The Delhi High Court has elaborately examined the scope of an arbitral tribunal’s power to grant monetary relief under Section 17 of the Arbitration and Conciliation Act, 1996. Clarifying the distinction between an interim measure under Section 17 and an interim award under Section 31(6), the Court held that Section 17 is not confined to prohibitory or preservative reliefs alone. Where the monetary entitlement is admitted or otherwise undisputed, the tribunal may direct release of money as an interim measure, provided such order does not finally determine the parties’ substantive rights.
The appeal arose under Section 37(2)(b) of the Arbitration and Conciliation Act challenging an order of the Majority Arbitral Tribunal directing India International Convention and Exhibition Centre Limited (“IICECL“) to release approximately Rs. 227.18 crores to Larsen & Toubro Limited (“L&T“) towards Stage Payments SP-69 and SP-70 during the pendency of arbitral proceedings. A dissenting opinion had been rendered by one member of the Tribunal.
Background of the Dispute
The parties had entered into an Engineering, Procurement and Construction (EPC) Contract for execution of Phase-I works of the India International Convention and Exhibition Centre Project at Dwarka, New Delhi.
Under the contractual framework, payments were to be released through stage-wise certifications issued by an independent Engineer after verification of the work executed. During execution of the project, disputes arose regarding change in scope, negative variations, delay, extension of time, withholding of payments, GST-related claims and force majeure costs.
Arbitration was eventually invoked, wherein L&T raised claims exceeding Rs. 3,000 crores, while IICECL lodged counterclaims exceeding Rs. 1,000 crores, primarily on account of negative change in scope and liquidated damages.
During the pendency of arbitration, disputes also arose concerning withholding of payments under Stage Payments SP-68, SP-69 and SP-70. Alleging that certified amounts were being wrongfully withheld against disputed counterclaims, L&T filed an application under Section 17 seeking release of the certified dues. The Majority Arbitral Tribunal partly allowed the application and directed release of approximately Rs. 227.18 crores pertaining to SP-69 and SP-70, while rejecting certain other reliefs. Aggrieved thereby, IICECL preferred the present appeal under Section 37.
Appellant’s Contentions
IICECL contended that the Tribunal had exceeded its jurisdiction under Section 17 by granting substantive monetary relief at an interlocutory stage. It was argued that Section 17 is intended only to preserve the subject matter of arbitration and cannot be employed to direct payment of disputed monetary claims. According to the Appellant, directing release of Rs. 227 crores effectively amounted to granting a part of the final relief sought in arbitration without completion of pleadings or recording of evidence.
The Appellant further submitted that any such monetary direction could only be issued through an interim award under Section 31(6), and only where there existed an unequivocal admission comparable to Order XII Rule 6 of the Code of Civil Procedure. Since the Engineer’s certifications were expressly subject to reconciliation and adjustments arising from negative variations, the amounts could not be regarded as admitted liabilities.
It was also argued that the Tribunal had virtually conducted a mini-trial by interpreting contractual provisions and prejudging issues which ought to have been decided only after appreciation of evidence.
Respondent’s Contentions
L&T contended that the amounts directed to be released had already undergone the contractual certification process and constituted certified contractual dues payable under the agreement. The Appellant had withheld these amounts solely by setting them off against unadjudicated counterclaims concerning alleged negative variations.
The Respondent argued that Section 17(1)(ii)(e) expressly empowers an arbitral tribunal to pass such interim measures as may appear “just and convenient“, which is sufficiently broad to include interim monetary directions in appropriate cases. It was further submitted that the Tribunal had merely protected an existing contractual entitlement without finally determining the rival claims of the parties.
Scope of Powers under Section 17
The Delhi High Court undertook an extensive examination of the nature and ambit of Section 17. Referring to various authorities, the Court reiterated that the powers conferred upon an arbitral tribunal under Section 17 are co-extensive with those exercised by a civil court under Section 9. Consequently, the well-established principles governing grant of interim injunctions, including prima facie case, balance of convenience and irreparable injury, equally regulate the exercise of jurisdiction under Section 17.
The Court further observed that Section 17(1)(ii)(e), by employing the expression “such other interim measure of protection as may appear to the arbitral tribunal to be just and convenient“, confers wide discretionary powers upon the tribunal and is not restricted to conventional prohibitory injunctions alone.
Whether Monetary Relief as an Interim Relief can be Granted
The Court rejected the broad proposition that monetary reliefs are altogether outside the scope of Section 17.
It observed that there exists no statutory prohibition against directing payment of money as an interim measure. Rather, Section 17 empowers the tribunal to mould interim relief in a manner that is just and convenient, provided such exercise does not result in final adjudication of disputed claims.
The Court distinguished cases where the monetary entitlement itself is seriously disputed from cases where the amount is admitted or is otherwise undisputed under the contractual mechanism. It noted that if the tribunal merely protects an existing contractual entitlement without conclusively determining disputed issues, the exercise of power under Section 17 cannot be said to be without jurisdiction. Conversely, Section 17 cannot be employed to prematurely decide contested monetary claims or render an interlocutory order equivalent to a final award.
Decision
The Delhi High Court held that Section 17 is not confined to preservative or prohibitory reliefs and does not exclude interim monetary directions merely because they involve payment of money. An arbitral tribunal may, in an appropriate case, direct release of a monetary claim where the entitlement is admitted, the requirements governing interim protection are satisfied and the order does not amount to a final adjudication of the parties’ substantive rights.
Case Details
Case Name: India International Convention and Exhibition Centre Ltd. v. Larsen & Toubro Ltd.
Court: Delhi High Court
Case No.: ARB. A. (COMM.) 35/2026
Neutral Citation: 2026:DHC:5249
Date of Judgment: 1 July 2026
Coram: Justice Harish Vaidyanathan Shankar