Closure of Interim Pleas for Non-Payment of Arbitral Fees Not Appealable: Delhi High Court

The Delhi High Court on 18 August held that an arbitral tribunal's order closing a party's interim relief applications and counterclaim for non-payment of arbitral fees is procedural and does not amount to an order granting or refusing interim relief appealable under Section 37 of the Arbitration and Conciliation Act, 1996.

Justice Om Prakash Shukla dismissed as non-maintainable the appeal filed by Orbit In-Te-Rio against American Epay Services Pvt. Ltd., while granting the former liberty to seek recall of the closure order before the arbitral tribunal. The Bench observed:

“It is clear from the above that the impugned order is procedural in nature and consequently, appropriate remedy was to seek re-call of the impugned order since, the impugned direction does not fall within the express language of Section 37(2)(b), which permits an appeal from an order 'granting or refusing to grant an interim measure under Section 17'.”

As per a Fit-Out Agreement dated 28 November 2023, Orbit was to supply and install fit-outs, fixtures and related works at American Epay Services' commercial premises against monthly fit-out lease charges while retaining ownership of the installed fit-outs.

Disputes subsequently arose over the performance of the works, including modifications and additional works sought by American Epay, which terminated the agreement on 15 February 2024. It issued a legal notice on 21 February 2024, claiming approximately Rs. 15 crore towards reimbursement and damages. Orbit disputed the allegations, contending that it had completed substantial work and that its fit-outs remained at, and continued to be used in, the premises without payment.

American Epay Services then approached the High Court under Section 9 of the Arbitration and Conciliation Act, 1996, which permits parties to seek interim protection from a Court before or during arbitration. On 1 March 2024, the Court appointed Local Commissioners to inspect the premises and assess the fit-out works.

The parties invoked arbitration on 20 March 2024, and a sole arbitrator was appointed on 2 September 2024. Orbit also approached the High Court seeking deposit of alleged fit-out rent arrears or, alternatively, permission to remove its fixtures from American Epay Services' premises.

On 4 September 2024, the Court directed the arbitral tribunal to consider Orbit's application as one seeking interim relief under Section 17 of the Act, which empowers an arbitral tribunal to grant interim measures. Orbit thereafter filed two interim relief applications, one seeking disclosure and protection of assets and another seeking deposit of alleged rent arrears. It also raised a counterclaim of approximately Rs. 16.78 crore, while American Epay Services raised claims of approximately Rs. 11.71 crore.

On 25 September 2025, the sole arbitrator directed Orbit to deposit its entire share of the arbitral fee before hearing its two interim applications and counterclaim. Orbit deposited Rs. 14 lakh out of the assessed amount of approximately Rs. 39.03 lakh. On 27 March 2026, the arbitral tribunal consequently closed Orbit's right to pursue the two interim applications and counterclaim for non-payment of the requisite arbitral fee.

Orbit challenged the closure order under Section 37(2)(b), which permits an appeal from an order of an arbitral tribunal granting or refusing to grant an interim measure under Section 17. It argued that closing its applications effectively amounted to refusing interim relief.

It also relied on Sections 38 and 39 of the Act and the relevant Delhi International Arbitration Centre Rules to contend that non-payment of arbitral deposits could not justify closing pending interim relief applications.

The High Court rejected the contention, noting that the arbitrator had never considered whether Orbit was entitled to interim protection. The tribunal had neither granted nor refused the reliefs sought but had merely prevented Orbit from pursuing them because it failed to comply with the fee-deposit direction.

It held that Section 37 does not provide a general right of appeal against every order passed during arbitration. An order affecting a valuable right would still remain procedural unless it actually decided a substantive issue.

Further, the Bench held that Orbit could raise its objections under Sections 38 and 39 and the Delhi International Arbitration Centre Rules before the tribunal in a recall application. Those objections, it said, did not transform the procedural closure order into an appealable refusal of interim relief.

Accordingly, the High Court dismissed the appeal as non-maintainable and granted Orbit liberty to seek recall of the closure order before the arbitral tribunal. It clarified that the closure of its counterclaim and interim applications did not prevent it from otherwise participating in the arbitration and that the tribunal continued to exercise jurisdiction over it.

Appearances for petitioner (Orbit In-Te-Rio): Advocates Deepender Banger, Sakshi Rastogi, Shashwat Prateek Panda, Apartim Animesh Thakur and Suryansh.