Supreme Court: Arbitral Tribunal Should Decide Interim Relief Under Arbitration Act

• The Supreme Court ruled that an arbitral tribunal, once constituted, is generally the appropriate forum for deciding interim relief applications under the Arbitration and Conciliation Act, 1996.
• This decision came in a case involving Liberty Investment Pvt Ltd, which challenged a Bombay High Court order regarding an injunction.
• The Court referred the parties back to the FOSFA arbitral tribunal for a decision on interim relief, maintaining the existing injunction until November 20, 2026.
• The ruling emphasizes judicial restraint under Article 136 when arbitration proceedings are ongoing, preferring tribunals to handle interim measures.
• The case involved the interpretation of Sections 9 and 9(3) of the Arbitration and Conciliation Act, which govern court intervention for interim relief.

The Supreme Court underscored its practice of exercising jurisdiction under Article 136 of the Constitution with considerable restraint when parties are already engaged in arbitration.

The Supreme Court of India recently clarified the appropriate forum for deciding interim relief applications once an arbitral tribunal has been established and is actively hearing a dispute. A bench comprising Justices K V Vishwanathan and Arun Palli determined that, under such circumstances, the arbitral tribunal itself is generally the most suitable body to rule on requests for interim measures under the Arbitration and Conciliation Act, 1996. This directive emphasizes that courts should typically defer to the tribunal's judgment regarding necessary interim protections, including those aimed at securing the amount in contention, particularly when arbitration proceedings are already in progress.

This pronouncement came in response to a plea filed by Liberty Investment Pvt Ltd, which challenged a September 22, 2026 order issued by the division bench of the Bombay High Court. The Supreme Court concluded that the arbitral tribunal, having been constituted under the Federation of Oils, Seeds and Fats Association Rules, 2025 (FOSFA Rules) and having made substantial progress in its hearings, possessed the best insight to ascertain whether any interim protection was warranted. Consequently, the apex court directed the parties to return to the arbitral tribunal for a decision on the interim relief, while ensuring that the existing injunction remained in effect until November 20, 2026.

The Supreme Court underscored its practice of exercising jurisdiction under Article 136 of the Constitution with considerable restraint when parties are already engaged in arbitration. This approach reflects a preference for allowing the arbitral tribunal to address questions pertaining to interim measures, thereby upholding the autonomy and efficiency of the arbitration process. The bench also recalled that both the Supreme Court and various High Courts have, on numerous occasions, allowed orders made under Section 9 to be superseded or modified by subsequent orders issued by the tribunal under Section 17, once the tribunal is fully constituted.

The core of the dispute revolved around the interpretation and application of Sections 9 and 9(3) of the Arbitration and Conciliation Act, 1996. Section 9 grants parties the ability to approach a court for interim measures either before or during the course of arbitration proceedings. However, Section 9(3) introduces a crucial limitation: it generally prevents a court from entertaining such an application once an arbitral tribunal has been constituted, unless the court determines that the remedy available through the tribunal under Section 17 would not be effective. This provision aims to channel interim relief requests to the arbitral forum once it is operational.

Article 136 of the Constitution of India also played a role in the Supreme Court's deliberation. This constitutional provision bestows upon the Supreme Court discretionary authority to grant special leave to appeal against any judgment, decree, determination, sentence, or order issued by any court or tribunal across the country. The Supreme Court's decision to refer the matter back to the arbitral tribunal, while keeping the existing injunction in place for a limited period, demonstrates its cautious application of this broad power, especially when an alternative dispute resolution mechanism is already actively engaged.

The specific application for interim relief, which sought an injunction against Liberty Investment, originated under Section 9 read with Section 9(3) of the Arbitration and Conciliation Act, 1996. The initial ruling came from a single judge of the Bombay High Court, who dismissed the application on January 8, 2026. The single judge deemed the application non-maintainable, citing the fact that the arbitral tribunal, as stipulated by the contract, had already been constituted on November 17, 2025.

This dismissal was subsequently challenged by the respondent before a division bench of the Bombay High Court. The division bench, diverging from the single judge's stance, proceeded to consider the application on its merits. It concluded that the remedy available through the FOSFA Tribunal would not be efficacious, thereby allowing the application to be heard. It was this September 22, 2026 order from the division bench that Liberty Investment Pvt Ltd then brought before the Supreme Court for review.

Liberty Investment's counsel presented several key arguments before the Supreme Court. They contended that if the division bench had indeed found the Section 9 application maintainable, its proper course of action should have been to remand the matter back to the Single Judge for a full consideration on its merits, rather than deciding it directly. The company further highlighted that the arbitral tribunal had been established on November 17, 2025, and was already deeply involved in the arbitration proceedings.

Evidence presented, including minutes from the tribunal and correspondence exchanged between the parties, confirmed that hearings were actively underway and that a claim for set-off had also been introduced. Based on this, Liberty Investment asserted that the division bench had erred in its determination that the remedy available before the FOSFA Tribunal would not be efficacious. These arguments underscored the company's position that the arbitral tribunal was the appropriate and effective forum for addressing the interim relief request.

Source: Original reporting on a Supreme Court ruling