Arbitration Act Allows Interim Relief Even After Arbitral Award Before Enforcement: Kerala High Court

The Kerala High Court recently held that courts possess wide powers under Section 9 of the Arbitration and Conciliation Act to grant interim measures, even after the arbitral award is passed but before its enforcement.

A Division Bench comprising Chief Justice Soumen Sen and Justice Syam Kumar V.M. partly allowed an appeal filed by three foreign companies against Emil Traders Private Limited.

The appellants, foreign companies, had obtained an arbitral award against Emil Traders Private Limited and initiated execution proceedings. During the pendency of the execution petition, they filed an application under Section 9 seeking interim measures including attachment before judgment to secure the awarded amount.

The application was filed apprehending difficulty in realizing the awarded sum, particularly in light of Emil Trader's failed attempt to invoke proceedings under the Insolvency and Bankruptcy Code. The Single Judge restricted the relief to an injunction restraining Emil Traders from withdrawing money from its bank accounts or alienating or creating encumbrances over its movable and immovable properties.

The appeal was filed challenging the order of the Single Judge declining interim relief under Section 9 seeking to secure the awarded sum and direct disclosure of assets.

The appellants contended that since Emil Trader's fraudulent intent was evident from the records, the Court should direct them to deposit the entire awarded sum and file an affidavit disclosing its movable and immovable assets, including bank account details.

Emil Traders, on the other hand, argued that unless the enforceability of the award is established, the appellants are not entitled to any relief.

The bench observed that Section 9 confers wide powers to the courts to pass interim measures even after an award is passed but before its enforcement.

“The expressions “securing the amount in dispute” and “such other interim measure of protection as may appear to the Court to be just and convenient” are important features of the said section, which confer wide and sweeping powers on the Court to pass interim measures even after an award is passed but before its enforcement.” it observed

The court also noted that the NCLT's order dated July 17, 2025 dismissing the Emil Trader's voluntary winding-up petition and making adverse observations against the company was a relevant factor in considering whether interim protection was necessary.

It further observed that before directing Emil Traders to secure the awarded amount, it must first be examined whether the company possesses sufficient assets to satisfy the award if enforcement succeeds.

“The learned Single Judge has overlooked this aspect of the matter and has merely restricted the relief to an order of injunction.” it said

The court directed the respondent and its directors to file an affidavit disclosing all movable and immovable assets along with valuation reports and the company's audited financial statements for the last three years before the Single Judge.

It added, "In the event a finding is arrived at that the assets available are inadequate to meet the awarded sum, it will be open to the appellants to pray for a direction for securing the awarded sum till the enforceability of the award is decided.”

Accordingly, the appeal was partly allowed, and the interim order was modified.

For Appellants: Senior Advocates Barucha Zarir Pesi, Advocates Pranoy K Kottaram, Sivaraman P.L and Sreenand Udayan

For Respondent: Advocate P,B Subranyan