Losing Side Finally Gets To Fight Back: How Supreme Court Rewrote Rules On Interim Relief In Arbitration
Imagine you have just lost arbitration. The award sits on the table, and the other side is already moving to enforce it. You believe the award is wrong – perhaps it was procured through fraud, or perhaps the arbitrator overlooked a decisive point of law. While you challenge the award under Section 34 of the Arbitration and Conciliation Act, 1996, a process that can take years, the...
Imagine you have just lost arbitration. The award sits on the table, and the other side is already moving to enforce it. You believe the award is wrong – perhaps it was procured through fraud, or perhaps the arbitrator overlooked a decisive point of law. While you challenge the award under Section 34 of the Arbitration and Conciliation Act, 1996, a process that can take years, the award-holder has already set the wheels in motion. Assets are being transferred, accounts emptied, property changing hands, and by the time the court rules in your favour, there may be nothing left to recover.
Section 9 of the Arbitration Act addresses precisely this situation by allowing a party to seek interim protective measures by approaching a court at three distinct stages: (i) prior to the commencement of arbitration, (ii) during the pendency of arbitral proceedings, and (iii) after the award has been rendered but before it is enforced under Section 36. The purpose of such interim protection, that too at multiple stages in dispute, is to ensure that relief, if ultimately granted, is not rendered infructuous due to non-interference by the court.
However, in case of interim protective measures after the award, the High Courts across the country were divided on the locus of the unsuccessful party in seeking interim reliefs. The Bombay High Court in Dirk India Pvt. Ltd. v. Maharashtra State Electricity Generation Co. Ltd.[1] laid down the foundational reasoning that would influence courts for over a decade. The Bombay High Court's judgment was premised on the reasoning that post-award interim measures under Section 9 exist solely to safeguard the “fruits of arbitration” and since a losing party holds no enforceable award, it has no fruits to protect and consequently the losing party cannot maintain a petition under Section 9 of the Arbitration Act. The Delhi High Court[2], the Madras High Court[3], and the Karnataka High Court[4] followed the ratio laid down by the Bombay High Court in Dirk India in their respective judgments.
On the other side of the divide, the Telangana High Court[5], the Gujarat High Court[6], and the Punjab & Haryana High Court[7] held that even an unsuccessful party in arbitral proceedings can maintain a petition under Section 9 of the Arbitration Act. The Gujarat High Court in GAIL (India) Ltd. v. Latin Rasayani Private Ltd.[8] expressed its disagreement with Dirk India, holding that Section 9 of the Arbitration Act draws no distinction between a party that has succeeded in arbitration and a party that has failed, therefore, either party is entitled to approach the Court for interim protective measures. The Telangana High Court[9] and the Punjab & Haryana High Court[10] echoed the view expressed in Gail India Judgment.
The issue arising from the divergent views of the High Courts was put to rest by the Supreme Court on April 24, 2026 in Home Care Retail Marts Pvt. Ltd. v. Haresh N. Sanghavi[11] where it held that any party to an arbitration agreement, regardless whether such party had succeeded or lost in arbitration, can seek interim relief under Section 9 of the Arbitration Act.
The issue settled by the Supreme Court in the Home Care Judgment[12] is:-
“whether the expression 'party' in Section 9 of the Act includes a party that has lost in the arbitral proceedings?”
Meaning of term “party”
Section 9 of the Act opens with the words “party” which is defined under Section 2(h) of the Arbitration Act as “a party to an arbitration agreement”. The Supreme Court in Home Care Judgment held that neither Section 9 nor Section 2(h) draws any distinction between a successful or an unsuccessful party in arbitration and that restricting the right to seek interim protective measures under Section 9 to successful parties alone would amount to introducing a limitation into the statute that the legislature never contemplated and therefore, such reading of the provision was impermissible in law.[13]
The Supreme Court found support for its interpretation in the legislative history of Indian arbitration law read with the structure of the UNCITRAL Model Law. Under Section 18 of the Arbitration Act, 1940, the post-award grant of interim relief was expressly confined to the successful party. The Parliament's choice not to carry forward any such restriction in Section 9 of the Arbitration Act was, in the Supreme Court's view, deliberate.
Similarly, while Article 9 of the UNCITRAL Model Law permits court-ordered interim measures only before or during arbitral proceedings. The interim protective measures at post-award stage is a creation of the Parliament and a distinct departure from UNCITRAL Model Law. In fact, the Parliament did so without imposing any restriction on the category of party entitled to seek such relief.
Why the “Fruits of Arbitration” Theory Could Not Hold
The most enduring rationale behind Dirk India Judgment was the theory of “fruits of arbitration” i.e., interim protection post-award exists only to preserve the winning party's right to enforce the award. The losing party, having no enforceable claim and therefore no “fruit” to protect; hence, no right to seek interim protection.
However, such reasoning was held to be flawed by the Supreme Court. Firstly, the Supreme Court observed that the "fruits of arbitration" theory is premised on a presumption of a binary outcome of arbitral proceedings i.e., one party will win and other will lose arbitral proceedings. Furthermore, the court under Section 34 of the Arbitration Act can either uphold or set aside an award and nothing more. This presumption, the Supreme Court held, stands conclusively displaced by the Constitution Bench judgment in Gayatri Balasamy v. ISG Novasoft Technologies Limited[14], which recognized that courts possess the power to modify an award in certain circumstances. Consequently, a party that has lost in arbitration may, through the Section 34 process, emerge with a partial or even complete reversal of the award, and to deny such a party interim protection on the assumption that it has "no fruits to protect" fundamentally misunderstands what the Section 34 challenge process can deliver. Moreover, even during the arbitral proceedings, the outcomes can be numerous, for instance, the arbitral tribunal can partially allow the claim, or the arbitral tribunals allows the claim as well as the counter claim, or the arbitral tribunal passes a nil award.
Secondly, the Supreme Court observed a textual flaw in the Dirk India reasoning. It noted that Section 9(1)(ii) of the Act authorizes courts to grant measures for the protection of the “subject matter of arbitration” and the “amount in dispute”, and such expressions are much broader and open-ended than the phrase “fruits of the arbitral award.” and these terms do not presuppose who has won or lost. It, therefore, held that it was impermissible to restrict a provision expressed in such broad terms to protecting only the winning party's right of enforcement.
Two Different Remedies, Two Different Purposes
Another argument made for restricting post-award Section 9 relief to a successful party was the availability of an alternate remedy by way of stay of the award under Section 34 and 36(2) of the Act.
The Supreme Court rejected this argument, holding that Section 34 or 36(2) on one hand, and Section 9 on the other, operates in entirely distinct spheres. To elucidate, Section 34 and / or Section 36(2) deal with the award itself, however, Section 9, by contrast, is concerned with preserving the subject matter of the dispute and has no concern with the validity or correctness of the award. An unsuccessful party seeking a stay of the award under Sections 34 or 36(2) therefore has no mechanism to prevent dissipation of assets or protect its claim till its petition / appeal is decided, and the remedy under Section 9 cannot be substituted for that purpose. Therefore, the power of the Courts to stay the award under Section 34 or Section 36(2) cannot be an alternative to power of the Courts to grant interim reliefs under Section 9.
That said, the Supreme Court was careful to clarify that this ruling does not open the floodgates. The Supreme Court held that an unsuccessful party seeking interim relief carries a higher evidentiary and equitable burden, and courts have been cautioned to approach such applications with "care, caution and circumspection".
Implications
The Supreme Court's judgment settles a long-running judicial disagreement and realigns Indian arbitration law with the practical realities of commercial dispute resolution. The ruling, however, is not merely declaratory and its true significance is best appreciated by examining the scenarios where parties earlier were previously left remediless.
One such instance is a case of "nil" award where the arbitral tribunal rejects both the claims and the counter-claims, and neither party emerges successful. The Dirk India approach fails to deal with such a scenario since neither party held an enforceable award, and therefore neither could claim “fruits” to protect, leaving both parties without recourse under Section 9 of the Act even while their Section 34 challenges remained pending. The Telangana High Court had already recognized this lacuna in Saptarishi Hotels, observing that since courts can modify an award under Section 34 of the Act, a "nil" award may well transform into one favoring either party, and the Dirk India approach was accordingly distinguished. This reasoning now stands affirmed by the Home Care Judgment.
Another instance is the case where the arbitral tribunal has partially allowed the claim and / or counter-claim, blurring the line between a successful and an unsuccessful party. The Supreme Court in the Home Care Judgment specifically noted that such a party, in terms of the Dirk India rule, would be unable to prevent the other side from alienating its assets after the award, even though the offending portion of the award may ultimately be severed and set aside in the Section 34 proceedings, and without interim relief in the interregnum, the assets may dissipate, rendering the final success illusory. The Home Care Judgment puts an end to such artificial classification, and a counter-claimant or a partially successful party can now seek to secure the amounts awarded to it or the subject matter of the dispute pending adjudication of the challenge proceedings.
The judgment is perhaps most transformational for the claimant who has lost the arbitration altogether and whose claim itself requires protection. Earlier such a claimant could always challenge the award under Section 34 but had no mechanism to preserve the subject matter of its claim while that challenge was heard. In fact, the Supreme Court identified situations where such protection becomes necessary: where the award is prima facie vitiated by fraud or corruption, or has been rendered without proper notice; or where interim protection granted during the arbitral proceedings stands vacated and such vacation would cause irreversible prejudice; or where the award-holder takes steps to enforce the award even before it becomes enforceable under Section 36 of the Act.
In the end, the judgment reflects a simple and durable principle: a legal remedy is only as meaningful as the ability to preserve the conditions necessary for it to be effective. By securing that principle for every party to the arbitration, whether successful, unsuccessful, or somewhere in between, the Supreme Court has made the Indian arbitration framework a more complete system of justice.
Dirk India Pvt. Ltd. v. Maharashtra State Electricity Generation Co. Ltd., Appeal No.114 of 2013, decided by the Bombay High Court on 19 March 2013. ↑
Nussli Switzerland Ltd. v. Organizing Committee Commonwealth Games 2010, FAO (OS) 121 of 2014, decided by the Delhi High Court on 18 September 2014; National Highways Authority of India v. Punjab National Bank & Anr., FAO(OS)(COMM) No.27 of 2021, decided by the Delhi High Court on 10 August 2023. ↑
A. Chidambaram v. Dr. S. Rajagopal & Ors., O.A. No.843 of 2024, decided by the Madras High Court on 17 February 2025. ↑
Padma Mahadev v. Sierra Constructions (P) Ltd., COMAP No. 2 of 2021, decided by the Karnataka High Court on 22 March 2021. ↑
Saptarishi Hotels Pvt. Ltd. v. National Institute of Tourism & Hospitality Management, C.O.M.C.A No.55 of 2019, decided by the Telangana High Court on 11 October 2019. ↑
GAIL (India) Ltd. v. Latin Rasayani Pvt. Ltd., First Appeal No.3889 of 2014, decided by the Gujarat High Court on 9 December 2014. ↑
art., FAO-CARB No.51 of 2024 (O&M), decided by the Punjab & Haryana High Court on 21 February 2025. ↑
GAIL (India), cited in note 6 above. ↑
Saptarishi Hotels, cited in note 5 above. ↑
DLF Home Developers, cited in note 7 above. ↑
Home Care Retail Marts Pvt. Ltd. v. Haresh N. Sanghavi, 2026 INSC 415. ↑
Home Care @ Para 2. ↑
R.S. Nayak v. A.R. Antulay, Criminal Appeal No.356 of 1983, decided by the Supreme Court on 16 February 1984; Grasim Industries Ltd. v. Collector of Customs, Civil Appeal No.1951 of 1998, decided by the Supreme Court on 4 April 2002. ↑
Civil Appeal No.6178 of 2025, decided by the Supreme Court on 30 April 2025. ↑
Authors Dharav Shah & Aayush Maheshwari are Advocates practicing at Supreme Court and Delhi High Courts. Views are personal.