With the advancement of the institutional arbitration rules, interim measures as emergency relief in international arbitrations are an important tool to protect the rights of the parties pending determination of disputes. Therefore, the enforcement of an emergency order granted by emergency arbitrators is critical and holds significance for parties.

This article examines the key issues in regard to the enforceability of emergency orders on the basis of seat under Indian legal regime and the legislative vacuum requiring change to make the Indian arbitration framework robust.

The Arbitration and Conciliation Act, 1996 (“Arbitration Act,1996) currently does not recognize an emergency arbitrator order. However, the Supreme Court in the case of Amazon NV v/s Future Retail recognized emergency arbitrator orders by holding that the interim order by emergency arbitrator in arbitration seated In Indian are enforceable in India in the same manner as an interim order granted by the arbitral tribunal under Section 17 of the Arbitration Act, 1996.

Thus, emergency relief orders for arbitration seated in India are enforceable as a decree of court under Section 17(2) of the Arbitration Act, 1996.

Notable the Amazon NV judgement is limited to orders passed by the emergency arbitrator in an arbitration seated in India. Thus, as things stands today, there exists no direct route under the Indian legal regime to seek the enforcement of an order passed by the emergency arbitrators otherwise.

In the absence of any provision for the recognition and enforcement of foreign interim orders, the only avenue available to parties, unless otherwise agreed, is to institute a petition under Section 9 of the Arbitration Act, 1996 seeking reliefs identical to those sought before the emergency arbitrator.

The earliest case in this regard is HSBC PI Holdings (Mauritius) Limited v/s Avitel Post Studioz Limited, wherein the Hon’ble Bombay High Court, while dismissing a challenge to a Section 9 petition instituted following an emergency order, observed that the Section 9 is proper and maintainable.

The explicit authoritative position on the issue was laid down in the case of Raffles Design International India Private Limited v/s Educomp Professional Education Limited, wherein the Delhi High Court, in a Section 9 petition filed seeking reliefs akin to the reliefs sought while securing the emergency order, expounded a de novo approach and observed that under the scheme of Arbitration Act, 1996, a Section 9 petition is maintainable even where the parties had previously obtained a favourable emergency order. The relevant observations are as follows:

"However, in my view, a party seeking interim measures cannot be precluded from doing so only for the reason that it had obtained a similar order from an arbitral tribunal. Needless to state that the question whether the interim orders should be granted under section 9 of the Act or not would have to be considered by the Courts independent of the orders passed by the arbitral tribunal. Recourse to Section 9 of the Act is not available for the purpose of enforcing the orders of the arbitral tribunal; but that does not mean that the Court cannot independently apply its mind and grant interim relief in cases where it is warranted."

The Delhi High Court justified its approach by placing its reliance upon Article 17l (2) of the Model Law as follows:

"It is relevant to note that the provisions under Article 171(2) of the Model Law, the court enforcing an interim order passed by an Arbitral Tribunal in prescribed form undertakes a review of the substance of interim measure [sic] the Model Law. To that extent, a Court while examining a similar relief under Section 9 of the Act would be unfettered by the findings or the view of the Arbitral Tribunal."

It is appurtenant to state herein that the above justification is premised on the misreading of Article 17I(2) of the Model Law as Article 17I(2), in categorical terms, states that where recognition or enforcement is sought, the Courts shall not undertake a review of the substance of the interim measure. Thus, it is a misreading of the Model Law that has expounded the de novo approach and the proposition that Courts should undertake an independent review unfettered by the findings of the arbitral tribunal.

Subsequent to the Raffles, the de novo approach remained unnoticed till 2020, when the Delhi High Court had to consider the maintainability of a Section 9 petition in the case of Ashwani Minda v/s U Shin Limited, wherein the emergency arbitrator rejected the interim application and a Section 9 petition was filed by the petitioner seeking an independent adjudication of the disputes on the basis of the Raffles judgment. The Hon’ble High Court in the case of Ashwani, while giving complete deference to the arbitrator’s order, observed that the petitioner cannot take a second chance and it is not open for the court to independently review the matter when the arbitrator has given a detailed and reasoned order. In this case, the Delhi High Court distinguished Raffles, stating that it was applicable in scenario wherein the emergency arbitrator granted relief in favour of petitioner.

The Calcutta High Court in the case of Uphealth Holdings INC, while recognizing party autonomy and observing that the emergency award is to be treated as a supplemental factor, comprehensively laid down the following factors for according weight to the emergency orders:

(a) Award is reasoned and unchallenged;

(b) Parties participated in the emergency proceedings, and an opportunity of hearing was granted to the other parties; and

(c) Award disclose no illegality or perversity.

Though in Uphealth, a brief analysis was undertaken by the court as to fairness of the procedure, it did not conduct a substantive evaluation of the arbitrator's reasoning. The approach was further implemented by the Bombay High Court in the case of Ashok Kumar Goel v/s Ebixcash Limited, which was further upheld by the Division Bench in Ebix Cash World Money Limited v/s Ashok Kumar Goel.

However, despite the shift to a deferential approach, the observations in Raffles continue to affect enforceability. Recently, the Hon’ble Delhi High Court in the case of JLT Energy 9SAS v/s Hindustan Cleanenergy Limited declined to consider an emergency arbitrator order in its entirety and relied upon the de novo approach laid down in Raffles to undertake an independent granular assessment of the issues.

Party autonomy is the foundation of arbitration and the underlying intent of Section 9, as revealed from sub-section (3), and the arbitrator is the final arbiter of the disputes. The de novo approach allows the courts to undertake an independent assessment of disputes, which undermines party autonomy and compels the parties to re-agitate issues before court, which creates uncertainty and weakens the arbitration framework. In such a scenario, the deferential approach aligns with the objective and intent of the Arbitration Act, 1996. Thus, the desirable solution would be for the courts to apply the deferential approach.

The most effective solution, in view of the uncertainty as to the mode of enforceability and the existence of divergent approaches, is the introduction of a statutory provision embodying the principles of Article 17H and Article 17I of the UNCITRAL Model Law. Article 17H provides that the interim measures issued by tribunals shall be recognized as binding and enforceable by courts, irrespective of the country in which they are issued. The scope of review by the court of tribunal-issued interim orders is envisaged under Article 17I, which restricts review to grounds envisaged under Article 36 of the UNCITRAL model law and incompatibility of the interim measure with powers conferred upon the court.

The incorporation of statutory provisions on the premise of Articles 17H and 17I of the UNCITRAL Model Law into the Indian arbitration framework would provide statutory certainty regarding the enforcement of interim measures and strengthen India’s arbitration regime. However, pending legislative intervention, courts should adopt a deferential approach towards emergency measures granted by arbitral tribunals, guided by the principles underlying Article 36 of the Model Law. Such an approach would promote consistency, preserve arbitral autonomy, and prevent the efficacy of emergency reliefs from being undermined by uncertainty at the enforcement stage.

About the authors: Susshil Daga is the Managing Partner of Amicus Legal. Gazal Ghai and Ashish Sharma are Senior Associates at the Firm.

Disclaimer: The opinions expressed in this article are those of the author(s). The opinions presented do not necessarily reflect the views of Bar & Bench.

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