The past decade has seen a growth in the use of Emergency Arbitrators (“EAs”) in international arbitrations. Despite the recognition of EAs and their orders in multiple jurisdictions, the concept of EAs has unfortunately failed to gain much traction in the Indian legal framework.

Prior to the conception of EAs, there was a vacuum in the sphere of arbitration with respect to urgent interim relief, as parties would either have to: (i) approach courts for such relief, or (ii) await the constitution of the arbitral tribunal. The use of EAs gradually gained popularity in international arbitration since an EA could be appointed within a couple of days, prior to the constitution of the main tribunal for the grant of urgent interim relief.

Despite the aforementioned, EAs have not been given statutory recognition under Indian law. Although provisions with respect to EAs are found in the Mumbai Centre for International Arbitration (“MCIA”) and the Delhi International Arbitration Centre Rules, due to the lack of statutory recognition, enforcement of EA orders remain challenging. Interim relief granted by EAs came up for scrutiny before Indian Courts in the below cases:

a. HSBC PI Holding (Mauritius) Limited v. Avitel Post Studiouz Limited[1]: The parties had agreed to a Singapore seat of arbitration, and an interim order was obtained from an EA. Since there was no framework for recognition and enforcement of reliefs passed by an EA under the Arbitration and Conciliation Act, 1996 (“Act”), the petitioner filed an independent Section 9 petition for interim reliefs in the Bombay High Court. The Court held that the Section 9 petition was not for enforcement of the EA award but for interim measures, and thus it independently granted the same interim reliefs as those granted by the EA.

b. Raffles Design International India Pvt. Ltd. & Anr.  v. Educomp Professional Education Ltd & Ors.[2]: In this case, the seat of arbitration was Singapore and the appointed EA granted interim reliefs. Due to breaches committed of the EA’s order, a Section 9 petition was filed before the Delhi High Court. The Delhi High Court held that the “…emergency award passed by the Arbitral Tribunal cannot be enforced under the Act and the only method for enforcing the same would be for the petitioner to file a suit….Recourse to Section 9 of the Act is not available for the purpose of enforcing the orders of the Arbitral Tribunal; but that does not mean that the Court cannot independently apply its mind and grant interim relief in cases where it is warranted.”[3]

c. Ashwani Minda & Anr v. U-Shin Ltd & Anr[4]: A Section 9 petition was filed before the Delhi High Court for interim reliefs that had already been refused by a detailed order of an EA appointed under the JCAA Rules. The Delhi High Court held that “this Court in a petition under Section 9 of the Act cannot sit as a Court of Appeal to examine the order of the Emergency Arbitrator.”[5] Thus the Delhi High Court, whilst refusing jurisdiction under Section 9 (on the grounds of implied exclusion of the provision by parties) also recognised that since there was a detailed EA award it could not be reviewed by the Delhi High Court as if it were an  appeal court.

With respect to an Indian seated institutional arbitration, despite the provisions of an EA, parties could still prefer to approach an Indian court for interim reliefs under Section 9 of the Act, owing to familiarity of the proceedings, and enforceability of the court orders. In fact, in exercise of powers under Section 9 petitions, courts can bind third parties as well as grant ex-parte orders, both of which cannot be done by EAs. However, EAs are still relevant as they attempt to avoid lengthy court procedure, maintain confidentiality and could potentially work well in a country like India where courts have a tremendous backlog of cases. The Law Commission[6] and the Srikrishna Committee[7] both suggested amendments to the Act to include provisions explicitly recognizing EAs and their orders, however, they have not been incorporated in any of the later amendments made to the Act.

One potential method for seeking action for breach of an EA order could be through Section 27 of the Act (Court Assistance in Taking Evidence), which is applicable to international commercial arbitrations (unless the parties have excluded the same). Section 27 (5) provides that if a person commits any default or is guilty of contempt to the arbitral tribunal, the tribunal could make a representation to the Court for initiation of contempt proceedings. Such an option is yet to be tested, and poses an interesting issue on the practical applicability of Section 27 to foreign seated arbitrations.

Despite the aforementioned advantages of EAs, it is important to bear in mind that the question of enforcement would perhaps not even arise if the order granted by the EA expires. For example, pursuant to the Singapore International Arbitration Centre Rules, the order issued by the EA will cease to be binding if within 90 days, no arbitral tribunal is constituted. However, this would depend on the rules of the institution pursuant to which the EA was appointed, as certain institutions such as MCIA, do not have a similar provision.

India has been making efforts to establish itself as a global arbitration hub, one that is at par with Singapore and Hong Kong. However, in the absence of provisions recognizing and providing statutory support to orders passed by EAs, India needs to step up. It will be interesting to see whether over the next decade, the law with respect to EAs undergoes a change and India has the same legal framework in place for enforcements of orders passed by EAs as other global arbitration hubs.

Author:
Bhakti Parekh, Associate

Footnotes:

[1] Arbitration Petition No. 1062 of 2012
[2] 2016 SCC OnLine Del 5521
[3] Ibid, para 105
[4] OMP(I)(COMM.) 90/2020
[5] Ibid,  para 56
[6] Law Commission’s 246th Report on Amendments to the Arbitration and Conciliation Act, 1996 dated August 5, 2014
[7] Report of the High Level Committee to Review the Institutionalisation of Arbitration Mechanism in India dated July 30, 2017