Introduction
The ICC Arbitration Rules provide for a procedure to the parties that want to seek an urgent temporary relief and are unable to wait for the constitution of Arbitral Tribunal. Uncertainty regarding the enforceability of such temporary relief in national courts has posed a serious problem and the same has come to the Supreme Court, directly or indirectly in plethora of cases, but the answer to this question has always been given in an ambivalent way. This article specifically deals with the un-enforceability of the decision of an emergency arbitrator seated outside India. The Arbitration and Conciliation Act 1996 does not incorporate any provision relating to the emergency arbitrator and the same has been discussed in detail in the upcoming paragraphs.
Decision of the emergency arbitrator is, in fact, an order and not an award
An arbitral tribunal’s decision upon a controversy submitted before it is— an award. An award is described as ‘final determination of a particular issue or claim in arbitration’. It is the result of consensual justice, by an arbitrator of parties’ own choice. The award is the result of judicial decision. However, not every decision by an arbitration tribunal is an award.[1] The arbitral tribunals make numerous decisions during arbitration proceedings having different effects. Some of them which give remedy in substantive issue —are awards while others are not.[2] Only an instrument that the tribunal intends to be final expression of its decision on some or the parties’ entire claim can be regarded as an award.[3]
Several arbitral legislations such as Section 12 of Singapore International Arbitration Act have expressly excluded orders and directions from the definition of award. An emergency arbitrator order, however, is intended to deal only with application for interim relief and, does not fall under the definition of award u/s 2(c) of Arbitration and Conciliation Act 1996. Hence, an emergency arbitrator order is unenforceable. Where a foreign seated arbitral tribunal renders an ‘interim order’, there is unfortunately nothing under Arbitration and Conciliation Act 1996 that would support such orders. There is also no scope for the courts to interfere since Section 5 restricts the extent of judicial intervention except where so provided. Keeping aside an emergency arbitrator’s order, India doesn’t even have an enforcement provision for interim orders passed by an ordinary arbitral tribunal. An ‘interim order’ passed by an emergency arbitrator would simply hold no good. In the present case, interim order passed by emergency arbitrator fails to determine any substantive issue finally, therefore it falls short of being an award and hence unenforceable.
Interim measures by its very nature are un-enforceable
As per the Article 29 of ICC Rules, a party that needs urgent interim measures that cannot await the constitution of an arbitral tribunal may make an application for the appointment of emergency Arbitrator. Thus, an emergency arbitrator is one who can grant interim measures in the form of an order.
Section 17 of Arbitration and Conciliation Act 1996 merely states that the tribunal may pass an interim measure. The Supreme Court of India has observed: It neither confers the tribunal the power to enforce its order nor provides for judicial enforcement of such order thereof. Section 17 gives the arbitral tribunal the power to pass orders the same cannot be enforced as orders of a Court.
It is, undoubtedly, inferred from Sections 17(1) and 37(2)(b) of Arbitration and Conciliation Act 1996 that an ‘interim order’ u/s 17 is not an ‘interim award’ but, strictly an ‘interim order’. Where a foreign seated arbitral tribunal renders an ‘interim order’, there is unfortunately nothing under the Indian arbitration law that would support such orders. Keeping aside an emergency arbitrator’s order, India doesn’t even have an enforcement provision for interim orders passed by an ordinary arbitral tribunal.
In Hfcl Bezeq Telecom Ltd. vs. Union of India[4]it was held that the petition u/s 9 of Arbitration and Conciliation Act 1996 for the enforcement of emergency measures is non-maintainable. If ultimately the orders that are made in foreign land are incapable of being enforced in India, then surely there is no scope for even considering grant of interim reliefs by resort to section 9 of the Act, particularly as such interim reliefs are meant to be only in aid of final relief. Obviously no question of the Indian Courts entertaining the plea for grant of interim relief by resort to section 9 of the Act arises.[5]
There is no such legislative intent in India
In order to recognise emergency arbitrations, The Law Commission’s 246th Report proposed an amendment to Section 2(d) of Arbitration and Conciliation Act 1996. It was expected that the Arbitration and Conciliation (Amendment) Act, 2015 would embrace this global turn of tide and create provisions for appointment of Emergency Arbitrator. But unfortunately the said amending Act didn’t include the recommendation of the Law Commission. Hence Indian law, as of now does not expressly recognize “emergency Arbitrator” award. The refusal of to adopt the recommendations of Law Commission’s report proves that legislature has no intention to embrace emergency arbitrator in the definition of Arbitral tribunal u/s 2(d).
Conclusion
- The decision passed by the emergency arbitrator whether seated in India or in any foreign country is in the form of an order as it fails to decide any substantive issue in question;
- As the decisions are deemed to be in the form of an order hence the same cannot be enforced under Section 9 of the Act;
- Section 17 of Arbitration and Conciliation Act, 1996 only provides for arbitral tribunal to pass an interim measure and not for its enforcement; &
- Thus, currently there is no provision in Indian Arbitration regime for the enforcement of the decision of emergency arbitrator seated outside India.
[1] Sundar Rajoo, Law, Practice and Procedure of Arbitration, 557 (2d ed. Lexis Nexis).
[2] S Greenberg et al., International Commercial Arbitration: An Asian-pacific Prespective, 393 (1t ed. Cambridge Univ. Press 2011).
[3] G Born, International Arbitration: Law and Practice, (2d ed. Wolter and Kluwer 2015).
[4] Hfcl Bezeq Telecom Ltd. vs. Union of India, (2001)129(3)P.L.R. 624.
[5] H.S.B.C. P. I. Holdings (Mauritius) Ltd. v. Avitel Post Studios & Ors., (2014) SCC Online Bom. 929.
This article is written by Digvijay Singh of RMLNLU, Lucknow.
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