After Home Care Retail Marts[1], the Supreme Court's latest Section 9 decision poses a tougher question: once the losing party is allowed legal protection, how far may the court go without turning interim protection into an appeal against the award?
The concept of arbitration rests on finality. Section 34 of the Arbitration and Conciliation Act, 1996 ("the Act") provides the statutory framework for challenging an award, while Section 36 governs its enforcement subject to the statutory scheme. Section 9, meanwhile, provides interim protection to preserve the subject matter of the dispute, though it cannot become a substitute for adjudication on the merits. The tension escalates after an award: what remains capable of protection when the applicant has lost the arbitration?
In National Projects Construction Corporation Ltd. v. Ishvakoo (India) Pvt. Ltd.[2] ("NPCC judgment"), the Supreme Court upheld an order directing National Projects Construction Corporation Ltd. (NPCC) to deposit ₹3.5 crore, although Ishvakoo had lost its substantive claims before the arbitral tribunal. The Court neither granted restitution nor decided the pending Section 34 challenge. Instead, it preserved the disputed amount in neutral custody. That distinction is central to NPCC judgment[3]. The decision permits, in exceptional circumstances, preservation of the disputed subject matter without deciding the substantive consequences of the award under challenge.
Factual Background
The dispute arose from a 2002 arrangement concerning bus terminus works in Agra, under which NPCC released ₹3.5 crore to Ishvakoo as mobilisation advance against bank guarantees.
In 2003, Ishvakoo approached the Delhi High Court under Section 9 to restrain invocation. A December 2005 order required the guarantees to remain alive through arbitral adjudication and, if a Section 34 challenge followed, until its disposal. Encashment was contemplated only if, upon the award becoming executable, the award entitled NPCC to recover the amount.
The guarantees were eventually encashed in September 2017. A subsequent Section 9 petition was dismissed after the High Court found no fault in NPCC's invocation, given Ishvakoo's failure to keep the guarantees alive. NPCC relied on that order to contend that the legality of the encashment stood concluded. The Supreme Court, however, distinguished the question of fault in invocation from the later question of entitlement to retain the money.
The arbitral tribunal subsequently dismissed Ishvakoo's claims. NPCC, however, had filed no counterclaim seeking determination of its entitlement to the ₹3.5 crore. Nor had the tribunal adjudicated the effect of the encashment, which had occurred before the award but was not reflected in its reasoning.
The dispute had therefore changed character. The guarantees were no longer awaiting invocation. The question was what should happen to the money after encashment when the condition contemplated by the earlier Section 9 order had not been affirmatively adjudicated.
That distinction cautions against reading NPCC judgment[4] as a general power under Section 9 to undo an encashed bank guarantee merely because an award is under challenge.
Expansion of Post-award question's ambit
Post-award Section 9 had traditionally been viewed as means to protect the fruits of an award. If a party succeeded, there were fruits to protect; if it lost, there was said to be nothing left to preserve. That reasoning found expression in Dirk India Pvt. Ltd. v. Maharashtra State Electricity Generation Co. Ltd.[5]
Home Care Retail Marts Pvt. Ltd. v. Haresh N. Sanghavi[6], unsettled that binary. The statutory protection was no longer confined to the award-holder's eventual recovery but potentially to the subject-matter or amount that was capable of being protected while judicial processes were still underway. In the matter, the Supreme Court held that "a party" in Section 9 cannot be restricted to the successful party merely because an award has been rendered. An unsuccessful party can therefore invoke Section 9 after the award.
However, Home Care[7] did not convert maintainability into entitlement. It recognised that the threshold for granting relief to an unsuccessful party is higher and that such relief would ordinarily arise only in rare and compelling circumstances, particularly where refusal could cause irreparable prejudice or undermine the efficacy of the pending challenge.
While the Home Care[8] decision set out the doctrinal work for post-award relief, NPCC judgment[9] analysed the position a step further: once the losing party can enter the courtroom, what can the court actually preserve?
The answer lies in the form of relief. The Supreme Court did not direct NPCC to pay ₹3.5 crore to Ishvakoo. It upheld the direction to deposit the amount in an interest-bearing fixed deposit pending the Section 34 proceedings. Payment would have altered the parties' positions before the Section 34 court determined whether the award could stand. Deposit instead removed the money from either party's immediate control while preserving the eventual determination.
The order was therefore one of preservation.
Why Failure to file Counter-claim mattered
NPCC's failure to file a counterclaim was significant. Its success in arbitration was essentially defensive: it defeated Ishvakoo's claims but obtained no affirmative award declaring its entitlement to retain ₹3.5 crore.
The 2005 Section 9 order had not created an unconditional right in NPCC to the money. Retention was linked to a subsequent adjudication establishing that entitlement. The tribunal did not furnish it. Although the tribunal found Ishvakoo's conduct concerning bank charges to be "fraudulent and collusive", that adverse finding did not amount to an affirmative adjudication that NPCC was entitled to retain the ₹3.5 crore.
The broader lesson is important: failure to establish one party's claim does not, without proper adjudication, establish the opposing party's entitlement. If an entitlement matters, it must be pleaded and adjudicated.
Section 9 cannot substitute Section 34
Home Care[10] does not make Section 9 a post-award safety net whenever an unsuccessful party files a Section 34 petition. Section 9 cannot become appellate jurisdiction in disguise. An interim court cannot reappreciate the award, rewrite its operative effect or grant, in substance, the relief sought under Section 34.
That boundary assumes greater significance after Gayatri Balasamy[11], which recognises the Section 34 court's power, within the statutory framework, to modify an award, including by severing its valid from its invalid portions. That power belongs to the Section 34 court.
It has been unequivocally noted that courts should exercise sufficient care, caution and circumspection while granting protection in such cases.
An absolute bar on interim protection could equally render the Section 34 remedy ineffective in substance. Therefore, the two propositions must coexist: Section 9 cannot substitute for Section 34; but, in an exceptional case, it may preserve what is necessary to ensure that Section 34 remains an effective remedy.
The Essar House discipline
The NPCC judgment[12] does not purport to displace the established principles governing Section 9. Essar House Pvt. Ltd. v. ArcelorMittal Nippon Steel India Ltd.[13] recognises the wide amplitude of Section 9 while requiring judicial exercise of discretion having regard to prima facie case, balance of convenience, irreparable injury and reasonable expedition. Adhunik Steels Ltd. v. Orissa Manganese & Minerals (P) Ltd.[14], similarly cautions against treating "just and convenient" as unfettered equitable jurisdiction.
The relief in NPCC judgment[15] operated within that framework, including the residuary power under Section 9(1)(ii)(e). Its circumstances were unusually specific: conditional earlier protection, completed encashment, absence of a counterclaim, no affirmative entitlement in the award and a pending Section 34 challenge. That combination should not become a general formula.
Finality needs efficacy, not rigidity
Read together, Home Care[16] and NPCC[17] judgments establish a disciplined proposition. Losing the arbitration is not a jurisdictional bar, but maintainability is only the beginning. The applicant must establish the basis for interim protection consistently with the settled principles governing such relief. The relief must remain genuinely interim and must not modify, rewrite or re-adjudicate the award.
Where ultimate entitlement remains contested, deposit, escrow or neutral custody may better preserve the position than transferring the disputed asset to either party. The policy objective is therefore not unlimited protection, but the minimum intervention at the instance of courts that is necessary to preserve meaningful adjudication.
The judgment charts a middle path between two undesirable extremes: the second appeal disguised as Section 9, and finality at all costs. The defeated party does not obtain relief because it lost. It obtains protection only where exceptional circumstances make protection necessary to preserve the efficacy of the legal process through which that loss is being challenged.
Section 9, after Home Care[18] and NPCC judgment[19], neither dons the winner's armour nor becomes the loser's second appeal. It is rather a bridge between the award and its judicial review, preserving the process without pre-empting its outcome.
Home Care Retail Marts Pvt. Ltd. v. Haresh N. Sanghavi, 2026 INSC 415 ↑
National Projects Construction Corporation Ltd. v. Ishvakoo (India) Pvt. Ltd. 2026 INSC 828 ↑
2026 INSC 828 ↑
National Projects Construction Corporation Ltd. v. Ishvakoo (India) Pvt. Ltd. 2026 INSC 828 ↑
2013 SCC OnLine Bom 481 ↑
Home Care Retail Marts Pvt. Ltd. v. Haresh N. Sanghavi, 2026 INSC 415 ↑
Home Care Retail Marts Pvt. Ltd. v. Haresh N. Sanghavi, 2026 INSC 415 ↑
2026 INSC 415 ↑
National Projects Construction Corporation Ltd. v. Ishvakoo (India) Pvt. Ltd. 2026 INSC 828 ↑
Home Care Retail Marts Pvt. Ltd. v. Haresh N. Sanghavi, 2026 INSC 415 ↑
2025 INSC 605 ↑
National Projects Construction Corporation Ltd. v. Ishvakoo (India) Pvt. Ltd. 2026 INSC 828 ↑
2022 SCC Online SC 1219 ↑
(2007) 7 SCC 125 ↑
National Projects Construction Corporation Ltd. v. Ishvakoo (India) Pvt. Ltd. 2026 INSC 828 ↑
Home Care Retail Marts Pvt. Ltd. v. Haresh N. Sanghavi, 2026 INSC 415 ↑
National Projects Construction Corporation Ltd. v. Ishvakoo (India) Pvt. Ltd. 2026 INSC 828 ↑
Home Care Retail Marts Pvt. Ltd. v. Haresh N. Sanghavi, 2026 INSC 415 ↑
National Projects Construction Corporation Ltd. v. Ishvakoo (India) Pvt. Ltd. 2026 INSC 828 ↑
Author is an Advocate practicing at Calcutta High Court. Views are personal.