Section 9 Relief Not Available While Section 12A Mediation Is Pending: Madras HC [Read Order]

Chennai: The Madras High Court has dismissed an application under Section 9 of the Arbitration and Conciliation Act, 1996, holding that a party which had already invoked pre-institution mediation under Section 12A of the Commercial Courts Act, 2015, cannot seek interim relief in aid of arbitration without putting an end to those proceedings, and that it had approached the court with unclean hands by suppressing them. 

The court granted liberty to approach it again once the proceedings under the Commercial Courts Act are withdrawn.

Justice K. Kumaresh Babu was hearing OA No. 1010 of 2026, filed by Grand Blue Projects Pvt Ltd under Order XIV Rule 8 of the Original Side Rules read with Section 9(ii)(d) of the Arbitration Act. The applicant sought an interim injunction restraining True Value Home India Pvt Ltd and TVH Estates Chennai Pvt Ltd from encumbering, creating a charge on, transferring, alienating or otherwise dealing with the Schedule B property.

Senior Counsel Mr. Sathish Parasaran, for the respondents, raised a primordial objection to maintainability. He submitted that the applicant had earlier approached the District Legal Services Authority, Chengalpattu, under Section 12A of the Commercial Courts Act for pre-institution mediation, and had suppressed this in its Section 9 application. Having given up its right to invoke the arbitration clause by approaching the civil court's process under the Commercial Courts Act, he argued, the applicant could not maintain the application, and had come with unclean hands.

Senior Counsel Mr. Abdul Hameed, for the applicant, submitted that certain facts were not disclosed in the affidavit by oversight, owing to the urgency of protecting the applicant's rights under the memorandum of understanding. He said the mediation had been averred in the affidavit in a manner that could be read as covering the mediation before the DLSA, that he would advise the applicant to withdraw the DLSA proceedings since the only right available was to initiate arbitral proceedings, and that a suit would invite a Section 8 application seeking reference to arbitration. He pointed to the respondents' alleged unilateral dealing with the property by selling it to a third party, which called for urgent interim protection.

In reply, Mr. Parasaran submitted that if the applicant proceeded under the Commercial Courts Act before the Commercial Division of the District Court at Chengalpattu, the respondents would have no objection to the suit proceeding.

The court found that the applicant's affidavit did not disclose the invocation of Section 12A. The applicant had made the request on 28.08.2026, and the District Mediation and Conciliation Centre had issued notices in Form II by proceedings dated 18.09.2026, requiring the parties' presence on 22.09.2026, with the matter posted again on 05.10.2026. The present application was e-filed on 21.09.2026 and physically filed on 22.09.2026, the very date on which the mediation was taken up. The court held that these material facts were not disclosed in the supporting affidavit.

Holding that a party which voluntarily initiated proceedings under the Commercial Courts Act can only be "deemed to have given up its right to initiate arbitral proceedings," the court noted that the respondents had indicated they would submit to those proceedings. It held that the applicant could not be allowed to invoke the Arbitration Act without putting an end to the proceedings under the Commercial Courts Act, and that it had also come to the court with unclean hands by suppressing their initiation.

The court therefore held that the applicant was not entitled to any relief at present under Section 9 and dismissed the application with no order as to costs. It granted liberty to the applicant to approach the court again if it withdraws the proceedings pending under the Commercial Courts Act.

Appearances:

For the Applicant: Mr. Abdul Hameed, Senior Counsel, for Ms. Anbarasi Rajendran, Advocate.

For the Respondents: Mr. Sathish Parasaran, Senior Counsel, for Mr. V.G. Suresh Kumar, Advocate.

Case Title: Grand Blue Projects Pvt Ltd vs. M/s. True Value Home India Pvt Ltd & Anr., OA No. 1010 of 2026

[Read Order]