Section 9 interim relief cannot restore a terminated determinable contract absent a strong case.

The petitions were filed under Section 9 of the Arbitration and Conciliation Act, 1996, seeking interim protection against termination of transport arrangements for LPG tank trucks and directions to the respondent oil companies to resume allotment of LPG loads pending arbitration.

The lead petitioner participated in BPCL’s tender for transportation of bulk LPG in Tamil Nadu. Under Corrigendum No. 3, trucks whose ownership could not immediately be transferred could be offered under an Agreement to Sell, subject to transfer of the Registration Certificate and PESO licence within four months from issuance of the Letter of Intent, failing which penal action could include forfeiture, termination and blacklisting.

The Letter of Intent was issued on 19 October 2025, making 19 February 2026 the relevant deadline. The Registration Certificate was transferred within time, but the application for transfer of the PESO licence was made only on 23 February 2026 and the licence was transferred on 26 February 2026.

Although LPG loads had been allotted before and after expiry of the four-month period, BPCL subsequently issued an email and show-cause notice, suspended allotments, and terminated the truck’s arrangement on 15 June 2026, forfeiting the caution money of ₹1,00,000.

Whether the petitioners were entitled to an interim mandatory injunction directing the respondents to suspend or disregard the termination orders and resume continuous allotment of LPG loads pending arbitration?

Whether the transport contracts were determinable in nature, such that an order restoring or continuing the contractual relationship would be barred by Section 14(d) of the Specific Relief Act, 1963?

Whether the respondents could immediately appropriate the forfeited caution money, or whether the amount should be preserved pending adjudication by the Arbitral Tribunal?

Whether the short delay in transferring the PESO licence, the respondents’ subsequent allotment of LPG loads, and the availability of multiple penal consequences raised a sufficiently strong case for interim relief?

The Court applied Section 9 of the Arbitration and Conciliation Act, 1996, which permits interim measures in aid of arbitration, but held that an interim mandatory injunction requires a higher threshold than an ordinary prima facie case.

Relying on Dorab Cawasji Warden v. Coomi Sorab Warden, (1990) 2 SCC 117, and Samir Narain Bhojwani v. Aurora Properties & Investments, (2018) 17 SCC 203, the Court held that such relief generally requires a strong case, prevention of irreparable or serious injury not normally compensable in money, and a balance of convenience in favour of the applicant.

The Court applied Section 14(d) of the Specific Relief Act, 1963, under which a contract determinable by its nature cannot ordinarily be specifically enforced.

Contractually, Clause 33 authorised termination or foreclosure before expiry by 30 days’ written notice without assigning reasons, while Clause 34 permitted immediate termination in specified circumstances.

The Court also interpreted the Corrigendum’s use of “may include” as indicating a range of possible penal consequences rather than automatic termination in every case of delay.

The Court held that the petitioners had an arguable case because the delay in transferring the PESO licence was short, the licence was ultimately transferred, LPG loads continued to be allotted after the contractual deadline, and the Corrigendum contemplated several possible consequences rather than mandatory termination.

However, the petitioners’ case was not that the PESO transfer application had been made within time and delayed only by the statutory authority; the application itself was filed after expiry of the deadline.

Consequently, the petitioners failed to establish the heightened “strong case” required for an interim mandatory injunction.

Further, Clause 33 independently empowered the respondents to terminate or foreclose the contract on notice without assigning reasons, making the contractual arrangement prima facie determinable. A direction to resume LPG allotments would therefore substantially restore and continue a terminated contract, amounting in substance to specific performance.

The Court also found that uncertainty in calculating future loss, the specialised nature of the trucks, possible reputational harm and limited operational life did not, by themselves, establish irreparable injury warranting continuation of the contract.

Nevertheless, because the validity and proportionality of forfeiture remained matters for arbitration, the caution money was required to be preserved rather than appropriated.

It declined to stay or set aside the termination orders and clarified that the protection granted regarding the caution money did not restore or continue the transport contracts.

The respondents were directed to maintain the caution money of ₹1,00,000 separately and not appropriate, utilise or finally deal with it until commencement of arbitration and an appropriate application was made before the Arbitral Tribunal.

The Arbitral Tribunal was directed to decide the disputes independently and without being influenced by the Court’s prima facie observations; the petitions were disposed of without costs.