Section 9 Interim Relief in India pending Arbitration seated in London
Section 9 petition for interim protection pending LMMA arbitration
Arbitration initiated in London LMAA. The respondents raised the defence that there had been a settlement through Bulkcom and thereafter, raised the case of pledge or adjustment.
The petitioner filed section 9 petition for interim protection is filed in India since the assets of the respondents are in India.
Judgment dated 2.7.2026 of the High Court of Bombay in Commercial Arbitration Petition (L) No.15734 of 2026 of Norvic Shipping Asia PTE Limited Vs. Zigma International.
The parties executed the Repayment Schedule Agreement dated 9 January 2025. A plain reading of the agreement shows that the respondent acknowledged that a sum of USD 215,310.01 was payable towards demurrage. Clause 2 records such acknowledgment. Clause 1 prescribes the schedule of repayment. Clause 3 further provides that upon default in payment of any instalment, the entire outstanding amount would become due and payable. At this stage, there is nothing on record to indicate that the execution of the agreement is disputed.
The principle relating to diminution of assets is connected with the test of balance of convenience. The Court is required to consider whether refusal of interim protection may result in the claimant obtaining an arbitral award which cannot be enforced because assets are no longer available. At the same time, the Court is also required to consider the prejudice likely to be caused to the respondent if interim protection is granted and the claim fails. If the hardship likely to be suffered by the claimant is greater than the inconvenience likely to be caused to the respondent, the balance of convenience would justify grant of interim protection. Thus, Section 9 has been enacted to preserve the effectiveness of the arbitral process.
Therefore, while considering the maintainability of a petition under Section 9 after constitution of the Arbitral Tribunal, the Court is required to examine whether the order, if passed by the Tribunal, would provide an effective remedy to the applicant. If such remedy is found to be ineffective or incapable of enforcement, the bar contained in Section 9(3) would not operate. Thus, the scheme of the Act indicates that Sections 9 and 17 are intended to supplement each other.
The requirement of irreparable prejudice is also satisfied. Once assets become unavailable or diminish during pendency of arbitration, the successful party may be left with an award incapable of enforcement. Such prejudice cannot be compensated after conclusion of arbitration.
