'Enforced' Is Not The Same As 'Enforceable' For Post-Arbitral Award Interim Relief: Telangana High Court

The Telangana High Court has recently held that an award-holder can invoke Section 9 of the Arbitration and Conciliation Act to seek interim protection until an arbitral award is actually enforced. The remedy remains available even after the award becomes enforceable.

A Division Bench of Justices Moushumi Bhattacharya and Gadi Praveen Kumar ruled that the expression "before it is enforced" in Section 9 refers to the completion of enforcement proceedings. It cannot be equated with the stage when an award merely becomes enforceable.

"Section 9(1) provides a straightforward answer by the words 'before it is enforced' as opposed to 'the award becomes enforceable' (absent in the provision). Hence, from a purely grammatical point of view, the word 'enforced' would mean completion or culmination of the enforcement proceedings. The finality attached to the word 'enforced' is unmistakable; there is no further recourse for enforcement of the Award. On the other hand, 'enforceable' would mean a process in continuum which is devoid either of finality or a conclusive enforcement of the arbitral Award.", the court held.

Explaining why a contrary interpretation would create an anomaly, the Court said it would leave an award-holder without interim protection during the period between an award becoming enforceable and its actual enforcement.

Such an interpretation, it held, would also run contrary to the legislative scheme of Section 36, under which stay of an arbitral award is an exception rather than the rule.

"This anomaly would be incongruous to the legislative intent of section 36 itself. A bare reading of the section leaves no doubt that grant of stay of an arbitral award is not automatic or granted in the usual course. Section 36(2) and (3) manifests a clear resistance to stay an arbitral award where the award has become enforceable. The statutory mandate requiring the Court to record reasons in writing for granting an order of stay makes this intent evident; that stay is not the norm but an exception."

The dispute arose from an arbitral award dated August 30, 2025, directing Swmabhan Commerce Pvt. Ltd. to pay KPB Consumers about ₹38 lakh, along with interest. Swmabhan Commerce did not challenge the award under Section 34 of the Act.

KPB Consumers subsequently approached the Commercial Court under Section 9. It sought a direction requiring the company to file an affidavit disclosing its assets to facilitate enforcement of the award.

The Commercial Court dismissed the petition. It held that the award had become enforceable and that KPB Consumers had not established exceptional circumstances warranting post-award interim protection.

Setting aside that order, the High Court held that Section 9 expressly permits interim protection after an arbitral award is made and until it is enforced. It found no statutory basis for denying relief merely because the award had become enforceable. The Court also held that the Act does not require an award-holder to establish "exceptional circumstances" before seeking post-award interim protection.

The Court further held that Section 9 is a standalone enabling provision that can be invoked independently of whether execution proceedings have been initiated. It said the Commercial Court's interpretation would impermissibly dilute the post-award remedy intended by the Legislature.

"Section 9 of the A&C Act is an enabling standalone provision which can be invoked by a party, independent of whether the party has filed for execution of the award. The approach adopted by the Commercial Court in drawing a distinction between the 'pre' and 'during' and the post-award scenario amounts to an unnatural interpretation of the section. Such an interpretation denudes the post-award remedy under section 9 of its efficacy which is clearly not intended by the Legislature."

Holding that the Commercial Court's interpretation had no statutory basis and wrongly curtailed the scope of post-award interim relief, the High Court set aside the impugned order and allowed the appeal.