Telangana HC: Award-Holder Can Seek Section 9 Relief Until Arbitral Award Is Actually Enforced

Hyderabad: A Division Bench of the Telangana High Court has held that an award-holder can invoke Section 9 of the Arbitration and Conciliation Act, 1996 to seek interim protection even after an arbitral award becomes enforceable, and is not required to demonstrate exceptional circumstances to obtain such relief, while setting aside a Commercial Court order that had refused to direct the award-debtor to disclose its assets.

The Bench of Justice Moushumi Bhattacharya and Justice Gadi Praveen Kumar was hearing a Commercial Court Appeal filed under Section 37(1)(b) of the Act by KPB Consumers, the award-holder, against an order of the Commercial Court at Hyderabad dismissing its Section 9 petition. The petition had sought a direction on the respondent, Swmabhan Commerce Private Limited, the award-debtor, to file an affidavit disclosing its assets under Form No.16A of Appendix E of the Code of Civil Procedure, 1908.

The respondent remained unrepresented throughout the appeal despite the Court ordering notice. The appellant's attempts at personal service through Speed Post at the address recorded in the parties' agreement and in the respondent's Statement of Defence were returned with endorsements such as 'addressee left without instructions' and 'no such person at the address'. The appellant thereafter served notice by email at all seven addresses the parties had used during the contract and the arbitral proceedings. Relying on Rule 60(1) of the Appellate Side Rules of the Telangana High Court, which recognises electronic mail as a valid mode of service, the Bench accepted the email service as sufficient and proceeded to decide the appeal on the appellant's arguments alone.

On the merits, the Court noted that the appellant had obtained an arbitral award directing the respondent to pay over Rs.38 lakh with interest, and that the respondent had not filed any application under Section 34 to set aside the award. The Commercial Court had dismissed the Section 9 petition on the ground that the award had already become enforceable under Section 36 and that no extraordinary circumstances existed to entertain a post-award petition for interim protection.

Examining the statutory scheme, the Bench held that Section 9(1) permits a party to apply for interim measures 'before or during arbitral proceedings or at any time after the making of the arbitral award but before it is enforced', and that this window remains open until the award is actually enforced, not merely until it becomes enforceable. The Court drew a clear distinction between an award becoming 'enforceable', which occurs on expiry of the limitation for filing a Section 34 application, and an award being 'enforced', which denotes the actual completion of execution proceedings.

The Bench reasoned that reading down Section 9 to end once an award becomes enforceable would leave the award-holder without protection during the often indeterminate gap between enforceability and actual enforcement, particularly since the Act prescribes no outer time limit for seeking execution and Order XXI of the CPC contains no provision for interim relief during execution proceedings.

It is inconceivable that a party would be deprived of its statutory right.

the Bench observed, holding that Section 9 functions as a step in aid of enforcement under Section 36 and is intended to ensure that an award is not reduced to what the Court called a paper decree through the award-debtor's acts of alienating or depleting assets.

The Court also rejected the Commercial Court's requirement that the appellant show exceptional circumstances, holding that no such heightened standard is contemplated for the post-award stage under Section 9. It observed that grant of stay under Section 36(3) is itself not automatic but requires reasons to be recorded in writing, reinforcing that the statute treats stay as an exception rather than the norm.

Stay is not the norm but an exception.

the Bench noted, adding that the proviso to Section 36(3) further requires courts to be guided by the principles governing stay of money decrees under Order XLI Rule 1(5) of the CPC, including the furnishing of security.

The Bench relied on the Bombay High Court's ruling in Dirk India Private Limited v. Maharashtra State Electricity Generation Company Limited, its own Division Bench decision in Mytrah Energy (India) Private Limited v. Siemens Gamesa Renewable Power Pvt. Ltd., and the Calcutta High Court's ruling in Alok Saraf v. Shyam Sundar Nangalia, all of which recognised that Section 9 relief survives until actual enforcement of the award. It also referred to the Supreme Court's ruling in Rahul S. Shah v. Jinendra Kumar Gandhi on a defendant's obligation to disclose assets in a suit for payment of money.

Holding that the petition seeking disclosure of the respondent's assets was not punitive but only a step in aid of enforcing the award, the Court set aside the Commercial Court's order dated 31.03.2026 and allowed the appeal along with connected applications.

Case Title: KPB Consumers versus Swmabhan Commerce Private Limited