Authority: Supreme Court of India, Civil Appellate Jurisdiction

Order Date: 11 August 2026

Case Overview

  • Parties: Appellant – National Projects Construction Corporation Ltd.; Respondent – Ishvakoo (India) Pvt. Ltd.
  • Background: On 16‑08‑2002 the parties executed an MoU for development of bus termini and the Taj Trapezium Zone Heritage Corridor in Agra, Government of Uttar Pradesh. In December 2002 the respondent received a mobilisation advance of Rs 3.5 crore against bank guarantees issued by Canara Bank (Nos. 109/2002 to 124/2002).
  • Dispute: The parties fell out; the arbitration clause was invoked. The respondent filed a Section 9 petition (OMP No. 363/2003) on 15‑12‑2005 seeking restraint on the appellant from invoking the guarantees. The High Court ordered the guarantees to be kept alive until arbitration award and, if the award required, to allow the appellant to encash them.
  • Arbitration: No counter‑claim was filed by the appellant. The arbitrator rendered an award on 05‑12‑2017, dismissing the respondent’s claims for discharge of the guarantees and for bank‑charge compensation (Rs 77,27,225). Prior to the award, the appellant had already encashed the guarantees in September 2017 because the respondent failed to keep them alive.
  • Post‑award Section 9 applications: The respondent filed another Section 9 petition (OMP No. 57/2019). The Single Judge of the Delhi High Court, on 05‑04‑2019, allowed the petition and directed the respondent to deposit the amount of Rs 3.5 crore with the Court registry, to be placed in an interest‑bearing fixed deposit, pending the pending Section 34 challenge of the award.
  • Appeals: The appellant appealed the Single Judge’s order (FAO (OS)(COMM) No. 113/2019). The Division Bench dismissed the appeal on 21‑05‑2019, confirming the Single Judge’s direction.
  • Contentions:
  • Appellant argued that Section 9 cannot be used to grant relief that amounts to a final adjudication of rights still pending before the Section 34 court, that the award debtor had no enforceable award, and that the High Court’s interference with the award was illegal.
  • Respondent contended that no counter‑claim was filed, the arbitrator had not decided Issue 3 (discharge of guarantees), and that allowing the appellant to retain the money would unjustly enrich it; therefore, Section 9 relief was appropriate.
  • Legal Principles Cited: The Court referred to recent precedents – Home Care Retail Marts Pvt. Ltd. v. Haresh N. Sanghavi (2026), Essar House Pvt. Ltd. v. Arcelor Mittal Nippon Steel India Ltd. (2022), Jagdish Ahuja v. Cupino Ltd. (2020), Nimbus Communications Ltd. v. BCCI (2012), and Adhunik Steels Ltd. v. Orissa Manganese & Minerals (P) Ltd. (2007) – emphasizing that Section 9 can be invoked by a losing party in rare, compelling cases where the balance of convenience and prima‑facie case justify interim protection.
  • Application of Law: The Court found that the respondent satisfied the Section 9 yardsticks – the 15‑12‑2005 order allowed the appellant to encash the guarantees only if the award required it; no counter‑claim existed; the arbitrator had not addressed the discharge issue; the respondent moved with reasonable expedition; and denying the deposit would result in unjust enrichment.

Final Outcome

  • The Supreme Court dismissed the appeal, upholding the High Court’s direction.
  • The appellant is ordered to deposit Rs 3.5 crore with the Delhi High Court registry within four weeks.
  • The deposited amount shall be kept in a fixed deposit with a nationalised bank on an auto‑renewal basis until the Section 34 application is finally decided.
  • No order as to costs was made.

Topics: Arbitration | Section 9 Interim Relief