The Supreme Court has dismissed an appeal filed by National Projects Construction Corporation Ltd. and upheld the direction requiring it to deposit ₹3.5 crore with the Delhi High Court Registry pending the decision on a challenge to an arbitral award.
A Bench of Justice K. V. Viswanathan and Justice Alok Aradhe held that the case justified interim protection under Section 9 of the Arbitration and Conciliation Act, 1996. The Court found that the circumstances met the required tests of a prima facie case, balance of convenience and possible irreparable prejudice.
Background of the Case
The dispute arose from a 2002 Memorandum of Understanding concerning construction and development work in Agra, including bus terminals and the Taj Trapezium Zone Heritage Corridor.
A mobilisation advance of ₹3.5 crore had been provided against bank guarantees furnished by Ishvakoo (India) Pvt. Ltd. Disputes later went to arbitration. In 2005, the Delhi High Court had directed that the bank guarantees be kept alive and could be invoked if, after the arbitral proceedings, an executable award required recovery of money.
The guarantees were subsequently encashed in September 2017 after Ishvakoo was unable to keep them alive. The arbitrator later dismissed Ishvakoo's claims. Importantly, NPCC had not filed any counter-claim before the arbitrator.While proceedings challenging the award under Section 34 were pending, the Delhi High Court directed NPCC to deposit the equivalent amount of ₹3.5 crore in Court. The Division Bench upheld that order, leading to the present appeal before the Supreme Court.
Supreme Court's Observations
The Supreme Court noted that an unsuccessful party in arbitration can, in appropriate circumstances, approach the Court under Section 9 for interim protection. However, the threshold for such relief is higher where the applicant has lost the arbitration.
The Bench found several circumstances significant. There was no counter-claim by NPCC, and the arbitral award did not contain a finding that the mobilisation advance had not been utilised. The Court also noted that the arbitrator appeared to have been unaware that the bank guarantees had already been encashed when the award was delivered.
The Court observed that allowing NPCC to retain the money during the pending Section 34 proceedings could result in unjust enrichment and run contrary to the purpose of the earlier High Court order.
The Bench further held that the High Court had exercised its Section 9 jurisdiction judiciously, after considering the prima facie case, balance of convenience and possibility of irreparable prejudice.
Decision
The Supreme Court found no merit in the appeal and dismissed it.
It granted NPCC four weeks to deposit ₹3.5 crore with the Registry of the Delhi High Court. The amount is to be kept in a fixed deposit with a nationalised bank on an auto-renewal basis until disposal of the Section 34 proceedings.
The Supreme Court clarified that its observations were confined to deciding the Section 9 proceedings and that the Section 34 challenge would be decided independently on its own merits.
No order was made as to costs.
Case Details:
Case Title: National Projects Construction Corporation Ltd. v. Ishvakoo (India) Pvt. Ltd.
Case Number: Civil Appeal No. 5819 of 2025
Judges: Justice K. V. Viswanathan and Justice Alok Aradhe
Decision Date: August 11, 2026
