#Bank Guarantees

The Supreme Court upheld a Delhi High Court order directing the appellant to deposit Rs 3.5 crore under Section 9 of the Arbitration Act, clarifying that courts may grant interim security to a party who ultimately loses the arbitration where equity demands it. This ruling expands the scope of Section 9, allowing preservation of assets even when the applicant’s substantive claim is weak, affecting all parties seeking interim protection during arbitration.

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.