Arbitration can take months, and a party that eventually wins may find that the other side has no assets left to pay. Indian law allows parties to seek protective orders during the arbitration to reduce this risk.
Under Section 17 of the Arbitration and Conciliation Act, 1996, the tribunal can order interim measures including securing the amount in dispute. The court has similar powers under Section 9, including before the tribunal is constituted and after the award but before enforcement.
Security for the amount in dispute is typically sought where there is evidence that the respondent is dissipating assets, transferring business to related entities, or is in financial distress. The applicant must generally show a strong prima facie case, a real risk of the award being frustrated, and that the balance of convenience favours protection.
Security for costs — requiring a claimant to provide security for the respondent's costs in case the claim fails — is less common in Indian practice but can be ordered by the tribunal in appropriate cases, for example where the claimant is a shell entity with no assets.
These applications need evidence, not assertion. Bank statements, company filings, evidence of asset transfers and correspondence showing financial distress make the difference between an application that succeeds and one that is dismissed as speculative.