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Report No. 176

2.6.1 Grant of interim measures etc by court:

Section 9 restructured into sub-sections (1) to (3) and sub-section (4), (5) and (6) added. Section 9 is not proposed to be altered but is only proposed to be restructured and clauses (4), (5) and (6) are being proposed to be added to prevent abuse of Section 9. The existing section 9 of the Act 1996 reads as follows:-

"9 Interim measures etc. by court -

(1) A party may, before or during arbitral proceedings or at any time after the making of the arbitral award but before it is enforced in accordance with section 36, apply to a court -

(i) for the appointment of a guardian for a minor or a person of unsound mind for the purposes of arbitral proceedings; or

(ii) for an interim measure of protection in respect of any of the following matters, namely:-

(a) the preservation, interim custody or sale of any goods which are the subject-matter of the arbitration agreement;

(b) securing the amount in dispute in the arbitration;

(c) the detention, preservation or inspection of any property or thing which is the subject matter of the dispute in arbitration, or as to which any question may arise therein and authorizing for any of the aforesaid purposes any person to enter upon any land or building in the possession of any party, or authorizing any samples to be taken or any observation to be made, or experiment to be tried, which may be necessary or expedient for the purpose of obtaining full information or evidence;

(d) interim injunction or the appointment of a receiver.

(e) for such other interim measure of protection as may appear to the court to be just and convenient, and the court shall have the same power for making orders as it has for the purpose of and in relation to, any proceedings before it."

Section 9 of the 1996 Act deals with the power of the Court to grant interim measures before commencement of, or pending, or after conclusion of, the arbitration proceedings. This section has been adverted to in detail while dealing with sec. 2(2) and making it applicable to international arbitrations where the place of arbitration is outside India or where the place of arbitration is not specified in the arbitration agreement. Now we shall deal with certain other aspects relating to section 9.

So far as the 'Court' which can grant interim measures is concerned, it will be the 'Court' which falls under proposed sec. 2(1)(e), i.e., Principal civil court of original jurisdiction in a district or Court of Principal Judge Civil Court in a city or the High Court exercising original jurisdiction. There have been suggestions that the scope and width of sec. 9 of the Act have to be brought at par with the provisions of sec. 44 of the English Act.

But it is felt that in view of the omnibus provision in section 9(e) "such other interim measures of protection as may appear to be just and convenient:", there is no need to amend sec. 9 in this behalf but its restructuring is required. A reading of section 9 as it stands shows that the wider power of the court is placed at the end and the limited powers are set out at the beginning of the section.

This is rather misleading and is to be rectified. Section 9 shows that the "interim measures" contemplated by the section are enumerated in clauses (i) and (ii). Clause (ii) has sub-clauses (a) to (e). Clause (ii) refers to "protection" and appears to govern sub-clauses (a) to (e) thereof but gives an impression that interim measures in sub-clauses (a) to (e) are restricted to "protection", i.e., protection of the subject matter of dispute in arbitration.

However, it appears that the Act has intended that at the stage before commencement of arbitration or during arbitration or after the award and before the enforcement of the award under order 21 CPC, it may be necessary for the parties to obtain orders in respect of other property of the opposite party, such as attachment or by way of temporary or interim mandatory injunction.

In fact, the Supreme Court of India in Sundaram Finance Ltd. v. NEPC India Ltd. (1999 (2) SCC 479 = AIR 1999 SC 565) has accepted that section 9 can be invoked before any application for reference is filed under section 11 (unlike under the 1940 Act) and made reference to Russel on Arbitration (21st Edn.) (1999) to the effect that under sec. 9, the Court can even grant a Mareva injunction or interim mandatory injunction.

We may point out further that the various items of interim measures enumerated appear to have been drawn from sec. 41 and Schedule II of the 1940 Act. Section 41 enabled exercise of wide powers by the Court before commencement of arbitration. In the view of the Commission, and as pointed out by the Supreme Court, the present Act does not show any intention to exclude the wide powers which were there under the 1940 Act.

The clue in this behalf is given by the last part of sec. 9 which says- "and the court shall have the same powers for making orders as it has for the purposes of, and in relation to, any proceedings before it." These words are drawn from sec. 41 of the old Act. The words 'same powers' in this part of sec. 9, in the view of the Commission, are neither referable nor controlled by the enumerated measures in sub-clauses (a) to (e) of sec. 9 and, in fact, they clarify that the Court under sec. 9 shall have all the powers of the Court which it exercises in respect of "any proceeding before it", i.e., all the power of a Civil Court.

It is thus clear that the place in which the above clause is found is likely to create an impression that the words 'same powers' are referable to the enumerated categories (a) to (e) in clause (ii) of sec. 9. The flaw in the framework of sec. 9 appears to be that the limited enumerated powers are referred to at the outset and the broad and wider powers are relegated to the end of the section. The Commission is of the view that this has to be rectified by bringing the last para of sec. 9 to the forefront as sub section (2) and the enumerated powers are to be placed lower down in the section under sub section (3).



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