Mere Objections To Specific Performance Not Enough To Deny Interim Relief In Arbitration: Delhi High Court

The Delhi High Court has recently held that mere invocation of statutory restrictions on specific performance cannot, by itself, justify refusal of interim protective relief in arbitration proceedings.

It observed that such objections must be clearly established before a court can decline measures aimed at preserving the subject matter of a dispute pending arbitration.

Justice Harish Vaidyanathan Shankar made the observation while granting interim protection to Conscient Infrastructure Pvt. Ltd. in a dispute concerning a proposed 6.76-acre development project in Delhi's Aya Nagar.

“This court is of the considered opinion that once the statutory framework itself favours enforcement of contractual obligations, the exceptions restraining such enforcement cannot be expansively construed at the threshold stage so as to defeat the very subject matter of arbitration. Mere invocation of Sections 14 or 41 of the SRA, without a clear and unimpeachable demonstration that the case squarely falls within the statutory prohibitions, cannot by itself compel the Court, at a prima facie stage, to decline protective interim measures.”, the court ruled.

The court was dealing with a petition filed by Conscient Infrastructure in relation to a Binding Heads of Terms executed on May 17, 2023 for development of a 6.76-acre parcel of land at Aya Nagar.

Under the arrangement, the landowners, Mahesh Kapoor and Usha Kapoor, were to contribute the land. Conscient Infrastructure was to undertake the development and bear the project costs. The parties also agreed to a revenue-sharing arrangement.

According to Conscient Infrastructure, it pursued statutory approvals, revised layout plans and facilitated settlement of a dispute concerning the land. It also claimed to have paid about ₹8 crore under the arrangement.

The Binding HoT was extended on three occasions through addenda executed on May 6, 2024, May 18, 2025 and August 5, 2025.

The relationship soured after the landowners informed Conscient Infrastructure on March 10, 2026 that the Binding HoT had expired on December 17, 2025. A few weeks later, they remitted ₹2.8 crore to the developer.

Maintaining that the arrangement continued to remain in force, Conscient Infrastructure moved the High Court for interim protection. It argued that any creation of third-party rights over the land could prejudice its claimed rights and undermine the arbitral proceedings.

The landowners, however, contended that the Binding HoT was only a precursor to a future collaboration agreement. According to them, it was neither a concluded contract nor one capable of specific enforcement. They also argued that the arrangement involved continuing obligations and multiple regulatory approvals.

The court held that it was not called upon at the interim stage to finally determine whether the Binding HoT was specifically enforceable or whether Conscient Infrastructure would ultimately be entitled to specific performance. It observed that the inquiry at this stage was confined to examining whether an arguable arbitral claim existed warranting preservation of the subject matter pending adjudication.

The court further held that the Binding HoT could not, at this stage, be treated as a mere exploratory arrangement or an unenforceable expression of future intent. It noted that the parties had acted upon it over an extended period through multiple addenda, payments and interactions with statutory authorities.

“The Court is of the considered view that the Binding HoT herein cannot, at this stage, be said to be so uncertain, nebulous or unworkable as to render the Petitioner's claim ex facie frivolous or incapable of arbitral consideration.”, the court ruled.

Observing that creation of third-party rights could frustrate the arbitral process and render any eventual award ineffective, the Court granted interim protection.

It restrained the respondents from creating third-party rights, alienating, encumbering, transferring or otherwise dealing with the land in a manner prejudicial to Conscient Infrastructure's claimed rights under the Binding HoT, subject to any orders that may be passed by the arbitral tribunal.

For Petitioner (Conscient Infrastructure Pvt. Ltd.): Senior Advocate Dayan Krishnan with Advocates Anirudh Bakhru, Divyam Agarwal, Ayush Puri, Ranvir Singh Sisodia, Kanav Madnani and Siddhant.

For Respondent (Mahesh Kapoor & Usha Kapoor): Senior Advocate Sandeep Sethi with Advocates Manu Bajaj, Parul, Krishna Gambhir, Shreya Sethi and Riya Kumar.