Indian courts not bound by emergency arbitrator’s award in interim relief plea: Delhi High Court

The Delhi High Court recently reiterated that courts are not bound by orders passed by emergency arbitrators while deciding pleas for interim relief and must independently assess such requests under Indian law. [JLT Energy v. Hindustan Clean Energy]

A Bench of Justices Anil Kshetrapal and Amit Mahajan made the observation while dismissing an appeal filed by JLT Energy 9 SAS against refusal of interim protection in its dispute with Hindustan Cleanenergy Limited and others.

Clarifying the legal position, the Bench held that an emergency arbitrator’s order cannot dictate the outcome before a court.

“Emergency Award/Order does not bind the Court under Section 9, which is required to apply its own mind to the material on record and assess the prayer for interim relief in accordance with Indian law."

The dispute arose out of two share purchase agreements executed in December 2024 for acquisition of solar power projects in Tamil Nadu and Bihar. The agreements were interlinked and required fulfilment of certain pre-closing conditions.

JLT Energy invoked emergency arbitration before the Singapore International Arbitration Centre (SIAC) and secured an order restraining the respondents from creating third-party rights in the project assets.

It subsequently approached the High Court seeking similar interim protection.

However, both the single judge and the Division Bench of the High Court declined relief, holding that the agreements had automatically terminated due to non-fulfilment of conditions precedent within the agreed timeline.

In such circumstances, the Court held, there was no enforceable right that could be protected through interim measures.

“Section 9 jurisdiction cannot be invoked to preserve or enforce rights arising from a contract which has, prima facie, ceased to subsist.”

The Court also noted that the emergency arbitrator had granted relief on a limited record and at a preliminary stage.

"...the Emergency Arbitrator granted relief at a preliminary stage on the basis of a “reasonably arguable” case...The Emergency Award/Order thus proceeded on a lower threshold, tailored to the exigencies of emergency relief under the SIAC framework, and was accompanied by explicit caveats as to its tentative nature."

Finding no perversity or illegality in the single judge’s reasoning, the Division Bench dismissed the appeal and upheld refusal of interim relief, while clarifying that the arbitral tribunal will adjudicate the dispute on merits independently.

JLT Energy 9 SAS, was represented by Senior Advocate Rajshekhar Rao along with Advocates VP Singh, Meherunissa Anand, Asif Ahmed, Shailja Rawal, Suneel Kumar and Khushi Mittal.

Hindustan Cleanenergy Limited and others were represented by Senior Advocate Jayant Mehta along with Advocates Atul Shanker Mathur, Prabal Mehrotra, Shubhankar and Pallav Arora.

[Read Judgment]