Synopsis

The petitioner (supplier of heavy construction equipment) filed a petition under Section 9 of the Arbitration and Conciliation Act, 1996, seeking interim protection, including repossession of equipment supplied to the respondent on a deferred payment basis. The parties had entered into a settlement agreement during mediation, but the respondent defaulted on the payment schedule. The respondent gave an undertaking to clear the entire outstanding amount by 10.07.2026. The High Court held that while the contractual right to repossession had not yet ripened (as no termination notice had been issued), the court under Section 9 has wide powers to protect the subject matter of arbitration. The court directed symbolic possession of equipment in case of default and restrained the respondent from selling or encumbering the equipment, preserving its value pending arbitration.

1. Heading of the judgment

High court of delhi at new delhi

O.m.p.(i)(comm.) no. 268 of 2025

M/s liugong india pvt ltd (petitioner) vs. M/s c5 engineering pvt ltd & anr. (respondents)

Coram: hon’ble mr. justice vikas mahajan

Core Law: Arbitration and Conciliation Act, 1996 – Section 9 – Interim measures by court – Repossession of equipment under hire-purchase/retention of title agreement – Scope of powers – Distinction from Order XXXVIII Rule 5 CPC.

Court: High Court of Delhi at New Delhi
Coram: Hon’ble Mr. Justice Vikas Mahajan (Single Judge)
Date of Judgment: May 22, 2026
Case No.: O.M.P.(I)(COMM.) 268 of 2025
Citation: 2026:DHC:4983

2. Legal framework

Major laws and provisions involved:

• Arbitration and Conciliation Act, 1996 – Section 9 (interim measures by court), Section 17 (interim measures by arbitral tribunal), Section 21 (commencement of arbitral proceedings)

• Code of Civil Procedure, 1908 – Order XXXVIII Rule 5 (attachment before judgment), Order XXXIX Rules 1 and 2 (temporary injunctions)

Subject matter of the judgment:

Whether in a petition under Section 9 of the Arbitration Act, the court can order repossession or symbolic possession of equipment supplied under agreements where title remains with the supplier until full payment, and whether such relief is analogous to attachment before judgment under Order XXXVIII Rule 5 CPC requiring proof of likelihood of dissipation of assets.

Key legal principles applied:

• Section 9 – wide and expansive power: The court under Section 9 has the same power for making orders as it has for the purpose of and in relation to any proceedings before it. The power is interim and protective, intended to preserve the subject matter of arbitration and safeguard the efficacy of the arbitral process.

• Prima facie case, balance of convenience, irreparable injury: The well-settled parameters for grant of interim relief apply – existence of a good prima facie case, balance of convenience in favour of the applicant, and likelihood of irreparable injury. (Arcelor Mittal Nippon Steel v. Essar Bulk Terminal)

• Strong possibility of diminution of assets suffices:&nbs

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