Derivative claims under Section 9 are unsustainable once the underlying contractual authority is negatived by an arbitral award.

The Petitioner (Bhanu Arora) entered into an Agreement to Sell (ATS) dated 10.03.2023 with Respondent No. 1 (Aditya Bhutani) for the purchase of the first floor of a property in Greater Kailash-I

Respondent No. 1’s rights to the property were derived from a Collaboration Agreement dated 06.01.2023 with the owner, Respondent No. 2

Subsequent disputes between the Respondents led to an arbitral award dated 03.02.2026, which rejected Respondent No. 1’s claims and authority to sell portions of the property

Meanwhile, in a Section 11 petition filed by the Petitioner, the Court appointed an arbitrator for disputes between the Petitioner and Respondent No. 1 but deleted Respondent No. 2 from the array of parties as they were a non-signatory

The Petitioner approached the High Court under Section 9 of the Arbitration and Conciliation Act, 1996, seeking a status quo order and restraint against third-party rights

1. Whether a Section 9 petition for interim measures is maintainable when the underlying contractual authority (the Collaboration Agreement) of the vendor has been extinguished by a prior arbitral award

2. Whether interim reliefs can be granted against a third party (Respondent No. 2) who is a non-signatory to the arbitration agreement and has already been deleted from the Section 11 proceedings

The court applied Section 9 of the Arbitration and Conciliation Act, 1996, which provides for interim measures by the court

It relied on the principle of "derivative rights," holding that a party cannot claim greater rights than those held by their predecessor-in-interest

Furthermore, it applied the principle that Section 9 reliefs generally cannot be granted against non-signatories who are neither necessary nor proper parties to the arbitration agreement

The court also respected the finality of arbitral awards under the Act, noting that an existing award binds the parties unless stayed or set aside

The Court reasoned that the Petitioner’s claim was entirely parasitic upon the rights of Respondent No. 1

Since the arbitral award dated 03.02.2026 expressly rejected Respondent No. 1’s authority to deal with the property, the "legal foundation" of the Petitioner’s ATS stood extinguished

Consequently, the Court could not grant interim protection for rights that no longer legally exist

Regarding Respondent No. 2, the Court found that as a non-signatory who had been formally deleted from the Section 11 appointment proceedings, they could not be subjected to interim injunctions in a proceeding arising from an agreement to which they were not a party

The Court dismissed the petition but clarified that the Petitioner remains at liberty to pursue independent claims for damages or other remedies against Respondent No. 1 before the already-constituted Arbitral Tribunal

No orders were passed against Respondent No. 2