Interim moratorium exclusion permits asset disclosure and preservation measures against personal guarantors pending arbitration under amended insolvency regime.

Section 96(4) of the Insolvency and Bankruptcy Code is described as excluding pending insolvency-resolution applications against personal guarantors to corporate debtors from the Section 96 interim moratorium from its effective date. The note characterises this application as retroactive rather than retrospective because it operates on an existing continuing status without impairing vested rights, and states that the applicant's identity is immaterial. It further explains that, once the moratorium ceases, Section 9 of the Arbitration and Conciliation Act may support limited interim measures requiring asset disclosure and restraining dissipation, where arbitration agreements and indebtedness are undisputed, pending arbitration.

---

---

Issues: (i) Whether Section 96(4) of the Insolvency and Bankruptcy Code, 2016 applies to pending insolvency-resolution applications against personal guarantors and removes the interim moratorium under Section 96(1); (ii) Whether limited protective relief for disclosure and preservation of guarantors' assets should be granted under Section 9 of the Arbitration and Conciliation Act, 1996 pending arbitration.

Issue (i): Whether Section 96(4) of the Insolvency and Bankruptcy Code, 2016 applies to pending insolvency-resolution applications against personal guarantors and removes the interim moratorium under Section 96(1).

Analysis: Section 96(4), effective from 26 May 2026, excludes applications concerning personal guarantors to corporate debtors from Section 96. The expression "where an application is filed" encompasses applications already filed and pending on the effective date. Its application to an ongoing proceeding is retroactive, not retrospective, because it operates prospectively upon an existing and continuing status without impairing vested rights. The identity of the person who initiated the insolvency application is immaterial under the amended provision.

Conclusion: The interim moratorium in respect of the personal guarantors ceased from 26 May 2026; the Section 9 petition was not barred. This issue is in favour of the Petitioner.

Issue (ii): Whether limited protective relief for disclosure and preservation of guarantors' assets should be granted under Section 9 of the Arbitration and Conciliation Act, 1996 pending arbitration.

Analysis: The arbitration agreements and indebtedness were undisputed. The relief sought was confined to asset disclosure and restraint against dissipation, rather than any direction for deposit. Such limited measures were equitable and appropriate pending arbitration, particularly after cessation of the moratorium.

Conclusion: The guarantors must disclose their assets and are restrained from dealing with the disclosed assets pending arbitration. This issue is in favour of the Petitioner.

Final Conclusion: The amended insolvency regime permits recourse to interim arbitral protection against personal guarantors whose insolvency applications remain pending, and limited asset-preservation measures may be granted pending commencement and conduct of arbitration.

Ratio Decidendi: A statutory exclusion introduced prospectively may apply to pending proceedings founded on an existing status without being retrospective; accordingly, Section 96(4) removes the automatic interim moratorium for pending insolvency applications against personal guarantors to corporate debtors.

---