Interim protection over hypothecated machinery in arbitration led to a custody handover direction to secure the claimant's interest.

In proceedings under Section 9 of the Arbitration and Conciliation Act, 1996, the Madras HC considered interim protection over hypothecated machinery pending arbitration. The Court noted the respondent's readiness to hand over certain machinery and the appellant's claim to protect its secured interest, and it acted without entering into the merits of the underlying dispute. Taking the practical circumstances into account, it directed delivery of custody of the machinery identified in the connected appeals to the appellant's authorised representative within the time fixed, to preserve substantial justice and the subject matter of the arbitration.

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Issues: Whether, in proceedings under Section 9 of the Arbitration and Conciliation Act, 1996, the respondent should be directed to hand over the custody of the hypothecated machinery to the appellant.

Analysis: The appeal concerned interim protection in aid of arbitration in respect of hypothecated machinery. The Court noted the rival stands, including the respondent's readiness to hand over certain machinery and the appellant's claim for protection of its secured interest. Without entering into the merits of the dispute, the Court considered the practical circumstances and the need to secure substantial justice. On that basis, it directed delivery of custody of the machinery identified in the connected appeals to the appellant's authorised representative within the time fixed.

Conclusion: The direction for handing over custody of the machinery was issued in favour of the appellant.

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