Oil And Natural Gas Corporation Limited vs Swiber Offshore Construction Pte Limited

2026:BHC-OS:13025
carbpl-17832-2026-J.doc

Shabnoor
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
IN IT’S COMMERCIAL DIVISION
COMM ARBITRATION PETITION NO. 17832 OF 2026
SHABNOOR
AYUB
PATHAN
Oil and Natural Gas Corporation
Limited … Petitioner
V/s.
Swiber offshore Construction PTE
Limited … Respondent
Digitally signed by
SHABNOOR AYUB
PATHAN
Date: 2026.06.15
14:17:54 +0530
Mr. Zubin Behramkamdin, Senior Advocate with
Shreya Gupta, Abhijeet Sadikale, Sanjana Kattoor i/b
Shardul Amarchand Mangaldas & Co., for the
petitioner.
Mr. Venkatesh Dhond, Senior Advocate with Vinodini
Srinivasan, Ganesh Chandru, Siddhart Agrawal,
Dharmesh S Jain, Shashwat Dhyani, & Arpita Tiwari
i/b Anil T. Agarwal, for the respondent.
CORAM : AMIT BORKAR, J.
RESERVED ON : JUNE 11, 2026
PRONOUNCED ON : JUNE 15, 2026
JUDGMENT:
1. The present petition raises an issue concerning the scope of
post award interim protection under Section 9 of the Arbitration
and Conciliation Act, 1996. The petitioner, Oil and Natural Gas
Corporation Limited (ONGC), seeks continuation and extension of
a bank guarantee furnished by the respondent, Swiber Offshore
Construction Pte. Limited (Swiber), pending adjudication of
ONGC's challenge to the arbitral award dated 30 September 2025.
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2. The petitioner, Oil and Natural Gas Corporation Limited
(ONGC), is a Government company and also a Maharatna Public
Sector Undertaking. It is doing work of finding, exploring and
producing oil and natural gas at different places in India. The
respondent, Swiber Offshore Construction Pte. Limited (Swiber), is
a company incorporated in Singapore and was carrying on offshore
construction activities. On 3 July 2010, ONGC and Swiber entered
into a contract bearing No. MR/OW/MM/MHNRD-II/PL/08/2009
for execution of a project having value of USD 148,200,000. Under
Clause 6.3.1 of the contract, the entire work was required to be
completed on or before 30 April 2011. Clause 6.3.2 provided that
if there was delay in completing the work, or if Swiber failed to
perform its obligations under the contract, ONGC would get right
to recover liquidated damages. As per this clause, Swiber was
liable to pay liquidated damages at prescribed rate for every week
of delay, subject to maximum limit of 10% of total contract value.
The parties had already agreed between themselves that this
amount was a genuine estimate of loss which ONGC may suffer
because of delay and, therefore, ONGC would not be required to
separately prove actual loss. Clause 6.3.4 further required Swiber
to furnish a bank guarantee equal to the maximum amount of
liquidated damages recoverable under the contract.
3. Before expiry of the original period of completion, Swiber
requested ONGC to extend the time for finishing the project. By
communication dated 5 May 2011, ONGC granted first extension
and permitted completion of work up to 30 June 2011. While
granting such extension, ONGC clearly kept open and reserved its
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right to recover liquidated damages for the delay. Thereafter,
Swiber again sought extension of time. By communication dated
17 June 2011, ONGC granted second extension up to 28 February
2012. Even while granting this extension, ONGC continued to
reserve its right to levy liquidated damages in accordance with the
terms of the contract.
4. On 3 October 2011, ANZ Banking Group issued a bank
guarantee of USD 14,820,000 on behalf of Swiber as security
towards possible liability of liquidated damages. Later on, this
guarantee was replaced and continued through DBS Bank on 3
December 2015. On 22 February 2012, Swiber once again
requested extension of time for completion of the project. By
communication dated 14 March 2012, ONGC granted third
extension up to 30 April 2012 and at the same time continued to
reserve its right to recover liquidated damages. Thereafter, on 18
March 2012, Swiber sought one more extension. By
communication dated 30 April 2012, ONGC granted what was
described as the final extension and allowed time up to 31 May
2012 for completion of the project. Even at that stage also, ONGC
expressly reserved its right to levy liquidated damages. Ultimately,
the project came to be completed on 24 May 2012. After
completion of the work, ONGC issued a Completion Certificate on
18 February 2013.
5. Subsequently, disputes arose between the parties in relation
to the contract and claims arising therefrom. On 14 September
2015, Swiber invoked the arbitration clause by issuing a Notice of
Arbitration. Thereafter, on 3 December 2015, Swiber furnished a
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fresh bank guarantee bearing reference No. 811-02-0041188
through DBS Bank for an amount of USD 14,820,000 as security
towards liquidated damages. The validity of this bank guarantee
was extended from time to time and presently it remains valid up
to 15 June 2026. During the period between July 2016 and
September 2016, ONGC invoked the bank guarantee. Being
dissatisfied with such invocation, Swiber approached this Court by
filing proceedings under Section 9 of the Arbitration and
Conciliation Act, 1996 and sought restraint against encashment of
the bank guarantee. Those proceedings were eventually disposed
of on the basis of consent terms recorded by this Court on 8
September 2016. Shortly thereafter, on 6 October 2016, the
Singapore High Court placed Swiber under judicial management
and appointed judicial managers, including Mr. Bob Yap Cheng
Ghee, for managing the affairs of the company.
6. On 15 July 2019, ONGC lodged claims aggregating to USD
156,346,000 before the Judicial Manager of Swiber in Singapore.
According to ONGC, these claims represented additional costs and
losses allegedly suffered by it because of failure on the part of
Swiber to perform its obligations under various contracts. By
communication dated 12 August 2022, the Judicial Manager
informed ONGC that its claims had been examined and admitted
to the extent of USD 51,224,353.74. Thereafter, by another
communication dated 12 September 2022, ONGC was informed
that the remaining part of its claim had been marked and kept
aside for consideration and adjudication at a later stage. It was
also stated that the total claim amount of USD 156,346,000 could
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not be finally determined for the purpose of interim distributions
because proceedings initiated by ONGC before the Singapore High
Court were still pending. On 11 November 2022, the Singapore
High Court passed an order directing winding up of Swiber and
placed the company into liquidation. Liquidators, including Mr.
Bob Yap Cheng Ghee, came to be appointed for conducting and
administering the liquidation process. In the meantime, the
arbitral proceedings continued. After completion of evidence and
submissions, final arguments were heard and concluded, and in
August 2023 the Arbitral Tribunal reserved the matter for passing
its Award.
7. On 5 June 2025, Swiber extended the validity of the bank
guarantee up to 15 June 2026. Thereafter, on 30 September 2025,
the Arbitral Tribunal delivered its Award, which was received by
ONGC on 9 October 2025. Under the Award, the Tribunal held that
ONGC was not entitled to recover liquidated damages and
consequently directed return of the bank guarantee to Swiber. The
Tribunal also partly allowed certain claims made by Swiber and
certain counterclaims raised by ONGC. After adjustment of the
amounts found payable by either side, the Tribunal directed ONGC
to pay Swiber a net amount of USD 4,113,200 together with
interest at the rate of 5% per annum from the date of the Award
till payment. The Tribunal further directed that each party shall
bear its own costs. So far as claims made by Swiber were
concerned, the Tribunal partly allowed claims relating to
additional work and interface related issues. However, it rejected
claims concerning delay mitigation expenses, standby charges,
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insurance related claims, costs incurred towards extension of
performance bank guarantee and various other claims for losses
and expenses allegedly arising from delay. In relation to ONGC's
counterclaims, the Tribunal rejected the claim for liquidated
damages and directed return of the bank guarantee. The Tribunal
also rejected ONGC's claims relating to customs duty and certain
tax benefits. At the same time, it allowed limited counterclaims
concerning use of ONGC facilities, crossing benefits and excess
CENVAT credit.
8. Being aggrieved by certain findings and directions contained
in the Award, ONGC filed a petition under Section 34 of the
Arbitration and Conciliation Act, 1996 on 5 January 2026 seeking
partial setting aside of the Award. Thereafter, on 16 January 2026,
ONGC filed an application under Section 36(3) of the Arbitration
and Conciliation Act, 1996 seeking, amongst other reliefs, stay of
operation, execution and enforcement of the Award. The matter
first appeared before this Court on 23 January 2026. At that stage,
both sides agreed that the petition under Section 34 itself could be
taken up for final hearing. This understanding was reached on the
basis of an assurance given on behalf of Swiber that no steps for
enforcement of the Award would be taken till the challenge
proceedings were heard and decided.
9. In the meantime, since the bank guarantee was approaching
its expiry date and the proceedings challenging the Award were
still pending, ONGC filed the present proceedings under Section 9
of the Arbitration and Conciliation Act, 1996 in May 2026.
Through these proceedings, ONGC has sought various interim
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reliefs, including continuation and extension of the bank
guarantee.
10. On 1 June 2026, ONGC addressed a communication to the
liquidators of Swiber requesting them to extend the validity of the
bank guarantee beyond its scheduled expiry date.
11. Swiber filed its reply in the present proceedings on 9 June
2026. The bank guarantee is due to expire on 15 June 2026.
According to ONGC, if the guarantee is allowed to expire while the
challenge proceedings are still pending, ONGC would lose the
contractual security furnished by Swiber and may suffer serious
prejudice. ONGC contends that such prejudice would become more
serious because Swiber is already under liquidation. It is in these
circumstances that ONGC has filed the present petition seeking
suitable interim protection, including continuation and extension
of the bank guarantee till the proceedings challenging the Award
are finally decided.
12. Mr. Behramkamdin, learned Senior Counsel appearing for
the petitioner, submitted that ONGC has challenged the arbitral
award dated 30 September 2025, which was received by it on 9
October 2025, by filing a petition under Section 34 of the
Arbitration and Conciliation Act, 1996. He submitted that ONGC
has questioned those parts of the Award which contain findings
against it, allow certain claims made by Swiber and reject, either
wholly or partly, the counterclaims raised by ONGC. According to
him, ONGC has specifically challenged the directions by which the
Tribunal refused liquidated damages, directed return of the Bank
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Guarantee and granted monetary reliefs in favour of Swiber.
13. Learned Senior Counsel submitted that, apart from filing the
challenge petition, ONGC has also filed an application under
Section 36(3) of the Arbitration and Conciliation Act seeking stay
of operation and enforcement of the Award. According to him,
ONGC has prayed for an unconditional stay of the Award,
exemption from depositing any amount awarded under the Award
and also a direction requiring Swiber to continue and keep alive
the Bank Guarantee till final disposal of the Section 34 petition. He
submitted that both the challenge petition and the stay application
are presently pending before this Court and are yet to be finally
decided.
14. Learned Senior Counsel submitted that the Bank Guarantee
is now nearing its expiry and because of that ONGC was compelled
to approach this Court by filing the present petition under Section
9 seeking urgent interim protection. According to him, ONGC has
prayed that Swiber be directed to continue extending and
maintaining the existing Bank Guarantee till final determination of
the disputes concerning liquidated damages or at least till disposal
of the Section 34 proceedings. He submitted that if for any reason
the existing guarantee is not extended, then Swiber should be
directed to furnish a fresh Bank Guarantee of equivalent value
amounting to USD 14,820,000. According to him, these reliefs do
not seek any final adjudication of rights but are only protective
measures intended to preserve the existing security and avoid
serious prejudice until the challenge proceedings are decided.
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15. Learned Senior Counsel thereafter referred to the
background of the dispute. He submitted that on 3 July 2010 the
parties entered into Contract No. MR/OW/MM/MHNRD-II/PL/
08/2009 having a total contract value of USD 148,200,000. Under
the contract, Swiber was required to carry out extensive offshore
works including laying approximately 75.5 kilometres of
submarine pipelines and carrying out modification works on
various offshore platforms and production facilities situated in the
Bombay High region. According to him, the project was of
substantial size and importance. It was not merely a routine
construction activity but involved creation of offshore
infrastructure and integration of such infrastructure with existing
production systems used in oil and gas operations.
16. Learned Senior Counsel submitted that under the impugned
Award the Tribunal held that ONGC was not entitled to recover
liquidated damages and further directed return of the Bank
Guarantee. He submitted that certain claims raised by Swiber and
certain counterclaims raised by ONGC were partly allowed and
after adjustment of accounts ONGC was directed to pay a net sum
of USD 4,113,200 together with interest. He pointed out that
ONGC's claim towards liquidated damages alone amounts to USD
12,480,504.60 and therefore the dispute regarding liquidated
damages is of considerable financial significance. Learned Senior
Counsel submitted that ONGC possesses a strong prima facie case
in the challenge proceedings. According to him, the Award
deserves to be set aside because the Tribunal granted reliefs
without properly determining responsibility for delay. He
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submitted that the Award reflects non application of mind,
contains findings contrary to the express terms of the contract and
also travels beyond the contractual arrangement agreed between
the parties. According to him, the conclusions reached by the
Tribunal are contrary to public policy of India, the fundamental
policy of Indian law and the basic principles of justice. He
submitted that rejection of ONGC's counterclaim for liquidated
damages and the direction for return of the Bank Guarantee are
contrary to settled legal principles and have caused serious
prejudice to ONGC.
17. Learned Senior Counsel submitted that Clause 6.3.2 of the
contract clearly provides that in the event of delay in completion of
the work, ONGC would be entitled to recover liquidated damages
from Swiber. According to him, the parties had specifically agreed
that the liquidated damages represented a genuine pre-estimate of
likely loss and that proof of actual loss was not necessary. He
submitted that despite such a clear contractual arrangement, the
Tribunal insisted upon proof of actual loss and thereby virtually
rewrote the contract between the parties. According to him, such
an approach is contrary to Section 28(3) of the Arbitration and
Conciliation Act and contrary to settled principles governing
contractual obligations. Learned Senior Counsel further submitted
that the Tribunal failed to consistently apply the law laid down by
the Supreme Court regarding liquidated damages. According to
him, in large infrastructure projects where losses caused by delay
are difficult to calculate with precision, parties are entitled to
agree upon a genuine pre-estimate of loss and such stipulations
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can be enforced without strict proof of actual damage. He
submitted that the present project clearly falls within that category.
18. According to him, the Tribunal itself recognised that Clause
6.3.2 described liquidated damages as a genuine pre-estimate of
loss and also accepted that proof of actual loss was not necessary.
The Tribunal further referred to the principles laid down by the
Supreme Court in ONGC v. Saw Pipes and other judgments.
However, despite recording these principles, the Tribunal
ultimately rejected ONGC's claim on the ground that actual loss
was not proved. Learned Senior Counsel submitted that such
reasoning is self-contradictory and legally unsustainable. He
further submitted that the Tribunal failed to determine the most
important issue in the dispute, namely, responsibility for delay.
According to him, the findings on delay are internally inconsistent.
He submitted that while the Tribunal rejected the delay analysis
prepared by Swiber's own expert witness and also observed that
responsibility for delay affecting the critical path could not be
conclusively fixed upon either side, it nevertheless proceeded to
deny liquidated damages altogether. According to him, the
Tribunal itself accepted that Swiber had contributed towards delay
and therefore the ultimate conclusion becomes difficult to
reconcile with its own findings.
19. Learned Senior Counsel referred to various portions of the
Award where the Tribunal observed that it was not possible to
determine which party was responsible for critical delays, that
both parties appeared to have contributed towards delay and that
the available material was insufficient to conclusively establish
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responsibility for delays affecting the critical path. According to
him, once such findings were recorded, the Tribunal could not
have rejected the claim for liquidated damages in the manner it
eventually did. Learned Senior Counsel further submitted that the
Award reflects non application of mind. He argued that the project
concerned an important public utility undertaking connected with
oil production and that the project was delayed by nearly one year.
According to him, it is difficult to accept that such delay caused no
loss whatsoever to ONGC. He submitted that the Supreme Court
has repeatedly recognised that delay in commissioning important
public utility projects itself gives rise to a presumption of loss and
thereafter the burden shifts upon the defaulting party to establish
that no loss was suffered.
20. Learned Senior Counsel further submitted that the Tribunal
failed to properly consider important evidence led by ONGC.
According to him, the Tribunal proceeded on an incorrect
assumption that ONGC's case was based only upon loss of revenue
arising from delayed production of oil. He submitted that ONGC
had produced evidence relating to several other categories of loss
including overhead expenses, depreciation of capital assets,
retention of manpower, retention of machinery and expenditure
incurred towards certification agencies and third-party agencies.
According to him, these matters were material and required proper
examination while adjudicating the claim for liquidated damages.
21. Learned Senior Counsel submitted that ONGC reserves its
right to make further submissions regarding other findings
contained in the Award as well as the contentions raised by Swiber
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in its reply, if such submissions become necessary during the
hearing. He further submitted that the Award itself was delivered
after an inordinate and unexplained delay. According to him, final
arguments concluded before the Tribunal in August 2023, whereas
the Award came to be pronounced almost two years thereafter. He
submitted that under the contract the parties had contemplated
that the Award would be delivered within twelve months from the
first meeting of the Tribunal. According to him, such prolonged
delay adversely affected proper appreciation of ONGC's
submissions and evidence and therefore constitutes an additional
ground of challenge.
22. Learned Senior Counsel submitted that unless the Bank
Guarantee is continued, ONGC would suffer serious and
irreversible prejudice. According to him, the loss which would
result from expiry of the Bank Guarantee cannot be adequately
compensated at a later stage. He pointed out that Swiber was first
placed under judicial management by orders of the Singapore High
Court and was thereafter ordered to be wound up and placed into
liquidation. Liquidators have since been appointed. According to
him, in view of this insolvency situation there is a real possibility
that ONGC may not be able to recover amounts due to it even if it
ultimately succeeds in the Section 34 proceedings.
23. Learned Senior Counsel submitted that if the Bank
Guarantee is permitted to lapse, ONGC would lose valuable
security worth approximately USD 14 million and would thereafter
be required to stand alongside other creditors in the liquidation
proceedings. According to him, recovery from a company already
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under liquidation is uncertain and may ultimately yield only a
limited recovery. Learned Senior Counsel further submitted that
Swiber's former Judicial Manager had admitted claims lodged by
ONGC to the extent of USD 51,224,353.74. According to him, this
amount is substantially higher than the amount awarded in favour
of Swiber under the impugned Award. He submitted that if the
Bank Guarantee is allowed to lapse, ONGC's ability to recover
amounts due to it may be seriously affected and this may
ultimately result in loss to the public exchequer.
24. Learned Senior Counsel submitted that because Swiber is
under liquidation, there exists every possibility that the Bank
Guarantee may not be extended in future. According to him, if the
guarantee expires before final disposal of the challenge
proceedings, ONGC would permanently lose the contractual
security available to it and would suffer irreparable harm which
may never be adequately compensated. He submitted that the
Bank Guarantee has remained alive for more than ten years and
forms an integral part of the security arrangement contemplated
under the contract. According to him, Clause 6.3.4 obliges Swiber
to maintain such security till final settlement of disputes. He
submitted that permitting the guarantee to lapse while challenge
proceedings remain pending would defeat the very object for
which the security was maintained and would result in serious
injustice.
25. Learned Senior Counsel also submitted that Swiber's
financial difficulties have resulted in claims being made by various
subcontractors against ONGC. According to him, ONGC has
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already suffered considerable hardship and is presently exposed to
claims aggregating to approximately Rs.240 crores because of
defaults allegedly committed by Swiber. He submitted that the
balance of convenience lies overwhelmingly in favour of ONGC.
According to him, the relief sought is purely protective and
intended only to preserve the existing position till final
adjudication of the Section 34 proceedings. He submitted that if
relief is refused, the contractual security represented by the Bank
Guarantee would disappear. On the other hand, if relief is granted,
it would merely continue an arrangement which has remained in
existence for many years.
26. Learned Senior Counsel submitted that no substantial
prejudice would be caused to Swiber if continuation of the Bank
Guarantee is directed. According to him, Swiber would merely be
required to maintain a security which has already remained in
force for more than a decade. He submitted that since Swiber is
already under liquidation, continuation of the guarantee during
pendency of the challenge proceedings would not materially affect
its financial position. According to him, refusal of relief would
create a wholly disproportionate result. ONGC would lose security
equivalent to ten percent of the contract value whereas the burden
upon Swiber would only be continuation of the existing Bank
Guarantee. He submitted that if ONGC ultimately succeeds in the
challenge proceedings, recovery may become practically
impossible because of Swiber's liquidation. Learned Senior Counsel
lastly submitted that ONGC is a Public Sector Undertaking and
shall abide by any directions issued by this Court.
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27. On the aspect of urgency, Learned Senior Counsel submitted
that the Bank Guarantee, which forms part of the subject matter of
the arbitration as well as the challenge proceedings, is due to
expire on 15 June 2026. According to him, if the guarantee is not
extended before that date, any amount which may ultimately
become payable to ONGC towards liquidated damages may
become incapable of recovery. He further submitted that when the
stay application was taken up on 23 February 2026, both sides
agreed that the Section 34 petition itself could be heard finally.
According to him, this understanding was reached on the
assurance given on behalf of Swiber that no steps would be taken
for enforcement of the Award pending hearing of the challenge
petition. He submitted that the Section 34 petition was thereafter
listed on 1 April 2026, but due to paucity of time the matter could
not be reached and came to be adjourned to 13 July 2026, which
is after expiry of the Bank Guarantee. According to him, in view of
this situation ONGC mentioned the stay application on 20 April
2026 and sought urgent circulation because the Bank Guarantee
was approaching expiry. He submitted that the Court thereafter
directed immediate circulation of the matter after reopening
following the vacation.
28. Learned Senior Counsel submitted that thereafter the
Supreme Court, in Home Care Retail Marts (P) Ltd. v. Haresh N.
Sanghavi , 2026 SCC OnLine SC 670, clarified that even an
unsuccessful party in arbitration can seek interim measures under
Section 9 of the Arbitration and Conciliation Act. According to
him, it was after this legal development that ONGC filed the
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present Section 9 petition on 15 May 2026. He submitted that the
Court vacation remained operative from 11 May 2026 till 7 June
2026 and therefore ONGC could not effectively move the present
petition earlier.
29. Learned Senior Counsel further submitted that this Court has
recently applied the principles laid down in Home Care Retail
Marts while deciding ONGC v. Larsen & Toubro, Ltd. , 2026 SCC
OnLine Bom 2861, wherein the successful party in arbitration was
directed to continue the bank guarantee pending challenge to the
Award. According to him, the facts of the present case are
substantially similar and therefore ONGC is entitled to similar
protection. Lastly, Learned Senior Counsel submitted that both the
Section 34 petition and the stay application were heard on 10 June
2026 and the matter has been fixed on 24 June 2026 for final
arguments in the challenge proceedings. According to him, till that
time the Bank Guarantee deserves to be protected so that the
challenge proceedings do not become meaningless.
30. Mr. Venkatesh Dhond, learned Senior Counsel appearing for
the respondent, opposed the petition and submitted that the
petitioner has not approached this Court with complete disclosure
of all material facts. According to him, the petitioner has not
placed before this Court the Consent Terms entered into between
the parties and recorded by this Court while filing the present
petition under Section 9. Learned Senior Counsel pointed out that
the petitioner itself has relied upon those very Consent Terms in its
application under Section 36(3), being IA (L) No. 1628 of 2026,
and has even reproduced the relevant clauses therein while
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seeking stay of the Award. However, in the present petition there is
no reference to those Consent Terms. According to him, this
omission is significant because the Consent Terms directly deal
with the continuation of the Bank Guarantee. He submitted that
under those Consent Terms the parties had agreed that the Bank
Guarantee would remain alive only for a period of 120 days after
issuance of the arbitral award. According to him, that period
expired on 28 January 2026. Learned Senior Counsel therefore
submitted that the petitioner cannot now seek extension of the
Bank Guarantee beyond the period consciously agreed by the
parties themselves.
31. Learned Senior Counsel next submitted that there is in fact
no genuine urgency in the present matter. According to him, the
arbitral award was delivered on 30 September 2025 and was
received by the petitioner shortly thereafter. The petitioner filed its
challenge petition under Section 34 on 5 January 2026 and
thereafter filed an application under Section 36(3) on 16 January
2026. He pointed out that even in that application the petitioner
had specifically sought continuation of the Bank Guarantee.
However, despite seeking such relief, the petitioner did not pursue
the matter with any real urgency for several months. Learned
Senior Counsel submitted that although some procedural steps
were taken from time to time, no serious effort was made to obtain
immediate orders from the Court. He further pointed out that the
present petition under Section 9 came to be filed only on 15 May
2026 and was served upon the respondent on 1 June 2026, barely
a few days before the Bank Guarantee was due to expire on 15
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June 2026. According to him, the urgency now projected by the
petitioner is therefore not entirely genuine.
32. Learned Senior Counsel submitted that this aspect becomes
even more important because the petitioner was throughout aware
that the agreed period of 120 days under the Consent Terms had
already expired on 28 January 2026. According to him, if
continuation of the Bank Guarantee was truly indispensable and
urgent, the petitioner would have actively pursued the application
under Section 36(3) immediately after filing it. Instead, according
to him, the petitioner allowed considerable time to pass without
obtaining any orders and has now approached the Court when the
expiry date is almost at hand. Learned Senior Counsel submitted
that a party which remains inactive for several months cannot
subsequently create urgency and then seek extraordinary
discretionary protection from the Court on that basis.
33. Learned Senior Counsel further submitted that the petitioner
has failed to establish even a prima facie case on merits. According
to him, the reliance placed upon the decision in Larsen & Toubro,
is misplaced because the facts of that case were materially
different. He submitted that in Larsen & Toubro, the Tribunal itself
had recognised entitlement to a part of the liquidated damages
and the dispute was largely regarding calculation and
quantification of the amount. According to him, there existed a
crystallised entitlement in favour of ONGC in that matter. The
present case, according to him, stands on an entirely different
footing. Here, the Arbitral Tribunal has categorically held that
ONGC is not entitled to any liquidated damages whatsoever and
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has further directed return of the Bank Guarantee. According to
him, there is no admitted liability, no crystallised entitlement and
no finding in favour of ONGC which can justify continuation of the
security.
34. Learned Senior Counsel submitted that the findings
challenged by ONGC are not clerical mistakes, computational
errors or accidental omissions. According to him, the Tribunal
arrived at those conclusions only after a detailed examination of
the evidence placed before it. He submitted that the Tribunal
specifically found that ONGC failed to establish that delays
affecting the critical path of the project were solely attributable to
Swiber. The Tribunal also found that ONGC had failed to establish
the losses allegedly suffered by it. Learned Senior Counsel pointed
out that the Tribunal further considered certain acts and omissions
on the part of ONGC itself, including alleged delay in providing
access and other relevant circumstances while examining the claim
for liquidated damages. According to him, all these are findings of
fact arrived at after appreciation of evidence. He submitted that
the petitioner is in substance seeking re-appreciation of evidence,
which is impermissible within the limited scope of challenge
available under Section 34.
35. Learned Senior Counsel further submitted that the present
arbitration is an International Commercial Arbitration since the
respondent is a company incorporated in Singapore. According to
him, in such arbitrations the ground of patent illegality is not
available as a basis for challenging the Award. He submitted that
ONGC is confined only to the limited grounds available under the
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public policy provisions of Section 34. According to him, the
statutory framework does not permit a review on merits.
Therefore, the petitioner cannot seek a fresh examination of the
evidence or invite the Court to substitute its own view for that of
the Tribunal under the guise of challenging the Award.
36. Learned Senior Counsel further submitted that the petitioner
is effectively abusing the process of the Court by pursuing
substantially the same relief in two separate proceedings
simultaneously. According to him, the reliance placed upon Larsen
& Toubro, is again misplaced because that judgment does not
permit a party to pursue identical reliefs in parallel proceedings.
He submitted that while the Court in Larsen & Toubro, recognised
that remedies under Sections 9 and 36(3) may be available in
appropriate circumstances, it did not authorise a litigant to keep
both proceedings alive simultaneously while seeking the same
substantive protection. Learned Senior Counsel pointed out that
the application under Section 36(3), being IA (L) No. 1628 of
2026, is still pending and continuation of the very same Bank
Guarantee forms part of the relief sought therein. At the same
time, ONGC has filed the present petition under Section 9 seeking
substantially identical relief. According to him, such simultaneous
pursuit of the same relief is impermissible and amounts to misuse
of the judicial process.
37. Learned Senior Counsel submitted that no such situation
existed in Larsen & Toubro, . According to him, that case did not
involve any consent terms and there was no agreed outer limit
governing continuation of the Bank Guarantee. He submitted that
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the petitioner has disclosed certain facts before this Court in one
proceeding but has chosen not to disclose equally important facts
in the present proceeding. According to him, the petition deserves
dismissal on this ground alone. Learned Senior Counsel further
submitted that this Court cannot rewrite the Consent Terms
voluntarily entered into by the parties by directing extension of the
Bank Guarantee beyond the period specifically fixed therein. He
pointed out that the Larsen & Toubro, decision did not concern a
situation where parties had entered into consent terms expressly
prescribing the maximum duration for which the guarantee would
survive after the arbitral award. According to him, the
continuation directed in Larsen & Toubro, was based upon
contractual provisions and equitable considerations in the absence
of any agreed outer limit. The facts of the present case, according
to him, are fundamentally different. Learned Senior Counsel
submitted that under the Consent Terms dated 5 September 2016,
which were recorded by this Court on 8 September 2016, the
parties expressly agreed that the liquidated damages Bank
Guarantees would remain valid only for a period of 120 days after
issuance of the arbitral award. According to him, the purpose of
this arrangement was to provide sufficient time for either side to
take appropriate legal recourse after the Award. By agreeing to
such a clause, both parties consciously fixed the duration of the
security and accepted the consequences flowing from it. Learned
Senior Counsel submitted that the agreed period expired on 28
January 2026. Therefore, if this Court now directs continuation of
the Bank Guarantee, it would not merely preserve an existing
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arrangement pending adjudication. According to him, it would
amount to altering and rewriting the Consent Terms which the
parties voluntarily accepted and which were subsequently
recorded by the Court. Learned Senior Counsel submitted that
even the principles laid down in Home Care Retail Marts do not
authorise the Court to ignore or override binding consent
arrangements entered into by experienced commercial parties
acting with legal advice.
38. Summarising his submissions, learned Senior Counsel
contended that the principles emerging from ONGC v. Larsen &
Toubro, only recognise that post-award relief under Section 9 may
be granted in exceptional situations. According to him, the
petitioner has failed to satisfy that standard on every material
aspect. He submitted that the petitioner has failed to disclose the
Consent Terms in the present proceedings despite relying upon
them in another proceeding; the agreed 120-day period for
continuation of the Bank Guarantee expired on 28 January 2026;
this Court cannot rewrite the Consent Terms by extending the
guarantee beyond the period fixed by the parties; the petitioner
has approached the Court after considerable and unexplained
delay; no prima facie case has been established because the
Tribunal has completely rejected the claim for liquidated damages;
the present arbitration being an International Commercial
Arbitration, the scope of challenge remains extremely limited; and
finally, the petitioner continues to pursue substantially identical
reliefs in separate proceedings. On all these grounds, Learned
Senior Counsel submitted that the petition is devoid of merit and
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deserves to be dismissed.
REASONS AND ANALYSIS:
39. I have carefully considered the submissions made by both
sides and have also gone through the documents and material
placed on record.
40. The dispute between the parties has passed through several
stages over a period of more than fifteen years. The matter began
with a contract entered into between ONGC and Swiber on 3 July
2010 for carrying out offshore works in the Bombay High area.
The contract value was USD 148,200,000, which shows that the
project involved substantial public money. Under Clause 6.3.2 of
the contract, the parties had agreed that if there was delay in
completion of the work, liquidated damages could be recovered,
subject to a maximum limit of ten percent of the contract value.
Clause 6.3.4 further provided that instead of immediate deduction
of such amount, the contractor could furnish a bank guarantee as
security towards possible liability for liquidated damages. The
material placed before the Court shows that the project was not
completed within the contractual period. Swiber sought extension
of time on more than one occasion and those extensions were
granted by ONGC. However, while granting such extensions,
ONGC reserved its right to recover liquidated damages. Ultimately,
the work was completed on 24 May 2012 and thereafter a
completion certificate came to be issued on 18 February 2013.
41. Even after completion of the project, the disputes between
the parties continued regarding delays arising out of the contract.
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These disputes were referred to arbitration and remained pending
for several years. After recording evidence and hearing both sides,
the Arbitral Tribunal delivered its Award on 30 September 2025,
which was received by ONGC on 9 October 2025. Under the
Award, the Tribunal rejected ONGC's claim for liquidated damages,
directed return of the bank guarantee and awarded a net amount
of USD 4,113,200 in favour of Swiber. Being dissatisfied with these
findings, ONGC filed proceedings under Section 34 of the
Arbitration and Conciliation Act challenging the Award. ONGC also
filed an application seeking stay of operation and enforcement of
the Award. During pendency of those proceedings, the present
petition under Section 9 has been filed seeking continuation of the
bank guarantee until the challenge proceedings are decided.
42. The next aspect which requires consideration is the
parameters within which the present petition is required to be
examined. Here, a arbitral award has already been rendered after
detailed proceedings, consideration of evidence and hearing of
arguments. Therefore, the principles applicable to a post-award
petition stand on a different footing. The Supreme Court in Home
Care Retail Marts has clarified that even a party which has not
succeeded before the Arbitral Tribunal is not barred from invoking
Section 9 after the award. At the same time, the Supreme Court
has also made it clear that such power cannot be exercised in a
routine manner. The Court has observed that where the applicant
is faced with an adverse award, the threshold for obtaining interim
protection becomes much higher. The reason behind such an
approach is that once an arbitral award has been delivered, the
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findings recorded by the Tribunal continue to operate unless they
are set aside. Therefore, an unsuccessful party cannot point out
that a petition under Section 34 has been filed and seek
continuation of interim arrangement. If such a principle is
accepted, every unsuccessful party would become entitled to
interim protection merely because it has challenged the award.
That is not what the Supreme Court has held. Something more is
required. Apart from establishing a prima facie case, balance of
convenience and likelihood of irreparable injury, the applicant
must demonstrate existence of exceptional circumstances which
are capable of justifying departure from the normal rule. The
language used by the Supreme Court is important. The real
question is whether the circumstances are so extraordinary that
refusal of interim protection would result in a situation which
cannot later be corrected even if the challenge succeeds. Thus, the
inquiry before this Court is whether the present case crosses the
higher threshold contemplated by the Supreme Court.
43. ONGC has attempted to demonstrate that such exceptional
circumstances do exist in the present case. Learned Senior Counsel
appearing on behalf of ONGC submitted that the Award suffers
from legal infirmities and that the challenge raised by ONGC is not
frivolous. According to ONGC, Clause 6.3.2 of the contract treated
liquidated damages as a genuine pre-estimate of loss and
specifically dispensed with the necessity of proving actual loss.
ONGC submits that this arrangement was agreed between the
parties while entering into the contract. Therefore, according to
ONGC, once delay stood established and the contractual conditions
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were satisfied, the Tribunal ought not to have insisted upon proof
of actual loss. ONGC points out that the Tribunal noticed the
contractual provision and also referred to the law laid down by the
Supreme Court regarding liquidated damages. Yet, according to
ONGC, the Tribunal rejected the claim because actual loss was not
proved. It is argued that such an approach changes the agreement
entered into by the parties.
44. ONGC has further submitted that the findings recorded by
the Tribunal on the issue of delay do not appear to be consistent
with each other. According to ONGC, the Tribunal itself observed
that it was difficult to conclusively determine which party alone
was responsible for delays affecting the critical path of the project.
The Tribunal also noticed that responsibility for delay could not be
fixed upon one side. However the Tribunal rejected the claim for
liquidated damages. According to ONGC, these findings do not
stand together. ONGC argues that if the Tribunal itself found it
difficult to identify one party as responsible for delay, then the
rejection of liquidated damages required further explanation. It is
also contended that the Tribunal did not consider evidence relating
to categories of loss apart from delayed production revenue.
Reference has been made to overhead expenses, depreciation of
assets, retention of manpower, retention of machinery and
expenditure incurred towards certification and third party
agencies. According to ONGC, these were important aspects having
bearing on the question of loss and they deserved detailed
consideration. ONGC therefore submits that these issues are
substantial in nature and raise questions which require
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examination in the pending proceedings under Section 34 of the
Arbitration and Conciliation Act.
45. ONGC has also placed emphasis on the financial condition of
Swiber. It has been pointed out that Swiber has been placed under
liquidation pursuant to orders passed by the Singapore Court and
that liquidation proceedings are continuing. It has further been
pointed out that claims lodged by ONGC have been admitted in
those proceedings. According to ONGC, if the bank guarantee is
allowed to expire while the challenge proceedings remain pending,
the security presently available to ONGC would disappear. ONGC
submits that recovery from a company which is already under
liquidation may become impossible. According to ONGC, once the
guarantee expires, even if it ultimately succeeds in the challenge
proceedings, there may remain no security against which recovery
can be made. Therefore, ONGC contends that continuation of the
bank guarantee is necessary to preserve the existing position until
the challenge proceedings are decided.
46. These submissions made on behalf of ONGC cannot be said
to be without merit. Some of the concerns raised by ONGC
certainly require consideration. However, when the matter is
examined in the context of the present petition under Section 9,
the submissions advanced on behalf of the respondent appear to
carry weight. The respondent has pointed out a circumstance
which goes to the root of the discretionary relief sought before this
Court. According to the respondent, ONGC has not disclosed in the
present petition the Consent Terms dated 5 September 2016,
though those Consent Terms have been specifically relied upon by
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ONGC in its application filed under Section 36(3). The record
further shows that the said Consent Terms were recorded by this
Court on 8 September 2016. According to the respondent, these
Consent Terms directly concern continuation of the bank
guarantee and therefore have a connection with the relief
presently sought by ONGC. The respondent submits that when the
Court is called upon to decide whether the bank guarantee should
continue or not, any earlier arrangement entered into by the
parties regarding the continuation of that guarantee becomes a
matter of importance.
47. According to the respondent, the Consent Terms provide that
the bank guarantee would remain alive only for a period of 120
days after the arbitral award was issued. The award having been
delivered on 30 September 2025, the said period expired on 28
January 2026. If this arrangement is accepted, then the present
request seeking continuation of the bank guarantee till disposal of
the Section 34 proceedings extends beyond what was consciously
agreed by the parties themselves. This aspect assumes importance
because the parties were not ordinary individuals entering into an
arrangement without understanding its implications. They were
commercial entities engaged in a high value project and were
represented by legal advisors. They were fully aware of the
consequences flowing from the arrangement they accepted. The
Consent Terms were reduced into writing after discussions and
thereafter recorded by order. Prima facie, therefore, they reflect a
conscious acceptance of responsibilities by both sides.
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48. Viewed from this perspective, the respondent's submission is
that ONGC is not merely seeking preservation of an existing
arrangement. According to the respondent, ONGC is seeking
enlargement of its rights beyond the period agreed in the Consent
Terms. The object of Section 9 is to preserve existing securities so
that the subject matter of the dispute remains protected pending
adjudication. It is not intended to extend existing rights beyond
limits agreed upon by the parties. Therefore, once parties have
agreed that the bank guarantee would remain alive only for a
specified period after the award, the Court would necessarily be
required to exercise caution before directing continuation beyond
that agreed period. Such a direction may, at least prima facie, alter
the agreement. The existence of these Consent Terms therefore
introduces feature which distinguishes the present case from
situations where no agreed outer limit exists regarding
continuation of security. For this reason, the objection raised by the
respondent cannot be treated as a mere technical defence. It
touches the foundation of the relief sought by ONGC and therefore
deserves weight while considering the present petition.
49. In these circumstances, the Court is required to balance the
considerations placed before it. The Court is faced with two
considerations. One concerns preservation of security pending
challenge proceedings. The other concerns respect for a
arrangement entered into by the parties. It therefore becomes
necessary to examine whether the present matter falls within the
category of those rare and compelling cases contemplated by the
Supreme Court in Home Care Retail Marts and whether the higher
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threshold prescribed therein has been satisfied.
50. I am also of the view that the non-disclosure pointed out by
the respondent cannot be treated as a minor omission which may
be overlooked while considering a prayer for discretionary relief
under Section 9 of the Arbitration Act. A reading of the petition
shows that reference has been made to the clauses, particularly
Clauses 6.3.2 and 6.3.4. Detailed submissions have been advanced
regarding the contractual right to liquidated damages, the purpose
of the bank guarantee and the manner in which ONGC claims
protection under the contractual arrangement. However, what
attracts attention is that the Consent Terms dated 5 September
2016, which were recorded by this Court on 8 September 2016,
have not been placed before the Court with the same degree of
emphasis. This circumstance assumes significance because the
material on record indicates that ONGC itself has relied upon those
Consent Terms in its application under Section 36(3). Therefore, it
becomes difficult to accept that the document was either unknown
to ONGC. On the contrary, ONGC's own conduct in the connected
proceedings indicates that the document was considered important
for supporting its case. In such circumstances, absence of similar
disclosure in the present proceedings assumes importance.
51. It is in this background that the respondent contends that the
omission was deliberate. Whether the omission amounts to
suppression or whether it should merely be described as non-
disclosure is not the central issue. The Court is not concerned with
labels. What matters is the effect of the omission. The fact remains
that the Court was not informed in the present petition that there
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existed an arrangement between the parties governing
continuation of the bank guarantee after the Award. The relief
presently sought concerns continuation of that bank guarantee.
Therefore, any document having a bearing upon its expiry assumes
importance. In matters involving discretionary jurisdiction, a party
approaching the Court is expected to place before the Court all
material facts, including facts which may not support its own case.
Such obligation becomes even more important when the party
seeks extraordinary protection against the consequences of an
arbitral award which operates against it. Viewed from this angle,
the omission assumes significance and cannot be brushed aside as
a mere procedural lapse.
52. The importance of this omission becomes even more
apparent when the contents of the Consent Terms are examined.
According to the respondent the parties had agreed that the bank
guarantee would continue only for a period of 120 days after
issuance of the arbitral award. This was incorporated into Consent
Terms and accepted by order. Consequently, the arrangement
ceased to remain acquired a degree of sanctity. If the parties had
fixed an outer limit for continuation of the guarantee, then that
arrangement necessarily has a bearing upon the relief sought by
ONGC. The Court cannot ignore such a circumstance while
deciding whether continuation beyond that period should be
directed.
53. In such circumstances, fairness required that the Court
should have been informed about the existence of this
arrangement. A litigant seeking discretionary relief is expected to
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approach the Court with openness. The Court exercises
discretionary powers not only on the basis of legal rights but also
on the point of fairnes. Where a party seeks continuation of a
security beyond the period which it had itself agreed upon in
proceedings, failure to disclose that agreement becomes a relevant
factor. Such omission may not be sufficient to non suit the
applicant in every case. However, it certainly affects the Court's
assessment of the overall equities. The Court cannot overlook that
the respondent has opposed petitioners claim on the basis of an
arrangement which the petitioner had accepted. Therefore,
considering whether extraordinary post-award protection should
be granted, this omission goes against ONGC.
54. The next aspect relates to urgency, which ONGC has relied
upon while seeking interference from this Court. According to
ONGC, the bank guarantee is due to expire on 15 June 2026 and if
it is not extended before that date, the security would come to an
end. ONGC submits that once the guarantee expires, it may not be
possible to bring back the same position. However, the issue of
urgency cannot be looked at separately without examining the
conduct of the party seeking relief. While considering a request for
urgent protection, the Court is required to see not only the nature
of the apprehended injury but also the promptness shown by the
applicant. Normally, a party seeking urgent orders must
demonstrate that it acted with reasonable speed once the necessity
for protection became known. Delay and urgency do not move
together. If a litigant is aware of the facts and consequences, yet
allows time to pass before approaching the Court, the Court is
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entitled to examine whether the urgency is genuine or whether it
has arisen because of the litigant's own conduct. It is a settled
principle that equitable relief is granted in favour of a vigilant
litigant.
55. The Award was received by ONGC on 9 October 2025.
Thereafter, ONGC instituted its petition under Section 34 on 5
January 2026. The application under Section 36(3) followed on 16
January 2026. Significantly, even in that application ONGC had
sought continuation of the bank guarantee. Therefore, the issue
regarding continuation of the guarantee was within the knowledge
of ONGC from the beginning. Thereafter, on 23 February 2026, the
parties agreed that the Section 34 petition itself could be taken up
for final hearing. The matter was listed on 1 April 2026 but could
not be reached. It is true that the proceedings did not progress in
the manner expected. However, even after that stage, the record
does not indicate any immediate effort for obtaining urgent orders
concerning continuation of the bank guarantee for a considerable
period. The present petition under Section 9 came to be filed only
on 15 May 2026 and was served upon the respondent on 1 June
2026, that is only a short time before expiry of the guarantee on
15 June 2026. ONGC has attempted to explain this by relying upon
the judgment of the Supreme Court in Home Care Retail Marts Pvt.
Ltd., which was delivered on 24 April 2026. According to ONGC, it
was only after the Supreme Court clarified that even an
unsuccessful party in arbitration could seek post-award protection
under Section 9 that the present petition came to be filed. This
explanation cannot be brushed aside altogether. At the same time,
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it is important that long before Home Care Retail Marts was
delivered, ONGC had sought continuation of the same bank
guarantee in its application under Section 36(3) filed on 16
January 2026. Therefore, the concern regarding preservation of
the guarantee did not arise for the first time after the Supreme
Court judgment. The decision in Home Care Retail Marts may
explain the remedy chosen by ONGC, but it does not explain why
effective steps were not pursued earlier.
56. These dates become important because ONGC was aware
throughout this period about the expiry date of the guarantee. It
was also aware of the respondent's position regarding extension of
the same. If continuation of the guarantee was of urgency, one
would expect immediate steps to get protection from the Court.
Instead, there appears to have been a substantial period during
which no interim relief was secured. Therefore, it becomes difficult
to accept that the urgency arose because of circumstances beyond
the control of ONGC. To some extent, the urgency appears to have
developed because available remedies were not pursued with
urgency. The law certainly protects a diligent litigant. However,
where a party allows valuable time to pass and approaches the
Court only when the deadline is about to expire, the Court is
entitled to consider such conduct while exercising discretionary
jurisdiction. Consequently, the respondent's submission that the
urgency is partly self-created deserves due consideration.
57. ONGC has urged its plea of urgency by referring to the
liquidation of Swiber and by pointing out that claims aggregating
to approximately USD 51.22 million have been admitted in the
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proceedings pending before the Singapore Court. Whenever a
company enters liquidation, questions arise regarding
recoverability of claims. Therefore, the apprehension expressed by
ONGC cannot be said to be without basis. The Court cannot ignore
the fact that Swiber is under liquidation and that ONGC has
lodged claims in those proceedings. The possibility that recovery
may become more difficult in future because of liquidation is
certainly a factor which deserves consideration. At the same time,
the issue which this Court is required to decide is narrower than
what ONGC seeks to project. The scope of the present petition is
focused on the relief which has been claimed and the foundation
on which that relief rests. Merely because ONGC may have claims
against Swiber in other proceedings, that by itself cannot enlarge
the scope of the present petition. The controversy before the Court
has to be examined within its own boundaries. The bank
guarantee in question was furnished in a particular contract. It was
not security created for all future disputes between the parties. The
material on record shows that the guarantee was furnished in
connection with the contract relating to liquidated damages under
Clauses 6.3.2 and 6.3.4. Its purpose was linked to the issue of
delay and liability towards liquidated damages. It was never
intended to operate as a blanket security covering every financial
claim which ONGC may raise against Swiber. Therefore, although
the fact of liquidation may increase ONGC's apprehensions
regarding recovery, that circumstance cannot alter the purpose for
which the guarantee was furnished. The respondent is therefore
justified in contending that the guarantee cannot now be
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transformed into a general security securing the entire financial
exposure which ONGC claims to face in the liquidation
proceedings.
58. Once the matter is viewed from this angle, the focus shifts
from the financial condition of Swiber to a legal question. The real
issue is not whether Swiber is in liquidation. The real issue is
whether ONGC presently possesses a legally enforceable right to
insist that this particular bank guarantee should continue beyond
the period which had been agreed between the parties. The fact of
liquidation may strengthen ONGC's apprehension regarding
recoverability. However, apprehension alone cannot create a legal
right. Therefore, although the liquidation proceedings lend support
to ONGC's concerns, they do not answer the question before the
Court. The fact of liquidation, standing alone, is insufficient to
elevate the present matter to the category of a compelling case
contemplated by the Supreme Court in Home Care Retail Marts .
59. The merits of the challenge also do not provide ONGC
assistance necessary for obtaining relief under Section 9. It is true
that ONGC has challanged the Award. ONGC has contended that
the Tribunal misunderstood the law relating to liquidated
damages, failed to appreciate the contractual provisions, did not
evaluate the evidence and ecorded findings which are inconsistent
with each other. These submissions can be argued in Section 34
proceedings. They cannot be dismissed as frivolous. However, this
Court is not sitting as an appellate authority over the Award. Nor is
the Court presently called upon to conclusively determine whether
the conclusions reached by the Tribunal are correct or incorrect.
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Those questions fall for consideration in the proceedings under
Section 34.
60. The Award does not appear to be founded upon any clerical
mistake, computational error or accidental omission which can be
identified on the face of the record. The respondent has pointed
out that the Tribunal undertook an examination of the material
concerning delays, analysed the rival evidence and thereafter
arrived at the conclusion that ONGC had failed to establish that
delays affecting the critical path of the project were attributable to
Swiber. The Tribunal further held that ONGC had not established
the loss claimed by it. The Tribunal also appears to have taken into
account certain acts and omissions on the part of ONGC. Whether
those findings are sustainable or whether they suffer from legal
infirmities is a matter which will have to be determined in the
Section 34 proceedings. As matters presently stand, however, those
findings continue to form part of arbitral award. Until the Award is
set aside, it cannot be ignored while considering a prayer for post-
award interim protection. This circumstance limits the extent to
which the Court can interfere at the present stage.
61. This aspect assumes importance because the relief sought by
ONGC is continuation of the bank guarantee even though the
Arbitral Tribunal has rejected ONGC's claim for liquidated damages
and has directed return of that guarantee. In substance, ONGC
seeks continuation of a arrangement despite findings recorded
against it in the Award and despite the subsequent arrangement
reflected in the Consent Terms. Such a relief can be granted only
when the applicant is able to demonstrate an exceptionally strong
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prima facie case coupled with circumstances of a compelling
nature. At this stage, I am unable to conclude that the challenge
raised by ONGC is so strong that the Award can almost be ignored
while considering interim protection. The challenge undoubtedly
raises arguable issues. Some of the contentions advanced by ONGC
may require examination in the Section 34 proceedings. However,
an arguable challenge is not enough. The judgment in Home Care
Retail Marts requires something much more. It requires existence
of circumstances which are truly exceptional. Tested on that
standard, the merits presently shown by ONGC do not appear to
reach the level necessary for grant of the extraordinary protection
sought in the present proceedings.
62. The submission advanced by the respondent regarding the
nature of the arbitration also deserves consideration. It is not
disputed that Swiber is a company incorporated in Singapore.
Consequently, the arbitration falls within the category of an
international commercial arbitration. According to the respondent,
in such matters the ground of patent illegality is not available as a
basis for setting aside an arbitral award. Whether that contention
succeeds or fails is an issue which will have to be examined in the
Section 34 proceedings. I do not propose to express any final
opinion on that aspect. Nevertheless, the submission draws
attention to an important limitation governing challenges to
international commercial awards and therefore cannot be ignored.
63. The relevance of this aspect lies in the narrow scope of
judicial interference available in relation to international
commercial arbitral awards. Courts are not expected to reassess
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evidence, reappreciate factual material or undertake a detailed
review on merits while exercising supervisory jurisdiction. The
legislative policy under the Arbitration Act is to minimise judicial
intervention. Therefore, where the challenge is governed by
restricted statutory parameters, the Court must proceed with
caution before granting interim protection founded upon
submissions directed against the merits of the Award. If broad
interim protection is granted merely because the unsuccessful
party asserts that the Tribunal reached an incorrect conclusion, the
distinction drawn by law between a challenge proceeding and an
appeal may become insignificant. For this reason also, the
petitioner's request for extensive post-award protection becomes
less acceptable.
64. It is true that the Supreme Court in Home Care Retail Marts
has held that Sections 9, 34 and 36 operate in distinct fields. The
Supreme Court has further observed that the mere availability of a
remedy under Section 34 or a stay application under Section 36
cannot by itself prevent a party from invoking Section 9.
Therefore, the present petition cannot be rejected merely because
ONGC has approached the Court under Sections 34 and 36. At the
same time, the respondent's objection is not confined only to
maintainability. The respondent points out that substantially
similar protection regarding continuation of the bank guarantee
was being pursued in more than one proceeding. It is also relevant
to note that during the course of hearing, ONGC clarified that if
this Court examines the present petition on merits, it is willing not
to press the prayer regarding continuation of the bank guarantee
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in the pending Section 36(3) application. This statement reduces
the force of the objection. Therefore, the parallel proceedings
cannot by itself become a ground for rejecting the petition.
Therefore, the existence of parallel proceedings is not a bar in view
of Home Care Retail Marts .
65. The Supreme Court in Home Care Retail Marts has made it
clear that while considering a petition under Section 9, the Court
must examine whether a prima facie case exists, whether the
balance of convenience lies in favour of the applicant and whether
refusal of protection is likely to result in irreparable prejudice. At
the same time, where the applicant is a party who has suffered an
award, the Supreme Court has held that a higher standard is
required and the case must disclose circumstances of a rare and
compelling nature. So far as the question of prima facie case is
concerned, ONGC has undoubtedly raised several grounds in its
challenge to the Award. However, Home Care Retail Marts makes it
equally clear that an arguable challenge by itself is not sufficient
when interim protection is sought by an unsuccessful party after
the Award. Therefore, although ONGC may have shown that its
challenge is arguable, it cannot presently be said that ONGC has
demonstrated such a strong prima facie case that the Award can
virtually be put aside while considering a request for interim
protection. The prima facie case shown is therefore not exceptional
as contemplated by Home Care Retail Marts .
66. The second requirement concerns the balance of
convenience. ONGC has argued that if the bank guarantee is
permitted to expire, a valuable security which has remained in
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existence for several years would be lost. Yet, the balance of
convenience cannot be examined only from the standpoint of
ONGC. The Court must also consider the position arising from the
Award. The material on record prima facie indicates that under the
Consent Terms the parties agreed that the bank guarantee would
continue only for a period of 120 days. That agreed period has
already expired. Therefore, continuation of the guarantee would
effectively extend security beyond the period which the parties
have agreed. Consequently, the balance of convenience does not
tilt in favour of ONGC.
67. The third requirement is irreparable injury. ONGC has
submitted that if the guarantee is allowed to lapse and if ONGC
ultimately succeeds in the Section 34 proceedings, serious
prejudice may result because Swiber is already in liquidation. This
apprehension cannot be dismissed as imaginary. Therefore, the
concern expressed by ONGC deserves consideration. At the same
time, the question is whether such prejudice reaches the level
contemplated by the Supreme Court while describing rare and
compelling cases. The bank guarantee in question was furnished as
security connected with liquidated damages under Clauses 6.3.2
and 6.3.4. It was not intended to function as a general security for
every claim which ONGC may have against Swiber. Therefore, the
mere existence of liquidation proceedings does not justify
continuation of guarantee. The possibility that recovery may
become difficult is a relevant factor, but that circumstance alone
cannot elevate the matter into a rare and compelling case within
the meaning of Home Care Retail Marts . If liquidation by itself
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were treated as sufficient, the higher threshold prescribed by the
Supreme Court would lose its significance. Therefore, even when
the principles stated in paragraphs 59 and 60 of Home Care Retail
Marts are applied, the present matter does not appear to cross the
higher threshold prescribed for an unsuccessful party seeking post-
award protection under Section 9.
68. The judgment in Larsen & Toubro, can be distinguished on
facts and therefore may not provide assistance to ONGC in the
present matter, though some observations made support ONGC's
contention that a post-award petition under Section 9 is
maintainable at the instance of a party against whom the award
operates. The first point of distinction arises from the nature of the
arbitral award itself. In Larsen & Toubro , the Arbitral Tribunal had
not rejected ONGC's claim for liquidated damages in its entirety.
On the contrary, the Tribunal had accepted ONGC's entitlement to
35% of the liquidated damages, which amounted to approximately
Rs.42.95 crores. Thus, at least a part of ONGC's claim already
stood crystallised under the Award itself. The real dispute before
the Court was whether ONGC was entitled to the remaining 65%
liquidated damages which had been denied by the Tribunal.
Therefore, the Court was dealing with a situation where a
substantial portion of ONGC's claim had already received
recognition in the Award. The position before this Court is
different. Here, the Tribunal has completely rejected ONGC's claim
for liquidated damages. The Award directs return of the Bank
Guarantee and records findings against ONGC on the issue of
liquidated damages. Therefore there is presently no adjudicated
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entitlement in favour of ONGC under the Award itself. This
distinction goes to the root of the matter.
69. A second distinguishing feature relates to the reason for
which continuation of the Bank Guarantee was directed in Larsen
& Toubro, . The Court found that ONGC had already become
entitled under the Award to recover approximately Rs.42.95 crores
towards liquidated damages. The Court further found that this
amount represented money which ONGC could have deducted
from the contractor's bills but had refrained from deducting
because a Bank Guarantee had been furnished in its place. In that
context, the Bank Guarantee was viewed as continuing security for
an amount which already stood awarded in favour of ONGC. No
such situation exists in the present case. Therefore, continuation of
the Bank Guarantee cannot be justified on the basis that it merely
secures an amount already awarded in favour of ONGC.
70. The third distinction assumes even greater significance. In
Larsen & Toubro , there were no Consent Terms and no subsequent
arrangement between the parties prescribing any outer limit for
continuation of the Bank Guarantee after the Award. Therefore,
directing continuation of the guarantee did not conflict with any
arrangement entered into by the parties. In the present case,
however, the respondent places considerable reliance upon the
Consent Terms dated 5 September 2016 which were recorded by
this Court on 8 September 2016. According to the respondent,
those Consent Terms specifically provided that the Bank Guarantee
would remain alive only for a period of 120 days after the Award.
Prima facie, therefore, the parties themselves appear to have fixed
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a outer limit for continuation of the security. If that position is
accepted, extension of the Bank Guarantee beyond that period
would involve considerations which simply did not arise before the
Court in Larsen & Toubro .
71. The fourth distinguishing feature relates to the application of
the principles laid down in Home Care Retail Marts . In Larsen &
Toubro, the Court found the existence of several compelling
circumstances. The Tribunal had partly upheld ONGC's claim for
liquidated damages. The original Award directed payment of 35%
liquidated damages before return of the Bank Guarantee.
Subsequently, an Additional Award altered that position. The Court
found that ONGC had demonstrated a strong prima facie challenge
to the Additional Award and that exceptional circumstances
existed warranting protection. It was in those peculiar facts that
the Court concluded that the higher threshold contemplated in
Home Care Retail Marts stood satisfied. The present case stands on
a different footing. Here, the Tribunal has completely rejected the
claim for liquidated damages. No part of the claim has been
awarded in favour of ONGC. The challenge raised by ONGC may
be arguable and may require examination in the Section 34
proceedings. The circumstances which persuaded the Court in
Larsen & Toubro , are therefore not available in the present case.
72. The fifth distinction concerns the nature of the prejudice
alleged by ONGC. In Larsen & Toubro , the Court emphasised that
continuation of the Bank Guarantee would amount to a non-
prejudicial interim measure of the kind contemplated in paragraph
50 of Home Care Retail Marts . The Court found that renewal of the
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guarantee would not obstruct enforcement of the Award and
would merely preserve ancillary rights pending adjudication of the
challenge proceedings. Although ONGC seeks to invoke the same
principle here, according to the respondent, continuation of the
Bank Guarantee in the present case would operate not only against
the findings recorded in the Award but also against the subsequent
Consent Terms allegedly agreed between the parties. Therefore,
the relief sought is not merely preservation of an existing right. It
seeks continuation of a security which was required to come to an
end under the parties' arrangement.
73. At the same time, it must be recognised that Larsen &
Toubro , does lend some support to ONGC on limited aspects. The
judgment clearly recognises that an unsuccessful party is not
barred from invoking Section 9 after the decision in Home Care
Retail Marts. It also recognises that continuation of a Bank
Guarantee may, in an appropriate case, constitute a permissible
post-award interim measure. The judgment further accepts that
non-prejudicial interim protection can be granted even where the
Award substantially operates against the applicant and that
liquidation or financial uncertainty of the opposite party may be a
relevant consideration while assessing irreparable prejudice.
74. For all these reasons, I am of the view that ONGC has failed
to establish entitlement to the exceptional interim protection
sought in the present petition.
75. In view of the foregoing discussion and for the reasons
recorded hereinabove, the following order is passed:
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O R D E R
(i) The Petition is dismissed;
(ii) The prayer seeking a direction to the respondent to
continue, renew, extend or keep alive Bank Guarantee No.
811-02-0041188 issued through DBS Bank, or to furnish any
fresh or substitute bank guarantee in lieu thereof, is rejected;
(iii) It is held that the petitioner has failed to establish the
existence of such exceptional and compelling circumstances
as would justify grant of post-award interim protection under
Section 9 of the Arbitration and Conciliation Act, 1996 in
terms of the principles laid down by the Supreme Court in
Home Care Retail Marts Pvt. Ltd .;
(iv) It is clarified that the observations made in this order
are confined to adjudication of the present petition under
Section 9 of the Arbitration and Conciliation Act, 1996 and
shall not be construed as an expression of opinion on the
merits of the pending proceedings under Section 34 of the
Arbitration and Conciliation Act, 1996 or the application
filed under Section 36(3) thereof. All questions arising
therein are expressly kept open for consideration in
accordance with law;
(v) The respondent and its liquidators shall be at liberty to
act in accordance with the terms of the Arbitral Award dated
30 September 2025, subject to any order that may be passed
by the Court in the pending proceedings under Sections 34
and 36 of the Arbitration and Conciliation Act, 1996;
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(vi) There shall be no order as to costs.
76. At this stage, learned Senior Advocate for the petitioner
requested that the respondent be directed to continue the bank
guarantee and that the interim protection granting during the
pendency of the present petition be continued.
77. Considering the said request, grant of such relief would, in
effect, amount to granting final relief sought in the present
petition. For the detailed reasons recorded herein above in this
judgment, the request for issuance of directions to continue the
bank guarantee stands rejected.
(AMIT BORKAR, J.)
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