Section 9 Petition Converted to Section 17 Application Upon Consensual Appointment of Sole Arbitrator

The Petitioner, Tata Capital Housing Finance Limited, filed a petition under Section 9 of the Arbitration and Conciliation Act, 1996, seeking urgent interim reliefs against the Respondents

The reliefs sought included the attachment of bank accounts (linked to specific PANs), disclosure of assets on affidavit, furnishing of bank guarantees, and restraining the Respondents from alienating mortgaged or other properties to secure a dispute valued at approximately Rs. 2,43,90,718/-

During the hearing, the parties reached a consensus to refer the matter to arbitration based on Clause 12 of the Home Equity Agreements dated 29.02.2024 and 13.05.2024

Whether an Arbitrator should be appointed and the Section 9 petition be converted into a Section 17 application given the consensus between the parties?

Whether interim protection should be granted to the Petitioner pending the adjudication of the dispute by the Arbitral Tribunal?

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

It also utilized Section 17 of the Act, which empowers an Arbitral Tribunal to pass interim orders

Furthermore, the court acted upon the principle of party autonomy and the waiver of formal requirements (such as a Section 21 notice or a Section 11 petition) when parties mutually consent to the appointment of an arbitrator to avoid undue delay

The Court did not adjudicate the merits of the dispute as the parties were ad idem regarding the referral to arbitration

Upon reviewing the Arbitration Clause (Clause 12), which provided for various institutional appointments and electronic proceedings, the Court noted the parties' express waiver of the Section 21 notice and Section 11 filing requirements

The Court determined that since the commencement of proceedings should not be delayed, it was in the interest of justice to appoint an independent arbitrator

To ensure the efficacy of the proceedings, the Court decided that the Section 9 petition would be treated as an application under Section 17 to be decided by the Arbitrator

To protect the Petitioner's interests in the interim, the Court found it necessary to impose an embargo on the transfer of assets until the Arbitrator could hear the Section 17 application

The petition under Section 9 was disposed of with a direction that it be treated as an application under Section 17 before the learned Arbitrator

The Court ordered that a status quo be maintained in respect of the Respondents' movable and immovable properties and placed an embargo on the transfer of any assets until the Arbitrator adjudicates the Section 17 application

All rights and contentions of the parties, including jurisdictional objections, were kept open