In National Projects Construction Corporation Ltd. v. Ishvakoo (India) Pvt. Ltd., the Supreme Court has settled a question that had divided practitioners for years — can a party that has already lost before the arbitral tribunal still go to court under Section 9 of the Arbitration and Conciliation Act, 1996 for interim protection? A Bench of Justice K.V. Viswanathan and Justice Alok Aradhe held that it can, though only in rare and compelling cases, and only to prevent irreparable prejudice and to preserve the practical efficacy of a pending Section 34 challenge to the award.
The dispute traced back to a 2002 Memorandum of Understanding between National Projects Construction Corporation Ltd. (NPCC) and Ishvakoo (India) Pvt. Ltd. for infrastructure works around the Taj Mahal, UPST and Idgah bus stands and the Taj Trapezium Zone heritage corridor in Agra, under which Ishvakoo had received ₹3.5 crore as a mobilisation advance secured by bank guarantees. After Ishvakoo failed to renew the guarantees, NPCC encashed them in September 2017. The arbitral tribunal went on to dismiss Ishvakoo's claims by an award dated 5 December 2017 — notably, without NPCC having pressed any counterclaim of its own for the advance. Ishvakoo challenged the award under Section 34 and, in parallel, filed a fresh Section 9 application seeking to have the encashed ₹3.5 crore secured pending that challenge. The Delhi High Court, and later its Division Bench, directed NPCC to deposit the amount with the High Court Registry; NPCC's appeal against that direction is what reached the Supreme Court.
The Court's central holding was that Section 9's language is not confined to successful claimants — an unsuccessful party can invoke it post-award where the case is exceptional, applying essentially the same tests that ordinarily govern interim relief: a prima facie case, balance of convenience, and the risk of irreparable prejudice. On the facts, the Court found those tests satisfied "in ample measure": because NPCC had filed no counterclaim and there was no arbitral finding that Ishvakoo had failed to account for the mobilisation advance, allowing NPCC to simply retain the ₹3.5 crore for the duration of the Section 34 proceedings could, prima facie, amount to unjust enrichment. Interim protection was accordingly necessary both to guard against irreparable prejudice to Ishvakoo and to keep its Section 34 challenge from being rendered a hollow exercise. The Court dismissed NPCC's appeal and upheld the Delhi High Court's direction, giving NPCC four weeks to deposit ₹3.5 crore with the High Court Registry, to be held in fixed deposit pending disposal of the Section 34 application.
For parties on either side of an arbitration, the ruling is a reminder that losing before the tribunal does not automatically foreclose interim relief while a Section 34 challenge is pending — but the bar is deliberately set high, and confined to genuinely exceptional fact patterns rather than routine post-award manoeuvring. Award holders defending encashed guarantees or received payments should not assume the arbitral outcome alone insulates them from a Section 9 application; the absence of a counterclaim or a clear tribunal finding on the disputed sum can itself become the basis for a court to order security pending the challenge.