Emergency Arbitration Orders Under DIAC Rules 2023: Delhi High Court Clarifies 90-Day Validity Limit

Delhi High Court Defines 90-Day Validity for Emergency Arbitration Orders Under DIAC Rules 2023

Introduction

In a significant judgment that strengthens procedural clarity within institutional arbitration, the Delhi High Court in Municipal Corporation of Delhi v. Himalayan Flora and Aromas Pvt. Ltd. (Arb. A. (Comm.) 54/2025, decided on 8 October 2025) examined the scope and duration of orders passed by an Emergency Arbitrator (EA) under the Delhi International Arbitration Centre (DIAC) Arbitration Proceedings Rules, 2023. The Court, presided over by Justice Purushaindra Kumar Kaurav, held that an Emergency Arbitrator’s order can only remain operative for 90 days, unless modified, vacated, or extended by the subsequently constituted Arbitral Tribunal. The ruling settles a crucial procedural question in India’s emerging institutional arbitration framework, particularly on how long interim relief granted by an Emergency Arbitrator can subsist.

Case Background

The Municipal Corporation of Delhi (MCD) challenged an emergency order passed on 11 December 2024 by an Emergency Arbitrator under the DIAC Rules, 2023. The order granted interim protection in favor of Himalayan Flora and Aromas Pvt. Ltd. The MCD, represented by Senior Advocate Ms. Arundhati Katju, argued that the Emergency Arbitrator’s order had continued to operate well beyond the permissible 90-day period stipulated under Rule 14.13 of the DIAC Rules. The respondent, represented by Senior Advocate Mr. Rajshekhar Rao, contended that the Emergency Arbitrator was empowered to extend the relief, relying on the definition of “Arbitral Tribunal” under Rule 2(c), which, according to them, included the Emergency Arbitrator.

The appeal was filed under Section 37 of the Arbitration and Conciliation Act, 1996, challenging the Emergency Arbitrator’s order on the ground that it had lapsed by operation of law after 90 days and could not have been validly extended by the EA.

Issue Before the Court

The central issue before the Delhi High Court was whether an Emergency Arbitrator under the DIAC Rules, 2023, could extend the operation of its own interim order beyond the 90-day period specified under Rule 14.13, or whether such power lies exclusively with the Arbitral Tribunal once constituted.

Relevant Legal Provisions and Institutional Framework

Rule 14 of the DIAC Rules, 2023, governs emergency arbitration proceedings. The Court closely examined the scheme of Rule 14, which establishes a fast-track mechanism for urgent interim relief before the constitution of the full Arbitral Tribunal. Rule 14.13 specifically provides that an Emergency Arbitrator’s order “shall remain operative for a period of 90 days from the date of passing of the order unless modified, substituted or vacated by the Arbitral Tribunal. The Arbitral Tribunal shall also have the power to extend the operation of the order beyond the period of 90 days.”

Further, Rule 14.11 declares that once the Emergency Arbitrator renders an order, they become functus officio and cannot be part of the subsequent Arbitral Tribunal unless agreed upon by the parties. The Court highlighted that this provision establishes a deliberate institutional distinction between an Emergency Arbitrator and the Arbitral Tribunal, preventing an overlap of functions.

Submissions by the Parties

The appellant, MCD, argued that the Emergency Arbitrator’s power is strictly limited by the Rules and that any continuation of the interim order beyond 90 days without intervention from the Arbitral Tribunal was illegal. The appellant relied on the structure and language of Rule 14 to assert that the Emergency Arbitrator becomes functus officio once the order is passed and therefore lacks jurisdiction to extend it.

Conversely, the respondent, Himalayan Flora and Aromas Pvt. Ltd., submitted that the Rules should be read purposively to ensure effective relief, especially in urgent matters. It contended that since the Emergency Arbitrator falls within the definition of “Arbitral Tribunal,” they could extend or modify their own order. The respondent also emphasized the equitable aspects, such as the balance of convenience and irreparable harm, and urged the Court not to nullify the interim protection that had been in effect for nearly a year.

Court’s Analysis and Reasoning

Justice Kaurav undertook a detailed examination of the DIAC Rules, 2023, and the statutory scheme under the Arbitration and Conciliation Act, 1996. The Court underscored that emergency arbitration serves a limited, urgent, and transitory purpose, ensuring immediate relief before the constitution of the main tribunal. Once the tribunal is constituted, the EA’s role concludes, and it cannot revisit or extend its own orders.

The Court read Rule 14.13 in conjunction with Rules 14.11 and 14.12, concluding that the 90-day limit was not merely procedural but substantive in nature. The power to extend or vary an EA’s order is vested exclusively in the Arbitral Tribunal, not the Emergency Arbitrator. Permitting the EA to extend its order would blur the institutional separation envisaged in the Rules and defeat the purpose of constituting a regular Arbitral Tribunal thereafter.

The Court further held that the definition of “Arbitral Tribunal” under Rule 2(c) cannot be stretched to include an Emergency Arbitrator for purposes that the Rules specifically assign to the Tribunal alone. Once an Emergency Arbitrator passes an order, they are functus officio, rendered without further authority to modify or renew the same order.

Findings and Directions

Applying these principles, the Court held that the Emergency Arbitrator’s order dated 11 December 2024 “had lived its life” after 90 days and automatically ceased to operate. No Arbitral Tribunal had, by that point, extended, vacated, or modified the order. Consequently, the Court set aside the EA’s order and held that it was no longer in force.

However, acknowledging the equities involved and the fact that the order had remained in effect for nearly eleven months, the Court directed maintenance of status quo for seven days to enable the respondent to approach the appropriate forum, either the Arbitral Tribunal under Section 17 or the Court under Section 9 of the Arbitration and Conciliation Act, for interim relief.

The Court also clarified that its observations were confined to the peculiar facts of the case and that the Arbitral Tribunal, once approached, should decide the matter independently and uninfluenced by any findings in this judgment.

Legal Significance and Precedential Value

This ruling carries considerable significance for institutional arbitration and particularly for emergency arbitration proceedings in India. It reinforces the structural limits placed on Emergency Arbitrators under institutional rules, aligning Indian practice with global arbitration standards such as those of SIAC, ICC, and LCIA, which also treat emergency measures as temporary and provisional.

The judgment echoes the reasoning in Amazon.com NV Investment Holdings LLC v. Future Retail Ltd. (2021) 9 SCC 1, where the Supreme Court recognized the validity of Emergency Arbitrator orders under Indian law but did not decide on their duration. The present judgment fills that procedural gap by clearly stipulating that such orders cannot continue indefinitely and must be revisited by the regular Arbitral Tribunal within the specified timeframe.

By emphasizing the autonomy and jurisdictional boundaries between an Emergency Arbitrator and the Arbitral Tribunal, the Delhi High Court strengthens the predictability of emergency arbitration under the DIAC Rules, ensuring procedural discipline and reducing the risk of prolonged interim orders beyond the intended temporal limit.

Conclusion and Author’s Opinion

The Delhi High Court’s decision in Municipal Corporation of Delhi v. Himalayan Flora and Aromas Pvt. Ltd. marks a pivotal moment in India’s arbitration jurisprudence, reaffirming the temporary and limited nature of emergency arbitral relief. The Court’s meticulous interpretation of Rule 14 of the DIAC Rules, 2023, ensures that emergency arbitration remains an instrument for immediate but short-lived intervention, paving the way for the full Arbitral Tribunal to assume control thereafter.

In the author’s view, this ruling strikes a necessary balance between urgency and procedural finality. It preserves the efficiency of emergency arbitration while preventing potential abuse of prolonged interim protection. For practitioners and parties alike, it reinforces the need to swiftly move from emergency relief to substantive arbitral adjudication. By setting this clear boundary, the judgment enhances the credibility and institutional consistency of arbitration under the DIAC framework, an essential step toward India’s vision of becoming a preferred global arbitration hub.

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