Beyond Textualism: Disciplining the “Rare and Compelling” Threshold Under Section 9

Arjun Singh^[1]

The question of whether an interim protection under Section 9 of the Arbitration and Conciliation Act, 1996 (A&C Act) can be granted, especially after an arbitral award has been passed but before it has been enforced, has long been a subject of judicial disagreement under the Indian arbitration framework. Over the years, the courts have grappled with the question of whether post-award relief under section 9 of the A&C Act is intended solely to protect the "fruits" of a successful award for the award-holder or whether it remains a remedy open even to an unsuccessful party having no beneficial award to protect.

For over a decade, Indian jurisprudence answered this through the Bombay High Court’s ruling in Dirk India v. Maharashtra State Electricity Generation Co. Ltd, which restricted post-award Section 9 relief strictly to award-holders to prevent losing parties from delaying execution. In its recent judgment of Home Care Retail Marts v. Haresh N. Sanghavi, the Supreme Court departed from this position. Relying on a literal reading of Section 2(1)(h), the Court held that any party to an arbitration agreement retains standing under Section 9 until enforcement of the award. Textually, the Court's conclusion on standing is unimpeachable. The core difficulty emerges at the subsequent stage, where the Court recognized broad statutory standing but failed to explain the much narrower circumstances in which an unsuccessful party should obtain substantive post-award relief. This piece argues that while Home Care Retail Marts correctly settles locus, it leaves the substantive standard unguided, creating an immediate risk that statutory access will be treated as an entitlement to protective orders.

The High Court Divide Before Home Care Retail Marts

This jurisprudential rift originated from Dirk India, where the Bombay High Court held that post-award relief under Section 9 exists exclusively to protect the "fruits" of a successful arbitral outcome pending its enforcement under Section 36. Since an unsuccessful party has no fruits to protect, it was held to have no standing to invoke Section 9 at all. On Dirk India's reasoning, section 34 was strictly limited to setting aside or upholding an award in its entirety, rather than granting substantive relief. The Court in Home Care Retail Marts treated this premise as resolved in Gayatri Balasamy v. ISG Novasoft Technologies Ltd., a claim revisited below. This reasoning was subsequently adopted by the High Courts of Delhi, Madras, and Karnataka. On the other side, the High Court of Telangana and the High Court of Punjab & Haryanaheld that Section 9 draws no such distinction and remains available to any party to the agreement until enforcement is complete.

The Supreme Court’s ruling is particularly notable for its jurisprudential pivot: Justice Manmohan, who himself endorsed Dirk India’s line of reasoning while authoring the Delhi High Court’s judgment in National Highways Authority Of India vs. Punjab National Bank, rejected the very doctrine on strict statutory grounds. Applying the settled rule of literal interpretation as established in R.S. Nayak v. A.R. Antulay, the court interpreted the word “party” under Section 2(1)(h) strictly and held that it does not contain any post-award restrictions on moving a section 9. It further held that giving the word “party” an elastic import depending on the stage of proceedings would amount to a judicial rewrite (Cox v. Hakes), and putting words that the legislature did not intend. This aligns with Parliament’s conscious departure from Article 9 of the UNCITRAL Model Law (which restricts court-ordered interim measures to stages before or during proceedings), by extending the relief even to a post-award stage without placing any qualification on the applicant's standing.

The Unnecessary Link to Gayatri Balasamy

While the Supreme Court’s interpretation is persuasive, a key strand of its reasoning leads to an unnecessary conceptual confusion. The bench relied on its judgment in Gayatri Balasamy, which recognised that an unsuccessful party may retain a legally cognisable interest in an award despite being unsuccessful, including in circumstances involving limited correction or severance, to demonstrate that an unsuccessful party is not necessarily left without potential “fruits”. While this reasoning supports the Court’s conclusion on locus, it does not resolve a distinct question: whether an unsuccessful party who can approach the court has nevertheless established grounds for interim relief.

While Gayatri Balasamy helps explain why an unsuccessful party may retain a legally cognisable interest for the purpose of locus, it offers little guidance on when that interest should warrant interim protection under Section 9. Practically, an unsuccessful party applying under Section 9 will often be contesting the core findings on liability. The limited forms of correction or severance recognised in Gayatri Balasamy, however, do not by themselves explain why such a party should receive interim protection pending the Section 34 challenge.

Discretion on the merits cannot cure the fact that relying on Gayatri Balasamy does little analytical work here. While limited modification or severance explains why an unsuccessful party retains an interest sufficient for threshold locus, it offers no guidance on when that interest justifies interim protection under Section 9. Using a narrow Section 34 modification power to reinforce post-award maintainability blurs the boundary between establishing standing and establishing grounds for substantive relief.

The undefined standard and the commercial fallout

The real concern lies in the Supreme Court’s broad qualification of maintainability. Having declared that "any party" may invoke Section 9 post-award, the bench directed the courts to exercise "care, caution, and circumspection" when an unsuccessful party applies, limiting relief to "rare and compelling cases", which is noticeably a higher threshold than the general Section 9 bar under Essar House Private Limited v. Arcelor Mittal Nippon Steel India Limited. The difficulty is not that the Court left the standard entirely blank, but that it provided isolated illustrations, such as fraud, lack of notice, or imminent dissipation, rather than a generalised legal test. While these examples identify severe procedural misconduct, they offer high courts no workable framework to determine how the traditional tripartite requirements must be heightened in standard commercial disputes.

The Bench retained the established requirements of prima facie case, balance of convenience and irreparable harm, while providing illustrations of circumstances in which relief to an unsuccessful party may be justified i.e., awards procured without notice, awards tainted by fraud or corruption, imminent dissipation of the subject matter pending a stay under Section 36(3), or a partially successful party whose counterclaim outcome technically labels it "unsuccessful". Each of these illustrations is essentially a narrow exception grounded in fraud or residual rights. The Court laid down a broad textual rule that "any party" has standing, but then quietly narrowed it down through its own illustrations, the Court effectively replaced Dirk India’s outcome-based bar which automatically disqualified losing parties with a conduct-based inquiry focusing on procedural foul play

This vagueness creates an immediate tactical loophole. The primary objective of the 2015 amendments to the A&C Act was to eradicate automatic stays and expedite the enforcement of arbitral awards. Under Section 36(3), a court granting a stay of execution typically requires the award-debtor to deposit the awarded sum or furnish sufficient security. While these provisions remain distinct in theory, their practical operation overlaps. Consider a commercial scenario where an arbitral tribunal awards a monetary sum to a contractor and terminates a long-term supply contract. The award-debtor, challenging the award under Section 34, moves under Section 9 for an interim status quo direction restraining the contractor from disposing of plant machinery tied to the terminated contract, contending that the machinery's sale would prejudice the Section 34 proceedings. If granted, such an order ostensibly preserves property, but commercially impedes the contractor's operations and functionally freezes enforcement assets, delivering the practical benefits of a stay without the award-debtor depositing a single rupee under Section 36(3). Without a defined threshold, every post-award Section 9 petition triggers a preliminary fight over whether the case is "rare and compelling." Moreover, the courts receive no workable criteria to separate a high-threshold application from a routine Essar House inquiry.

The real tactical damage ensues immediately after. Any order passed under Section 9, whether granting or refusing relief, is appealable under Section 37(1)(b) of A&C Act. Therefore, even if the Section 9 petition gets dismissed at the threshold, the losing party can immediately carry the dispute into a Section 37 appeal. This creates a secondary tier of interlocutory litigation. Turns out what was meant to be an exceptional post-award remedy turns into a routine mechanism to stall execution.

Building a Workable Standard for the High Courts

The Indian High Courts now face an immediate task of translating the Supreme Court’s "rare and compelling" threshold into a tangible judicial test. Jurisprudence of comparative jurisdictions offers a valuable guidance here, given we carefully take into cognizance the underlying statutory differences.

The comparative utility of English jurisprudence lies not in attempting a direct statutory transplant of Section 44 of the UK Arbitration Act 1996 (UKAC), which remains structurally confined to ongoing or prospective references, but in observing the judicial technique used to discipline a broadly expressed statutory power. Sections 44(1) and 44(3) of the UKAC restrict the judicial power of the court strictly to actions taken for the purposes of and in relation to arbitral proceedings involving a party or proposed party, thereby excluding arbitrations that have already concluded. Most Model Law jurisdictions do not confront India's precise dilemma. Article 9, closely reflected in Singapore's International Arbitration Act and Hong Kong's Arbitration Ordinance, confines interim measures to before or during arbitral proceedings. Post-award protection in those jurisdictions falls under ordinary civil procedure rather than a specialized arbitration mechanism. India's difficulty is partly self-created: by extending Section 9 beyond Article 9, a legislative choice the Supreme Court treated as decisive in Home Care Retail Marts, Parliament created a post-award remedy that comparable jurisdictions never had to define.

Despite these structural distinctions, English law offers a useful model for converting broad judicial discretion into objective and tangible pre-conditions. In Cetelem SA v. Roust Holdings Ltd., the UK Court of Appeal held that Section 44 jurisdiction remains strictly confined to orders necessary for preserving evidence or assets. The court clarified that while the term "assets" includes contractual rights, this necessity requirement forms a strict jurisdictional bar, removing the issue from routine judicial discretion. It is this method of crafting objective, threshold evidentiary filters that Indian High Courts must emulate. Since Section 9 and Section 36 operate independently in distinct statutory spheres as recognized inHome Care Retail Marts, the High Courts should structure the "rare and compelling" threshold around three specific evidentiary requirements:

First, Targeted and Irreversible Prejudice

Under the first inquiry, the applicant must establish imminent, irreversible harm directed to an identifiable right or specific asset that cannot adequately be protected through Section 34 or Section 36. This standard deliberately demands more than the conventional irreparable harm prong under Essar House. In ordinary pre-award Section 9 applications, general financial distress or counterparty insolvency risks frequently satisfy the balance of convenience. Post-award, an unsuccessful party cannot rely on general balance-sheet distress. It must prove that absent an immediate order over a distinct res, any future success under Section 34 would be rendered entirely illusory.

Second, Demonstrable Necessity and Calibrated safeguards

Interim relief under this second limb requires showing that the protection sought is strictly necessary to prevent immediate and unrecoverable loss, rather than a tool to secure strategic leverage. Crucially, counter-security should not be applied mechanistically as an invariable condition in every case, such as where an applicant demonstrates an outright lack of arbitral notice. However, it assumes vital importance wherever the requested Section 9 relief would materially impede or interfere with the award-holder's execution of the award. In such cases, conditioning interim protection upon security or a partial deposit prevents Section 9 from operating as a backdoor bypass of Section 36(3).

Third, Serious Defect Affecting the Integrity of the Award or Proceedings

Under this third limb, the applicant must demonstrate a fundamental defect that impeaches the integrity of the arbitral award or the arbitral reference itself, mirroring the Supreme Court's illustrations of fraud, corruption, or complete absence of notice. Borrowing from Order VI Rule 4 of the Code of Civil Procedure, 1908, courts must demand strict pleading particulars when award-debtors allege jurisdictional or procedural defaults. Under this prong, severability operates as a relevant limiting consideration rather than a sole defining criterion: where an alleged irregularity touches only a severable portion of an arbitral award, interim relief under Section 9 should be refused, leaving the applicant to pursue statutory remedies exclusively under Section 34.

Conclusion 

By interpreting Section 2(1)(h) literally, Home Care Retail Marts arrived at the correct textual result: as a matter of standing, Section 9 remains open to any party to the arbitration agreement until enforcement is concluded. The challenge now shifts from statutory standing to substantive entitlement. Recognizing threshold locus does not compel lowering the bar for relief. High courts should not seek to resurrect Dirk India’s categorical bar on standing through the back door. Rather, they must ensure that the actual grant of post-award interim relief to an unsuccessful party remains truly exceptional. Grounding the rare and compelling threshold in targeted prejudice, calibrated safeguards against enforcement disruption, and serious structural defects ensures that Section 9 respects statutory text without sacrificing the commercial integrity of arbitral awards.

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^[1] Arjun Singh is an Advocate practicing in Delhi High Court; Email: arjunrsingh777@gmail.com.