Interim protection for unsecured project loans may require borrowers to create the contractually mandated Debt Service Reserve.

Interim protection under Section 9 may secure a lender's outstanding loan where agreed project mortgage security remains uncreated and the borrower has not maintained the Debt Service Reserve. Although mortgage creation under the amended agreement depended on a no-objection certificate, the borrower's separate obligation to establish and maintain the reserve continued. The absence of a constituted arbitral tribunal and pending insolvency proceedings did not prevent interim relief. The uncreated mortgage supported a prima facie case, with balance of convenience and prejudice favouring protective measures, including creation of the Debt Service Reserve on the lender's requirement.

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Issues: Whether interim protection under Section 9 was warranted for securing the lender's outstanding loan where the agreed mortgage had not been created and the borrower had not created the Debt Service Reserve.

Analysis: The loan remained unsecured to the extent that the agreed mortgage over the financed project had not been created. Although creation and perfection of mortgage under the amended agreement was linked to receipt of a no-objection certificate, the borrower remained independently obliged to create and maintain the Debt Service Reserve under the loan agreement. The arbitral tribunal had not been constituted, and pending insolvency proceedings did not bar the application for interim protection. The absence of mortgage established a prima facie case; the balance of convenience and risk of prejudice also supported protective relief.

Conclusion: Interim protection was warranted in favour of the appellant; the respondent was directed to create the Debt Service Reserve upon the appellant's requirement within the stipulated period.

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