remedy under Section 17 is inefficacious, even though the application may have been filed before the constitution of the Arbitral Tribunal.
2. Further, the bar of Section 9 (3) ACA would not operate once an application has been entertained and taken up for consideration, as in the instant case where a hearing has been concluded, and judgment has been reserved.
3. Even after an arbitral tribunal is constituted, there may be many reasons why tribunal may not be an efficacious alternative to Section 9 (1) ACA (0. This could even be because of the temporary unavailability of any member because of illness, travel etc.
4. When an application has already been taken up for consideration and is in the process of consideration or has already been considered, the question of examining whether a remedy under Section 17 ACA is efficacious or not would not arise.
5. The bar of Section 9(3) ACA operates where the application under Section 9(1) ACA was entertained till the constitution of the arbitral tribunal.
6. Of course, even if an application under Section 9 ACA is entertained before the constitution of the tribunal, the Court always has the discretion to direct the parties to approach the tribunal, if necessary by passing a limited order of interim protection, particularly when there has been a long time gap between hearings and the application has for all practical purposes, to be heard afresh, or the hearing has just commenced and is likely to consume a lot of time.

The court approved the Delhi High Court’s single judge ruling in Avantha Holdings Limited v. Vistra ITCL India Limited, 2020 SCC OnLine Del 1717, except for its holding that the bar of Section 9(3) ACA also operates at the pre-arbitral stage.

Read the decision here.