Termination Notice Interdicted Pending Section 17 Adjudication Following Referral of Section 9 Petition to Arbitration

The Petitioner, Devyani International Limited, filed a petition under Section 9 of the Arbitration and Conciliation Act, 1996, seeking urgent interim injunctions against the Respondents.

The dispute arose from a Sub-License Agreement dated 20.02.2024 regarding business units at the Pune Airport Domestic Terminal.

The Petitioner sought to restrain Respondent No. 1 from interfering with day-to-day operations, disrupting utilities, or dispossessing them without due process.

During the hearing, both parties reached a consensus (*ad idem*) to refer the matter to arbitration and bypass formal notice requirements under Section 21 of the Act.

Whether the Court should grant interim protection and refer the dispute to a sole arbitrator based on the mutual consent of the parties, notwithstanding the pending Section 9 petition.

Whether the seat of arbitration and the jurisdiction of courts as defined in the agreement (New Delhi vs. Indore) affect the appointment of an arbitrator by the Delhi High Court.

The court primarily applied Section 9 of the Arbitration and Conciliation Act, 1996, which allows for interim measures by the Court before or during arbitral proceedings.

It also relied on Section 17, which empowers an Arbitral Tribunal to grant interim measures.

Section 12(2) regarding the mandatory disclosures of independence by an arbitrator.

The court followed the principle of party autonomy, allowing the parties to waive the formal Section 21 notice and the filing of a Section 11 petition for the appointment of an arbitrator through mutual consent.

The Court noted that rather than adjudicating the merits of the interim reliefs under Section 9, the parties preferred a reference to arbitration.

Despite the dispute resolution clause (Clause 10.12) specifying the seat as New Delhi while placing court jurisdiction in Indore, MP, the parties reached a consensus to conduct the arbitration under the aegis of the Delhi International Arbitration Centre (DIAC).

The Court determined that since the dispute valuation was approximately Rs. 4 Crores, it was appropriate to appoint a Senior Advocate as the Sole Arbitrator to ensure an expedited resolution.

To preserve the *status quo* and prevent the Section 9 petition from becoming infructuous before the tribunal could meet, the Court converted the present petition into a Section 17 application for the arbitrator's future consideration.

The Court ordered that the Termination Notice dated 06.03.2026 be interdicted (stayed) until the Arbitrator adjudicates the Section 17 application.

The petition was disposed of with directions for the parties to share costs equally and for the arbitrator to provide necessary disclosures under Section 12(2) within one week.