Implied duties in a joint venture can justify interim restraint on rival business pending arbitration.

In a subsisting joint venture, Section 9 interim relief may restrain a partner from distributing a rival product pending arbitration where the dispute and need for urgent protection are established. The Court applied ordinary injunction principles and accepted that competing distribution could undermine the common venture. It also held that, even without an express negative covenant, joint venture and partnership relationships carry implied duties of good faith, fidelity, and pursuit of common advantage. Read with the contractual framework and the partnership law obligations, those duties supported restraint against rival business and confirmed protection in aid of arbitration.

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Issues: (i) Whether, in proceedings under Section 9 of the Arbitration and Conciliation Act, 1996, interim protection could be granted to restrain a joint venture partner from distributing a rival product pending arbitration. (ii) Whether the absence of an express negative covenant in the joint venture and related agreements permitted a partner to carry on competing business notwithstanding the duties flowing from the partnership and joint venture relationship.

Issue (i): Whether, in proceedings under Section 9 of the Arbitration and Conciliation Act, 1996, interim protection could be granted to restrain a joint venture partner from distributing a rival product pending arbitration.

Analysis: The existence of an arbitration agreement and a live dispute was sufficient to invoke Section 9 for urgent protection. The Court treated the application as one for interim relief ancillary to arbitration and applied the ordinary principles governing injunctions, including prima facie case, balance of convenience, and equity. It found that the respondent's distribution of a competing anti-rabies vaccine, while the joint venture continued to manufacture and market the agreed product, created a case for interim protection.

Conclusion: Interim injunctive relief was justified and maintained in favour of the petitioner pending constitution of the arbitral tribunal and for a further period thereafter.

Issue (ii): Whether the absence of an express negative covenant in the joint venture and related agreements permitted a partner to carry on competing business notwithstanding the duties flowing from the partnership and joint venture relationship.

Analysis: The agreements and the partnership framework were read as a whole and in light of the commercial object of the venture. The Court held that the obligations of partners in a joint venture are not confined to express restraints; they also include duties of good faith, fidelity, and carrying on the venture to its greatest common advantage. Sections 9 and 11 of the Indian Partnership Act, 1932, together with the contractual arrangement and the prohibition on restraint of trade under Section 27 of the Indian Contract Act, 1872, did not justify permitting a partner to engage in rival business in the absence of consent. The Court rejected the contention that lack of an express negative covenant meant freedom to compete.

Conclusion: The respondent was not entitled to carry on rival business merely because the agreements did not contain an express negative covenant, and the restraint granted against distribution of the competing product was upheld.

Final Conclusion: The petition succeeded and interim protection against distribution of the rival product was confirmed in aid of arbitration, reflecting the Court's view that a continuing joint venture partner owes an implied obligation not to undermine the common venture by competing in the same field.

Ratio Decidendi: In a subsisting joint venture or partnership, a court may grant interim relief to restrain a partner from carrying on rival business in aid of arbitration even without an express negative covenant, because the relationship itself imports duties of good faith, fidelity, and common advantage.

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