Asset Disclosure Can Be Directed Post-Award To Secure Claim: Kerala High Court Clarifies Scope Of Powers U/S 9 Arbitration Act

The Division Bench emphasised that Section 9 is an “amalgam” of principles underlying Orders XXXVIII and XXXIX CPC, but is not strictly confined by procedural technicalities. Relying on the Supreme Court’s judgment in Essar House Pvt. Ltd. v. Arcelor Mittal Nippon Steel India Ltd. (2022) 20 SCC 178, the Court observed that its powers are broad enough to include any interim measure necessary to secure the ends of justice.

The Division Bench comprising Chief Justice Soumen Sen and Justice Syam Kumar V.M. partly allowing an appeal filed by foreign award-holders seeking stronger interim protection against an Indian company, observed, “The A & C Act, 1996 is a code in itself and Section 9 has a unique feature in the sense that it is an amalgam of Order XXXVIII and Order XXXIX of the Code of Civil Procedure. Section 9(1)(ii)(b) of the A & C Act, 1996 empowers the Court to pass an order for securing the amount in dispute in the arbitration as an interim measure of protection and in Section 9(1)(ii)(e) such other interim measure of protection as may appear to the Court to be just and convenient”.

“Although the conditions precedent for exercising the power under Order XXXVIII or Order XXXIX of the Code of Civil Procedure have not been specifically mentioned, ordinarily the Court exercising the power under Section 9 of the A & C Act, 1996 shall be guided by the said provisions, but should not limit its power if it appears to the Court that such interim measure of protection is necessary. This, in effect, permits the Court to exercise its inherent power to pass any such interim measure as it considers just and convenient. The expressions ‘securing the amount in dispute’ and ‘such other interim measure of protection as may appear to the Court to be just and convenient’ are important features of the said section, which confer wide and sweeping powers on the Court to pass interim measures even after an award is passed but before its enforcement”, it noted further.

Senior Advocate Bharucha Zarir Pesi appeared for the appellant and Advocate P.B. Subramanyan appeared for the respondent.

In the matter, the appellants had approached the Court apprehending difficulty in realising the awarded sum, particularly in light of the respondent’s earlier attempt to initiate insolvency proceedings.

A Single-Judge Bench had earlier granted limited relief by restraining the respondent from alienating assets or withdrawing funds, but declined to direct deposit of the awarded amount or disclosure of assets. Challenging this, the appellants argued that mere injunctive protection was insufficient where there existed a real risk of asset dissipation.

Importantly, the Court clarified that proof of actual asset disposal is not necessary; a strong possibility of diminution of assets is sufficient to justify interim protection.

“In the instant case, award has already been passed and presently, the execution petition is pending. The order of the NCLT dismissing the petition for voluntary winding up by order dated 17 July 2025, making adverse observations against the respondent, is a relevant consideration to find out whether an interim measure of protection by directing the respondent to secure the amount in dispute in the arbitration is necessary, apart from filing a detailed affidavit of assets. A strong possibility of diminution of assets in this regard would suffice. However, before an order is made for securing the amount, it has to be seen whether the respondent has sufficient assets to meet and satisfy the awarded sum in the event the enforcement of the award is held in favour of the appellants. The learned Single Judge has overlooked this aspect of the matter and has merely restricted the relief to an order of injunction...”, the Bench noted.

Accordingly, it directed the respondent and its directors to file a comprehensive affidavit disclosing all movable and immovable assets, along with valuation reports and audited financial statements for the past three years.

The Court further held that if, upon such disclosure, the assets are found insufficient to satisfy the award, the appellants would be at liberty to seek further directions, including securing the awarded amount.

Cause Title: E D & F Man Liquid Products Italia Srl & Ors. v. Emil Traders Private Limited [Neutral Citation: 2026:KER:21531]

Appearances:

Appellant: Bharucha Zarir Pesi (Senior), Pranoy K. Kottaram, Sivaraman P.L & Sreenand Udayan, Advocates.

Respondent: P.B. Subramanyan, Advocate.

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