Court Appoints Local Commissioners to Inventory Goods Following Repudiation of Commercial Purchase Order Under Section 9.

The Petitioner, a technology company, entered into a contract with Larsen & Toubro (“L&T”) for the supply of SCADA and cyber security systems for solar plants in Uzbekistan

To fulfill this, the Petitioner placed a Purchase Order (PO) dated September 29, 2025, worth ₹2,90,40,980/- with the Respondent, an authorized Dell distributor

Despite confirming receipt of goods from the national distributor, the Respondent demanded post-dated security cheques not stipulated in the PO and subsequently repudiated the contract via email on February 14, 2026

L&T refused the Petitioner’s request for a time extension, threatening penalties and liquidated damages

The Petitioner invoked arbitration on April 24, 2026, and approached the High Court seeking interim protection to secure the specialized equipment currently held by the Respondent

1. Whether the Petitioner has established a prima facie case, balance of convenience, and the threat of irreparable injury to warrant interim measures under Section 9 of the Arbitration and Conciliation Act, 1996

2. Whether the Court should appoint Local Commissioners to inventory the specialized equipment to prevent its diversion to third parties

The Court applied Section 9 of the Arbitration and Conciliation Act, 1996, which empowers the Court to grant interim measures of protection before or during arbitral proceedings

The court relied on the established tripartite test for interim injunctions: the existence of a prima facie case (based on the unconditional acceptance of the PO), the balance of convenience (favoring the party ready to fulfill financial obligations), and the prevention of irreparable loss (arising from potential breach of a high-value international infrastructure contract)

The Court found that a prima facie case existed because the Respondent had unconditionally accepted the PO but failed to deliver the goods after receiving them from the National Distributor

The court noted the Petitioner’s willingness to deposit the full contractual amount via post-dated cheques even before receiving the goods, which shifted the balance of convenience in the Petitioner’s favor

Furthermore, the court observed that since the equipment consisted of specialized system hardware tailored to the technical requirements of the Uzbekistan project, the Petitioner would suffer irreparable injury through L&T's penalty clauses if the Respondent sold the goods to a third party

Consequently, the court determined that preserving the status quo of the equipment was necessary to protect the subject matter of the dispute

It restrained the Respondent from returning the equipment to the National Distributor or selling it to any third party

The Court appointed two Local Commissioners to visit the Respondent’s premises in New Delhi and Noida to inspect and inventory the material

The Station House Officers (SHOs) were directed to provide assistance for the execution of the commission

The Petitioner was directed to pay each Local Commissioner a fee of ₹2,00,000/-

The matter was scheduled for further hearing on September 2, 2026