Section 9 of the Arbitration and Conciliation Act, 1996 allows a party to seek interim measures from the court before, during, and after the arbitral proceedings but before enforcement of the award. What of the party that lost the arbitration? In National Projects Construction Corporation Ltd. v. Ishvakoo (India) Pvt. Ltd., 2026 INSC 828, decided on 11 August 2026, the Supreme Court has held that an unsuccessful party is not shut out of Section 9 altogether: in rare and compelling cases, interim protection may issue to prevent irreparable prejudice while a challenge to the award under Section 34 is pending.
The background
The parties entered into a memorandum of understanding in August 2002 for the development of bus termini in Agra. The contractor received a mobilization advance of Rs 3.5 crore, secured by bank guarantees. When disputes arose and the matter went to arbitration, a Section 9 proceeding in 2005 resulted in an arrangement under which the guarantees were kept alive pending the arbitration.
In September 2017, the employer encashed the guarantees. Weeks later, in December 2017, the arbitral tribunal delivered its award dismissing the contractor's claims. Two features of that award proved decisive in what followed: the employer had filed no counterclaim, and the award recorded no finding that the mobilization advance had gone unutilised or that the employer was entitled to appropriate the guarantee amounts.
The contractor challenged the award under Section 34 and, alongside, sought interim protection under Section 9 in respect of the encashed amount. A learned Single Judge directed the employer to deposit Rs 3.5 crore with the registry of the High Court; the Division Bench affirmed; and the employer appealed to the Supreme Court.
What the Supreme Court held
A Bench of Justice K.V. Viswanathan and Justice Alok Aradhe dismissed the appeal. The judgment settles the point of principle and then applies it with some care to the facts.
Section 9 is not closed to the losing party
An unsuccessful party may challenge the award under Section 34 and obtain a stay of enforcement. In that window, the immediate removal of interim protection may cause irreversible prejudice. Section 9 therefore remains available after the award — even to the party that lost — though only in rare and compelling cases.
A deliberately higher threshold
The threshold for interim relief is higher for an unsuccessful party than for an award-holder. The court examines whether the applicant has a good prima facie case, whether the balance of convenience favours protection, and whether the applicant moved with reasonable expedition.
Application to the facts
The guarantees had been kept alive under the shelter of a court order; they were encashed on the eve of the award; the tribunal made no finding entitling the employer to the amounts, and no counterclaim existed on which such a finding could rest. This was, the Court held, precisely the rare and compelling situation the principle contemplates.
The order that stands
The employer was directed to deposit Rs 3.5 crore with the registry of the High Court within four weeks. The registry is to hold the amount in a fixed deposit, renewed automatically, until the Section 34 petition is decided. The Supreme Court's observations are not to influence the merits of that challenge.
Why the decision matters
For award debtors
A party that has lost the arbitration but has a serious Section 34 challenge is not left defenceless while assets or security slip away. Where money has changed hands without any finding in the award to justify it, the court can preserve the status quo.
For award holders
The judgment does not license routine attacks on the fruits of an award. The threshold is expressly higher, and an applicant who delays, or who simply relitigates the merits, should expect to fail.
For drafting practice
The absence of a counterclaim proved costly. A party that intends to appropriate secured amounts should put its claim into the arbitration and obtain a finding, rather than rely on self-help against the security afterwards.
The provision in context
Section 9(1) permits an application for interim measures before or during arbitral proceedings, or at any time after the making of the award but before it is enforced in accordance with Section 36. The text does not confine the remedy to the successful party, and the Supreme Court has now confirmed that the omission is deliberate. What confines the remedy is judicial discipline: the trinity of prima facie case, balance of convenience and expedition, applied with the added rigour that the applicant's failure before the tribunal demands.
For commercial practice in Delhi — where Section 9 and Section 34 petitions form a substantial part of the original side docket of the High Court and the work of the Commercial Courts — the decision provides a clear framework for a situation that arises more often than the reported cases suggest: security encashed or assets moved in the interval between an award and the decision on its challenge.
Frequently Asked Questions
Can a party that lost the arbitration apply under Section 9 at all?
Yes, but only in a narrow class of cases. The Supreme Court has held that an unsuccessful party may invoke Section 9 after the award in rare and compelling circumstances, where interim protection is necessary to prevent irreparable prejudice and to preserve the efficacy of its pending challenge to the award under Section 34. The jurisdiction exists; the threshold for exercising it is deliberately high.
What must such an applicant show?
The familiar trinity, applied with added rigour: a good prima facie case, balance of convenience in favour of interim relief, and reasonable expedition in approaching the court. Because the applicant has lost before the arbitral tribunal, the court will scrutinise the application more strictly than one made by a successful award-holder seeking to secure the fruits of the award.
Why was the deposit ordered in this case?
The bank guarantees securing the mobilization advance had been kept alive under an earlier court order, and were encashed shortly before the award was delivered. The award dismissed the contractor's claims but recorded no finding entitling the employer to the guarantee amounts — no counterclaim had even been filed. Ordering the Rs 3.5 crore into court preserved the position until the Section 34 challenge is decided.
Does the deposit decide who is entitled to the money?
No. The amount is kept in a fixed deposit with the High Court registry, renewed automatically, until the Section 34 petition is disposed of. The Supreme Court made clear that its observations would not bind the court hearing the substantive challenge to the award.