Interim protection in arbitration may secure the claim by deposit or bank guarantee without rigid CPC attachment standards.

Section 9 of the Arbitration and Conciliation Act permits wide interim protection, including securing the claim by deposit or bank guarantee, and the Court need not apply Order XXXVIII Rule 5 of the CPC in a rigid manner. The relevant considerations remain a strong prima facie case, balance of convenience, and the need to prevent frustration of the arbitral process. On the facts, the refundable security deposits had been paid, and the Court found no reason to treat the interim protection ordered by the High Court as unjustified despite arguments based on internal arrangements, lack of free assets, or encumbrances. The securing direction was upheld.

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Issues: Whether, in proceedings under Section 9 of the Arbitration and Conciliation Act, 1996, the Court could direct deposit of the refundable security amounts or insist on bank guarantees to secure the arbitral claim, and whether the principles of Order XXXVIII Rule 5 of the Code of Civil Procedure, 1908 had to be applied in a rigid manner.

Analysis: Section 9 confers a wide power to grant interim measures of protection, including securing the amount in dispute. The power is not confined by the strict technical requirements of Order XXXVIII Rule 5 of the Code of Civil Procedure, 1908, though the underlying principles of procedural fairness remain relevant. The guiding considerations are the existence of a strong prima facie case, balance of convenience, and the need to prevent frustration of the arbitral process. The refundable security deposits were admittedly paid, and the attempts to divert or appropriate them through internal group arrangements did not persuade the Court that the interim protection granted by the High Court was unjustified. The Court also accepted that the absence of free assets or the existence of encumbrances did not bar an equitable order securing the claim in arbitration.

Conclusion: The direction securing the respondent's claim by requiring deposit or bank guarantee was upheld and the appellants' challenge failed.

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