You fought your case in arbitration. You lost. Now you’ve filed a challenge under Section 34 of the Arbitration and Conciliation Act, 1996, hoping to get the award set aside. But here’s the real worry keeping you up at night: what if the other side sells off the disputed property, drains the bank account, or disposes of the goods before your challenge is even heard?
Can you ask a court to freeze the situation while your challenge is pending, even though you’re the party that lost?
For over a decade, Indian courts have given conflicting answers to this question. In April 2026, the Supreme Court finally settled it. This post breaks down what the law says, how we got here, and what it means for you.
The Basic Framework: Sections 34, 36, and 9
Before getting into the debate, it helps to know the three types of provisions that govern this space under the Arbitration and Conciliation Act, 1996.
The challenge provision lets a party apply to set aside an arbitral award, on limited grounds like fraud, patent illegality, or conflict with public policy.
The enforcement provision deals with how an award is executed. Following a key amendment made in 2015, merely filing a challenge against the award does not automatically stop it from being enforced. The award-holder can go ahead and enforce the award unless the court specifically grants a stay on a separate application filed for that purpose. This was a significant shift from the earlier position, where courts had held that filing a challenge automatically rendered an award unenforceable until the challenge was decided.
The interim relief provision allows a party to approach a court for protective measures — like an injunction, appointment of a receiver, or securing an amount in dispute — at three points in time: before arbitration begins, during the arbitral proceedings, or after the award is made but before it is enforced.
That third window — post-award, pre-enforcement — is where all the action is.
The Old Debate: Can a Losing Party Even Ask?
The interim relief provision uses the words “a party.” On a plain reading, that should include everyone — winner and loser alike. But for years, several High Courts read it more narrowly, holding that post-award interim relief exists only to protect the “fruits of the award” — meaning it’s a tool for the award-holder to safeguard what they’ve already won, not a lifeline for the party that lost.
Other High Courts took the opposite view — holding that the provision draws no distinction between successful and unsuccessful parties, and that its language should simply be applied as written.
This meant that depending on which state your case was in, an unsuccessful party challenging an award might either get emergency protection to prevent asset dissipation — or be turned away entirely, left with no remedy if the winning side moved to liquidate assets or transfer property while the challenge was still pending.
The Supreme Court Steps In
This conflict reached the Supreme Court, and in a landmark 2026 ruling, the Court settled the question decisively.
What the Court held
The Court ruled that an unsuccessful party in arbitration can seek interim relief even at the post-award stage — while a challenge to the award is pending. Here’s the reasoning, in plain terms:
1. The statute doesn’t distinguish winners from losers. The Court held that the term “a party” cannot mean something different before an award than it does after one. Had lawmakers wanted to confine post-award relief only to award-holders, they would have said so in clear terms.
2. India deliberately went beyond the international model. Most arbitration laws around the world don’t provide for interim relief after an award is made. India’s Parliament consciously built in this extra post-award window, and did so without carving out any restriction on which category of party could use it. That deliberate choice, the Court said, shows lawmakers wanted broad protection — not a narrow one limited to winners.
3. The challenge and enforcement provisions don’t fill the gap. The Court pointed out that the challenge provision only lets you contest the award, and the enforcement provision only deals with staying its execution — neither actually protects the disputed property or funds while the challenge is pending. Without a standalone interim relief mechanism, a losing party watching the case play out would have absolutely nowhere to turn if assets were at risk of disappearing.
4. An award isn’t necessarily all-or-nothing anymore. The Court noted that its own recent jurisprudence recognises that courts can modify or partially set aside an award, rather than only accepting or rejecting it wholesale. Since outcomes aren’t binary, the Court reasoned, the “winner takes protection, loser gets nothing” logic doesn’t hold up either.
5. Correcting the restrictive line of reasoning. The Court held that the High Courts which had denied unsuccessful parties this remedy had not laid down the correct legal position, and affirmed the more inclusive approach taken by other High Courts instead.
But there’s a catch — a higher bar for losing parties
This isn’t a free pass. The Supreme Court was careful to add a safety valve: while an unsuccessful party can apply for interim relief, courts must approach such applications with far greater caution and scrutiny than they would an application from an award-holder. The relief is meant to protect the subject matter of the dispute or the amount in question — not to function as a backdoor stay on the award, and not to reopen or relitigate what the tribunal already decided.
In practice, this means a losing party seeking interim relief will need to clearly show a genuine risk — such as real danger of asset dissipation or irreversible harm — rather than simply wanting to delay the inevitable. Courts are expected to keep applying the established tests for interim relief, including prima facie case, balance of convenience, and irreparable harm.
What This Means If You’re Challenging an Award
If you’re the party that lost in arbitration and you’ve filed (or plan to file) a challenge, here’s the practical takeaway:
- You are not without options while your challenge is pending. You can approach the court for protective relief.
- Don’t expect this to work like an automatic stay. You’ll need to build a real case — showing why the subject matter or disputed amount is at genuine risk if the court doesn’t step in.
- Courts will scrutinise such applications more closely than they would if the award-holder was asking for the same relief. Vague apprehension won’t cut it.
- This remedy exists specifically to prevent a scenario where you eventually win your challenge, only to find there’s nothing left to recover because assets were moved or disposed of in the meantime.
For award-holders, the flip side is worth noting too: the other side now has a legitimate route to seek protective orders against you while your enforcement is paused or a stay application is pending — so it’s worth factoring this into how aggressively you deal with disputed assets during the challenge period.
FAQs
Yes. Following a recent Supreme Court ruling, an unsuccessful party can seek interim relief even after the award is made, while a challenge is pending.
No. Interim relief is separate from a stay of enforcement. Getting protective orders over the subject matter or disputed amount does not automatically pause enforcement of the award — that requires a specific stay application.
Typical reliefs include injunctions to prevent transfer or disposal of specific property, orders for preservation of goods, appointment of a receiver, or measures to secure the amount in dispute so it isn’t dissipated before the challenge is resolved.
Yes. The Supreme Court has made clear that while both parties can apply, an unsuccessful party’s application will face a higher threshold and stricter scrutiny, since the concern is preventing misuse of this remedy as a backdoor way to delay or effectively stay the award.
High Courts were divided. Some held that only the successful party (award-holder) could seek post-award interim relief, since it was meant to protect the “fruits of the award.” Others took the opposite view, holding that the relief applies to any party regardless of outcome.
For further reading and detailed analysis, refer to this resource.
