Arbitral Tribunal Can't Reject Interim Relief Merely For Overlap With Final Relief: Delhi High Court

On 28 September, the Delhi High Court held that an arbitral tribunal cannot reject interim relief under Section 17 of the Arbitration and Conciliation Act, 1996 merely because the relief sought overlaps with or is co-extensive with the final relief claimed in the arbitration.

Justice Tushar Rao Gedela allowed an appeal filed by Wello Retail Pvt. Ltd. against an order passed by the arbitrator rejecting its application under Section 17 of the Act. The Bench observed:

“At times, and having due regard to myriad situations arising in cases, certain interim orders may need to be passed so as to maintain equality and balance the contrasting rights between the parties. That grant by itself, would not, in the opinion of this Court, tantamount to or be an expression on merits of the SoC. Looked at from a different perspective, if that proposition is acceded to, then in no case can an order granting temporary injunction or any other interim relief, be granted. That is not, and cannot be the law.”

Wello Retail was a lessee of approximately 605.76 sq. ft. of space inside Sant Parmanand Hospital under a registered Lease Deed dated 20 April 2023, at a monthly rent of Rs. 12 lakh. The dispute concerned the supply and billing of pharmaceutical products to patients of the hospital.

Apprehending termination of the Lease Deed, Wello Retail approached the Delhi High Court under Section 9 of the Arbitration Act. By an order dated 19 February 2026, the Section 9 petition was converted into an application under Section 17 and directed to be considered by the arbitrator.

The arbitrator rejected the application, observing that granting the interim reliefs would amount to granting the final reliefs and pre-judging the dispute concerning Clauses 11 and 12 of the Lease Deed, thereby rendering the arbitral proceedings redundant.

The High Court disagreed with this approach, holding that the fact that an interim prayer may be co-extensive with the final relief sought in the Statement of Claim does not, by itself, mean that granting such relief would amount to final determination of the dispute. It held:

“The prayers in the application are in the nature of interim protection/directions of measures which may be co-extensive with the prayers in the SoC, but that by itself would not, ipso facto, mean that the prayer would tantamount to final determination.”

The Bench also emphasised the need for reasons in orders passed by arbitral tribunals, observing that although such orders are not expected to meet the same threshold as a judicial determination by a court, the basis for the conclusion reached must at least be discernible. It observed:

“….It is trite that reasons are the bedrock of any order, be it judicial or quasi judicial. No doubt that under the arbitration regime, the orders are not expected to be at the same threshold as of a judicial determination in a Court of law, nevertheless, some reason or justification to have arrived at or formation of an opinion, ought to be at least, discernible.”

Accordingly, the High Court allowed the appeal and directed the arbitrator to hear and dispose of Wello Retail's Section 17 application expeditiously.

For Appellant: Dr. Amit George, Mr. Roshan S., Ms. Rupam Jha and others

For Respondent: Mr. Prashanto Chandra Sen, Senior Advocate, with Mr. Madhup Singhal and others