By Vatsal Golyan.
The author is a fourth-year student at NALSAR University of Law, Hyderabad.
The Indian Supreme Court’s (“Court”) decision in Home Care Retail Marts v. Haresh N. Sanghavi (“Home Care”) has settled a question that had divided High Courts for over a decade: whether an unsuccessful party may seek post-award interim measures under Section 9 of the Arbitration and Conciliation Act, 1996 (“the Act”). The decision resolves the conflict between the Bombay High Court’s restrictive approach in Dirk India Pvt. Ltd. v. Maharashtra State Power Generation Company Ltd. (“Dirk India”) and a growing body of High Court jurisprudence that had favoured a broader reading of the provision. In doing so, it brings clarity to an area that has been the subject of considerable debate (see for e.g., here)
However, Home Care does more than merely answer the maintainability question. While recognising that interim measures under Section 9 are available to an unsuccessful party, the Court simultaneously introduces a heightened threshold, holding that such relief should be granted only in ‘rare and compelling’ cases. The judgment offers only limited guidance on the content of this standard or the circumstances in which it is expected to operate.
This post argues that while Home Care correctly identifies the preservation of challenge proceedings as the justification for post-award interim measures, it fails to articulate a coherent limiting principle for distinguishing permissible preservation from impermissible interference with the award.
The Bombay High Court in Dirk India held that the post-award interim measures under Section 9 exist only for the benefit of the party that seeks to enforce the award. According to the Bombay High Court, post-award interim measures exist to protect the ‘fruits of a successful conclusion of the arbitral proceedings’. Consequently, they could not be invoked by a party that had failed in arbitration. Several High Courts (e.g., here and here) subsequently rejected this approach. Significantly, none of these decisions formulated a separate standard for applications by unsuccessful parties.
The clearest of these rejections came from the Gujarat High Court in GAIL (India) Ltd. v. Latin Rasayani Pvt. Ltd. (“GAIL”), which held that Section 9 contains no textual distinction between successful and unsuccessful parties. In that case, the claimant’s claims were rejected in arbitration, after which the successful party disconnected the gas supply that formed the subject matter of the dispute. The Gujarat High Court reasoned that permitting the successful party to immediately alter the status quo would substantially erode the effectiveness of the statutory opportunity available to challenge the award under the Act. It therefore held that an unsuccessful party could also invoke Section 9 where interim protection was necessary to preserve the efficacy of the challenge process.
Home Care arrives at the same conclusion on maintainability, but through a somewhat different route. The Supreme Court rejected Dirk India on the ground that Section 9 extends to ‘a party’ and contains no textual distinction between successful and unsuccessful parties [Paras 31-32]. Yet the judgment simultaneously subjects unsuccessful parties to a heightened ‘rare and compelling’ standard and a ‘higher threshold’. The difficulty is not that these standards lack an express textual foundation. Courts routinely develop principles governing the exercise of discretionary relief. Rather, the judgment offers little explanation for why unsuccessful parties require a distinct threshold once the statutory distinction itself has been rejected.
Many High Courts were already assessing such applications through the ordinary principles governing interim relief. Against that backdrop, Home Care, while settling maintainability, introduces an additional filter without clearly identifying the concerns that existing Section 9 principles were unable to address. The question, therefore, is no longer whether an unsuccessful party may invoke Section 9. It is what the newly introduced ‘rare and compelling’ standard is intended to achieve, and how it differs from the ordinary framework that already governs interim relief.
While the judgment does not elaborate on this standard, some clues may be drawn from the illustrations employed by the Court. These illustrations largely concern the continuation of existing protections, the prevention of irreversible prejudice, and measures intended to preserve the efficacy of challenge proceedings without disturbing the operative effect of the award itself [Paras 49-50]. Notably absent are examples where interim protection would effectively place the unsuccessful party in substantially the same commercial position that it sought, but failed, to obtain in arbitration.
One possible reading is that the Court sought to prevent Section 9 from becoming a vehicle through which an unsuccessful party secures, through interim orders, advantages that were denied by the arbitral tribunal. Such a concern would explain both the introduction of a heightened standard and the restrained nature of the Court’s illustrations. The judgment does not expressly articulate this principle, however, leaving some uncertainty as to whether this is the distinction courts are expected to draw going forward. If so, identifying the boundary between preserving a challenge and interfering with the practical consequences of an award becomes the central difficulty.
The difficulty becomes apparent in the Bombay High Court decision in ONGC v. L&T, one of the first cases to apply Home Care. While the Court concluded that the applicant had established a ‘rare and compelling’ case, its analysis largely proceeded through familiar Section 9 considerations, including the existence of a prima facie challenge, the continuation of an existing bank guarantee, and the potential prejudice arising from its discontinuation. The judgment offers little indication of how the new standard meaningfully alters the inquiry beyond these established considerations.
This is not to suggest that the Court reached the wrong result. Rather, the decision illustrates a broader difficulty with the standard introduced in Home Care. The language of the heightened standard appears to carry independent doctrinal weight, yet its content remains largely inferred rather than articulated.
The uncertainty becomes particularly apparent when Home Care is read alongside the pre-existing High Court jurisprudence. The Gujarat High Court in GAIL proceeded on the basis that interim protection may be justified where the immediate consequences of an award would render the statutory challenge mechanism ineffective, even if the relief granted closely resembled the position sought in arbitration. The illustrations employed in Home Care, however, are noticeably more restrained than the relief granted in GAIL.
The Court never explains whether it intended to narrow the broader challenge-efficacy rationale adopted by the High Courts or merely supplement it with an additional threshold. The distinction is significant. If Home Care marks a departure from decisions such as GAIL, the judgment offers no explanation for why the logic of preserving the challenge process, the basis of relief in those cases, is no longer sufficient. If it does not, then the independent role performed by the new standard remains unclear.
The distinction between successful and unsuccessful parties remains significant despite Home Care because the heightened standard applies only to the latter. Yet commercial arbitration rarely produces clear winners and losers. Awards frequently involve multiple claims and counterclaims, with parties succeeding on some issues and failing on others.
This problem was recognised even before Home Care. In DLF Home Developers Ltd. v. Shipra Estate Ltd., the Punjab & Haryana High Court declined to characterise the applicant as an unsuccessful party at all, noting that the award involved both claims and counterclaims and that a binary classification was therefore unavailable. Home Care does little to resolve this difficulty. The judgment assumes that parties can be straightforwardly categorised as successful or unsuccessful, but offers no guidance for cases where that distinction is contestable.
As ONGC v. L&T demonstrates, where the heightened standard is formally applied, the analysis may ultimately proceed through familiar Section 9 considerations. The functional significance of the distinction between successful and unsuccessful parties remains difficult to identify.
Home Care settles the maintainability debate. Section 9 is available to an unsuccessful party, and the restrictive approach in Dirk India no longer represents good law. The more difficult question is what the ‘rare and compelling’ standard is meant to achieve. The first decisions after Home Care suggest that courts are giving content to it through considerations such as enforceability, continuation of existing protections, and the nature of the relief sought, but no clear organising principle has emerged. Whether that turns on the status of the applicant, the nature of the relief sought, or some broader concern regarding the enforceability of awards remains, for now, an open question that Home Care leaves unanswered.
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