Recently, the Delhi High Court (“Delhi HC”) in Airports Authority of India v. TDI International Ltd. (“TDI International”) has held that arbitral tribunals have the power to vacate or modify an interim order passed by them under Section 17 of the Arbitration Act, albeit this judgment was effectively stayed by the Supreme Court on appeal.

While the current discourse in India has been focused on modification of arbitral awards, this article attempts to comment on what has otherwise gone unaddressed: Can an arbitral tribunal modify its interim order issued under Section 17 of the Arbitration Act? This article contends that the judgment of the Delhi HC in TDI International represents a progressive development in arbitration jurisprudence and argues in favour of providing legislative recognition to such power of modification of interim orders to the arbitral tribunal.

The Current Legal Position

The Arbitration Act does not explicitly provide the arbitral tribunal with the power to modify its interim order. This is unlike several other jurisdictions which have expressly recognized the power of an arbitral tribunal to modify an interim order. The Delhi HC in TDI International dealt with the same issue where the appellant contended that the Arbitration Act lacks any enabling provision to grant the arbitral tribunal power to modify its interim order by exercising powers under Order XXXIX Rule 4 of Civil Procedure Code, 1908 (“CPC”). The Delhi HC rejected the contention of the appellant and upheld the power of the arbitral tribunal to modify its interim order. It reasoned that the power of ‘modification’ is different than the power of ‘review’ to be exercised by the arbitral tribunal. It noted that while the arbitral tribunal cannot exercise the power of substantive review, no such bar exists regarding its power of modification of an interim order, in case of ‘change in circumstances’ and ‘undue hardship’. Therefore, the Delhi HC held that the arbitral tribunal was correct to exercise its power to modify the interim order.

Having said that, the Delhi HC failed to identify any statutory basis under the Arbitration Act that permits an arbitral tribunal to modify its interim order. This article seeks to analyse the reasons that would support the decision of the Delhi HC to allow the arbitral tribunal to modify its interim order. Further, it discusses the principles that would govern such modification of the interim orders by the arbitral tribunal.

Arbitral Tribunal as the Appropriate Authority for Modification

There are several reasons to support the conclusion that an arbitral tribunal is the appropriate forum to modify its interim order. First, the legislative amendments to the Arbitration Act and judicial interpretation have constantly expressed the need to reduce frequent and pervasive interference by the courts in arbitral proceedings. In furtherance of this interpretation, courts have interpreted Section 9 of the Arbitration Act in a restricted manner and have held that if the interim measure granted by the arbitral tribunal is an efficacious remedy, parties cannot approach the courts for the same under Section 9. Further, the jurisdiction of the courts to grant interim reliefs under Section 9 after the commencement of arbitral proceedings has been restricted to reduce judicial intervention in the arbitration proceedings. When the overarching consideration seems to be the restriction of judicial interference (except when absolutely required), it is reasonable to argue that the arbitral tribunal should be the appropriate forum for the modification of its interim orders.

Secondly, courts have consistently held that arbitral tribunals’ powers under Section 17 of the Arbitration Act are akin to those of the courts under Section 9. The courts have the power to modify its interim orders if the prerequisites provided under Order XXXIX Rule 4 of the CPC are met. Further, the SC has consistently held that the courts are guided by the principles of the CPC while exercising their power under Section 9 of the Arbitration Act. Therefore, it is reasonable to provide similar powers to an arbitral tribunal for modification of its interim orders, as granted to courts under Section 9.

Thirdly, it is unreasonable and inimical to the objectives of arbitration to expect parties to approach the court for a modification to the interim order when the arbitral tribunal is competent to address the same — the arbitral tribunal is best placed to understand the evolving circumstances of the dispute. Since the arbitral tribunal would have already assessed the grounds for grant of the interim relief under Section 17, it is also equally equipped to determine if a modification is warranted without the need for a fresh judicial inquiry. Further, arbitral tribunals can ensure that modifications are made swiftly and appropriately, without procedural delays that may arise from the involvement of the courts. This becomes even more important given that the nature of interim reliefs sought, more often than not, is urgent. Approaching the court even in cases where the arbitral tribunal is competent to deal with the same would increase the litigation cost and time for the litigants. This, at times, leads to inefficient and costly results, defeating the purpose of seeking urgent interim reliefs, while also hampering the ethos of alternate dispute resolution.

In the absence of an express provision under the Arbitration Act allowing parties to seek a modification of an interim order, parties have no recourse but to file an appeal under Section 37 of the Arbitration Act, even if such parties are largely agreeable to the interim order, save minor modifications. This would pave way for a time consuming and burdensome review by courts, requiring them to appreciate the merits of the case leading to the interim order. Given that courts in India are always backlogged, more often than not, they are agreeable to grant an interim stay on the arbitration proceedings, or at least on the effect of the interim order, pending adjudication of the appeal. Final adjudication on the appeals may then take months to years, depending on the fate of the parties.

Silence on modification of interim orders in the Draft Arbitration Bill 2024

The Indian legislature had surfaced the Draft Arbitration Amendment Bill (“Draft Bill”) in October 2024. For the purposes of this article, Section 9A and Section 17(1)(ii)(da) of the Draft Bill become relevant. While Section 9A(1) provides for appointment of an emergency arbitrator prior to the constitution of an arbitral tribunal, Section 9A(4) provides that an order of the emergency arbitrator may be confirmed, ‘modified’ or vacated by the subsequently constituted arbitral tribunal. On the other hand, Section 17(1)(ii)(da) also empowers an arbitral tribunal to confirm, ‘modify’ or vacate ad interim measures granted by courts under section 9 or an order made by an emergency arbitrator under Section 9A.

A reasonable assessment of this proposed framework would conclude that the legislature has intended to expand the powers and scope of arbitral tribunals, specifically in relation to modification of orders issued prior to or during the course of the dispute — perhaps because an arbitral tribunal is the ultimate authority in seisin of the dispute. While this is a welcome step, the Draft Bill remains silent on an arbitral tribunal’s power to modify its own orders, which would ideally flow as a natural corollary of the proposed expanded scope of arbitral tribunals.

International Recognition of Arbitral Tribunal’s power of modification

International arbitration jurisprudence has also come to recognise an arbitral tribunal to be the appropriate authority for modification of interim orders. The Arbitration Act, as it exists presently, is inspired by the UNCITRAL Model Law on International Commercial Arbitration (“UNCITRAL Model Law”). Since the issue of modification of interim orders passed by the arbitral tribunal was not at the forefront of discussion when the UNCITRAL Model Law was first introduced, most national legislations based on it did not have provisions for the same. However, in 2006, the Working Group on the UNCITRAL Model Law introduced an amendment that added Article 17D which reads as:

“The arbitral tribunal may modify, suspend or terminate an interim measure or a preliminary order it has granted, upon application of any party or, in exceptional circumstances and upon prior notice to the parties, on the arbitral tribunal’s own initiative.”

With the introduction of Article 17D, the UNCITRAL Model Law now explicitly confers powers on arbitral tribunals to modify their interim orders either upon the application of parties or on their own motion. While the Working Group had suggested adding the phrase “in light of additional information or change of circumstances”, it was dropped to ensure that the power of the arbitral tribunal to provide an interim relief was not unduly restricted.

With the evolution of the UNCITRAL Model Law, there have also been corresponding amendments to various national legislations on arbitration. For instance, the Malaysia Arbitration Act, 2005 was amended in 2018 to introduce Section 19D which confers the same powers as envisaged by Article 17D. Similarly, Article 34 of the Arbitration Rules of the Abu Dhabi International Arbitration Centre also now provides for a wide power of modification of an interim order by an arbitral tribunal. Hence, there has been an evolution of the international jurisprudence towards recognizing the power of an arbitral tribunal to modify its interim orders. However, as discussed above, Draft Bill appears to have not followed suit.

In the authors’ view, the amendments in the Malaysian and Abu Dhabi arbitration jurisprudence, based on the amendments to the UNCITRAL Model Law, provide a compelling case for the Indian legislature to also amend the Arbitration Act to bring it in line with international best practices.

Existing Principles Guiding Modification

The Delhi HC in TDI International has noted that principles of ‘change in circumstances’ and ‘undue hardship’ envisaged by Order XXXIX Rule 4 of the CPC were applicable when applications for modification of interim reliefs granted under Section 9 were considered. Judicial opinions in cases like Augmont Gold (P) Ltd. v. One97 Communication Ltd. have consistently held that principles guiding the exercise of powers under Section 9 must also inform the exercise of similar powers under Section 17. The Delhi HC in Augmont has also held that an arbitral tribunal, while exercising jurisdiction under Section 17, is required to bear in mind the provisions of Order XXXVIII and XXXIX of the CPC. Further, in Genestore India Pvt. Ltd. v. Mr. Vineet Singh Chauhan and Ors., the Delhi HC has observed that “an order under Section 17 of the Act is in essence one which is made by an arbitrator by way of an interim measure of protection. Injunctions that may be passed by a court, tribunal or authority can always be modified or varied, if circumstances so warrant”. In fact, in Genestore India, the Delhi HC granted the opportunity to the appellant therein to apply to the arbitral tribunal for modification/variation of the subject interim order.

Thus, there is an express judicial recognition of the arbitral tribunal’s powers to modify an interim order (sans codification), if compliance of the same causes prejudice and circumstances warrant such modification. In the authors’ view, till the time the Indian Arbitration Act remains silent on specific powers of modification of interim orders, the arbitral tribunals, while exercising such powers of modification, should be guided by the same principles of CPC which govern courts in the exercise of such powers.

Conclusion

It remains to be seen how legislative and judicial developments shape this discourse, but the need for a forward-looking reform in this area is clear. Providing the power of modification of its interim order to the arbitral tribunal would enable a more cost and time effective, and self-sufficient framework. This would also minimize judicial intervention — the bedrock of the Indian arbitration law, and position India as a pro-arbitration jurisdiction.

This article was originally published in Lexology on 11 March 2025 Co-written by: Binsy Susan, Partner; Vishal Hablani, Associate; Sambhav Sharma, Associate. Click here for original article

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