Section 9 permits securing claims by directing deposit of proceeds realized from the alienation of assets.

The Petitioner filed a petition under Section 9 of the Arbitration and Conciliation Act, 1996, seeking interim measures to secure an outstanding liability of INR 2,82,20,063

The Petitioner requested the Court to direct the Respondent to deposit the amount or furnish a bank guarantee, and to restrain the Respondent from alienating any assets

The Respondent opposed the petition, arguing that Section 9 cannot be used for "recovery proceedings" and that no collateral security was mortgaged to the Petitioner

The Petitioner countered that the Respondent, dealing in perishable goods, might dissipate assets if the amount was not protected

During the proceedings, both parties consented to refer the matter to arbitration based on Clause 11 of their Credit Facilities Application dated 22.07.2024

1. Whether reliefs for the preservation and custody of goods/assets are maintainable under Section 9 of the Act in a commercial dispute

2. Whether the Court can appoint a Sole Arbitrator and grant limited interim protection while referring the parties to arbitration

The Court applied Section 9 of the Arbitration and Conciliation Act, 1996, which provides for interim measures by the Court for the preservation, interim custody, or sale of goods which are the subject matter of the arbitration agreement

It also relied on Section 17 regarding the Arbitral Tribunal’s power to pass interim orders

Section 12(2) regarding mandatory arbitrator disclosures

The principle of party autonomy was exercised as the parties jointly waived the requirements of Section 21 (notice of arbitration) and Section 11 (formal petition for appointment of arbitrator)

The Court rejected the Respondent’s contention that the petition was an impermissible recovery proceeding, clarifying that Section 9 expressly permits orders for the preservation and custody of goods

The Court noted the emergent nature of the Petitioner’s request, specifically the risk of asset dissipation given the nature of the Respondent’s business in perishable goods

However, instead of granting the full scope of requested reliefs (such as an immediate deposit or bank guarantee), the Court opted to protect the subject matter while transitioning the dispute to the Arbitral Tribunal.

By treating the Section 9 petition as a Section 17 application, the Court ensured the Arbitrator would ultimately decide on the interim protections

To balance equities in the interim, the Court imposed a conditional restraint on the alienation of assets

The Section 9 petition was directed to be treated as an application under Section 17 before the learned Arbitrator

The Court granted a limited interim relief: should the Respondent sell or transfer any movable or immovable assets, the proceeds—up to the value of INR 2,82,20,063—must be deposited with the Registrar General of the Delhi High Court in an interest-bearing account

The petition was disposed of with the date of May 25, 2026, cancelled