In what circumstances may an unsuccessful party in arbitration invoke Section 9 of the Arbitration and Conciliation Act, 1996 to seek continuation of interim protection such as a restraint on invocation of a bank guarantee?

In rare and compelling cases, an unsuccessful party may be permitted to invoke Section 9 to seek continuation of existing interim protection where immediate removal of that protection, pending its challenge to the award under Section 34, would cause irreparable prejudice; the rights of such a party cannot be curtailed merely on the apprehension of possible misuse of the provision.

Arbitration and Conciliation Act, 1996 — s.9 — s.34 — Post-award interim relief — Maintainability at instance of Award Debtor — Bank guarantee — Unjust enrichment — Arbitration and Conciliation Act, 1996 — s.9 — Post-award petition by unsuccessful party is maintainable — Held: A petition under Section 9 at the post-award stage, filed by a party with no enforceable award in its favour, is maintainable in law, though the threshold for interim relief is correspondingly higher. (¶18, 19) Arbitration and Conciliation Act, 1996 — s.9 — Continuation of interim protection in rare and compelling cases — Held further: In rare and compelling cases, an unsuccessful party may invoke Section 9 to seek continuation of existing interim protection, such as a restraint on invoking a bank guarantee, to prevent irreparable prejudice and preserve the efficacy of its Section 34 challenge. (¶19) Arbitration and Conciliation Act, 1996 — s.9 — Prima facie case, balance of convenience, reasonable expedition — Held further: Grant of interim relief under Section 9 is governed by the existence of a prima facie case, balance of convenience, likelihood of irreparable harm, and whether the applicant approached the court with reasonable expedition. (¶20, 21, 22, 23) Arbitration and Conciliation Act, 1996 — s.9 — Deposit direction upheld to prevent unjust enrichment — Held further: Since no counter-claim was filed and the discharge of the bank guarantees was never decided, retaining the encashed amount pending the Section 34 challenge would unjustly enrich the appellant. The deposit direction is upheld and the appeal dismissed. (¶26, 27)

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