In Brief
Sanghi Industries invoked performance bank guarantees against Ravin Cables regarding three defective cable purchase orders and initiated arbitration. Ravin Cables applied under Section 9 of the Arbitration Act, 1996 seeking to secure the disputed amount by directing Sanghi to deposit the guaranteed sums. The Commercial Court and High Court granted this relief. The Supreme Court held that Section 9 interim relief requires strict compliance with Order XXXVIII Rule 5 of the CPC, including specific allegations and prima facie evidence of asset disposition risk. Since the guarantees were already invoked and paid before the court order, the deposit direction was unsustainable. The appeal was allowed on condition that Sanghi furnish a company-backed undertaking to honour any arbitral award subject to challenge.
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