Losing Parties Can Seek Post-Award Interim Relief Under Arbitration Law: Supreme Court

(MENAFN- KNN India) New Delhi, Apr 27 (KNN) The Supreme Court has held that even an unsuccessful party in arbitration can seek interim relief under the Arbitration and Conciliation Act 1996 after an arbitral award is passed. However, the Court cautioned that such requests must be examined with care and caution.

A Bench of Justice Manoj Misra and Justice Manmohan delivered the ruling while adjudicating a batch of commercial appeals concerning the maintainability of post-award interim relief petitions filed by parties unsuccessful in arbitration.

The key issue before the Court was whether a losing party, which does not hold an enforceable award, can invoke Section 9 of the Act after the award stage.

Court's Interpretation

The Court held that Section 9 uses the term 'a party', which includes all parties to an arbitration agreement, without distinguishing between winners and losers. It observed that restricting this right only to successful parties would amount to rewriting the law.

The Bench further noted that the right to seek interim protection continues until the conclusion of the legal process, including the period between the award and its enforcement.

Conflicting High Court Views Resolved

The ruling settles conflicting judicial interpretations. While some courts, including the Bombay High Court, had held that only award-holders could seek post-award interim relief, others-such as the Telangana, Gujarat, and Punjab & Haryana High Courts-had allowed such petitions by unsuccessful parties.

The Supreme Court endorsed the latter view, holding that denying such relief would deprive parties of a statutory remedy.

Rationale for Relief

The Court clarified that Sections 34 and 36 deal with challenging or staying an arbitral award, whereas Section 9 serves a different purpose-protecting the subject matter of the dispute or the amount involved.

It noted that denying interim protection to a losing party could leave it without any remedy, particularly where the award is under challenge and there is a risk of asset dissipation.

Caution on Grant of Relief

At the same time, the Court emphasised that interim relief should not be granted routinely to unsuccessful parties. It said courts must apply a higher threshold, carefully assessing factors such as a strong prima facie case, balance of convenience, and risk of irreparable harm.

Final Ruling

The Court held that any party to an arbitration agreement, including an unsuccessful one, may invoke Section 9 at the post-award stage. However, it advised courts to exercise“care, caution and circumspection” while dealing with such applications.

(KNN Bureau)

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