Section 17 interim relief cannot be refused without discernible reasons.

The appellant, a hospital lessee under a registered lease deed dated 20 April 2023, alleged that the respondent hospital breached the lease by sourcing pharmaceutical supplies for its in-patients from third parties.

The respondent maintained that the appellant had inflated medicine prices and that third-party procurement was necessary.

After the appellant sought interim protection under Section 9 of the Arbitration and Conciliation Act, 1996, the High Court directed that the application be treated as one under Section 17 and heard by the arbitrator.

The arbitrator dismissed it, reasoning that the requested relief would pre-judge the dispute and substantially grant the final relief.

The appellant challenged that order under Section 37(2)(b) of the Act.

1. Whether the arbitrator’s refusal of interim relief could be sustained where the order did not explain how granting any or all of the requested measures would pre-judge the contractual dispute or render the arbitration redundant

2. Whether interim relief may be refused solely because it is co-extensive with, or overlaps with, relief sought in the statement of claim

Section 17 of the Arbitration and Conciliation Act, 1996 empowers an arbitral tribunal to grant interim measures of protection; an order under Section 17 is appealable under Section 37(2)(b).

An arbitrator’s decision must disclose at least some reason or justification for the opinion reached, although arbitral orders are not held to the same standard as judicial determinations.

Dyna Technologies Pvt. Ltd. v. Crompton Greaves Ltd., 2019 SCC OnLine SC 1656, distinguishes inadequacy of reasons from an unintelligible decision and recognises the need for legal reasoning.

Dulpat Kumar v. Prahlad Singh, (1992) 1 SCC 719, and Assistant Collector of Central Excise v. Dunlop India Ltd., (1985) 1 SCC 260, caution against interlocutory relief that effectively disposes of the main dispute or confers relief that should follow only after a full hearing.

However, overlap between interim and final relief does not, by itself, bar interim protection.

The High Court did not interpret the disputed lease clauses, so as not to prejudice the arbitration.

It compared the Section 17 prayers with the statement-of-claim prayers and observed that, although some interim measures overlapped with final relief, that overlap did not automatically amount to final determination or make interim relief unavailable.

The arbitrator had stated that the requested relief would pre-judge the dispute and render the arbitration redundant, but had not explained how those consequences would follow from any particular prayer.

The Court therefore found the reasoning insufficient to disclose the basis for refusing the application, without expressing any view on whether interim relief should ultimately be granted.

The Section 17 application was to be heard afresh and disposed of expeditiously.

The Court clarified that it had expressed no view on the merits of either the statement of claim or the Section 17 application, which the arbitrator was to decide uninfluenced by the judgment.