In Arkawelle Infra Private Limited v. Carbon Minus Energy Pvt. Ltd. & Ors., the Bombay High Court considered whether the public nature of an infrastructure project restricts the Court’s jurisdiction to grant interim measures under Section 9 of the Arbitration and Conciliation Act, 1996. The dispute arose from a large-scale solar power project undertaken pursuant to a tender issued by MSEDCL. Carbon Minus Energy, the successful bidder, subsequently issued a Letter of Award to Arkawelle Infra for EPC works and one year of operation and maintenance for a cumulative 505 MW solar project valued at approximately ?1,616 crore. The parties thereafter entered into an Agreement of Association contemplating, among other matters, a proposed 30% equity participation linked to contractual milestones. Arkawelle alleged that Carbon failed to hand over the demarcated project land and subsequently terminated the contractual arrangement, while portions of the EPC work were allegedly allocated to third parties. Arkawelle therefore approached the High Court under Section 9 seeking interim protection pending arbitration. The Court rejected the argument that the public infrastructure character of the project, by itself, deprived the High Court of jurisdiction under Section 9. It held that the Court must balance the need to prevent disruption to an important public project with the need to preserve the contractual and commercial rights of the parties until the arbitral tribunal adjudicates the dispute. The Court treated the Letter of Award and Agreement of Association as components of the same commercial arrangement and declined to conclusively determine disputed questions concerning land handover, termination, equity participation, and allocation of EPC obligations at the interim stage. It observed that such issues required detailed evidence and were therefore more appropriately left to the arbitral tribunal. At the same time, because the disputed contractual rights formed the subject matter of the contemplated arbitration, limited interim protection was considered necessary to prevent the arbitration from being rendered ineffective. Accordingly, the High Court partly allowed the Section 9 petition and restrained Carbon Minus Energy from transferring the remaining obligations under the Letter of Award and Agreement of Association to third parties, while making existing transfers subject to the outcome of the arbitration. The respondents were directed to disclose the current status of the project within four weeks, and Arkawelle was directed to commence arbitration within the same period. However, the Court declined broader reliefs, including creation of a charge over the proposed equity, appointment of a receiver, and wider asset disclosure. The judgment reinforces that public infrastructure status does not create an exception to Section 9 jurisdiction; instead, it requires the Court to adopt a calibrated approach that protects the arbitral process without unnecessarily interfering with the progress of a public project.

Legal Issue

Whether the fact that the underlying dispute concerns a public infrastructure project restricts the High Court's jurisdiction to grant interim measures under Section 9 of the Arbitration and Conciliation Act, 1996, and whether interim protection can be granted to preserve the subject matter of arbitration despite the potential impact on the progress of the public project.

Brief Facts

MSEDCL had issued a tender for development of grid-connected solar projects, pursuant to which Carbon Minus Energy emerged as the successful bidder. Carbon subsequently issued Arkawelle Infra a Letter of Award for EPC works and one year of operation and maintenance for a cumulative 505 MW solar project, valued at approximately ?1,616 crore. 
The parties thereafter executed an Agreement of Association contemplating, inter alia, a proposed 30% equity participation linked to achievement of contractual milestones. Arkawelle alleged that Carbon failed to hand over the demarcated project land and subsequently terminated the contractual arrangement. It further alleged that portions of the EPC work were later allocated to third parties. Arkawelle approached the High Court under Section 9 seeking interim protection pending arbitration.

Court's Reasoning

The Court rejected the contention that the public infrastructure character of the project, by itself, deprived the Court of jurisdiction under Section 9. It held that the Court was required to balance two competing considerations: preventing disruption or delay to a public project and ensuring that the contractual and commercial rights of the parties were not defeated before the arbitral tribunal could adjudicate the disputes. The Court expressly observed that the public nature of the project does not take away Section 9 jurisdiction; rather, it informs the manner in which the Court should exercise that jurisdiction. 
The Court also treated the Letter of Award and Agreement of Association as parts of the same commercial arrangement and declined to determine disputed questions concerning land handover, termination, equity participation and allocation of EPC obligations at the interim stage. In particular, it held that a clause contemplating future transfer of shares could not, merely by its existence, establish that the shares had already transferred upon execution of the agreement. Such questions required detailed evidence and were therefore matters for the arbitral tribunal. However, since the disputed contractual rights and project obligations constituted the subject matter of the contemplated arbitration, limited interim protection was warranted to prevent the dispute from being rendered nugatory. 

Judgment

The Court partly allowed the Section 9 petition. It restrained Carbon Minus Energy from transferring the remaining obligations under the Letter of Award and Agreement of Association to third parties, while providing that transfers already effected would remain subject to the outcome of arbitration. The respondents were directed to disclose the current status of the project within four weeks, and Arkawelle was directed to commence arbitration within the same period. The Court declined the wider reliefs sought, including creation of a charge over the proposed equity, appointment of a receiver and broader asset disclosure. 

Legal Significance
 

The decision reinforces that public infrastructure status does not create an exception to Section 9 jurisdiction. The Court must instead adopt a calibrated approach: protecting the integrity of the arbitral process and the parties' contractual rights while avoiding unnecessary interference with the progress of a public project. The order also illustrates that at the Section 9 stage, courts should preserve the subject matter and efficacy of arbitration without conclusively determining disputed contractual rights, particularly where those questions require evidentiary adjudication by the arbitral tribunal. 

Link to Official Judgement here

Case Title

Arkawelle Infra Private Limited v. Carbon Minus Energy Pvt. Ltd. & Ors.

Case Number

Commercial Arbitration Petition (L) No. 294 of 2026

Citation

2026 LLBiz HC(BOM) 431

Court

Bombay High Court

Bench

Justice Amit Borkar