Applicant's Section 9 Arbitration Application Held Not Maintainable for Concealing Pre-Institution Mediation under Commercial Courts Act; Liberty Granted to Re-Approach Court after Withdrawal of Ongoing Proceedings
In a significant judgment delivered on September 28, 2026, the Madras High Court, presided over by Justice K. Kumaresh Babu, dismissed an application filed by Grand Blue Projects Pvt Ltd seeking an interim injunction against M/s. True Value Home India Pvt Ltd. The injunction sought to restrain the respondents from alienating or dealing with a specified property amid an arbitration dispute.
The Court's dismissal hinged on the applicant's failure to disclose material facts concerning the initiation of pre-institution mediation proceedings under Section 12A of the Commercial Courts Act, 2015 before the District Legal Services Authority, Chengalpattu. The applicant had simultaneously filed a Section 9 application under the Arbitration and Conciliation Act, 1996, seeking urgent interim relief without revealing the pendency of mediation efforts, which is a prerequisite under the Commercial Courts Act.
The respondents, through Senior Counsel Mr. Sathish Parasaran, contended that by invoking the mediation process under the Commercial Courts Act, the applicant had effectively waived the right to initiate arbitration proceedings unless those proceedings were first withdrawn. They argued that the applicant had approached the Court with "unclean hands" by suppressing the initiation of mediation, thus disentitling them from the discretionary relief under Section 9 of the Arbitration Act.
The applicant's counsel, Senior Counsel Mr. Abdul Hameed, explained that the omission was inadvertent and underscored the urgency of protecting the applicant's rights under a memorandum of understanding. He also expressed readiness to withdraw mediation proceedings to enable arbitration to proceed and to face any consequent Section 8 application to refer the dispute to arbitration.
The Court examined the chronology and evidentiary material, noting that the request for mediation was made on August 28, 2026, and mediation notices were issued on September 18, 2026, with hearings scheduled for September 22 and October 5, 2026. The Section 9 application was e-filed on September 21 and physically submitted on September 22, coinciding with the mediation hearing date - facts that were not disclosed in the affidavit supporting the Section 9 petition.
In its ruling, the Court held that the applicant's voluntary invocation of the Commercial Courts Act proceedings implied a relinquishment of the right to pursue arbitration unless those proceedings are withdrawn. It emphasized that an applicant cannot maintain arbitration proceedings under the Arbitration and Conciliation Act while simultaneously pursuing remedies under the Commercial Courts Act without concluding the latter first.
As a consequence, the Court dismissed the Section 9 application, finding it not maintainable and the applicant's conduct as suppression of material facts tantamount to coming with "unclean hands." However, the Court granted liberty to the applicant to withdraw the mediation proceedings pending before the Commercial Court and thereafter to approach the Court afresh under the Arbitration Act.
This judgment underscores the importance of transparency and adherence to procedural requirements in arbitration and commercial dispute resolution, reaffirming the rule that parties cannot pursue parallel proceedings under conflicting legal regimes without first resolving or withdrawing one.
Bottom Line:
Arbitration and Conciliation Act, 1996 Section 9 Interim injunction - Applicant having already invoked pre-institution mediation under Section 12A of Commercial Courts Act, 2015 and suppressed that fact in Section 9 proceedings - Held, applicant deemed to have given up right to initiate arbitral proceedings unless proceedings under Commercial Courts Act are withdrawn, Section 9 application dismissed with liberty to approach Court afresh after withdrawal of commercial court proceedings.
Statutory provision(s):
Arbitration and Conciliation Act, 1996 Section 9, Commercial Courts Act, 2015 Section 12A
