Purposive reading of arbitral tribunal constitution preserves Section 37 appeal and supports limited escrow protection for future receipts.

Section 9(3) of the Arbitration and Conciliation Act, 1996 was construed purposively: constitution of the arbitral tribunal means its assumption of jurisdiction on commencement of arbitral proceedings, not merely appointment of an arbitrator. On that basis, a pending Section 37 appeal was held maintainable and the objection based on Section 9(3) was rejected. On interim protection, the contract and escrow clauses did not require all receipts to be routed into escrow after termination of the master service agreement, but the respondents' statements and prior email provided a prima facie basis for a limited protective order. The respondents were directed to deposit future contract receipts into escrow, subject to further orders of the tribunal or the award.

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Issues: (i) whether an appeal under Section 37 of the Arbitration and Conciliation Act, 1996 remained maintainable after the arbitral tribunal had been constituted for the purpose of Section 9(3); (ii) whether the appellant was entitled to an interim direction requiring the respondents to deposit future receipts from the underlying contract into the escrow account.

Issue (i): whether an appeal under Section 37 of the Arbitration and Conciliation Act, 1996 remained maintainable after the arbitral tribunal had been constituted for the purpose of Section 9(3).

Analysis: Section 9(3) bars entertainment of a Section 9 application once the arbitral tribunal has been constituted unless the remedy under Section 17 is inefficacious. The phrase "constituted" was construed purposively, having regard to the scheme of Sections 9, 10, 11 and 21, and not as a mere synonym for appointment of an arbitrator. The Court held that constitution of the tribunal in this context means assumption of jurisdiction by the arbitral tribunal after commencement of arbitral proceedings. It further noted that Section 9(3) speaks of an application and not an appeal, and accepted that otherwise an anomalous result would follow where an appellate court would be divested of jurisdiction after the tribunal's constitution.

Conclusion: the appeal was maintainable and the objection based on Section 9(3) was rejected.

Issue (ii): whether the appellant was entitled to an interim direction requiring the respondents to deposit future receipts from the underlying contract into the escrow account.

Analysis: On a combined reading of the payment and escrow clauses, the contractual arrangement did not oblige the respondents to route all monies received under the concession agreement into the escrow account merely because the master service agreement had been terminated. At the same time, there was a prima facie admission of liability in the respondents' WhatsApp statement of account and an earlier email indicating willingness to deposit future payments in the escrow account. The Court treated the disputed receivables as property capable of interim protection and found a sufficient basis for a limited protective order under the court's interim powers.

Conclusion: the respondents were directed to deposit future amounts received from South Delhi Municipal Corporation in connection with the work covered by the master service agreement into the escrow account, subject to further orders of the arbitral tribunal or the award.

Final Conclusion: the appeal succeeded only to the extent of obtaining a protective interim direction in respect of future contract receipts, while the broader claim to compel all receipts into the escrow account was not accepted.

Ratio Decidendi: for purposes of Section 9(3) of the Arbitration and Conciliation Act, 1996, the constitution of the arbitral tribunal is to be understood purposively as the tribunal's assumption of jurisdiction on commencement of arbitral proceedings, and an appellate court is not automatically deprived of jurisdiction over a pending Section 37 appeal merely because an arbitrator has been appointed.

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