(Assignment submitted towards the assessment of Continues Assessment 3 in the subject of

Alternate Dispute Resolution)

Submitted by: Vishwas Agarwal Submitted to: Rosmy Ma’am

NATIONAL LAW UNIVERSITY, JODHPUR

SUMMER SESSION (JULY-NOVEMBER)

2022-233
 Answer 1
I.
Under the Arbitration Act, the parties are given the choice of approaching the courts for
interim reliefs under Section 9 of the Act and even the arbitral tribunals are given the power
to pass interim reliefs under Section 17 of the Act. While these powers closely resemble
Article 9 and 17 respectively of the Model law, these provisions are not mutatis mutandis
incorporated in the Indian act but some tweaked according to the Indian realities. Interim
relief is encapsulated under section 9(1)(ii) wherein application can be made to a court for an
interim measure of protection in respect of any of the following matters:
(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
authorising for any of the aforesaid purposes any person to enter upon any land or
building in the possession of any party, or authorising 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) Such other interim measure of protection as may appear to the Court to be just and
convenient.
The Court has the authority to issue orders in this matter when such an application is made.
Section 9(2) states that if interim relief is granted by the court and arbitral proceedings have
not yet begun, the arbitral proceedings must begin within 90 days of the relief order or within
such other time as the court may specify.
According to section 9(3), the Court may not consider an application under section 9(1) after
the arbitral tribunal has been established unless the remedies provided under section 17 are
ineffective.
Courts’ Interpretation through Case Laws:
 The issue of litigants hoarding their interim reliefs and delaying the start of arbitration
was highlighted by the Apex Court in the cases of M/s Sundaram Finance Ltd. v.
NEPC India Limited, 2018. According to the ruling in this case, there must be a
manifest intention on the part of the applicant to use the arbitral proceedings when an
application under Section 9 is filed prior to the start of the arbitration proceedings.
 The Arbitration and Conciliation (Amendment) Act, 2015 added Section 9(2) to the
Act in order to address the issue of non-invocation of arbitrations in a timely manner
following the grant of an interim relief. This was done in accordance with the
aforementioned principles.
 In Firm Ashok Traders v. Gurumukh Das Saluja, 2004, the Supreme Court laid
down that commencement of arbitral proceedings is independent of the interim relief
under Section 9 being allowed or denied.

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  In SBP & Co. v. Patel Engineering, 2005, the Court held that in case a dispute
involved was not covered by the arbitration clause or the Court which was approached
had no jurisdiction to pass any order under Section 9 of the Arbitration Act, that Court
should decide whether it has jurisdiction and whether there has been a valid
arbitration agreement and the dispute raised has been covered by it.
 Some High Courts, as in the case of Hinduja Leyland Finance Ltd. v. Avinandan
Mukherjee, 2016, believe that if a party that has obtained an interim order in its
favour fails to request arbitration within 90 (ninety) days of the date the interim order
was granted, the interim order will be automatically vacated and will no longer be
valid. The courts’ reasoning for the aforementioned conclusion is that Section 9(2)
has been made “mandatory” by the parliament to ensure that an order for any interim
measure will not last indefinitely without the initiation of arbitral proceedings, and
any interpretation to the contrary will undermine the purpose of the provision.
 In Arcelor Mittal Nippon Steel India Ltd. v. Essar Bulk Terminal Ltd., 2021,
‘entertained’ under section 9(3) was given a broad interpretation and it was held that
‘entertained’ means application of mind by the court. Thus, if the Court has applied its
mind to the issue, it means it has entertained it, and then section 9(1) would apply
even if the latter part of section 9(3) is not fulfilled.
Comparison and contradiction with the UNCITRAL
Model Law Section 9 of the ACA has been modelled on Article 9 of the UNCITRAL Model
Law [‘Model Law’] which discusses about interim protection. However, Article 9 of the
UNCITRAL Model Law provides that a party may approach the Court only before or during
the arbitration procedure and may request interim protections. Section 9 ACA further allows
an individual to approach the Court even after the arbitral award making the scope of Section
9 much wider.
II.
Relationship between arbitral interim relief and interim orders by courts
 Before its amendment, Section 17 had a limited scope. The authority of the Arbitral
Tribunal under Section 17 was a topic of considerable discussion. For instance, the
Delhi High Court addressed the reach of the Act’s Sections 9 and 17 powers in the
case of Intertoll ICS Cecons O & M Co. Pvt. Ltd. v. National Highways Authority of
India. In a nutshell, the Court stated that, despite potential overlap, the powers of an
arbitral tribunal under Section 17 of the 1996 Act are significantly more limited than
those of a court under Section 9 of the Act.
 While under section 17, a party can apply to the arbitral tribunal only during the
arbitral proceedings. Earlier, party could apply under section 17 even after the making
of arbitral award before its enforcement. However, this was done away with by virtue
of the Arbitration and Conciliation (Amendment) Act, 2019. Further, the Arbitration
and Conciliation (Amendment) Act, 2015 has put an end to the dispute whether the
powers of the court are narrow under section 9 of the Act. Thus, the court has broad
powers to grant interim relief and section 9 does not curtail it in any way.
 In Sundaram Finance Ltd. v. P Sakthivel, 2018, the High Court of Madras had to
decide whether the Arbitral Tribunal under section 17 had the authority to seize

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 properties that were not the subject of arbitration held that the Arbitral Tribunal’s
authority to grant temporary relief is equal to that of a regular court, and that it has the
authority to do so and to issue orders directing the attachment of properties other than
the subject property.
 With the amendment to Section 17 of the Act, it is now clear that, in the case of
interim reliefs granted by arbitral tribunals, an order of the tribunal would be
enforceable like an order of the court.

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 Answer 2
 The underlying rationale behind the concepts of “impartiality” and “independence” of
arbitrators:
(a) an arbitral award, like the judgment of a national court, may be subject to challenge if
the adjudicating body was linked economically to one of the parties to the dispute, or
lacked impartiality with respect to a party or the subject matter of the dispute.
(b) an arbitrator is a “quasi-judicial officer” and therefore the court ruled that impartiality,
independence and freedom from undue influence from the arbitrator must be
protected.
(c) the quality of an arbitral process is as much as the quality of the arbitrators involved
in it. Thus, it seems important to establish which is the nature of the arbitration, the
role of the arbitrator and more specifically to determine whether and to what extent
the arbitrator’s role could be conceived as limited to watching a game played by
others (the parties) as an impartial observer having the function to proclaim whose is
the victory once the game is finished.
(d) The impartiality and independence of arbitrators is required in most of the arbitral
processes to protect the arbitral institution itself. Arbitration remains a credible ADR
as long as the process to achieve the arbitral award is perceived as fair. As an essential
element of this fairness is the request for arbitrator to make its own decision, ideally
without any kind of bias predisposing him towards one of the parties.
(e) arbitration is based in trust, therefore the arbitrators’ respect of professional ethics
acquires great importance for the respectfulness of the arbitral institution itself as an
alternative dispute resolution mechanism
 In a three-person arbitration panel, biased arbitrators frequently lose the respect of
their colleagues. His viewpoint won’t be heard and considered as a result.
Additionally, biased arbitrators quickly lose their good name in the arbitration
community and are expelled from the system.
 The same inquiry leads to the logical conclusion that picking an unbalanced arbitrator
is a bad idea and generally works against the interests of the parties. In conclusion, the
requirement that arbitrators be impartial and independent gives parties the assurance
that their specific dispute will be fairly resolved and supports the idea of arbitration as
a whole.
 The independence of the decision-maker is crucial in the exercise of judicial power
and is also a necessary quality of an arbitrator, so the independence and impartiality
of the arbitrator are important. The arbitrator must be impartial and independent in
order for the arbitral tribunal’s decision to be fair.
 The Supreme Court ruled in Haryana Space Application Centre & Ors V. Pan India
Consultants Pvt. Ltd, 2021 that section 12(5) of the Arbitration & Conciliation Act of
1996 is a mandatory and non-derogable provision when read with the VII Schedule.
This is due to the fact that if an affiliate of one of the parties is directly involved in the
issues under dispute in the arbitration and the arbitrator holds one of these positions or
has a similar controlling influence, it will have an impact on the process’ neutrality.
 In the case of TRF Limited v. Energo Engineering Projects Limited, 2017, the court
emphasised the justification for using impartial and independent arbitrators, stating
that “once the infrastructure collapses, the superstructure is bound to collapse.”

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 II
 The Arbitration and Mediation (Amendment) Act 2015, which became effective on
October 23, 2015, was passed on December 31, 2015, with the goal of enhancing the
effectiveness of international commercial arbitration in India. The revised Arbitration
Law places a strong emphasis on the principles of reciprocity, independence, and
impartiality. An eighth schedule outlining general standards to be applied to
arbitrators is part of the 2019 Amendment to the Arbitration and Conciliation Act of
1996 (the Act), with a focus on the impartial and neutral standing of arbitrators in
proceedings.
 TRF Limited vs Energo Engineering Projects, 2017: The Supreme Court’s three-
judge panel has strengthened the statutory requirement for an independent, impartial,
and neutral arbitrator. According to the Supreme Court, an arbitrator cannot appoint
another arbitrator if he or she loses eligibility due to a legal requirement. Even going
so far as to say that “once the infrastructure collapses, the superstructure is bound to
collapse,” the honourable court.
 HRD Corporation (Marcus Oil and Chemical Division) v. Gail (India) Limited,
2017: When a Schedule 7 circumstance exists, the person is immediately disqualified
from serving as an arbitrator, according to the Supreme Court’s explanation in HRD
Corporation (Marcus Oil and Chemical Division) v. Gail (India) Limited, 2017. It
may serve as the foundation for a challenge request that is submitted and taken into
account by the appropriate arbitrator under the conditions outlined in Schedule 5. The
parties disagree on the single standard outlined in the two annexes because it is
necessary for determining the independence and impartiality of arbitrators and their
confirmation and/or continuation. Of course, a judge’s ruling will be the final word on
it.
 Perkins Eastman Architects DPC  v HSCC (India) Limited, 2019: A person with an
interest in the dispute or in the resolution of it must not only be ineligible to act as an
arbitrator, but must also not be eligible to appoint anyone else as an arbitrator, the
court held in its decision regarding the unilateral appointment of an arbitrator by one
party, heavily relying on the TFR judgement.
 It is common to observe arbitrators chosen by the parties acting as “negotiating
advocates” and advancing the interests of their side. The presiding arbitrator, who is
the only one not chosen by the parties, is the only neutral arbitrator in these cases, the
majority of which are ad hoc arbitrations. From the start, the party discredits the intent
behind the law. Arbitrators should not be appointed if they give the impression of
being impartial and independent. In the case of Swarmal Gadodia v. Tata Capital,
2019, the arbitral tribunal’s disclosures were ambiguous and vague, and the Bombay
High Court addressed this issue. In this instance, arbitrators chosen by the same party
were not permitted to disclose their appointment as arbitrators in more than one
ongoing arbitration, in violation of the law. Even the parties had agreed to a fixed
payment amount.
 Further, the independence and impartiality of the arbitrator throughout the
arbitration shall be maintained by a party-appointed arbitrator or sole arbitrator,
not a party representative. On the justification of a party’s right to select an

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 arbitrator, there are two opposing views. On the one hand, party-appointed
arbitrators are regarded as an essential component of the arbitration procedure and
a way to maintain trust throughout the procedure. On the other hand, some
contend that the election of a political party may result in the election of supporters
who fervently uphold the beliefs of the party that elected them. You might be
compelled to settle instead of giving up.
 According to Article 12, the court has the discretion to appoint arbitrators in order
to uphold the interests of justice, respect the autonomy of the parties, and give due
consideration to the nomination procedure that the parties have agreed upon. Prior
to the start of proceedings, Congress took steps to ensure the independence and
impartiality of arbitrators through the disclosures mandated by Section 12(1). A
party may challenge such an arbitrator under Sections 3 and 4 even after the
mutually agreed-upon disclosure has been made. Therefore, whether the arbitrator
is selected by the parties or acts alone, it doesn’t really matter when the impartiality
and independence of arbitrators are in question.