Section 9 security relief requires Order XXXVIII Rule 5 safeguards before directing deposit of invoked bank guarantee amounts.

Section 9 interim relief under the Arbitration and Conciliation Act, 1996, cannot be used to compel deposit of amounts covered by already-invoked bank guarantees unless the safeguards of Order XXXVIII Rule 5 CPC are met. The note states that such security-style relief requires cogent prima facie material showing an intention to defeat the eventual award by disposing of property or otherwise. As the guarantees had already been invoked and payment had already been made, the prerequisites for pre-award attachment or deposit were not satisfied, and the commercial court's deposit direction was unsustainable. Relief was therefore granted against the security order, subject to an undertaking during the arbitral process.

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Issues: Whether an order under Section 9 of the Arbitration and Conciliation Act, 1996 directing deposit of amounts covered by already-invoked bank guarantees could be sustained in the absence of the conditions contemplated by Order XXXVIII Rule 5 of the Code of Civil Procedure, 1908.

Analysis: Relief under Section 9 is an interim measure intended to secure the subject matter of arbitration. Such relief, when sought in the nature of attachment or security before judgment, requires satisfaction of the safeguards embodied in Order XXXVIII Rule 5 of the Code of Civil Procedure, 1908, including specific material showing a prima facie attempt to defeat the eventual decree or award by disposing of property or otherwise. Here, the bank guarantees had already been invoked and the bank had already made payment before the impugned order, and the record did not satisfy the stringent prerequisites for directing deposit of the amounts. In these circumstances, the commercial court could not have compelled deposit merely to secure the disputed claim.

Conclusion: The direction to deposit the amount of the performance bank guarantees was unsustainable and was set aside.

Final Conclusion: The appellant obtained relief against the security order, while an undertaking was directed to be furnished to protect the interests of the parties during the arbitral process.

Ratio Decidendi: A security order under Section 9 of the Arbitration and Conciliation Act, 1996, in the nature of pre-award attachment or deposit, cannot be made unless the stringent conditions for attachment before judgment are satisfied and there is cogent prima facie material showing an intention to defeat the award.

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