Section 9 does not bar contractual performance-guarantee invocation when resulting loss is compensable in money.

The appellant contractor challenged the Commercial Court’s order partly allowing its application under Section 9 of the Arbitration and Conciliation Act, 1996.

The contractor alleged that delays in completing construction resulted from the employer’s failure to provide a workable site and correct drawings.

After the employer issued show-cause notices concerning possible encashment of the contractor’s ₹29,34,276 performance guarantee under Clause 3(xii) of the contract, the contractor sought, among other reliefs, an injunction against its invocation.

The Commercial Court restrained blacklisting for six months or until an application under Section 17 was filed, but refused to restrain encashment of the guarantee.

The contractor appealed under Section 37 of the Arbitration Act, read with Section 13(1A) of the Commercial Courts Act, 2015.

Section 9 of the Arbitration and Conciliation Act, 1996 empowers a court to grant interim measures—including injunctions—to protect the subject matter of a dispute; such relief may be sought before or during arbitration and after an award but before its enforcement.

The court stated that Section 9 relief is discretionary and protective, and that the court must consider a prima facie case, balance of convenience and irreparable injury, applying principles analogous to temporary injunctions under Order 39 of the Code of Civil Procedure.

Interim relief should not contradict express contractual terms or rewrite the parties’ agreement, and should assist rather than hinder arbitration.

The arbitral tribunal may also grant interim measures under Section 17, while a court may be approached under Section 9 where those measures are insufficient.

The contract contained Clause 3(xii), which the employer relied on as permitting invocation of the performance guarantee in the event of the contractor’s breach.

The court considered that the dispute over whether the contractor failed to perform or the employer caused the delay by not providing a clear site or drawings was for the arbitrator to decide; that unresolved dispute did not warrant an injunction contrary to the contractual provision.

Further, encashment would cause a monetary loss capable of compensation: if the arbitrator found for the contractor, it could seek recovery of the guarantee amount.

The court therefore found no basis to interfere with the Commercial Court’s refusal of that injunction.

The Commercial Court’s limited restraint on blacklisting remained undisturbed.