Section 9 Interim Measures Cease Once Arbitral Tribunal Can Efficaciously Grant Relief Under Section 17.

The Petitioner (Society) entered into a Development Agreement (DA) in 2013 with Respondent No. 1 (Developer) for property redevelopment

Following defaults in transit rent, statutory dues, and project completion, the Society filed a Section 9 petition in 2017 seeking interim protection

On December 14, 2017, the High Court issued an expansive order attaching the Developer's personal assets and restraining them from creating third-party rights in any of their projects

Over time, 31 Interim Applications (IAs) were filed, many by third-party decree-holders and allottees from unrelated projects seeking to claim funds deposited in this Court

Meanwhile, an Arbitral Tribunal was constituted in September 2024, which subsequently passed an order under Section 17 of the Act in February 2026

1. Whether a Section 9 Court should continue to exercise jurisdiction and entertain applications once an Arbitral Tribunal has been constituted and has passed Section 17 orders

2. Whether third parties (decree-holders and allottees of unrelated projects) who are not signatories to the arbitration agreement can intervene in Section 9 proceedings to claim assets deposited in Court

The Court applied Section 9 and Section 17 of the Arbitration and Conciliation Act, 1996. Under Section 2(1)(h), a "party" is strictly defined as a party to an arbitration agreement

Section 9(3) mandates that once a tribunal is constituted, the Court shall not entertain applications unless the remedy under Section 17 is inefficacious

Regarding non-signatories, the Court relied on the "veritable party" doctrine established in Cox and Kings Ltd. v. SAP India (P) Ltd. and ASF Buildtech Pvt. Ltd. v. Shapoorji Pallonji, which requires a non-signatory to show proximity, consent, or a de facto connection to the specific dispute to be bound by or benefit from an arbitration agreement

The Court reasoned that Section 9 is not a standalone equity jurisdiction but is strictly "in aid of" arbitral proceedings to preserve the subject matter of the specific agreement

Since the Arbitral Tribunal is now functional and seized of the matter via Section 17, the Section 9 Court's jurisdiction has effectively been superseded

The Court found that the third-party applicants (decree-holders from other projects) had no privity to the DA and were not "veritable parties" as their claims did not arise from the specific redevelopment project in question

Consequently, using Section 9 as an execution forum for unrelated decrees was held to be coram non judice

The Court determined that the Learned Arbitral Tribunal is the appropriate forum to decide which assets are necessary to secure the Society's claims and which can be released as surplus

The Court disposed of the Section 9 Petition and all 31 IAs. It held that: (i) Third-party interventions are rejected as they lack privity to the arbitration agreement; (ii) The Learned Arbitral Tribunal shall assess and determine within three months which funds in Court are required to protect the Society’s interests, and any surplus shall be released to the Developer; (iii) The Developer must honor undertakings to pay third-party decree-holders within 12 months of fund release; and (iv) The court-appointed committee is disbanded, and a joint handover of assets to the official Court Commissioner is directed.