Section 9 Petition Treated as Section 17 Application Upon Consensual Reference of Disputes to Arbitration

The Petitioner, a construction company, filed a petition under Section 9 of the Arbitration and Conciliation Act, 1996, seeking interim reliefs against the Respondents.

The dispute arose from a Letter of Intent dated 07.06.2023 and a Tender Agreement regarding a construction project.

The Petitioner sought to restrain the Respondents from acting on a termination notice dated 03.02.2025, prevent them from engaging third parties or altering the existing structure, and requested a direction for the Respondents to deposit approximately ₹5.10 crores to secure pending bills.

During the hearing, both parties reached a consensus to refer the matter to a Sole Arbitrator rather than adjudicating the Section 9 petition on its merits.

Whether the disputes arising from the Letter of Intent and Tender Agreement should be referred to a court-appointed Sole Arbitrator based on party consensus?

Whether the Section 9 petition for interim measures can be treated as an application under Section 17 before the newly appointed Arbitral Tribunal?

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

It also gave effect to the party autonomy principle under Section 21 regarding the commencement of proceedings and Section 12(2) regarding mandatory disclosures by arbitrators.

Furthermore, it utilized the procedural efficiency of converting a Section 9 petition into a Section 17 application (interim measures by an Arbitral Tribunal) to ensure the Arbitrator determines the merits of the interim protection.

The Court noted that both parties were ad idem regarding the appointment of an independent arbitrator to resolve their disputes, which were valued at approximately ₹6 crores.

By mutual agreement, the parties waived the statutory requirements for a formal Section 21 notice and the filing of a separate Section 11 petition for the appointment of an arbitrator.

The Court identified the arbitration clauses in the Letter of Intent and the General Conditions of Contract (GCC) which established New Delhi as the venue.

To avoid delay and preserve the interests of justice, the Court exercised its power to appoint a Senior Advocate as the Sole Arbitrator, leaving all substantive disputes, including jurisdictional objections, to be decided by the Tribunal.

The Court directed that the present Section 9 petition be treated as an application under Section 17 to be decided by the Arbitrator upon entering the reference.

The Arbitrator is required to provide disclosures under Section 12 within one week, and fees are to be governed by the Fourth Schedule of the Act, shared equally by the parties.

No opinion was expressed on the merits of the underlying dispute.