Scope of Section 9 of Arbitration and Conciliation Act, 1996 Answered in a recent Judgment passed in July 2026

Scope of Section 9 of Arbitration and Conciliation Act, 1996 Answered in a recent Judgment passed in July 2026

S.9 of Arbitration and Conciliation Act, 1996 deals with situation when a party can approach Court for interim measure of protection. S.9 can be invoked before enforcing arbitral award and even after making of arbitral award. S. 9(2) fixes time of 90 days while S.9 (3) connects S. 9(1) with S.17 of the Act.

It has been held that while considering an application under Section 9, it is not necessary to strictly apply all the requirements which are applicable while passing an order of attachment before judgment under Order XXXVIII Rule 5 of the Code of Civil Procedure. The powers under Section 9 are wider. The object behind conferring such power is to ensure that the arbitral award does not remain on paper because assets are no longer available. 

While exercising jurisdiction under Section 9, the Court is concerned with preserving the effectiveness of the arbitral proceedings. Therefore, while examining such an application, the Court is required to consider the surrounding circumstances placed before it. It is not expected to reject the application because technical requirement of Order XXXVIII Rule 5 has not been pleaded. If the facts justify grant of interim protection, relief should not be denied because the pleadings are not drafted in the same manner as an application for attachment before judgment.

The expression "a strong possibility of diminution of assets would suffice" does not mean that the applicant must prove that the respondent has dishonestly transferred or concealed its assets. At the same time, every apprehension expressed by the claimant cannot be accepted. What is required is that the surrounding facts should indicate that the respondent's assets are likely to become less in value or may not remain available by the time the arbitral award is to be enforced. If such circumstances are shown, the Court may exercise powers under Section 9 even before the assets are transferred.

In commercial matters, assets may become unavailable for different reasons. A business may suffer losses. Valuable properties may become charged in favour of financial institutions. Amounts receivable from customers may be transferred to somebody. Fresh liabilities may be created over existing assets. Although these circumstances may not by itself establish any dishonest conduct, they may still reduce the assets which would otherwise remain available for satisfaction of the arbitral award.

Section 9 is preventive in its object. The Court is expected to intervene before the situation becomes irreversible. If the Court waits until the respondent has disposed of all its assets, then the purpose behind granting interim protection may fail. Since dishonest intention is difficult to establish by direct evidence, the Court is entitled to examine the surrounding circumstances and arrive at a conclusion whether there exists a real likelihood that the respondent's assets may diminish before the arbitral award becomes capable of enforcement. 

Case reference is Norvic Shipping Asia PTE Limited v Zigma International [2026] GCtR 407 (Bombay).