The main legal point established in the judgment is the criteria for granting interim measures under Section 9 of the Arbitration Act, including the need to establish a prima facie case, potential irreparable injury, and the balance of convenience.

I.A No. 8776 of 2007 (of the respondent under Section 9 of the Arbitration Act. 1996) in OMP No. 1012007 under Section 34 of the Arbitration Act, 1996

1. Mr. Pradeep Jain, Director of the petitioner company is present in compliance to the directions on the last date. The objection of the Counsel for the petitioner that the application under Section 9 ought to have been filed by way of an independent has already been rejected on the last date. The Counsel for the parties have been heard.

2. The petitioner has preferred this petition under Section 34 of the Act with respect to a unanimous arbitral award dated 28th September, 2006 of a Arbitral Tribunal comprising nominees of each of the parties and the third arbitrator appointed, by this Court vide order dated 12th December, 2002 in an application under Section 11(6) of the Act. It is not in dispute that under the said award as on the date of filing of this application, a sum of approximately Rs. 60 lacs is due from the petitioner to the respondent.

3. The respondent has filed this application seeking interim measures during the pendency of this petition and till the award is enforced. It is contended, that the petitioner is a closely held Private Limited Company; that the share holders and Directors of the petitioner company, with a view to defeat the award against them, have set up another, company namely MI s. Bio Veda Research Laboratory Private Limited and have been siphoning off the business of the petitioner company to the said other company; in the event of the petition being decided against the petitioner, making the execution of the award as a decree a virtual impossibility. It is, contended by the respondent that if the petitioner succeeds in its designs, even in the event of the respondent succeeding in these proceedings would be left with a paper award or decree.

4. The petitioner has filed a reply to this application. Though it is not disputed therein that the share holders and Directors of the petitioner company are also the share holders and Directors and in control of the other company namely M/s. Bio Veda Research Laboratory Pvt. Ltd. but it is denied that any case of siphoning off the assets is made out. It is contended that the other company was incorporated as far back as in July, 1999 and it is not as if the other company was incorporated after the arbitral award.

5. The Counsel for the petitioner has today urged that the respondent has not beer: able to make out any case of diversion of funds/siphoning off assets. It is also urged that ?-n application under Section 9 of the Act is generally filed before the making of the award and ought not to be entertained at this stage. It is next contended that for the respondent to be entitled to any interim measures, it has to pass the same tests as under Order 39 Rules 1 and 2 of the CPC, i.e. of prima facie case, irreparable injury and balance of convenience. It is urged that the respondent has no prima facie case the arbitral award allows escalation to the respondent in spite of there being no clause for the same in the agreement; it is stated that the arbitrators have allowed other claims which were not certified by the architect and which was prerequisite for the said claims being entertained/allowed. The Counsel, for the petitioner has in this regard relied upon Maharwal Khewaji Trust (Regd.), Faridkot v. Haldev Dass, IV (2004) CLT 172 (SC)=VI (2004) SLT 366=AIR 2005 SC 104, Adhunik Steels Limited v. Orissa Manganese and Minerals Private Limited, VI (2007) SLT 538=III (2007) CLT 287 (SC)=AIR 2007 SC 2563; and Transmission Corporation of A.P. Limited v. Lanco Kondapalli Power (Private) Limited, 1(2006) SLT 95=1 (2006) CLT 86 (SC)=(2006) 1 SCC 540.

6. As far as Maharwal Khewaji Trust (Regd.), Faridkot is concerned, that was a case of interim orders in appeal. The Supreme Court therein inter alia held that without a case of irreparable loss being made out, injunction could not be granted merely on the ground of the