Section 9 of ACA : Section 9: Interim Measures, Etc, By Court

Explanation using Example

Imagine a scenario where two businesses, Company A and Company B, are in a dispute over the delivery of custom-manufactured machinery, which Company A has failed to deliver on time as per their contract. Company B, fearing that Company A may sell the machinery to another party, decides to seek legal recourse to protect its interests.

Before the arbitration proceedings begin, Company B approaches the court under Section 9 of The Arbitration and Conciliation Act, 1996, with the following requests:

• For the court to issue an interim order to preserve the machinery and prevent its sale to another party (as per Section 9(1)(ii)(a)).
• To secure the amount Company A was supposed to pay as damages for the delay, by freezing Company A's bank accounts (as per Section 9(1)(ii)(b)).

The court, upon finding merit in Company B's request, grants the interim measures to protect Company B's interest until the arbitration panel is constituted and can make a decision on the matter.

As per Section 9(2), Company B must commence the arbitral proceedings within ninety days from the date of the court's interim order to ensure that the dispute is resolved through arbitration.

Once the arbitral tribunal is in place, Company B cannot approach the court for any further interim measures under Section 9(1), unless there are exceptional circumstances that make the relief available under Section 17 (power of the arbitral tribunal to order interim measures) ineffective (as per Section 9(3)).