Facts
The appellant, National Projects Construction Corporation Ltd., and the respondent, Ishvakoo (India) Pvt. Ltd., entered into an MoU in 2002, under which the respondent received Rs.3.5 crores as mobilisation advance against bank guarantees. By an order dated 15.12.2005, the High Court recorded the respondent’s undertaking to keep the guarantees alive and permitted their invocation if an executable arbitral award required recovery. The guarantees were subsequently encashed in September 2017.
The Arbitrator dismissed the respondent’s claims. No counter-claim was filed by the appellant. The respondent challenged the award under S.34 Arbitration and Conciliation Act, 1996 and simultaneously sought interim protection under S.9 Arbitration and Conciliation Act, 1996. The High Court directed the appellant to deposit Rs.3.5 crores pending disposal of the S.34 proceedings.
Issues Framed
Whether the courts below were justified in directing the appellant to deposit Rs.3.5 crores with the High Court pending disposal of the respondent’s S.34 Arbitration and Conciliation Act, 1996 application.
Court’s Reasoning
(a) Maintainability of S.9 post-award. The Court relied on Home Care Retail Marts Pvt. Ltd. v. Haresh N. Sanghavi, holding that an unsuccessful award party may, in “rare and compelling cases”, invoke S.9 Arbitration and Conciliation Act, 1996 to prevent irreparable prejudice and preserve the efficacy of a S.34 Arbitration and Conciliation Act, 1996 challenge. The threshold is higher for an Award Debtor.
(b) Governing principles. Under Essar House Pvt. Ltd. v. Arcellor Mittal Nippon Steel India Ltd., relief under S.9 requires consideration of a good prima facie case, balance of convenience and reasonable expedition. The Court also reiterated that S.9 confers wide power to grant measures which are “just and convenient”, though the discretion must be exercised judiciously.
(c) Application. The respondent satisfied these requirements. The appellant had filed no counter-claim; the arbitral award did not determine that the mobilisation advance was unutilised; and the Arbitrator had failed to address the continuing effect of the 15.12.2005 order concerning the bank guarantees. Permitting the appellant to retain Rs.3.5 crores could therefore result in unjust enrichment.
(d) Relief under S.9. The Court held that the High Court’s order was a judicious exercise of jurisdiction, aimed at preventing irreparable prejudice and preserving the efficacy of the S.34 proceedings. The order furthered the efficacy of arbitration as a dispute-resolution mechanism.
Held
The appeal was dismissed. The appellant was granted four weeks to deposit Rs.3.5 crores with the High Court Registry, to be kept in an automatically renewable fixed deposit until disposal of the S.34 application. The Court clarified that its observations would not affect adjudication of the S.34 proceedings on their merits.
Conclusion
In rare and compelling circumstances, an Award Debtor may obtain interim protection under S.9 Arbitration and Conciliation Act, 1996 post-award where the relief is necessary to prevent irreparable prejudice and preserve the efficacy of a pending S.34 Arbitration and Conciliation Act, 1996 challenge
Case Details
Citation: 2026 INSC 828
Decided on: 11 August 2026
Case Title: National Projects Construction Corporation Ltd. v. Ishvakoo (India) Pvt. Ltd.
Court: Supreme Court of India
Bench: K. V. Viswanathan J.; Alok Aradhe J.