Unsuccessful party in arbitration can maintain Section 9 petition for interim measures in rare and compelling cases.

The Petitioner (ONGC) and Respondent (L&T) entered into a contract in 2010 for offshore well-head platforms.

Delays occurred, leading ONGC to withhold INR 122.73 crores as liquidated damages (LD); L&T secured the release of these funds by providing a Bank Guarantee (BG) of INR 150.34 crores (10% of contract price).

An Arbitral Award dated 30 December 2024 and an Additional Award dated 12 December 2025 were passed, awarding L&T ~INR 271.12 crores and ONGC ~INR 42.95 crores (restricting LD to 35%).

The Additional Award directed mutual set-off of these amounts.

ONGC challenged the awards under Section 34 and subsequently filed this Section 9 petition seeking to compel L&T to renew the BG, which was set to expire on 30 April 2026, to secure the LD amount pending the Section 34 challenge.

1. Whether an unsuccessful or partially successful party in arbitral proceedings can maintain a petition under Section 9 of the Arbitration Act for interim measures at the post-award stage.

2. Whether a petitioner can maintain a Section 9 petition after having already applied for interim relief under Section 36(3) of the Act in a Section 34 proceeding.

3. Whether the Petitioner made out a "rare and compelling case" to warrant a direction to the Respondent to renew a Bank Guarantee despite the Respondent being the net award-holder.

Section 9 of the Arbitration and Conciliation Act, 1996, regarding interim measures by the Court.

The Supreme Court precedent in Home Care Retail Marts Pvt. Ltd vs. Haresh N. Sanghavi (2026), which overruled Dirk India Pvt. Ltd. v. MSEGCL and established that any party, including an unsuccessful one, may invoke Section 9 post-award.

Gayatri Balaswamy v. ISG Novasoft Technologies Ltd. regarding the court's power to modify or sever awards under Section 34.

While Section 9 is available to losing parties, they must meet a "higher threshold" and demonstrate a "rare and compelling case".

The Court held the petition maintainable by applying the Home Care Retail Marts ratio, noting that Section 9 protection is distinct from Section 36(3) stays and ensures the "subject matter" is preserved.

ONGC demonstrated a prima facie error in the Tribunal’s LD computation—even using the Tribunal's delayed days, the LD should have hit the 10% cap rather than being restricted to 35%.

The BG was originally provided specifically to prevent ONGC from deducting LD from running bills, meaning the funds were essentially ONGC's money held by L&T under an assurance.

The Additional Award's direction for mutual set-off potentially exceeded Section 33 powers, as the original award made the BG's return conditional on L&T paying the 35% LD.

The Court reasoned that renewal was a "non-prejudicial" measure under the Home Care guidelines because it preserved ONGC's ancillary rights without obstructing L&T's ability to enforce its net award.

The Court directed the Respondent to extend and keep alive Bank Guarantee No. 00040100008747 (amounting to USD 9,710,490 + EUR 529,370 + INR 52,42,50,100) until the final disposal of the Section 34 petition. If expired, a fresh equivalent guarantee must be furnished. The Petitioner is prohibited from invoking or encashing the renewed BG during this period to balance equities.