Delhi HC Affirms Maintainability of Section 9 Arbitration Petitions Amid Parallel Proceedings

“The relationship between Courts and Arbitral Tribunals has been said to swing between forced cohabitation and true partnership. The process of arbitration is dependent on the underlying support of the Courts who alone have the power to rescue the system when one party seeks to sabotage it.” —‘Adhunik Steels Ltd. v. Orissa Manganese and Minerals (P) Ltd., (2007) 7 SCC 125’

The appellants had Builder Buyer Agreement and MoU with the respondent in respect of a suit in Neo Square project at Gurugram.  As per MoU, there was unconditional obligation that the respondent assured the appellants for assured monthly returns of Rs.22,500/- from the date of 31.1.2015 of the BBA.  In 2019, the disputes including non payment of assured monthly returns arose between the parties.

The appellants filed complaints with Delhi Police and also with RERA Haryana.  RERA Authority passed final orders in favour of the appellants and against the respondent.

Thereafter, the respondent informed the appellants that the occupancy certificate was obtained and offered possession subject to payment of dues and documentation. The respondent also raised further demands.

The appellants filed section 9 petitions.   However, they were rejected on the ground that the appellants had already availed the RERA remedy and they cannot claim relief under section 9 of the Arbitration Act.

HELD that the jurisdiction under Section 9 AA is purely interim and protective as also preservative.  Section 9 petitions were filed for interim measures by restraining the Developer from cancellation of allotment or creation of third party rights. The appellants did not seek adjudication of the disputes on merits and also did not invite the Commercial Court to sit in appeal on the orders of Haryana RERA. A close scrutiny of the pleadings and the nature of reliefs sought reveals that the RERA proceedings and section 9 petitions occupy distinct legal terrains and invoked for different and well-defined purposes.

Doctrine of election of remedy has no application if the ambit and scope of two remedies are essentially different.

it is established that the jurisdiction under Section 9 of the Arbitration and Conciliation Act, 1996, is not an adjudicatory substitute for the final determination of rights, but a supportive mechanism to facilitate effective dispute resolution through arbitration. The mere fact that a party has availed a statutory remedy under a special enactment does not, by itself, denude the Court of jurisdiction to grant interim protection, particularly where the reliefs sought do not overlap in substance or effect. In the opinion of this Court, there can be no doubt that persons like the Appellants are forced to avail of remedies at different stages before different Authorities.

This Court finds it necessary to refer to the ‘International Commercial Arbitration in UNCITRAL Model Law Jurisdictions’ by Dr Peter Binder, wherein it is stated:

“It is not incompatible with an arbitration agreement for a party to request, before or during arbitral proceedings, from a Court an interim measure of protection and for a Court to grant such measure.” It is further stated: “In certain circumstances, especially where the Arbitral Tribunal has not yet been established, the issuance of interim measures by the Court is the only way assets can be saved for a future arbitration. Otherwise, the claimant could end up with a worthless arbitral award due to the fact that the losing party has moved his attachable assets to a ‘safe’ jurisdiction where they are out of reach of the claimant’s seizure. The importance of such a provision in an arbitration law is therefore evident, and a comparison of the adopting jurisdictions shows that all jurisdictions include some kind of provision on the issue, all granting the parties permission to seek Court-ordered interim measures.”

38. In cases where one party is in a position of dominance, such as a developer exercising control over possession, allotment, or documentation, the absence of interim restraint may permit actions that effectively foreclose the other party’s remedies. Section 9 enables the Court to neutralise such an imbalance, ensuring procedural fairness and preserving the sanctity of the arbitral process.
39. Reference may also be made to ‘The Law and Practice of Commercial Arbitration in England by Mustill and Boyd’, wherein it was discussed that:

          “(b) Safeguarding the subject-matter of the dispute The existence of a dispute may put at risk the property which forms the subject of the reference, or the rights of a party in respect of that property. Thus, the dispute may prevent perishable goods from being put to their intended use, or may impede the proper exploitation of a profit earning article, such as a ship. If the disposition of the property has to wait until after the award has resolved the dispute, unnecessary hardship may be caused to the parties. Again, there may be a risk that if the property is left in the custody or control of one of the parties, pending the hearing, he may abuse his position in such a way that even if the other party ultimately succeeds in the arbitration, he will not obtain the full benefit of the award. In cases such as this, the Court (and in some instances the arbitrator) has power to intervene, for the purpose of maintaining the status quo until the award is made. The remedies available under the Act are as follows: (i) The grant of an interlocutory injunction. (ii)The appointment of a receiver. (iii) The making of an order for the preservation, custody or sale of the property. (iv) The securing of the amount in dispute.”

Judgment dated 24.12.2025 of the High Court of Delhi in FAO (COMM) No.210 of 2025 of Rahul Bhargava and another   Vs.   M/s Neo Developers Pvt Ltd with connected matters