A Section 9 court cannot attach a non-signatory’s property to secure an individual’s disputed debt.

The applicant sought interim protection pending arbitration, including an injunction against dealing with scheduled properties and an order requiring security of ₹151,61,44,565, failing which attachment before judgment.

He relied on a disputed promissory note dated 20 August 2024, said to contain an arbitration clause, and stated that he had issued a notice invoking arbitration under Section 21 on 31 March 2026.

The respondents alleged that earlier disputes had been fully and finally settled under a compromise recorded by the NCLT in 2023, and denied execution of the promissory note as forged.

The scheduled properties stood in the name of the second respondent company, which was not a signatory to the promissory note.

The Court considered the applicant’s Section 9 request and the respondents’ applications to vacate the ad-interim injunction granted on 13 May 2026.

1. Whether interim relief could be granted on the basis of the disputed promissory note without determining the parties’ underlying factual disputes in a Section 9 proceeding.

2. Whether the scheduled properties, which stood in the name of the second respondent company and not the signatory first respondent, could be restrained or attached in these proceedings.

3. Whether, in the circumstances, the first respondent should be directed to furnish security for the applicant’s claim.

The Court applied the principle governing an application under Section 9 of the Arbitration and Conciliation Act, 1996: the Court must reach prima facie satisfaction when considering interim measures, but cannot conduct a mini-trial on disputed issues that are for the arbitral tribunal to decide.

The Court also proceeded on the basis that interim relief against property belonging to a separate, non-signatory entity could not be granted where the Court was not prepared to pierce the corporate veil.

The judgment does not identify or apply any other statutory provision or precedent as the basis of its decision.

The Court noted the parties’ admitted commercial relationship but treated the alleged settlement, the alleged discharge of debts, and the authenticity and effect of the promissory note as disputed matters for the arbitrator, particularly because the NCLT order and compromise document had not been placed before it.

It therefore did not resolve those disputes in the interim proceedings.

Because the second respondent company owned the scheduled properties and was not a signatory to the promissory note, the Court declined to restrain or attach those properties or to require security through them.

To protect the applicant’s claim while leaving the merits to arbitration, it instead directed the first respondent to furnish a bank guarantee.

The direction will stand suspended if the applicant does not take the necessary steps to appoint an arbitrator within eight weeks.

The applications were disposed of with no order as to costs.