Section 9 Court may restrain third-party alienation of project inventory to preserve subject matter of arbitration.

The Petitioner, a promoter of the "Realtech Group," sought interim protection under Section 9 of the Arbitration and Conciliation Act, 1996, regarding his claimed 50% share in the "Capitol City Mall/Emaya Mall" project

The project was developed via Respondent No. 2 (SSCBPL), a Special Purpose Vehicle jointly owned by the Realtech Group and the "Dhingra Group" (Respondent No. 1)

Following internal disputes within Realtech, a 2011 Memorandum of Understanding ("MOU-I") allocated the subject project to the Petitioner

A subsequent "MOU-II" was executed between the Petitioner and the Respondents acknowledging this interest

In 2018, an Arbitral Award (Justice S.B. Sinha) upheld MOU-I and recorded that the rights in the project vested with the Petitioner

However, Respondents allegedly executed a "Divestment Agreement" on 18th January 2018, transferring Realtech’s 50% stake to Respondent No. 3 (an entity controlled by Respondent No. 1)

The Petitioner invoked arbitration on 18th February 2026, alleging fraud and seeking to restrain the Respondents from alienating the project inventory

1. Whether the Petitioner established a prima facie case, balance of convenience, and irreparable injury to warrant interim protection of the subject matter pending arbitration.

2. Whether the claims are ex facie barred by limitation or if the issue of limitation is a mixed question of fact and law to be decided by the Arbitral Tribunal.

3. Whether interim relief can be granted against Respondent No. 3, a non-signatory to the arbitration agreement.

Section 9 of the Arbitration and Conciliation Act, 1996, which empowers courts to grant interim measures for the preservation of the subject matter of arbitration

Arcelor Mittal Nippon Steel India Ltd. v. Essar Bulk Terminal Ltd. for the "triple test" of prima facie case, balance of convenience, and irreparable injury

Uttarakhand Purv Sainik Kalyan Nigam Ltd. v. Northern Coal Field Ltd., which holds that limitation is a jurisdictional issue often involving mixed questions of fact and law that must be determined by the Arbitral Tribunal under Section 16

Blue Coast Infrastructure Development Pvt. Ltd. v. Blue Coast Hotels Ltd., affirming that Section 9 allows orders against third parties if necessary to protect the subject matter of arbitration

The court found that the various MOUs and the 2018 Arbitral Award created a prima facie claim in favor of the Petitioner deserving of preservation

While the Respondents contended that the Petitioner never acquired the 50% interest and that the claim was time-barred, the court noted these were disputed questions of fact involving contract interpretation and allegations of fraud which required evidence

The court observed that the cause of action might be continuing, particularly as project delivery was tied to "completion," a trigger allegedly activated by a 2024 Conveyance Deed

It determined that if the Respondents were permitted to alienate the remaining mall inventory (the subject matter), any future award would be rendered infructuous, creating a risk of irreparable injury

Regarding Respondent No. 3, the court noted it was a family-owned entity of Respondent No. 1 (a signatory) and held that Section 9 is broad enough to restrain a non-signatory to prevent the dissipation of assets

It directed the Respondents, including their directors and agents, to be restrained from creating any third-party rights, alienating, or transferring 50% of the total saleable area of the "Capitol City Mall/Emaya Mall" until the Arbitral Tribunal is constituted and can consider the matter under Section 17

The court clarified that the Arbitral Tribunal remains free to decide all jurisdictional issues, including limitation and the "Group of Companies" doctrine, independently