The Delhi High Court has held that the protective jurisdiction under Section 9 of the Arbitration and Conciliation Act, 1996 cannot be invoked to revive or resurrect a commercial agreement that has stood automatically terminated by its own terms. The Court clarified that while Section 9 is intended to preserve the subject matter of arbitration, it requires a subsisting and enforceable right, which ceases to exist once a self-operative termination clause is triggered by the non-fulfillment of Conditions Precedent (CPs).

The Bench noted that in commercial contracts, such as Share Purchase Agreements (SPAs), time-bound fulfillment of CPs is fundamental, and courts cannot remodel these negotiated bargains under the guise of interim protection. Further noted that granting an injunction in the face of an automatic termination would amount to granting final relief in the form of an interim measure, which is impermissible when the underlying contract has already ceased to subsist.

Justice Anil Kshetarpal and Justice Amit Mahajan in an appeal filed under Section 37(1)(b) of the Act, observed, “Where, upon a prima facie examination of the contractual framework and the material placed on record, the Court arrives at the conclusion that the underlying Agreement has ceased to subsist, the jurisdiction under Section 9 cannot be invoked to grant interim relief so as to resurrect or revive a terminated contract. Grant of interim protection in such circumstances would amount to granting final relief in the guise of an interim measure and would run contrary to the settled principles governing Section 9”.

Senior Advocate Rajshekhar Rao appeared for the appellant and Senior Advocate Jayant Mehta appeared for the respondents.

The appellant, JLT Energy 9 SAS, entered into two interlinked SPAs with Hindustan Cleanenergy Limited to acquire solar power projects. A critical CP required the respondents to convert project land to non-agricultural (NA) use by the Closing Long Stop Date (CLSD). When the NA conversion was not fulfilled by the extended deadline of May 31, 2025, the respondents treated the agreements as automatically terminated under Clause 5.6.

The appellant initially secured an Emergency Award from the Singapore International Arbitration Centre (SIAC) providing a prohibitory injunction. Seeking to enforce this relief, the appellant filed a Section 9 petition before a Single Judge Bench of the Delhi High Court, which was dismissed on the grounds that the terminated SPAs left no ground for specific performance. The appellant subsequently preferred this appeal.

The Court noted that Clause 5.6 was unambiguous and self-operative; upon the non-occurrence of the CP, the contract died a natural death by operation of its own terms. It rejected the appellant's contention that termination was void due to the respondents' alleged lack of best efforts, noting that the contract did not predicate termination upon an attribution of fault.

“…this Court finds no perversity, illegality, or jurisdictional infirmity in the Impugned Order. The SPAs stood automatically terminated upon non-fulfillment of the CP within the CLSD, and the Appellant has failed to establish any subsisting right warranting protection by way of an interim injunction”, the Bench noted.

Furthermore, the Court clarified that an Emergency Award under SIAC Rules does not bind Indian courts, which must independently apply Indian substantive law to assess interim relief under Section 9 of the Act.

“In these circumstances, the Emergency Award/Order, founded on a lower and provisional standard and rendered without the benefit of the complete evidentiary record available before the Court in the Section 9 proceedings, could not govern or dictate the outcome of the Appellant’s case. The learned Single Judge rightly proceeded on a fuller record, applied the correct statutory and equitable principles, and declined interim relief”, the Bench held.

The Court upheld the Single Judge’s order and dismissed the appeal, finding it devoid of merit as no consideration had been paid and the transaction failed to close within agreed timelines. It clarified that its observations are confined to the interim proceedings and shall not influence the final determination of disputes by the arbitral tribunal.

Cause Title: JLT Energy 9 SAS v. Hindustan Cleanenergy Limited & Ors. (Neutral Citation: 2026:DHC:3034-DB)

Appearances:

Appellant: Rajshekhar Rao, Sr. Adv., V.P. Singh, Meherunissa Anand, Asif Ahmed, Shailja Rawal, Suneel Kumar and Khushi Mittal, Advocates.

Respondents: Jayant Mehta, Sr. Adv., Atul Shanker Mathur, Prabal Mehrotra, Shubhankar and Pallav Arora, Advocates.

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