-
by Admin
06 December 2025 7:01 AM
“Award Holder Sat Over Its Rights for 4 Years – Court Cannot Entertain Post-Award Interim Applications as Substitute for Execution” - In a significant judgment concerning the interplay between arbitral enforcement and interim relief, the Madras High Court dismissed applications filed by Eros International Media Ltd. under Section 9 of the Arbitration and Conciliation Act, 1996, seeking to injunct the release of the Telugu film Akhanda II by 14 Reels Entertainment Pvt. Ltd. and its alleged alter ego 14 Reels Plus LLP. The Court held that once an arbitral award has become enforceable, Section 9 cannot be invoked to secure enforcement or restrain commercial activity, especially when the award holder has already initiated execution proceedings.
Justice N. Anand Venkatesh, sitting in original civil jurisdiction, ruled that interim relief under Section 9 is not intended to supplant the execution regime under Section 36 of the Act, and certainly not in cases where the award holder had failed to act for over four years after the award attained finality.
“Eros Was Sleeping Over Its Rights Since 2021 – No Explanation for Four-Year Silence on Execution of ₹27.7 Cr Award”
The Court noted that although the arbitral award dated 23 July 2019 was confirmed up to the Supreme Court with the dismissal of the SLP on 6 August 2021, Eros failed to file an execution petition until 4 September 2025. The Court found this delay fatal to the Section 9 applications, observing that not a single document or correspondence had been produced to show any enforcement activity between 2021 and 2025.
The Court observed, “The applicant has not moved their little finger for more than four years to enforce the award… Not even a single document has been filed along with the applications for the period between 2021 and 2025.”
The Court rejected Eros’s oral explanations as to informal negotiations, holding that these were not even pleaded in the affidavit and thus irrelevant to adjudication.
“No Real or Alive Likelihood That Award Will Be Defeated – Mere Apprehension of Asset Dissipation Not Enough”
Eros had sought an interim injunction restraining the respondents from exploiting the film Akhanda II, arguing that the first respondent was using the second respondent as a vehicle to bypass the binding arbitral award. The Court, however, held that Section 9 post-award relief must meet a high threshold—there must be a demonstrable and imminent risk that the award would be rendered illusory if the injunction is not granted.
Justice Venkatesh clarified that “Section 9 cannot be regarded as a shortcut to avoid Section 36… Such applications must be entertained sparingly and in rare and exceptional cases.”
Citing the Delhi High Court’s judgment in IRB Ahmedabad Vadodara Super Express Tollways, the Court reiterated that post-award interim protection is only maintainable where there is a clear, realisable award coupled with a tangible threat to its enforceability, neither of which had been proved in this case.
“Allegation of Alter Ego Without Evidence is Baseless – Corporate Veil Cannot Be Lifted Casually”
The applicant argued that 14 Reels Plus LLP, which is releasing Akhanda II, is an alter ego of 14 Reels Entertainment, the award-debtor. This, it said, justified an injunction even against a non-signatory to the arbitration agreement.
The Court emphatically rejected this contention, observing that mere familial links between directors (in this case, a son of the director of the award-debtor being a director of the second respondent) do not warrant the lifting of the corporate veil.
Justice Venkatesh stated, “Lifting of corporate veil is a drastic measure, which should not be resorted to without evidence… This cannot be determined based on vague allegations or speculative inferences.”
He cited Balmer Lawrie & Co. Ltd. v. Saraswathi Chemicals, where the Delhi High Court cautioned against enforcing arbitral awards against non-signatories without proper adjudication and established fraud or collusion.
“Section 9 Application Filed After Execution Petition Is Not Maintainable – Civil Procedure Code Mechanism Must Take Over”
The Court was categorical in stating that once an execution petition is filed and the award is ripe for enforcement under Section 36, the jurisdiction under Section 9 is eclipsed. The applicant had already filed execution on 4 September 2025, prior to the present application being moved on 16 October 2025.
The judgment underscores: “If such applications are entertained as a matter of course, it will virtually amount to short-circuiting a mechanism that has been provided under Section 36 of the Act.”
Referring to the First Bench’s ruling in Gopuram Enterprises Ltd., the Court affirmed that the Arbitration Act ceases to apply once the enforcement stage is reached, and interim orders that resemble enforcement steps must be sought only under Order XXI of the Code of Civil Procedure.
Arbitration Not a Bypass Route to Execution Law
In dismissing all Section 9 applications, the Madras High Court reaffirmed that the Arbitration Act is not a parallel execution code, and its interim provisions cannot be used to seek injunctive or enforcement-like reliefs once an award is ripe for execution. The Court left it open to Eros International to pursue its remedies strictly in accordance with the execution framework under the CPC.
Justice Venkatesh concluded with a firm reminder:
“Orders can be passed only as an interim measure to protect the interest of the award holder, which is taking steps to enforce the award. But if the award holder, for any reason, is sitting over their rights and is not enforcing the award, they cannot be permitted to maintain the applications under Section 9.”
Date of Decision: 30 October 2025
