Section 9 Of Arbitration Act Allows Interim Orders Against Non-Signatories To Preserve Subject Matter: Delhi High Court

"Scope of power of a Court under Section 9 of the Arbitration Act is not limited to parties to an arbitration agreement. The Court has the authority to issue interim directions even against a third party. The Courts have recognised time and again that the purpose of Section 9 of the Arbitration Act is to aid arbitration between the parties." Delhi High Court, in a significant ruling dated July 3, 2026, has held that the court's jurisdiction to grant interim measures under Section 9 of the Arbitration and Conciliation Act, 1996, extends to passing directions against non-signatories to an arbitration agreement.

A bench of Justice Mini Pushkarna observed that while an Arbitral Tribunal is a "creature of the contract" and cannot venture outside it, the Court exercises wider powers to ensure that the subject matter of the dispute is preserved and the arbitral process is not rendered "otiose or inefficacious."

The petitioner, Rajeev Behl, approached the Court seeking interim protection of his claimed 50% share in the "Capitol City Mall" (now Emaya Mall) project in Paschim Vihar. Behl alleged that despite his rights being recognized in a 2018 Arbitral Award and a subsequent settlement, the respondents executed a "sham" Divestment Agreement in 2018 to transfer his stake to Respondent No. 3, an entity owned by the family of Respondent No. 1. The respondents contested the maintainability of the petition, arguing that the petitioner was never an individual shareholder and that Respondent No. 3 was not a party to any arbitration agreement.

The primary question before the court was whether interim relief under Section 9 can be granted against a non-signatory to an arbitration agreement. The court was also called upon to determine whether the "Group of Companies" doctrine applies at the Section 9 stage and if the claims were barred by limitation.

Court Explains The Purpose And Scope Of Section 9

The Court emphasized that the fundamental objective of Section 9 is to ensure that the subject matter of arbitration is preserved so that the proceedings do not become infructuous. Relying on the Supreme Court’s decision in Arcelor Mittal Nippon Steel India Limited v. Essar Bulk Terminal Limited, the Court noted that interim relief is granted in aid of final relief.

The bench observed that the purpose is to "ensure that the arbitration proceedings do not become infructuous and the arbitral award does not become an award on paper, of no real value." The Court stated that it is not expected to finally adjudicate disputed questions of title or fraud at this stage, but only to examine the "triple test" of a prima facie case, balance of convenience, and irreparable injury.

"Interim relief is granted in aid of final relief. The object is to ensure protection of the property being the subject-matter of arbitration."

Distinction Between Section 9 And Section 17 Powers

The Court drew a vital distinction between the powers of a Court under Section 9 and those of an Arbitral Tribunal under Section 17. It noted that while Section 17 specifically allows measures to be directed only against parties to the arbitration, Section 13 contains no such restriction for the Court.

The Court held that the "scope and sweep of Section 9 proceedings" allows for orders against third parties, especially when such orders are necessary to prevent the dissipation of the disputed property. The bench remarked that "an Arbitrator is a creature of the contract between the parties and therefore cannot venture outside the contract," but this limitation does not apply to a Court exercising its wide powers under the Act.

"The scope of power of a Court under Section 9 of the Act is not limited to parties to an Arbitration Agreement and the Court can issue interim directions even against a third party."

Applicability Of The Group Of Companies Doctrine

Addressing the objection that Respondent No. 3 was a non-signatory, the Court noted that it was a family-owned company of Respondent No. 1. It held that the question of whether a non-signatory is a "veritable party" to arbitration under the "Group of Companies" doctrine is a fact-intensive exercise that should ultimately be decided by the Arbitral Tribunal under Section 16.

However, the Court clarified that the mere objection of being a non-signatory does not denude the Court of its jurisdiction to grant protective relief in the interim. The bench noted that Respondent No. 1, who controls the third-party entity, was indeed a signatory to the relevant Memorandum of Understanding containing the arbitration clause.

"The mere objection raised by Respondents 2 and 3 on the basis of their non-signatory status does not, at this stage, denude this Court of its jurisdiction to grant protective relief in aid of Arbitration."

Court Rejects Objection On Limitation As A 'Mixed Question'

The respondents argued that the claims were barred by limitation as the cause of action arose in 2018. The Court rejected this at the interim stage, holding that limitation is a mixed question of fact and law that must be decided by the arbitrator. It noted the petitioner’s contention that the obligation to deliver the shares only triggered upon the completion of the project and execution of a Conveyance Deed in December 2024.

The Court referred to the "Kompetenz-Kompetenz" principle, stating that under Section 16, the Arbitral Tribunal is empowered to rule on its own jurisdiction, including objections regarding limitation. At the Section 9 stage, the Court only needs to see if there is a "possibility" that the petitioner’s rights might be defeated by the respondents' conduct.

Injunction Necessary To Prevent Irreversible Changes

Justice Pushkarna observed that the petitioner had established a prima facie case based on the prior 2018 award and subsequent acknowledgments by the respondents in other judicial forums. The Court noted that if further third-party rights were created in the mall inventory during the pendency of arbitration, it would "frustrate effective enforcement of any eventual award."

The Court held that maintaining the status quo does not determine ownership but merely preserves the existing factual position. It reasoned that the "comparative inconvenience" favors the petitioner, as creating successive third-party interests would lead to a multiplicity of proceedings and "gross injustice."

"Preservation of the remaining subject matter would, therefore, minimise future complications rather than create prejudice."

The Court concluded that the petitioner’s interest in the project cannot be adequately compensated by damages if the property is alienated. Consequently, the Court restrained the respondents, their directors, and agents from creating any third-party rights in respect of 50% of the total saleable area of the Capitol City Mall/Emaya Mall until the Arbitral Tribunal is constituted and can consider the matter.

Date of Decision: July 03, 2026