Debarment arising from contractual misperformance is an arbitrable dispute subject to Section 9 interim relief.

The Petitioners challenged a debarment letter dated 25.08.2025 issued by the Respondent (NHAI), which barred them from participating in future projects due to alleged non-performance or faulty performance under a Concession Agreement dated 12.03.2022.

The Petitioners sought interim relief under Section 9 of the Arbitration and Conciliation Act, 1996, to stay the debarment.

A Dispute Resolution Board (DRB) had previously recommended against the debarment.

The Respondent raised a preliminary objection, arguing that debarment is an inherent administrative power and not an arbitrable dispute arising from the contract, and further argued that Petitioner No. 2 (the bidder/shareholder) had no privity of contract.

The Court considered Section 9 of the Arbitration and Conciliation Act, 1996, regarding interim measures.

It addressed the Respondent's reliance on *Patel Engg. Ltd. v. Union of India (2012) 11 SCC 257*, which establishes that the power to debar is an inherent authority of the State and need not be specifically mentioned in a contract.

However, the Court balanced this with the scope of the Arbitration Clause (Clause 38.1), which covers any dispute "arising under or out of or in relation to" the Agreement.

It also referenced the principle of "representations and warranties" under Clause 7.1 and the role of the "bidder" in the contract's recitals to determine the standing of Petitioner No. 2.

The Court rejected the Respondent’s objection regarding non-arbitrability, noting that the debarment was explicitly triggered by alleged failures in performing the contract.

Since the debarment was a "direct consequence" of contractual performance, it fell within the broad scope of the dispute resolution clause.

The Court observed that the parties themselves had previously treated the issue as arbitrable by participating in proceedings before the Independent Engineer and the DRB without objecting to jurisdiction.

Regarding the maintainability of the petition by Petitioner No. 2, the Court found that they were "intrinsically interconnected" with Petitioner No. 1, held shares in the concession, and were required to fulfill specific warranties under the Agreement.

The Court declined to conduct a "mini-trial" on the technical evidence of construction safety, holding that such merits are for the Arbitral Tribunal to decide.

It granted interim relief by staying the operation of the impugned debarment letter dated 25.08.2025.

The Respondent was restrained from treating the Petitioners as debarred entities or posting any such declaration on its website.

The petition was disposed of with these directions, leaving the final adjudication of the merits to the Arbitral Tribunal.