Section 27(5) of The Arbitration Act

Section 27 – Court assistance in taking evidence

(5) Persons failing to attend in accordance with such process, or making any other fault, or refusing to give their evidence, or guilty of any contempt to the Arbitral Tribunal during the conduct of Arbitral Proceedings, shall be subject to the like disadvantages, penalties and punishments by order of the Court on the representation of the Arbitral Tribunal as they would incur for the like offences in suits tried before the Court.

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Section 17 – Interim measures ordered by Arbitral Tribunal

(2) Subject to any orders passed in an appeal under section 37, any order issued by the Arbitral Tribunal under this section shall be deemed to be an order of the Court for all purposes and shall be enforceable under the Code of Civil Procedure, 1908 (5 of 1908), in the same manner as if it were an order of the Court.

Persons guilty of any contempt to the Arbitral Tribunal during the conduct of the Arbitral Proceedings are within the ken of Section 27(5) of The Arbitration Act, 1996.

The entire object of providing that a party may approach a Arbitral Tribunal instead of a Court for interim reliefs would be stultified if interim orders passed by such Tribunal are toothless. It is to give teeth to such orders that an express provision is made in Section 27(5) of the Act. The Delhi High Court in 2009 (112) Delhi Reported Judgments 657, has correctly construed Section 27(5). Further, it must be remembered that this Court in Ambalal Sarabhai, (2001) 8 SCC 397 has held that parties to Arbitration Proceedings are put to an election as to whether to apply for interim relief before the Tribunal under Section 17 or before the Court under Section 9. Such election would be meaningless if interim orders passed by the Arbitral Tribunal were to be written in water, as all parties would then go only to the Court, which would render Section 17 a dead letter.

According to Shri Rana Mukherjee, Learned Senior Counsel, Section 27(5) would only apply to assistance in taking evidence and not to any other contempt that may be committed. This lacuna in the law has now been filled pursuant to the 246th Law Commission Report, which he has referred to and relied upon, after which Section 17(2) has been inserted by the Amendment Act of 2015.

Suffice it to state that the Law Commission itself, in its 246th report, found the need to go one step further than what was provided in Section 27(5) as construed by the Delhi High Court (supra). Sub-section (2) to Section 17 was added so that the cumbersome procedure of an Arbitral Tribunal having to apply every time to the High Court for contempt of its orders would no longer be necessary. Such orders would now be deemed to be orders of the Court for all purposes and would be enforced under the Code of Civil Procedure, 1908 in the same manner as if they were orders of the Court. Thus we do not find Shri Rana Mukherjee’s submission to be of any substance in view of the fact that Section 17(2) was enacted for the purpose of providing a ‘complete solution’ to the problem.”

Hon’ble Justice R.F. Nariman, Alka Chandewar vs. Shamshul Ishrar Khan, [Civil Appeal No. 8720 of 2017].

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