#Bank guarantee continuation

Bombay High Court rules that post-award interim protection under Section 9 of the Arbitration Act is exceptional and requires 'rare compelling circumstances'. The court allowed continuation of bank guarantees pending Section 34 challenge, reinforcing security interests in public utility contracts despite arbitral award directions.

Bombay High Court permits continuation of bank guarantees under Section 9 of the Arbitration Act post-award, where liquidated damages claims remain unresolved pending Section 34 challenges. The ruling underscores the need for security in public utility contracts, reconciling conflicting precedents on Section 74 of the Indian Contract Act.

Bombay High Court rules that continuation of post-award interim protection, such as a bank guarantee, under Section 9 of the Arbitration Act demands proof of 'exceptional circumstances'-not merely an arguable challenge to the award. The judgment reinforces the binding nature of consent terms and mandates full disclosure in discretionary proceedings, limiting the scope of post-award relief for parties seeking to extend interim measures.