Arcelor Mittal Nippon Steel India Ltd. v. Essar Bulk Terminal Ltd.
Background
A dispute arose between two companies over a cargo-handling agreement at Hazira Port in Gujarat. After arbitration was invoked, both sides separately approached a Commercial Court under Section 9 of the Arbitration and Conciliation Act seeking urgent interim protection (such as securing disputed amounts) even as steps to set up an arbitral tribunal were underway. The key legal question was whether, once an arbitral tribunal is constituted, a court is still allowed to "entertain" such interim-relief applications, or whether parties must instead seek interim relief from the tribunal itself under Section 17 of the Act.
Decision Breakdown
The Supreme Court clarified that Section 9(3) of the Arbitration Act bars a court from taking up a fresh interim-relief application only if the tribunal has already been constituted by the time the court is asked to "entertain" it; but if the court had already begun hearing and considering the application before or around the time the tribunal was formed, it is not required to go back and examine whether the tribunal's parallel remedy under Section 17 would be equally effective: that inquiry is relevant only when the application is first being taken up. Since the Commercial Court here had already entertained and was actively considering the Section 9 application, it did not need to independently assess the efficacy of Section 17 relief. The Court allowed the appeal only to the limited extent of clarifying this point, while otherwise leaving the High Court's underlying directions to the Commercial Court (to proceed with the adjudication) undisturbed.
Lesson Learnt
In arbitration disputes, whether a regular court can still grant you urgent interim relief depends heavily on timing: if the court already started considering your request before the arbitral tribunal was set up, it can continue to decide it without separately checking whether the tribunal could have done the job just as well.