Samunnati Agri Value Chain Solutions Pvt Ltd vs Gogreen Warehouses Pvt Ltd

Headnote:(A) Arbitration and Conciliation Act, 1996 - Section 9 and Section 21 - Interim measures to protect assets - Bailee's liability - Bank guarantee - Power of the Court under Section 9 is limited to granting interim reliefs to protect the interests of either party, regardless of the ultimate determination of liability on merits (Para 18).

(B) In a contract of bailment, where goods are destroyed, the bailee is prima facie responsible for the safe custody of the bailed commodities. Where there is evidence of the bailee's deteriorating financial condition, the court may grant interim protection to ensure the enforceability of any future arbitral award (Paras 19, 20).

Facts of the case:
The applicant deposited cotton bales with the respondent, who served as a collateral manager and warehousing service provider. The goods were destroyed by fire, and the subsequent insurance claim was repudiated. The applicant sought interim orders under Section 9 for asset disclosure, freezing of bank accounts, and securing the claim amount. The respondent filed applications to recall earlier interim orders, arguing that the fire occurred despite due diligence and that they are a profit-making entity.

Findings of Court:
The court found that the respondent was prima facie liable for the safe custody of the goods as a bailee. Given the dwindling business status of the respondent as reflected in records filed with the Registrar of Companies, the court determined that the applicant required protection via interim measures to secure the claim amount pending arbitration.

Issues: Whether the applicant was entitled to interim protection under Section 9 of the Arbitration and Conciliation Act to secure the claim amount and whether the respondent's request to recall previous interim orders should be granted.

Ratio Decidendi: The court ruled that Section 9 empowers the court to protect the interests of parties pending arbitration. Since the respondent admitted the quantity and value of the bailed goods and showed signs of financial instability, directing the respondent to provide a bank guarantee is a necessary measure to prevent the award from becoming unenforceable.

Result: Applications disposed of with a direction to the respondent to furnish a bank guarantee.

Legal Category Hierarchy

1. Application under Section 9, Arbitration Act seeking interim relief over goods destroyed by fire while in bailee's custody. (Para 9 , 10 , 11 )

2. Applicant sought asset disclosure and freezing; respondent denied liability citing pending insurance challenge and no need for relief. (Para 13 , 14 )

3. Court cannot decide merits under Section 9; prima facie bailee liable for safe custody; applicant's interest needs interim protection. (Para 18 , 19 , 20 )

4. Under Section 9 of the Arbitration Act, court grants interim measures to protect award enforcement, not to adjudicate liability. (Para 18 , 20 )

5. Disposed with direction to furnish bank guarantee for claim amount, kept alive pending arbitration, else interim relief vacated. (Para 22 )

6. What is the scope of Section 9 of the Arbitration and Conciliation Act, 1996?

Section 9 empowers the court to grant interim reliefs solely to protect the interests of either party, not to adjudicate the merits of entitlement or liability. (Para 18 )

7. Can a court decide the merits of a dispute while exercising power under Section 9 of the Arbitration Act?

No, the court cannot address issues touching upon the merits of entitlement or liability of the parties in exercise of its power under Section 9. (Para 18 )

8. What factors justify granting an interim measure under Section 9 to protect future arbitral award?

A prima facie case of liability and evidence of the respondent's financial deterioration justify an interim measure to enforce a possible future award. (Para 19 , 20 )

COMMON ORDER

Arb.Appln.No.614 of 2026 had been filed under Section 9 (i)(ii)(e) of the Arbitration and Conciliation Act, 1996 to order and direct the respondent to forthwith disclose on affidavit before this Court details of (i) all its assets – movable (including but not limited to share) and immovable, monies, bank deposits and accounts held by its singly or jointly (with any person or entity) and/or severally wherever in the world; (ii) all pending and/or threatened litigations against the respondent including under the insolvency & Bankruptcy Code, 2016; and (iii) full details of all transactions entered into by the respondent disposing off/alienating/dissipating or creating any third party rights including encumbrance, mortgage, pledge or lien over any of its assets (movable and immovable) from May 2023 till date.

2.Arb.Appln. No.615 of 2026 had been filed under Section 9 (i)(ii)(e) of the Arbitration and Conciliation Act, 1996 to direct the respondent to forthwith secure the principal claims of the applicant in the arbitration proceedings in such sum as may be specified in the order, to produce and place at the disposal of the Court, when required, the said property or the value of the same, or such portion thereof as may be sufficient to satisfy the award that may be passed against it, including by

(i) depositing a sum of Rs.14,09,65,589/- before this Court and/or

(ii) furnishing an unconditional bank guarantee from a nationalized bank in the sum of Rs.14,09,65,589/- in favour of Registrar General, Madras High Court.

3.Arb.Appln. No.616 of 2026 had been filed under Section 9 (i)(ii)(e) of the Arbitration and Conciliation Act, 1996 to pass an order of debit freeze of respondents' bank accounts, including the one bank account specified in Schedule B, whether held in the sole name of the respondent or jointly with any person or entity, thereby restraining the respondent, its directors, officers, servants and agents from operating, transferring, alienating, encumbering, withdrawing or otherwise dealing with the monies lying in its bank account(s) to the extent of Rs.14,09,65,589/- and direct the respondent to forthwith deposit any shortfall to maintain a minimum balance of Rs.14,09,65,589/- in its bank account(s) pending conclusion of the arbitral proceedings.

4. Arb.Appln. No.803 of 2026 had been filed under Section 9 (i)(ii)(e) of the Arbitration and Conciliation Act, 1996 to pass an order of attachment of the respondent's assets, including but not limited to Schedule A and which may be disclosed by the respondent before this Court and in the respondent's latest financial statements as may be sufficient to satisfy the award that may be passed against it.

5.Appln. SR.No.118390 of 2026:- had been filed to pass an order of interim injunction restraining the respondent, its representatives, agents, successors or any other person claiming through or under the respondent from in any manner dealing with the respondent's assets – movable and immovable, monies, bank accounts wherever situated and from encumbering, selling transferring or creating any third party interest by parting with possession of the same pending disposal of the arbitration proceedings.

6.Arb.Appln. Nos.1513, 1515, 1517 & 1519 of 2026 have been filed to recall forthwith the common order dated 25.06.2026 passed in Arb.A.No.614, 615 & 616 and 813 of 2026 in so far as it directs the respondent to file an affidavit of assets.

7.Arb.Appln. Nos.1514, 1516, 1518 & 1520 of 2026 have been filed to recall forthwith the common order dated 09.07.2026 passed in Arb.A.No.614, 615 & 616 and 813 of 2026 in so far as it directs freezing of the respondents bank account.

8.Heard AR.L.Sundaresan learned Senior counsel appearing for Mr.Aditya Vikram Bhat, learned counsel appearing for the applicant and Mr.S.R.Rajagopal, learned counsel appearing for the respondents.

9. Mr.AR.L.Sundaresan, the Senior learned counsel appearing for the applicant would submit that a Master Facility Agreement was

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2026 Supreme(Online)(Mad) 94186

IN THE HIGH COURT OF JUDICATURE AT MADRAS
K.Kumaresh Babu, J
Samunnati Agri Value Chain Solutions Pvt Ltd – Appellant
Versus
Gogreen Warehouses Pvt Ltd – Respondent
Arb Appln Nos.614 to 616 & 803 of 2026 | Arb Appln 118390 of 2026 | Arb Appln 1513 to 1520 of 2026

Under Section 9 of the Arbitration and Conciliation Act, the court can order interim measures, such as a bank guarantee, to secure a claim and ensure the enforceability of a future award when a prima facie liability exists and the respondent's financial stability is in question.

Legal Category Hierarchy

Table of Contents

6. What is the scope of Section 9 of the Arbitration and Conciliation Act, 1996?

7. Can a court decide the merits of a dispute while exercising power under Section 9 of the Arbitration Act?

8. What factors justify granting an interim measure under Section 9 to protect future arbitral award?

2026 Supreme(Online)(Mad) 94186

IN THE HIGH COURT OF JUDICATURE AT MADRASK.Kumaresh Babu, JSamunnati Agri Value Chain Solutions Pvt Ltd – AppellantVersusGogreen Warehouses Pvt Ltd – RespondentArb Appln Nos.614 to 616 & 803 of 2026 | Arb Appln 118390 of 2026 | Arb Appln 1513 to 1520 of 2026

Under Section 9 of the Arbitration and Conciliation Act, the court can order interim measures, such as a bank guarantee, to secure a claim and ensure the enforceability of a future award when a prima facie liability exists and the respondent's financial stability is in question.

Legal Category Hierarchy

Table of Contents

6. What is the scope of Section 9 of the Arbitration and Conciliation Act, 1996?

7. Can a court decide the merits of a dispute while exercising power under Section 9 of the Arbitration Act?

8. What factors justify granting an interim measure under Section 9 to protect future arbitral award?

IN THE HIGH COURT OF JUDICATURE AT MADRAS
K.Kumaresh Babu, J
Samunnati Agri Value Chain Solutions Pvt Ltd – Appellant
Versus
Gogreen Warehouses Pvt Ltd – Respondent
Arb Appln Nos.614 to 616 & 803 of 2026 | Arb Appln 118390 of 2026 | Arb Appln 1513 to 1520 of 2026