Osterreichischer Lloyd Seereederei, a Cyprus-incorporated shipping company, held a foreign arbitral award against Victore Ships Private Limited, an Indian company. Rather than filing separately, it brought a rolled-up petition before the Bombay High Court combining the application for recognition and enforcement of the foreign award under Part II of the Arbitration and Conciliation Act, 1996 with execution of that award once recognised. Alongside that combined petition, and before the Court had finished with recognition, the Cyprus company also moved under Section 9 of the Act asking the Court to secure the amount due under the award pending the outcome.
Victore Ships resisted the Section 9 application on a jurisdictional footing rather than on the merits of whether interim protection was warranted. Its argument was that once an award holder has filed a Part II petition seeking enforcement and execution, Section 9 is no longer available as a separate route, since the Act channels a foreign award holder's remedies through the enforcement petition itself rather than leaving a parallel interim relief application open. If that argument had succeeded, foreign award holders enforcing in India would have had to rely entirely on how quickly the enforcement petition itself moved, with no means of protecting assets in the meantime.
The Bombay High Court rejected that reading of the statute. It held that the mere filing of a Part II petition for recognition and enforcement does not strip an award holder of the separate right to seek interim protection under Section 9, and that this right continues to be available at least until the foreign award is recognised and treated as a decree under Section 49 of the Act. Until that point is reached, the Court reasoned, the award holder remains in a position comparable to any other party awaiting adjudication of its rights, with a genuine need to guard against the other side dissipating assets while the enforcement question is pending.
Central to the reasoning was a distinction between execution of a domestic award under Part I of the Act and enforcement of a foreign award under Part II, which the Court treated as materially different processes rather than mirror images of each other. Case law on whether interim relief remains available once a domestic award is already being executed under Part I does not, on this reasoning, transfer automatically to the Part II context, where the award has not yet even been recognised as an Indian decree and the enforcement court is still at the threshold stage of deciding whether to treat it as one.
The Court stopped short of resolving every question in this space. It left open whether Section 9 relief would remain available once the foreign award has actually been recognised and converted into an enforceable decree, at which point the award holder moves into execution proper rather than the threshold enforcement stage the case in front of it concerned. Commentators tracking the decision have noted that High Courts have not spoken with one voice on that later-stage question, leaving room for a different outcome once a case squarely raising it reaches a court, and possibly the Supreme Court in time. That gap matters in practice, since an award holder whose enforcement petition drags on for years could still find itself arguing afresh, at the execution stage, over whether interim protection remains open to it.
For foreign companies holding awards against Indian counterparties, the order closes off a jurisdictional objection that could otherwise have stripped them of interim protection at the precise moment they need it most, in the gap between filing for enforcement and the Court actually determining the recognition question. A respondent facing a weak case on the merits of an award has every incentive to use delay as a strategy, and an inability to seek Section 9 relief during that delay would have handed respondents exactly the tool they needed to dissipate assets while an enforcement petition worked its way through the list.
Counsel for award holders should still file the Section 9 application promptly alongside, rather than instead of, the Part II enforcement petition, since the ruling preserves the right to seek interim relief at the enforcement stage without yet settling what happens once the award matures into a decree and moves to execution. Drafting the Section 9 application to identify specific, traceable assets within the jurisdiction, rather than seeking a broad freeze in the abstract, will also matter more once this reasoning is tested before other benches and, eventually, at the execution stage the Court left undecided.