14 September 2021 | Cyfuture India Private Limited v. Futuretimes Technology India Private Limited | OMP (I) (COMM.) 103/2021 | C Hari Shankar J | Delhi High Court | 2021 SCC OnLine SC 4464

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.

In Arcelor Mittal Nippon Steel India Ltd. v. Essar Bulk Terminal Ltd. 2021 SCC OnLine SC 718, the Supreme Court examined this provision and in particular the meaning of “entertained” vis-à-vis the power of the Section 9 court and the power of the tribunal. It approved C Hari Shankar J’s ruling in Avantha Holdings Limited v. Vistra ITCL India Limited, 2020 SCC OnLine Del 1717 (except the finding on pre-arbitral stage jurisdiction).

Now, following Arcelor, in a case where the court had earlier made an ad-interim order, the matter was sent to the tribunal because the tribunal stood subsequently constituted. Arcelor’s ruling was summarized as follows:-

1. The proscription under Section 9 (3) ACA applies only before an application under Section 9(1) has been “entertained.” The expression “entertained” has to be understood as “taken up for consideration”. Once the application has been taken up for consideration, such as where arguments are in progress or judgment reserved, Section 9 (3) ACA has no application.
2. Where the bar applies, the Court has to examine whether the Section 17 ACA remedy would be efficacious. There is no absolute prohibition on deciding the Section 9 ACA application, even where the arbitral tribunal stands constituted.
3. Where the arbitral tribunal stands constituted, however, the approach of the Court has to be circumspect. Unless there is some impediment in approaching the arbitral tribunal under Section 17, or where the remedy under Section 17 is rendered inefficacious for some clear and apparent reason, the prayer for interim relief ought, appropriately, to be relegated to the arbitral tribunal.

Hari Shankar J noted that the tribunal was constituted before the court took up the application for consideration on merits. “No ground, which would indicate the Section 17 remedy to be inefficacious, has been made out, or even urged, by the petitioner.” Since there was an ad interim order in the petitioner’s favour, there was no likelihood of prejudice. The tribunal was directed to decide the petition as application under Section 17 ACA. of the 1996 Act.

To expedite matters, it was directed that the petitioner would not be required to re-file the petition; the the registry was directed to return the petitions along with the records, so that they could be presented before the arbitrator. The ad interim order was continued until an order made by the tribunal.

Read the decision here.