Appellate courts will not interfere with Section 17 interim measures unless the discretion is exercised perversely.

The Petitioners (Mayank) and Respondent No. 1 (Raju) are partners in Vidhi Research and Development LLP, governed by an LLP Agreement dated August 14, 2014.

The parties are embroiled in arbitration regarding governance rights and control of the LLP’s primary asset—land admeasuring ~2,18,122 sq. meters (“Subject Land”).

In July 2022, a consent order established an interim arrangement requiring Mayank to give Raju notice of any proposal to deal with the Subject Land, allowing Raju six weeks to object and an additional two weeks to move the Tribunal before implementation.

In July 2025, Mayank issued a notice to sell ~100,000 sq. meters of the land for ₹1,250 crores based on an alleged third-party offer.

Raju filed an application (IA 14) under Section 17 of the Arbitration and Conciliation Act, seeking a restraint on the sale.

The Arbitral Tribunal, after finding Mayank’s disclosures regarding the transaction to be redacted and "cloaked in mystery," passed the Impugned Order restraining Mayank from dealing with the land.

Mayank challenged this under Section 37.

1. Whether the Arbitral Tribunal misinterpreted the consent order dated July 20, 2022, thereby making the Impugned Order perverse.

2. Whether the restraint on the sale of the Subject Land was a justified interim measure under Section 17 to protect the subject matter of arbitration.

3. Whether an appellate court under Section 37 should interfere with the discretionary interlocutory order of an Arbitral Tribunal.

Section 17 of the Arbitration and Conciliation Act, 1996, regarding the Tribunal's power to order interim measures to preserve the subject matter of the dispute.

The court applied the restrictive scope of judicial interference under Section 37, equating it with the standards of Section 34.

The principle from Wander Ltd. v. Antox India (P) Ltd. (1990), which mandates that an appellate court shall not substitute its own discretion for that of the lower forum unless the exercise of discretion is shown to be arbitrary, capricious, or perverse.

"working partner" protections and majority principles under the Limited Liability Partnership Act, 2008.

The Court rejected Mayank’s argument that his 80% majority interest granted him absolute commercial wisdom to sell assets without full disclosure to the minority partner.

The Court found that even if the July 2022 order was interpreted narrowly as Mayank suggested, the Tribunal had independent authority under Section 17 to protect the Subject Land, which constitutes substantially all of the LLP’s assets.

Upon reviewing the documents shared by Mayank—which were heavily redacted and involved a 18% fee to a "group company" (Ulltra)—the Court agreed with the Tribunal that the transaction lacked transparency and "did not inspire confidence".

The Court reasoned that allowing the sale of half the Subject Land in a "cloak-and-dagger manner" would render the final arbitral award a mockery by destroying the substratum of the partnership.

Consequently, the Tribunal’s decision was found to be a "sensible and reasonable" exercise of discretion to maintain the status quo.

The Court held that the Subject Land must be preserved as the subject matter of the arbitration.

The Petition was dismissed with costs to be assessed and factored in by the Arbitral Tribunal at the conclusion of the arbitration proceedings.