Delhi High Court Protects Gurugram Properties After Arbitration Defeat, Rules Unsuccessful Claimants May Obtain Post Award Injunctions in Rare and Compelling Circumstances Pending Challenges
Delhi High Court Restrains Sale of Two Gurugram Properties Pending Arbitration Challenge, Finds Prima Facie Arbitrator’s Sham Loan Finding Unsupported by Evidence at Interim Stage
Facts
Thor Ventures (OPC) Pvt. Ltd. and NYEQ Technologies Pvt. Ltd. executed two agreements to sell on 4 May 2019 for Gurugram properties A-2/1 and B-7/4, each priced at ₹5,62,24,000. Thor advanced ₹5 lakh for each plot and relied on loan sanction letters from Pooja Finelease Ltd. (PFL), an RBI-registered NBFC, for the balance. NYEQ refunded the advances in February 2021; Thor initiated arbitration and obtained interim restraints on alienation. By separate awards dated 26 September 2026, the arbitrator upheld the agreements’ validity but refused specific performance and permanent injunction, holding the loan letters sham and financial readiness unproved; costs of ₹15 lakh were awarded to NYEQ. Thor challenged the awards under Section 34 and sought protective orders under Section 9.
Issues
Whether an unsuccessful claimant may obtain a post-award injunction under Section 9 of the Arbitration and Conciliation Act, 1996 while challenging the award under Section 34; whether the finding that PFL’s loan sanction letters were sham was prima facie unsupported by evidence; and whether alienation of the two plots would cause irreversible prejudice warranting interim preservation.
Petitioner’s Arguments
Thor argued that the arbitrator improperly rejected the PFL loan letters despite evidence from its authorised witness establishing NBFC registration, financial resources and willingness to disburse upon registration of the sale deeds. The respondent had not effectively impeached the documents. Thor submitted that the two properties were NYEQ’s only assets, its claim sought specific performance rather than alternative damages, and sale of the plots would frustrate its Section 34 challenge. Relying on Home Care Retail Marts and the amended Specific Relief Act, it asserted rare and compelling circumstances justifying continued protection.
Respondent’s Arguments
NYEQ emphasised that Thor paid less than one per cent of the price of each property and had failed to produce independent financial records demonstrating readiness and willingness. The arbitrator’s rejection of the loan letters, it argued, rested on evidence and was not open to reappraisal under Sections 9 or 34. NYEQ maintained that an unsuccessful party faces a heightened threshold for post-award relief and that a pending challenge, without exceptional circumstances, cannot justify freezing assets. It relied on Ritu Saxena and decisions restricting judicial interference with arbitral fact-finding.
Analysis of the Law
Section 9 permits interim measures even after an award and before its enforcement, including at the instance of a losing party, but the prima facie case, balance of convenience and irreparable-harm tests operate with greater rigour post-award. A Section 9 court cannot finally decide the Section 34 challenge or freely reassess evidence. Findings unsupported by any evidence may nevertheless raise a prima facie issue of patent illegality. Following the 2018 amendments to Sections 10 and 14 of the Specific Relief Act, specific performance is the general statutory remedy subject to prescribed exceptions; the availability of damages is not itself a bar.
Precedent Analysis
Home Care Retail Marts Pvt. Ltd. v. Haresh N. Sanghavi (2026 INSC 415) permits protection for an unsuccessful party in rare, compelling cases to prevent irreversible prejudice and preserve an award challenge. Ssangyong Engineering v. NHAI and Delhi Airport Metro Express v. DMRC distinguish impermissible reappraisal from a conclusion based on no evidence. B. Santoshamma and Global Music Junction explain the post-2018 shift towards specific performance. The Court distinguished Ritu Saxena on the particular loan evidence: here a PFL witness expressly affirmed its willingness to finance both transactions.
Court’s Reasoning
The Court considered PFL’s RBI registration, the witness’s assertion of substantial financial resources and willingness to disburse, and the absence of any direct suggestion to that witness that the sanction letters were fabricated or sham. It found, prima facie only, that the arbitrator’s categorical “sham document” conclusion appeared unsupported by evidence. The uncontroverted assertion that NYEQ had no assets beyond these plots, the specific-performance-only claim and the previous five-year restraint created a rare and compelling risk that alienation would render Section 34 proceedings ineffective. The balance of convenience and irreversible prejudice therefore favoured temporary preservation, without deciding the ultimate validity of the awards.
Conclusion
The Delhi High Court granted interim protection: NYEQ was restrained from selling, alienating, encumbering or creating third-party rights in either Gurugram property until the next hearing. It allowed NYEQ three weeks to reply and Thor two weeks thereafter to file a rejoinder, listing the matters for 2 December 2026 alongside the Section 34 petitions. The ruling is provisional, not an order granting specific performance or setting aside the arbitral awards; the merits of the awards remain open for determination.
Case: Thor Ventures (OPC) Private Limited v. NYEQ Technologies Private Limited
Court: High Court of Delhi at New Delhi
Case Number: O.M.P.(I) (COMM.) 461/2026 and 462/2026; CNR DLHC010476932026 and DLHC010477292026
Judge: Justice Tushar Rao Gedela
Date: 28 October 2026 (reserved 15 October 2026)
Result: Interim post-award restraint granted until next listing on 2 December 2026; Section 34 merits undecided.
