Moratorium-like interim protection cannot bar a bank guarantee restraint petition that may benefit the respondent company.

Proceedings under Section 9 of the Arbitration and Conciliation Act were sought to be kept in abeyance on the basis of an interim appellate order said to resemble a moratorium. The Court held that, although the order had a protective effect similar to a moratorium under the Insolvency and Bankruptcy Code, it was intended to shield the respondent company and could not be read to bar proceedings that were beneficial to it. Because the petition concerned restraint on invocation of a bank guarantee, and not recovery against the respondent, indefinite adjournment would have worked against the respondent's interest. The request for sine die adjournment was rejected.

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Issues: Whether the proceedings under Section 9 of the Arbitration and Conciliation Act, 1996 ought to be adjourned sine die on the basis of the interim order passed by the Appellate Tribunal, treated as analogous to a moratorium.

Analysis: The application was founded on the plea that the interim directions restraining proceedings against the respondent and its group companies should result in suspension of the present petition. The Court held that the interim order, though similar in effect to a moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016, was intended to protect the respondent company and could not be read to bar proceedings that were beneficial to it. The present petition was for restraint against invocation of a bank guarantee and did not involve recovery against the respondent. The Court therefore found that indefinite adjournment would operate against the respondent's interest rather than protect it.

Conclusion: The request for sine die adjournment was rejected and the application was dismissed.

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