Court Refers Section 9 Petition for Interim Relief to Arbitral Tribunal for Treatment as Section 17 Application

The Petitioner, Sunsure Energy Private Limited, filed a petition under Section 9 of the Arbitration and Conciliation Act, 1996, seeking interim relief against Respondent No. 1 (Vikram Solar Limited) and Respondent No. 2.

The dispute arose from a Domestic Module Supply Agreement dated October 14, 2025, which contained a detailed arbitration clause (Clause 18).

The Petitioner specifically sought to restrain the encashment or negotiation of a Letter of Credit (No. INLCU0100250674) or, alternatively, prayed that any realized amounts be deposited in court pending arbitration.

During the proceedings, both parties reached a consensus to refer their disputes to a three-member Arbitral Tribunal.

1. Whether the Court should grant interim protection regarding the Letter of Credit under Section 9 of the Act or refer the prayer to a newly constituted Arbitral Tribunal.

2. Whether the Court can dispense with separate Section 11 proceedings to appoint an Arbitral Tribunal when parties reach a consensus during Section 9 hearings.

The Court applied Section 9 of the Arbitration and Conciliation Act, 1996, which allows parties to seek interim measures before or during arbitral proceedings.

Clause 18 of the parties' Agreement, which mandated a three-member tribunal and designated Delhi as the seat of arbitration with exclusive jurisdiction in Delhi courts.

The Court exercised its discretionary power to bypass the procedural requirement of a separate Section 11 application for arbitrator appointment when parties are ad idem on the reference to arbitration.

The Court did not rule on the merits of the interim reliefs regarding the Letter of Credit. Instead, it noted the consensus between the Senior Counsel of both parties to resolve the dispute via arbitration.

To ensure the "commencement of arbitral proceedings... should not be unduly delayed," the Court accepted the nominations of two former Chief Justices as party-appointed arbitrators.

The Court determined that the Section 9 petition should be converted into a Section 17 application, thereby shifting the responsibility of deciding interim protection to the Arbitral Tribunal once constituted.

This approach prioritizes party autonomy and the efficiency of the arbitral process over protracted litigation in court.

The Court held that the Section 9 petition shall be treated as an application under Section 17 to be decided by the Arbitral Tribunal expeditiously.

All rights and contentions were kept open, and the requirement for a separate Section 11 petition was dispensed with.