Interim protection under Section 9 expires if arbitration proceedings do not commence within statutory timelines.

The Petitioner filed a petition under Section 9 of the Arbitration and Conciliation Act, 1996, seeking the appointment of a receiver to take possession of financed medical equipment and an injunction against the Respondents to prevent the alienation of said assets

On 03.02.2025, the Court granted an interim stay restraining the Respondents from creating third-party interests in the equipment

Despite the passage of over a year, the Petitioner failed to appear in recent hearings, and the record indicated no steps were taken to commence arbitration proceedings, even after failed mediation attempts

1. Whether a Section 9 petition can be maintained indefinitely without the Petitioner manifesting a clear intention to commence arbitration proceedings

2. Whether the interim protection granted to the Petitioner should be vacated for non-compliance with the statutory mandate of Section 9(2) of the Arbitration and Conciliation Act

Section 9 of the Arbitration and Conciliation Act, 1996, specifically Section 9(2), which mandates that arbitral proceedings must commence within 90 days of an interim order or within such further time as the court determines

Sundaram Finance v. NEPC India Pvt. Ltd., establishing that a party seeking Section 9 relief must have a "manifest intention" to take the dispute to arbitration

Satish Jha v. Headstrong Consulting Worldwide Ltd. and Firm Ashok Traders, which held that if arbitration is not commenced within a reasonable time, the link between the interim order and the arbitration is snapped, requiring dismissal of the application

The Court observed that Section 9 is intended for securing "emergent reliefs" and cannot be used as a tool to indefinitely prolong the commencement of arbitration

The Court noted that while an interim injunction was granted in February 2025, the Petitioner had allowed the matter to remain stagnant for over a year without invoking the arbitration clause

Applying the proximity test from Firm Ashok Traders, the Court found that the "distance of time" between the interim relief and the proposed arbitration had destroyed the required relationship between the two events

Given the Petitioner’s continuous absence and the total lack of evidence regarding the initiation of arbitral proceedings, the Court determined the Petitioner had no real intent to arbitrate

Section 9 petitions cannot remain pending on the board without a manifest desire to arbitrate

Consequently, the petition and all pending applications were dismissed, and the interim protection was vacated