₹8.97-Crore Sibling Settlement Dispute: Madras HC Bars Family From Transferring Properties Pending Arbitration Or Related Suits

In brief

The question

Whether the petitioner was entitled to an order requiring the first respondent to furnish security for ₹8,97,49,999.

The court held

The Court dismissed Arb. Appln. No. 1155 of 2026, refusing the requested security, and allowed O.A. No. 641 of 2026.

It also directed

It directed that neither the petitioner nor the respondents alienate the scheduled properties until the issue is finally decided in the arbitration proceedings, the testamentary suit, or the civil suit, as applicable.

No costs were awarded.

01Facts

The petitioner and respondents are members of the same family.

pp. 2–4

The petitioner alleged that, under a memorandum of understanding, he paid the first respondent ₹8,97,49,999 towards release of her shares in certain properties; the first respondent disputed the effect and validity of the relevant arrangements.

pp. 2–4

The petitioner sought security for that sum and an injunction restraining alienation of scheduled properties under Section 9 of the Arbitration and Conciliation Act, 1996.

pp. 2–4

A Section 11 application for appointment of an arbitrator was pending, alongside proceedings in a testamentary suit and a civil suit.

pp. 2–4

The first respondent contended that she had fulfilled her obligations under an earlier family arrangement and that the later memorandum, containing the arbitration clause, was obtained under pressure and promptly rescinded.

pp. 3–4

02Issues

i.Whether the petitioner was entitled to an order requiring the first respondent to furnish security for ₹8,97,49,999.

p. 5

ii.Whether interim protection should be granted against alienation of the scheduled properties, notwithstanding the first respondent’s challenge to the arbitration agreement.

pp. 5–6

03Law Applied

Section 9 of the Arbitration and Conciliation Act, 1996 empowers the court to grant interim measures of protection in aid of arbitration.

p. 5

The validity of the arbitration agreement was left to be contested in the pending Section 11 application or before the arbitrator, as appropriate.

p. 5

In considering interim protection, the Court assessed the balance of convenience and ordered preservation of the properties pending resolution of the competing proceedings.

p. 5

Provisions in the judgment · 2 · Linked ones open on LawLens

Arbitration and Conciliation Act, 1996 Section 9 Section 11

04Reasoning

The Court declined to order security because, in light of the first respondent’s prima facie submissions and the petitioner’s own submission that he was pressing only the injunction request, the security prayer was not granted.

p. 5

As to the properties, the Court did not determine the validity of the arbitration agreement or the parties’ competing claims.

pp. 5–6

It considered that the disputes were also connected with pending court proceedings and concluded that the balance of convenience favoured maintaining the status quo, without prejudice to the first respondent’s right to raise preliminary objections in the Section 11 proceedings or before the arbitrator.

pp. 5–6