INTRODUCTION:
The Bombay High Court in Oil and Natural Gas Corporation Limited v. Swiber Offshore Construction Pte Limited1, held that post-award interim protection under Section 9 of the Arbitration and Conciliation Act, 1996, though maintainable at the instance of an unsuccessful party, cannot be granted as a matter of routine. An adverse award raises the threshold to exceptional and compelling circumstances beyond the ordinary prima facie case, balance of convenience and irreparable injury test.
FACTS:
Oil and Natural Gas Corporation Limited (“ONGC”), a Maharatna Public Sector Undertaking, filed a petition under Section 9 of the Arbitration and Conciliation Act, 1996 seeking continuation and extension of a bank guarantee furnished by Swiber Offshore Construction Pte Limited (“Swiber”), pending ONGC’s challenge to an arbitral award dated 30th September, 2025 (“Award”).
ONGC and Swiber entered a contract dated 3rd July, 2010 (“Contract”) for offshore works in the Bombay High region, with completion due on 30th April, 2011. The Contract entitled ONGC to liquidated damages for delay, capped at 10% of Contract value, as a genuine pre-estimate of loss requiring no separate proof of actual loss; the Contract required Swiber to furnish a bank guarantee equivalent to the capped value. Swiber furnished a bank guarantee for USD 14,820,000 initially through ANZ Banking Group on 3rd October, 2011 and later replaced through DBS Bank on 3rd December, 2015 (“Bank Guarantee”).
Swiber sought, and ONGC granted, successive time extensions up to 30th June, 2011, 28th February, 2012, 30th April, 2012 and finally 31st May, 2012, with ONGC reserving its right to liquidated damages each time. The project was completed on 24th May, 2012 and a completion certificate issued on 18th February, 2013.
Disputes arose and, on 14th September, 2015, Swiber invoked the arbitration clause by issuing a Notice of Arbitration. ONGC invoked the Bank Guarantee, prompting Swiber to seek restraint under Section 9; those proceedings were disposed of on the basis of Consent Terms dated 5th September, 2016, recorded by the Court on 8th September, 2016 (“Consent Terms”).
On 6th October, 2016, the Singapore High Court placed Swiber under judicial management, and on 11th November, 2022, ordered it to be wound up with liquidators appointed. ONGC lodged claims of USD 156,346,000 before Swiber’s Judicial Manager, of which USD 51,224,353.74 was admitted by communication dated 12th August, 2022.
The tribunal rejected ONGC’s liquidated damages claim, directed return of the Bank Guarantee, and, after partly allowing certain claims and counterclaims, directed ONGC to pay Swiber a net USD 4,113,200 with interest at 5% per annum from the Award date.
ONGC challenged the award dated 30th September, 2025 before the Bombay High Court seeking partial setting aside of the Award, and filed an application under a Section 36(3) seeking stay. On 23rd January, 2026, both sides agreed that the Section 34 petition could proceed to final hearing, on Swiber’s assurance that no enforcement steps would be taken pending the challenge. With the Bank Guarantee due to expire on 15th June, 2026, ONGC filed the present Section 9 petition in May 2026 seeking continuation pending disposal of the Section 34 proceedings, and separately wrote to Swiber’s liquidators on 1st June, 2026 requesting extension.
ISSUE FOR CONSIDERATION:
Whether an unsuccessful party in arbitration can seek post-award interim protection under Section 9; seeking continuation of a bank guarantee after an award has rejected the applicant’s claim for liquidated damages; and whether existence of consent terms prescribing an outer limit for continuation of a bank guarantee is material to grant of such post-award relief.
SUBMISSIONS ON BEHALF OF THE PETITIONER:
ONGC submitted it had challenged the Award under Section 34, the findings refusing liquidated damages, directing return of the Bank Guarantee, and granting monetary relief to Swiber, and had sought stay under Section 36(3). With the Bank Guarantee nearing expiry, ONGC sought urgent interim protection directing Swiber to continue it till disposal of the Section 34 proceedings, or alternatively to furnish a fresh bank guarantee of equivalent value (USD 14,820,000), contending this was purely protective relief and that expiry, given Swiber’s liquidation, would cause serious prejudice.
ONGC submitted it had a strong prima facie case, contending the Award was contrary to the Contract’s express terms, reflected non-application of mind, and was contrary to public policy, since, although the Contract treated liquidated damages as a genuine pre-estimate requiring no proof of actual loss, the tribunal rejected the claim for want of such proof, effectively rewriting the Contract.
ONGC further submitted the tribunal’s findings on delay were inconsistent, having observed critical-path delay could not be conclusively fixed on either party, it nevertheless rejected liquidated damages altogether, and that the tribunal failed to appreciate evidence on other categories under which ONGC suffered losses. It also contended the Award’s delivery nearly two years after arguments concluded in August 2023 adversely affected appreciation of evidence, forming an additional ground of challenge.
ONGC submitted lapse of the Bank Guarantee would cause loss of security worth approximately USD 14 million, requiring it to stand alongside other creditors in Swiber’s liquidation with uncertain recovery, notwithstanding its admitted claims (USD 51,224,353.74) substantially exceeding the amount awarded to Swiber, ultimately risking loss to the public exchequer.
On urgency, ONGC submitted the Bank Guarantee was due to expire on 15th June, 2026, and that if not extended, amounts payable towards liquidated damages could become incapable of recovery. It relied on Home Care Retail Marts (P) Ltd. v. Haresh N. Sanghavi2 (an unsuccessful party can seek Section 9 interim measures) and ONGC v. Larsen & Toubro Ltd.3 (a successful party being directed to continue a bank guarantee pending challenge).
SUBMISSIONS ON BEHALF OF THE RESPONDENT:
Swiber contended ONGC had not disclosed the Consent Terms from the earlier Section 9 proceedings, which governed continuation of the Bank Guarantee by providing it would remain alive only for 120 days after the Award, a period that, the Award having been delivered on 30th September, 2025, expired on 28th January, 2026. ONGC could not, therefore, seek extension beyond the period consciously agreed.
Swiber submitted there was no genuine urgency: the Award was received on 9th October, 2025; ONGC filed the Petition under Section 34 on 5th January, 2026 and stay application (also seeking continuation of the Bank Guarantee) on 16th January, 2026; yet the present petition was filed only on 15th May, 2026 and served on 1st June, 2026, shortly before the Bank Guarantee’s expiry.
Swiber further contended ONGC had failed to establish a prima facie case, since the tribunal had categorically rejected any entitlement to liquidated damages and directed return of the Bank Guarantee, leaving no crystallised entitlement. The challenged findings, that delays were not solely attributable to Swiber and that ONGC’s losses were unproved, were findings of fact after detailed appreciation of evidence, and ONGC was, in substance, seeking impermissible re-appreciation outside the limited scope of Section 34.
JUDGMENT:
The Court noted the Contract dated 3rd July, 2010 involved substantial public money, with Clause 6.3.2 providing liquidated damages up to 10% of Contract value and Clause 6.3.4 providing for a bank guarantee as security. The Award, delivered on 30th September, 2025, rejected ONGC’s claim for liquidated damages, directed return of the Bank Guarantee, and awarded Swiber a net USD 4,113,200.
The Court held that a post-award Section 9 petition stands on a different footing. Relying on the judgment passed by the Apex Court in Home Care Retail Marts (P) Ltd. v. Haresh N. Sanghavi4, the Court observed that an unsuccessful party is not barred from invoking Section 9, but such power cannot be exercised routinely, where the applicant faces an adverse award, the threshold for interim protection is much higher, since the tribunal’s findings continue to operate unless set aside. A pending petition under Section 34 alone does not justify continuation of an interim arrangement; beyond prima facie case, balance of convenience and irreparable injury, exceptional circumstances must be shown to justify departure from the normal rule.
The Court noted ONGC’s submissions, the alleged inconsistency in the tribunal’s delay findings, and the substantial grounds raised in the challenge, but held that although not without merit, Swiber’s objections carried greater weight in the context of the present petition. It gave importance to the Consent Terms dated 5th September, 2016, recorded on 8th September, 2016, noting ONGC had not disclosed them here though it had relied on them in its application under Section 36(3), and that they were material since they directly concerned continuation of the Bank Guarantee. The Consent Terms provided the Bank Guarantee would remain alive only for 120 days after the Award, a period which, the Award having been delivered on 30th September, 2025, expired on 28th January, 2026, so the request for continuation till disposal of the Section 34 proceedings extended beyond what the parties had consciously agreed.
The Court observed Section 9 is intended to preserve existing securities pending adjudication, not to extend rights beyond agreed limits, requiring caution before directing continuation beyond an agreed period. Accordingly, the non-disclosure of the Consent Terms could not be treated as a minor omission: a party seeking discretionary reliefs under Section 9, must place all material facts before the Court, including facts unfavourable to its own case, and this omission assumed significance since it concerned continuation of the very Bank Guarantee whose duration the Consent Terms governed.
The Court held the real issue was not whether Swiber was in liquidation, but whether ONGC had a legally enforceable right to insist on continuation beyond the agreed period; apprehension regarding recoverability, however strengthened by liquidation, cannot by itself create a legal right or elevate the matter to a compelling case under Home Care Retail Marts (supra).
The Court observed that although ONGC’s challenge raised arguable issues, it was not sitting in appeal over the Award nor was it required under Section 9 to determine the correctness of the tribunal’s conclusions, reached after examining the rival evidence. Since these findings continued to operate until the Award is set aside, and ONGC sought continuation despite rejection of its claim for liquidated damages, such relief could be granted.
The Court also noted that, Swiber being Singapore-incorporated, the arbitration was an International Commercial Arbitration, and the narrow scope of judicial interference applicable to such awards was relevant to whether extensive post-award protection should be granted on merits-based submissions.
The Court distinguished ONGC v. Larsen & Toubro Ltd. (supra) on facts: there, the tribunal had accepted 35% of ONGC’s claim for liquidated damages (a crystallised entitlement) with no consent terms fixing an outer limit, whereas here the tribunal completely rejected the claim and directed return of the Bank Guarantee, with the Consent Terms prima facie fixing a 120-day outer limit.
Holding ONGC had failed to establish entitlement to exceptional interim protection, the Court dismissed the petition and rejected the prayer for continuation, renewal, extension or a fresh/substitute bank guarantee.
Footnotes
1 2026SCCOnLineBom1463
2 2026SCCOnLineSC 670
3 2026SCCOnLineBom2861
4 2026SCCOnLineSC670
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