The court emphasizes the need to preserve the subject matter of arbitration and prevent parties from transferring rights that may undermine arbitral outcomes.

O R D E R

% 04.08.2025

1. This is a petition filed under Section 9 of the Arbitration and Conciliation Act, 1996 seeking the following relief:-

“(a) Pass an order of exparte ad interim injunction restraining Respondent No. 1 and 2, their directors, officers, agents, servants, or any person claiming through or under them, from selling, transferring, assigning, alienating, recording or creating any third party rights or interest in the 25 MW power connectivity approval dated 16.03.2024 & 22.04.2024 granted by Tamil Nadu Generation and Distribution Corporation Limited (TANGEDCO/TNGECL) or effecting any name transfer of the said connectivity or causing noted for record approvals in respect of the said connectivity approvals to any third party, during the pendency of the arbitral proceedings.”

2. The brief facts of the case are that the respondents had engaged the services of the petitioner to set up the entire project on a turn-key basis for them. The same was based upon a Term Sheet executed on 04.03.2024. The term sheet stipulated reciprocal promises to be performed by both parties and also laid time frames within which the same were to be performed. However, the petitioner has not been paid for its services in entirety. The respondents are refusing to tender the amounts due even for the milestones completed.

3. Ms. Kaul, learned counsel for the petitioner, submits that it is the respondents who are in breach of their obligations under the Term Sheet and not the petitioner. She states that a substantial amount of approximately Rs. 2 crores is due and payable by the respondents to the petitioner, and despite this, the respondents are threatening to terminate the agreement and transfer the approval for the power project to a third party. She contends that such a transfer would defeat the very substratum of the arbitral dispute, even though the respondents remain in default of their obligations and have failed to discharge their admitted liabilities.

4. The issue needs consideration.

5. For the said reasons, issue notice to the respondent through all modes including electronic as well as dasti process on the petitioner taking steps within 1 week from today, returnable on 14.08.2025.

6. Under Section 9 , the object of the Court is to ensure protection of the property being the subject-matter of arbitration and/or otherwise ensure that the arbitration proceedings do not become infructuous and the arbitral award does not become an award on paper, of no real value as held in Arcelormittal Nippon Steel (India) Ltd. v. Essar Bulk Terminal Ltd., (2022) 1 SCC 712 .

7. Prima facie it seems that the petitioner has not been paid for its services and an approximate amount of Rs. 2 crores is due and payable by the respondents and despite this, the respondents are threatening to terminate the agreement and transfer the approval of the power project to a third party.

8. For the said reasons, I am satisfied that the petitioner has a strong prima facie case and the balance of convenience lies in favor of the petitioner and irreparable damage will be caused if an interim relief is not granted.

9. In view of the above, till the next date of hearing, the respondents shall maintain status quo as regards the transfer of the project to a third party.