ALTERNATIVE DISPUTE

RESOLUTION PROJECT
TOPIC:

UNCITRAL Model Law and Indian

Arbitration Law

MADE BY:
PRITHVI YADAV
A11911115068
SECTION ‘D’
B.A.LL.B(H)2015-2020
SEMESTER IX
ACKNOWLEDEGEMENT
I take this opportunity to express our humble gratitude and
personal regards to MS. SHIBA AHAD for inspiring me
and guiding me during the course of this project work and
also for her cooperation and guidance from time to time
during the course of this project work on the topic.
INTRODUCTION
In recent times, the issue of grant of interim relief by arbitral tribunals has become centre stage.
The 1985 Model Law contemplated grant of interim measures (Article 17) but it seemed half ‐
hearted, as it did not contain an enforcement mechanism and nor were any adverse affects
sanctioned in the event of non‐compliance. The old Article 17 was essentially premised on
voluntary compliance and therefore (not unsurprisingly) was rarely resorted to. At the same time, an
approach to court (while effective) had deterrents (including the inconvenience of moving a
different forum, perhaps through another legal team). Resort to courts also carried an inbuilt risk
of the court pre‐determining (or influencing) parties substantive rights. With this backdrop,
in the year 2006 UNCITRAL made extensive amendments to the Model Law and elaborate
provisions now stand incorporated on the subject. This project presents an analysis of the
UNCITRAL amendments to the Model Law and points out some problem areas. In the second part,
the article sets out the Indian law and practice on the subject.
The paper consists of two parts. In the first part, I comment upon the amendments brought about in
the year 2006 to the UNCITRAL Model Law in relation to interim measures. In the second part, I
discuss the Indian law and practice of grant of interim relief by arbitral tribunals.

PART I - The UNCITRAL Model

Law
The 1985 UNCITRAL Model Law provided for interim measures vide Article 17. The provision
however contained two express conditions: The measure had to be shown to be necessary and be "In
respect of the subject matter of the dispute". Besides, there were at least two inherent hurdles in the
path. First, one has to await the constitution of the tribunal and allow for a reasonable opportunity
for it to assemble at the seat and for the opposite side to respond to the request. This essentially
ruled out relief in the case of urgency (and more often than not an application for interim relief
cannot brook delay). Secondly, there was no mechanism to enforce an order of the tribunal.
The 1985 Model Law proceeded on an assumption that the parties would voluntarily accept the
interim order of the tribunal and there would be no need to even contemplate of an enforcement
procedure. On the other hand, if a party felt the need for an enforceable order, it would not be
incompatible for it to approach a court with a request in this regard.
The position was not satisfactory and after an elaborated process, in December, 2006 the
UNCITRAL Model Law stood amended. The old Article 17 stands completely replaced by an
extensive scheme providing inter alia for ex parte orders and for interim measures to be binding and
enforceable.
Article 17 now sets forth the powers of the arbitral tribunal in the widest terms. The earlier twin
conditions have been done away with. The amended Article 17 inter alia empowers the arbitral
tribunal to maintain or restore the status quo; direct a party to refrain from doing anything which
may prejudicially affect the arbitral process; provide a means for preserving assets for satisfaction
of the award, or preserve evidence that may be material for resolution of the dispute. The
tribunal may do so by framing its order in a form of an award or otherwise as it may deem
appropriate1.
Article 17 A provides for the conditions which must be satisfied for grant of an interim measure.
These conditions are universally recognised: balance of convenience; irreparable harm and “a
reasonable possibility that the requesting party will succeed on the merits of the claim”2.
Article 17 B is somewhat revolutionary in the realm of arbitration as it introduces the concept
of ex parte ad interim orders (called "preliminary orders"). The scope of such orders is
narrower and is essentially confined to maintaining the status quo. An ex parte order shall be
valid only for 20 days from the date of its issuance (within which time the tribunal may affirm
or modify the order after notice and an opportunity to the opposite side to present its case).
The general condition for ex parte orders is that the tribunal will require the applicant to
provide appropriate security in connection with the same unless the tribunal considers it
unnecessary to do so. An ex parte order shall be binding on the parties but shall not be
enforceable by a court process. Further such an order shall not be in the form of an award 3.
Perhaps the most far reaching amendment to the Model Law is vide Article 17 H and I. This
provides for recognition and enforcement of an interim measure ordered by the tribunal (i.e. other
than an ex parte order). Article 17 H inter alia states that an interim measure shall be recognized as
binding, unless otherwise stated by the tribunal. It may be enforced upon application to a competent
court irrespective of the country in which it was issued.
Recognition and enforcement may be refused only on the grounds stated in Article 17 I. Sub
Articles (i) to (iv) of Article 36 (1) (a) of the Model Law constitute the first set of grounds for
refusal to enforce an interim measure. Further, an interim measure will not be recognised if the
court finds that the grounds set forth in Article 36 1 (b) (i) or (ii) apply to the interim measure in
question. Article 36 1 (b) (i) provides for refusal to enforce if the subject matter of the dispute is not

1http://www.kaplegal.com/statutes/index.html
2ibid
3Supra note 1
capable of settlement by arbitration under the laws of the enforcing State and Article 36 (1) (b) (ii)
provides for the public policy ground.

Comments on the 2006 Amendments to the Model Law:

The UNCITRAL has moved boldly to try and address the limitations and hurdles in the way of an
arbitral tribunal in relation to interim measures. Though a new approach was warranted, I have
some reservations on the amendments. I may elaborate my reasons as follows:
(i) To begin with Article 17 (2) states that the interim measure can take any form i.e. it can be
in the form of an order simpliciter or in the form of an award. To my mind, these are two
completely different types of orders and cannot be treated in the same breath or be made
subject to the same set of rules. An interim order can of course be in the form of an interim
award but then an award is a final pronouncement on the issues it determines. It cannot be
called a "temporary measure" which the arbitral tribunal may modify or alter as it wishes as
it goes along. Once pronounced it becomes final and the arbitrators become functus officio in
relation to that issue. They cannot retrace their steps. Further, setting aside or enforcement of
an award (final or interim) is already a subject matter of Articles 34 and 36 of the Model Law.
There cannot be another (parallel) provision i.e. Article 17 (H) and (I) on the same subject.
There cannot be two provisions for enforcement of the same award.
Thus interim measures which take the form of an interim award ought not to have been included in
the new Article 17 scheme.

(ii) I also find the provisions for ex parte interim orders to sit uneasily with the role and standing of
an arbitral tribunal in the eyes of the parties. Arbitration is not a dispute resolution mechanism by
impersonal judges (akin to a court). The tribunal is a creation of the parties who perceive it as an
amiable forum. It is out of character to expect the tribunal to receive a secretive communication
from one party and pass binding orders thereon. It would be an embarrassment if later they have to
turn around and reverse their decision (after hearing the other side). It certainly will not be the best
start‐off for any arbitration. Further an ex parte order by the tribunal (though "binding") is not
capable of being enforced in court under Article 17 C (5). It will have to undergo a waiting period
of up to 20 days and if the order is maintained (after hearing the opposite side) the resultant order
will be subject to enforcement by court. An ex parte order is usually warranted in rare cases where
the aggrieved party cannot afford to lose any time. The process of issuance of an exparte order (first
provisionally and then finally) renders the whole exercise of doubtful value and perhaps in the
interest of efficiency and costs it may have been better to leave the subject of an ex parte orders to
the courts.
(iii) Further, I find the enforcement provisions (Article 17 I) to be too drastic. For all practical
purposes, it clothes an interim measure with the same vigour as a final award (but the two are not
the same). A final award is based on merits and evidence and follows the full legal process
(including an obligation to give reasons). An interim measure is not and it is anomalous to
give an interim measure the same standing and as a final award with little discretion with the court
except to enforce, as it is obliged a final award.

(iv) Under the Model Law if a challenge on bias is turned down by the arbitral tribunal
one can appeal by way of an interim recourse ) to court (under Article 13). It is for this reason
that a challenge on the ground of arbitrator's bias is not a ground for setting aside an award
under Article 34 or for resisting enforcement under Article 36. However, in relation to interim
measures, it should have been included in Article 17 I. Now one may have a situation that
there is no adequate opportunity to challenge an interim measure on the ground of bias.
(v) The amended Model Law seeks to achieve what the New York Convention never attempted to
i.e. give interim orders passed in another State the same enforceability as a final order.
For the above reasons I apprehend that the amended Model Law may not find the widespread
favour which the 1985 version did. In India, courts are zealous of their role in dispensation of
justice. The system is not very tolerant of the doors of the court being shut as Article 17 I seeks to.
We still have to come to terms with Article 34 of the Model Law (which does not allow a challenge
on merits in relation to a final award). A 2003 Indian Supreme Court decision 4 (which has
consistently been followed since) allows a final award to be challenged on merits. I therefore see
little hope of Article 17 I being adopted as part of Indian law.
This part is largely restricted to enforcement of foreign awards governed by the New York
Convention or the Geneva Convention. Part I is thus, (by its very nature) not a complete code. This
led to judicial innovation by the Supreme Court in the case of Bhatia International v. Bulk Trading 5.
Here the Indian court’s jurisdiction was invoked by a party seeking interim measures of protection
in relation to arbitration under the ICC Rules to be conducted in Paris. The provision for interim
measure (section 9) was to be found in Part II alone (which applies only to domestic
arbitration).Hence the Court was faced with a situation that there was no proprio vigore legal
provision under which it could grant interim measure of protection. Creatively interpreting the Act,
the Supreme Court held that the “general provisions” of Part I would apply also to offshore
arbitrations, unless the parties expressly or impliedly exclude applicability of the same. Hence by

4ONGC v. Saw Pipes Ltd; (2003) 5 SCC 705

5(2002) 4 SCC 105
judicial innovation, the Supreme Court extended applicability of the general provisions of Part II to
off-shore arbitrations as well.

PART II – Indian Arbitration law

and practice
On 20th of January 1996 by way of a special Ordinance, India promulgated a new
Arbitration Act6. It is essentially based on the 1985 Model Law and the 1976 UNCITRAL
Arbitration Rules with very few departures.
In relation to interim measures the Act follows Article 17 but adds an interesting twist. While it
does not create any mechanism for enforcement of the tribunal's interim measures, a provision is
made for an appeal to court from an order of the tribunal "granting or refusing to grant an interim
measure". This creates a grey area. A party is technically obliged to appeal if it feels aggrieved by
the interim order but it is not stated as to what will be the consequence if it simply chooses to
disobey it. At the same time if the succeeding party wishes to enforce it, there is no enabling
mechanism for it to do so. The succeeding party would necessarily be driven to start a second round
of litigation ‐ this time going to a court and hoping that the court would endorse what the tribunal
ordered or at least accept the tribunal's findings as a prima facie basis for an interim order of
protection in the same manner and to the same extent as ordered by the tribunal. Clearly this is an
unsatisfactory state of affairs.
Court mechanism:
Like the Model Law the Indian Act also enables an approach to a court for interim relief. Resort to
court has its pros and cons. To begin with one has to take ones case to a forum which presumably
the parties wished to avoid in the first place by having an arbitration clause. Further, one may
have to involve another set of lawyers, either because the competent court is in another seat, or
the arbitration bar is distinct from the court bar.
When approached, the court may be minded to clarify that its order is interim in nature and would
not bind the arbitral tribunal from holding otherwise on merits but nevertheless when a court
decides an issue (even though prima facie) in a certain manner it may impact the final decision or
compromise independent decision making by the tribunal. The High Court of Delhi has held7 that

6The Arbitration & Conciliation Act, 1996

7National Highways Authority of India (NHAI) v. China Coal Construction Group Corporation; decision dated
23rd January 2006 of High Court of Delhi.
if resort is made to both an arbitral tribunal and the courts for an interim measure and there
is a conflict or an overlap, the order of the court will have primacy. This is on the principle
that a court is a higher judicial forum. Thus having to go to a court has its complications.
The upside of resort to court is that it is effective and expeditious in a manner that an arbitral
tribunal's order can never be and can also be directed to third parties if needed. Therefore resort to
court may well be necessary and it is important to have a strong provision empowering the
courts as well to grant interim measures.
Section 9 of the Indian Arbitration Act is based on the Article 9 of the Model Law but it takes it
further. It empowers the Court beyond what Article 9 does. The Model Law enables a party to
approach a court for an interim measure of protection before or during the arbitral proceedings. The
Indian Act goes further by enabling an approach to court before, during or even after the arbitral
award is delivered (but before its enforcement by court). If there is recourse to court before
commencement of arbitration, the applicant must satisfy the court that it intends to take recourse to
the arbitration proceedings within a short period of time and can be put to terms in this regard by
the court8. In other words the law discourages a party from taking an interim order before the
arbitral proceedings commence and then keep the arbitration in abeyance. The other departure the
Indian Act makes from the Model Law is that it extensively sets out the types of interim measures
of protection the court may pass. These include:
‐ The preservation, interim custody or sale of any goods which are the subject matter of the
arbitration agreement;
‐ Securing the amount in dispute in the arbitration;
‐ The detention, preservation or inspection of any property or thing which is the subject matter of
the dispute in arbitration;
‐ Authorising any person to enter upon any land or building in the possession of any party or
authorising any samples to be taken or any observation to be made or experiment to be tried which
may be necessary or expedient for the purpose of obtaining full information or evidence;
‐ Appointment of a Receiver; and
‐ The residuary power to pass "such other interim measure of protection as may appear
to the court to be just and convenient".
Section 9 then goes on to clarify that the court shall have the same power to pass an interim order as
it has in relation to in any other proceeding before it.
Accordingly one may briefly explain the general provisions in India in matters of grant of
temporary injunctions and interlocutory orders. Under Indian law 9, courts have wide power to grant
such orders (including Mareva injunctions and Anton Piller Orders). An application in this regard is
8Sundaram Finance Ltd. v. M/s NEPC IndiaLimited; AIR 1999 SCC 565
9Order XXXVIII and XXXIX of the Code of Civil Procedure, 1908
dealt with on the basis of affidavits (i.e. without the need for any oral evidence). Indian courts are
liberal in matters of granting interlocutory relief (chiefly as the main suit can take an inordinate
period of time to reach conclusion and it may become necessary to protect the equities in the
meanwhile). It is not typical in India to ask the party safeguarded to provide a security for the
measure.
The remedy is discretionary and granted on three considerations: (i) the court finds that the
applicant has a good prima facie case in its favour; (ii) there is a balance of convenience in favour
of grant of an interlocutory order (the court compares the inconvenience to either party to see which
way the balance lies); and (iii) irreparable injury i.e. that which cannot be rectified by compensation
in terms of money.
The court does not undertake and indeed is not expected to undertake a detailed exercise on
the merits of the case. The court would also not grant an interim remedy which would in effect
amount to granting the final relief or make the final relief infructuous; nor will it grant an
interim relief which cannot in law be granted by way of a final relief. An ex parte order can be
granted in very exceptional circumstances. Essentially the court must be satisfied that the object of
granting the measure would be frustrated by the process of notifying the opposite party.
It may be stated that this was premised on the assumption that the Indian court would
otherwise have jurisdiction in relation to the matter (in international sense). This became
clear in a subsequent decision of the supreme court in Shreejee Traco (I)Pvt. Ltd v Paperline
International Inc10. Here the court’s assistance was sought for appointing an arbitrator in an
offshore arbitration. The power of appointment by court exists under section 11 of part II of
the act. The court declined to exercise jurisdiction. It found that the arbitration was to be
conducted in New York and that the law governing the arbitration proceedings would be the
law of seat of the arbitration. Hence the extension of part II provisions to foreign arbitrations
sanctified by Bhatia11 could not be restored to in every case. The Indian courts would have to
first determine if it has jurisdiction, in International sense.
Amendments on the anvil:
Over the years attempts have been made to amend the Arbitration Act (including the provisions
dealing with interim measures). In 2003 at the recommendation of the Law Commission of India
extensive amendments were proposed. First, it was proposed to add to and elaborate the powers of
the tribunal in relation to interim measure (i.e. 12 modify Section 17, corresponding to Article 17 of
the Model Law). Then a parallel committee proposed that interim measures of protection ordered by
the arbitral tribunal be enforceable through courts. A new Section was proposed to provide inter alia
that the courts may refuse to enforce an interim measure of protection only if it is satisfied that:
10(2003) 9 SCC 79.
11Supra note 2
(i) There is a substantial question of law relating to any ground for refusal; or
(ii) The applicant has failed to provide appropriate security in connection with the interim
measure as ordered.
However the Amendment Bill ran into trouble as there was difference of opinion on some major
proposals (other than in relation to interim measures). As a result the Bill and also a subsequent
attempt to amend the Act have come to naught and is not likely to be taken forward in the near
future.

Indian Arbitration Law – Supreme

Court Implements UNCITRAL
Model Law
Recently, on September 6, 2012, the five members constitutional bench of the Indian supreme court
("Supreme Court") in 'Bharat Aluminum Co. Vs. Kaiser Aluminium Technical Service
Inc.12 ("Balco Judgment")' after reconsidering its various previous decisions on the Indian
Arbitration & Conciliation Act 1996 ("Indian Arbitration Act") concluded that the Indian
Arbitration Act should be interpreted in a manner to give effect to the intent of Indian Parliament. In
Balco Judgement, the Supreme Court reversed its earlier rulings in cases of 'Bhatia International v
Bulk Trading S.A & Anr13and 'Venture Global Engineering v Satyam Computer Services Ltd and
Anr14 stating that findings in these judgments were incorrect.

Based on the Balco Judgment, the following is new legal position w.r.t. arbitrations law in India
which is in line with the intention of the parliament when they enacted Indian Arbitration Act in
1996:

a. The Indian Arbitration Act has accepted the territoriality principle which has been adopted
in the UNCITRAL Model Law. Accordingly, Part I of the Indian Arbitration Act applies only
to arbitrations taking place in India irrespective of whether such arbitrations takes place
between Indian parties or between the Indian and foreign parties ("Domestic Awards"). The

12Civil Appeal No. 7019 of 2005

132004 (2) SCC 105
142008 (4) SCC 190
 Domestic Awards can be challenged (section 34) and are enforceable (section 36) under Part
I of the Indian Arbitration Act.

b. Part I of the Indian Arbitration Act has no application to arbitrations seated outside India
irrespective of whether parties chose to apply the Indian Arbitration Act or not ("Foreign
Awards"). The grounds to challenge of awards given in Part I (section 34) of the Indian
Arbitration Act are thus applicable only to Domestic Awards and not to Foreign Awards.

c. The law of the seat or place where the arbitration is held is normally the law to govern
the arbitration. If the agreement provides for a "seat/place" outside India, Part I of the
Indian Arbitration Act would be inapplicable to the extent inconsistent with the
arbitration law of the seat/place, even if the agreement purports to provide that the
Indian Arbitration Act shall govern the arbitration proceedings.

d. In case of Domestic Awards, Indian laws shall prevail if substantive law conflicts with the
laws of India. In case of Foreign Awards, the conflict of laws rules of the country in which
the arbitration takes place would have to be applied.

e. There is no provision under the Civil Procedure Code 1908 or under the Indian Arbitration
Act for a court to grant interim measures in terms of Part I (section 9) of the Indian
Arbitration Act in arbitrations which take place outside India, even though the parties by
agreement may have made the Indian Arbitration Act as the governing law of arbitration. An
inter-parte suit simply for interim relief pending arbitration outside India would not be
maintainable in India.

f. The regulation of conduct of arbitration and challenge would be done by the courts of the
country in which arbitration is conducted. Accordingly, a Foreign Award can be annulled by
the court of the country in which the award was made, i.e., the country of the procedural
law/curial law ("First Alternative") and not before the courts of the country under the law
of which the award was made, i.e., the country of substantive law ("Second Alternative").
It can be challenged in the courts of the Second Alternative, only if the court of the First
Alternative had no power to annul the award under its national laws.
 g. The Indian Arbitration Act intentionally limits it to awards made in pursuance of an
agreement to which the New York Convention or the Geneva Protocol applies. Therefore, no
remedy is provided for the enforcement of the 'non convention awards' under the Indian
Arbitration Act.

h. Most importantly, these findings of the Supreme Court are applicable only to arbitration
agreements executed after 6 September 2012. Thus all disputes pursuant to arbitration
agreement entered into upto 6 September 2012 shall be decided by old precedents
irrespective of fact that according to the Supreme Court such rulings were incorrect and
have been reversed

It is noted that the foreign investors/parties have been facing problems in enforcing the
Foreign Awards in India against Indian parties because earlier the Supreme Court
consistently held that provisions of Part I of the Indian Arbitration Act are applicable to the
Foreign Awards as well. Thus, the Foreign Awards were subject to interference by Indian
courts both during pendency of arbitration proceedings and at enforcement stage because
Indian parties were entitled to challenge the Foreign Awards on various grounds available
under Part I of the Indian Arbitration Act. Also, under such proceedings, the Foreign Awards
were challenged on merits as well before the Indian courts. Therefore, now in view of the
Balco Judgment, the Indian parties will no more enjoy such protections if the place/seat of
arbitration is outside India.
CONCLUSION

Considering the growing significance of arbitrations in resolution of international disputes, it is only

appropriate that arbitral tribunals be empowered in relation to grant of interim measures of
protection. The 1985 Model Law was quite inadequate in this regard. At the same time, in my
respectful view, the 2006 amendments to Article 17 propose a leap too long, especially in relation to
the enforcement provisions. I apprehend that these provisions may not meet with the wide
acceptance the 1985 version did (and in the absence of uniform application, the Model Law
will not serve the purpose it set out to). In my respectful view fresh proposals need to be mooted
which would render the arbitral tribunal's decision binding and also enforceable. An aggrieved party
should be able to resist enforcement on narrow grounds such as patent illegality, irregularity or
gross unfairness of the result but to render an interim measure the same degree of enforceability as a
final award is potentially unfair and jurisprudentially inappropriate.
BIBLIOGRAPHY

Books Referred:

1. Madhabhusi Sridhar, Alternative Dispute Resolution, 1 st Edition: 2011, LexisNexis Butterworths,

Wadhwa Nagpur, Haryana.

2. O. P. Malhotra and Indu Malhotra, The Law and Practice of Arbitration and Conciliation, 2 nd
Edition: 2006, LexisNexis, Butterworths, New Delhi.

3. N. K. Acharya, Law Relating to Arbitration and ADR, 3 rd Edition: 2011, Asia Law House,
Hyderabad.

4. P.C.Markanda, Law Relating to Arbitration and Conciliation, 7th Edition: 2008, LexisNexis
Butterworths, Wadhwa, Nagpur, Haryana.

5. V.A.Mohta, Arbitration and Conciliation, 1st Edition: 2001, All India Reporter Pvt. Ltd.,
Mumbai.

6. G.K.Kwatra, Arbitration and Conciliation Law of India, 7 th Edition: 2010, Universal Law
Publishing Co., Delhi.

Websites Referred:

1. http://www.kaplegal.com (last visited on 21st march 2014)

2. https://ipba.org/media/fck/files/Arbitration (last visited on 21st march 2014)

3. http://www.mondaq.com (last visited on 22nd march 2014)

4. www.mediate.com (last visited on 22nd march 2014)