Court Exercising Power U/Sec 9 Arbitration Act Not Strictly Bound By CPC ; Should Not Withhold Interim Relief On Mere Technicality: Supreme Court

• The Supreme Court has observed that the power of Court to grant interim relief under Section 9 of the Arbitration and Conciliation Act is not curtailed by the rigours of every procedural provision in the Code of Civil Procedure.

What is Section 9 of the Arbitration Act

• Section 9 of the Arbitration Act 1996 provides that a party may apply to a Court for an interim measure or protection inter alia to

1. secure the amount in dispute in the arbitration; or
2. 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.

• The observation was made by the Court while dealing with an appeal challenging the order passed by a Division Bench of Bombay High Court, dismissing the appeal filed by the Appellant-Essar House Private Limited, under Section 37 of the Arbitration and Conciliation Act, 1996
• It confirmed an order passed by the Single Bench of the High Court and directing Essar House Private to deposit an amount of Rs.35.5 crores with the Prothonotary and Senior Master of the High Court or, in the alternative, to furnish bank guarantee of any nationalised bank for the entire amount along with interest thereon.
• It was further observed by the court that "If a strong prima facie case is made out and the balance of convenience is in favour of interim relief being granted, the Court exercising power under Section 9 of the Arbitration Act should not withhold relief on the mere technicality of absence of averments, incorporating the grounds for attachment before judgment under Order 38 Rule 5 of the CPC."
• The Court held that in order to assess the balance of convenience, the Court should examine and weigh the consequences of refusal of interim relief to the applicant for interim relief in case of success in the proceedings, against the consequence of grant of the interim relief to the opponent in case the proceedings should ultimately fail.