Arbitral Award Holders Can Seek Interim Protection Until Award Is Fully Satisfied: Calcutta High Court

The Calcutta High Court on 18 February, held that an arbitral award holder is not left remediless after initiating enforcement proceedings and may seek interim protection under Section 9 of the Arbitration and Conciliation Act until the award is fully satisfied.

A Division Bench of Justices Sabyasachi Bhattacharyya and Supratim Bhattacharya was hearing an appeal filed by Alok Saraf and others against the EPI Group, challenging a single judge's order dated 10 September 2025, which had refused ad interim relief in their Section 9 application.

The Court observed:

“Although Section 36 (2) of the 1996 Act itself contemplates stay of the award, the same operates only to the benefit of the award debtor, and is restricted to a stay of the award. However, neither Section 36 nor Section 34 of the 1996 Act provides any remedy similar to Section 9 to the award holder, in aid of and in order to facilitate the fruition of the award.”

The dispute arose from transactions recorded in minutes dated 15 November 2015 and a subsequent agreement dated 11 October 2018 between the ASA Group and the EPI Group. Following disagreements, arbitration concluded with a decision dated 16 March 2021, which the parties later treated as null and void. The matter was then referred to mediation, resulting in a memorandum of settlement dated 10 September 2024.

Alleging breach of the settlement, the appellants initiated execution proceedings, which were dismissed on 20 May 2025 on the ground that the settlement could not be treated as an arbitral award. They also filed a Section 9 application seeking interim protection, which was refused by a single judge on 10 September 2025.

The appellants argued that while Section 36(2) allows a stay of an award for the benefit of the award debtor, neither Section 36 nor Section 34 provides equivalent protection to an award holder.

Rejecting this restrictive interpretation, the Division Bench held that Order XXI of the CPC deals with remedies concerning final execution and does not empower the executing court to grant ad interim protection.

The Court interpreted “enforced” to mean full satisfaction of the award, the court set aside the 10 September 2025 order and restored interim protection pending disposal of the Section 9 application.

For Appellant: Senior Advocates Jishnu Saha, Shatadru Chakraborty, with Advocates Ishan Saha, Rishika Goyal, Indrani Joardar, Satadeep Bhattacharyya, Ramendu Agarwal, Apoorna Chowdhury