In a landmark ruling, the Supreme Court allows unsuccessful parties in arbitration to seek interim measures under Section 9 of the Arbitration and Conciliation Act, 1996, at the post-award stage.
In a significant judgment delivered on April 24, 2026, the Supreme Court of India, comprising Justices Manoj Misra and Manmohan, has expanded the scope of interim relief available under the Arbitration and Conciliation Act, 1996. The Court held that even parties unsuccessful in arbitration proceedings can invoke Section 9 of the Act to seek interim relief post-award, a decision that clarifies conflicting interpretations by various High Courts.
The case, Home Care Retail Marts Pvt. Ltd. v. Haresh N. Sanghavi, revolved around the question of whether a party that has not succeeded in arbitration can maintain an application under Section 9 of the Act at the post-award stage. The Court observed that the term "a party" under Section 9 includes any party to the arbitration agreement, irrespective of the outcome of the arbitration proceedings.
This judgment overturns previous restrictive interpretations by the Bombay, Delhi, Madras, and Karnataka High Courts, which limited the scope of Section 9 to successful parties in arbitration. The Supreme Court emphasized that such a restrictive interpretation would amount to judicial amendment of the statute, contrary to legislative intent.
The Court reasoned that Section 9's objective is to ensure parties have the right to seek interim measures until the judicial process culminates. It stressed that the provision aims to protect the subject matter or amount in dispute, even for unsuccessful parties, pending adjudication under Section 34 of the Act.
The judgment also distinguishes the operation of Sections 9, 34, and 36, asserting that while Sections 34 and 36 provide remedies against an award or stay thereof, Section 9 ensures protection of the disputed subject matter. Denying interim relief under Section 9 would leave unsuccessful parties remediless.
The Court underscored that granting interim relief will continue to be guided by established principles like prima facie case, balance of convenience, and irreparable harm. However, it cautioned that the threshold for granting such relief will be higher for unsuccessful parties, and courts should exercise care and caution in these instances.
This ruling aligns with the views of the Telangana, Gujarat, and Punjab & Haryana High Courts, which previously allowed unsuccessful arbitration parties to seek interim measures. By providing this clarification, the Supreme Court has ensured a more equitable application of the Arbitration and Conciliation Act, reinforcing the right to judicial protection for all parties involved in arbitration.
Bottom Line:
Arbitration and Conciliation Act, 1996 - Unsuccessful party in arbitration can invoke Section 9 of the Act at the post-award stage for interim relief, provided the principles of prima facie case, balance of convenience, and irreparable harm are satisfied.
Statutory provision(s):Arbitration and Conciliation Act, 1996 Sections 9, 34, 36
Home Care Retail Marts Pvt. Ltd. v. Haresh N. Sanghavi, (SC) : Law Finder Doc id # 2888430
