Urgency vs. Drama: Rethinking Section 9 in Commercial Disputes

Many parties arrive at arbitration with fire in their bellies, and urgency on paper. And one of the most commonly misunderstood tools in that scenario is the Section 9 application under the Arbitration and Conciliation Act, 1996.

But here’s the truth most arbitration lawyers know (and fewer clients accept): not everything that feels urgent actually is. And filing Section 9 applications prematurely, or with the wrong tone, can backfire, both legally and strategically.

Let’s unpack this.

What Section 9 Really Offers, and When

Section 9 allows a party to approach a court (even before the arbitration begins) to seek interim measures. This may include:

1. Preservation of subject matter (e.g., an immovable asset or disputed shares)

2. Prevention of third-party transfer of a contract or license

3. Injunction against termination or breach of terms

4. Restraint against coercive recovery actions

5. Asset freezing or securing of amounts claimed

But courts today ask two critical questions before granting relief:

• Is this genuinely urgent, or a pressure tactic?

• Will the relief become infructuous if arbitration begins later?

If the answer is no to either, you’re likely to walk away with costs imposed, and goodwill lost.

Case-in-Point: Co-founder Exit Drama or a Real Urgency?

In one founder dispute (early-stage SaaS company), the exiting co-founder moved court under Section 9 seeking:

• Restraint on the company from onboarding any new co-founder

• Preservation of their equity share

• A freeze on decision-making rights at the board level

The petition painted a picture of exclusion, concealment, and coercive dilution.

But in reality?

• The founder hadn’t responded to internal emails in weeks

• They had already sent a resignation WhatsApp to key investors

• The board was merely acting on resolution timelines

The Court dismissed the Section 9 application with costs, observing that it was not “urgent” but rather “preemptively adversarial.”

What the founder needed wasn’t court protection: it was an arbitration notice framed with clarity, not panic.

Where the Misuse Hurts

1. Breaks Negotiation Momentum

Section 9 filings tend to escalate the tone. Founders who could’ve walked away with a clean negotiation now spend months in recovery PR.

2. Reduces Credibility at Final Hearing

When interim applications are filed too casually, the eventual arbitrator (or judge) may view all your future pleadings with a degree of scepticism.

3. Delays Relief

Ironically, going straight to court can take longer than starting arbitration and seeking emergency measures through an emergency arbitrator.

When Section 9 Does Work

To be clear, Section 9 is a powerful tool, when used right.

A few successful use cases:

• Freezing sale of a property by a joint venture partner during a dispute over termination

• Protecting a client’s IP from being sold post-termination in a services contract

• Blocking invocation of bank guarantees where breach was prima facie evident

In these cases, the courts saw proportionality, clear contractual rights, and urgency grounded in evidence and not ego.

The Arbitrator’s Angle: Trust Matters

Most arbitrators and commercial courts are not looking to referee tempers. They are guardians of the contract and the process.

If you arrive with a Section 9 request that says, “He hurt my feelings,” you’ll be sent back to arbitration with a stern look.

But if your request says, “This relief will prevent irreversible harm,” and you have evidence: you’re much more likely to succeed.

How I Advise Clients to Frame Urgency

When clients come to me saying, “We need to file something now,” I ask:

1. What will actually happen if we wait 10 more days?

2. What rights are at risk of permanent injury?

3. What evidence supports that risk?

4. Will this move reduce or escalate long-term resolution costs?

Many times, what follows is a shift in thinking: from reactive lawyering to strategic intervention.

Section 9 is not a panic button.

It’s a scalpel. Use it to prevent real harm, not express outrage.

Founders, legal departments, and in-house teams must align their litigation posture with commercial priorities. Interim measures are valuable but only when they protect something worth the courtroom’s time.

And in most cases? Arbitration done well avoids these dramas in the first place.