JLT Energy 9SAS v. Hindustan Cleanenergy Limited
Introduction
The judgment in JLT Energy 9SAS v. Hindustan Cleanenergy Limited & Ors. was delivered by the Hon’ble High Court of Delhi (“Court”) in an appeal filed under Section 37(1)(b) of the Arbitration and Conciliation Act, 1996 (“Act”). The appeal was preferred by JLT Energy 9SAS (“Appellant”) against Hindustan Cleanenergy Limited (“Respondent No. 1”) and Peridot Power Ventures Pvt. Ltd. (“Respondent No. 2”), assailing the judgment dated 06 January 2026 passed by the learned Single Judge of the Court in a petition under Section 9 of the Act (“Impugned Judgment”). Vide the impugned judgment, the learned Single Judge declined interim protection on the ground that the underlying Share Purchase Agreements (“SPAs”) had stood automatically terminated upon non-fulfilment of the Conditions Precedent (“CPs”) within the stipulated timeline.
Brief Facts
The dispute arose out of two SPAs dated 31 December 2024 executed between the Appellant and the Respondents for the acquisition of certain ground-mounted solar power projects situated in the States of Tamil Nadu and Bihar. Respondent No. 1 & 2 collectively owned 100% shareholding in Respondent Nos. 3 and 4, being the companies which owned and operated the solar power projects situated in Tamil Nadu and Bihar respectively and agreed to transfer such shareholding to the Appellant as part of the transaction. The SPAs formed part of a composite and interlinked arrangement, where the closing of the Tamil Nadu SPA constituted a CP for the closing of the Bihar SPA, making the completion of the former essential for the completion of the overall transaction.
Under Clause 5 read with Schedule VII of the SPAs, the parties were required to fulfil certain CPs and Pre-Closing Actions (“PCAs”) prior to the Closing Long Stop Date (“CLSD”), which was initially fixed as 30 April 2025 and was thereafter extended once to 31 May 2025. Clause 11 of Part A of Schedule VII formed the basis of the dispute, as it required conversion of the project land from agricultural to non-agricultural use, referred to as the NA Conversion Condition. The SPAs further provided under Clause 5.6 that failure to fulfil the CPs and PCAs within the CLSD would result in automatic termination of the agreements, without any further act or communication between the parties.
During this period, the parties exchanged communications regarding fulfilment of the CPs and PCAs, and a draft amendment was circulated proposing extension of the CLSD to 30 June 2025 and conversion of the NA Conversion Condition from a CP into a Condition Subsequent (“CS”). However, the draft amendment remained unsigned and was not executed in accordance with the contractual requirements. The NA Conversion Condition remained unfulfilled as on the CLSD, which led to disputes between the parties regarding the subsistence of the SPAs.
The Appellant invoked arbitration on 07 August 2025 under the rules of the Singapore International Arbitration Centre (“SIAC”) by filing an Emergency Relief Application before SIAC which ultimately culminated into the order dated 27 August 2025 followed by an Emergency Award dated 28 August 2025, which granted a prohibitory injunction restraining the Respondents from creating any third-party rights or interests in the assets or securities of Respondent Nos. 3 and 4 except in accordance with the SPAs or with the Appellant’s consent. Upon constitution of the Arbitral Tribunal on 18 December 2025, the interim protection was continued.
The Appellant thereafter approached the Hon’ble High Court of Delhi under Section 9 of the Act seeking continuation of the interim protection. Vide judgment dated 06 January 2026, the learned Single Judge dismissed the petition, holding that the amendment seeking conversion of NA Conversion Condition into a CS and extension of the CLSD was not executed and therefore not binding. Further, the CLSD could not be extended through email communications and that the NA Conversion Condition continued as a CP, the non-fulfilment of which resulted in automatic termination under Clause 5.6. It was also observed that grant of specific performance would involve implications for governmental authorities and that no prima facie case for interim relief was made out.
Aggrieved by the dismissal of the petition, the Appellant preferred an appeal under Section 37(1)(b) of the Act before the Hon’ble High Court of Delhi.
Submissions on behalf of the Appellant
The Appellant submitted that the learned Single Judge erred in conclusively determining issues that properly fall within the domain of the arbitral tribunal and by holding that the SPAs stood terminated and were incapable of specific performance, effectively adjudicated the core disputes at an interim stage thereby rendering the arbitral proceedings infructuous.
The Appellant further submitted that the SPAs continued to subsist and had not automatically terminated, while placing reliance on the judgment of this Court in Upma Khanna v. Tarun Sawhney1Upma Khanna v. Tarun Sawhney , 2012 SCC OnLine Del 2716 and that the Respondents, having failed to take best efforts to fulfil the conditions precedent particularly the NA Conversion Condition could not be permitted to take advantage of their own default.
Further, the SPAs were not inherently determinable within the meaning of Section 14(d) of the Specific Relief Act, 1963, as held by the Hon’ble Supreme Court in K.S. Manjunath v. Moorasavirappa2K.S. Manjunath v. Moorasavirappa, 2025 SCC OnLine SC 2378 and that the grant of specific performance would not amount to compelling any statutory authority to grant approval, as clarified by the Hon’ble Supreme Court in Solitaire BTN Private Limited v. The Executive Officer, Gram Panchayat & Ors.
Referring to the conduct of the parties, the Appellant submitted that the NA Conversion Condition, though originally a condition precedent was treated as a condition subsequent which aspect was overlooked by the learned Single Judge, who also incorrectly construed Clause 17.5 as mandating a formal amendment in all circumstances and erroneously held Clause 5.8.3 to be inapplicable for extension of the CLSD without assigning any reasons.
Lastly, the learned Single Judge failed to consider the findings contained in the Emergency Award and that the material on record demonstrated a deliberate delay on part of the Respondents in completing the NA Conversion process with a view to triggering the automatic termination of the SPAs.
Submissions on behalf of the Respondents
The Respondents opposed the appeal by emphasising the limited scope of interference under Section 37 of the Act and contended that no interference was warranted merely because another view was possible. The discretion exercised by the learned Single Judge did not suffer from any perversity or illegality. The SPAs were expressly conditional upon fulfilment of the CPs within the CLSD and stood automatically terminated under Clause 5.6 of SPAs upon failure to do so.
The Respondents contended that the Appellant’s case was founded on unsubstantiated allegations of breach, which had been rightly rejected in the Impugned Judgment. It was stated that no material had been placed on record to establish any breach on part of the Respondents. The Respondents further supported the finding that the Executive Officer of the Gangavarpatti Town Panchayat was the competent authority for the purpose of NA conversion and submitted that the steps taken in this regard were in accordance with the applicable legal process.
The Respondents disputed the allegations of dishonest conduct in pursuing the Tehsildar certificate and contended that such allegations were untenable. Reliance was placed on the correspondence exchanged between the parties, including emails dated 29 January 2025 and 30 January 2025, which were stated to reflect adversely on the Appellant rather than the Respondents. In this background, it was contended that the learned Single Judge had correctly declined interim relief and that no case for interference was made out.
Analysis
The Court began by reiterating the limited scope of interference under Section 37 of the Act and observed that an appellate court does not reappreciate facts or substitute its own view merely because another interpretation is possible. Interference is warranted only where the exercise of discretion is shown to be arbitrary, perverse or contrary to settled principles. The courts while exercising appellate jurisdiction under section 37 of the Act, must refrain from substituting its own view where the reasoning adopted by the court of first instance is a plausible one. In this context, the Court also relied upon the decision of Hon’ble Supreme Court in Somdatt Builders NCC NEC (JV) v. NHAI3Somdatt Builders-NCC-NEC (JV) v. NHAI, (2025) 6 SCC 757, which held that courts while exercising appellate jurisdiction under section 37 of the Act must refrain from re-interpreting contractual terms where a plausible view has been taken by the court of first instance. Further, in the context of commercial contracts the Court emphasised the need for restraint and noted that contractual allocation of risk and obligations must be respected as they form the bedrock of arbitration jurisprudence.
The Court examined the nature of the transaction and observed that the SPAs formed part of a composite and interlinked arrangement, where the closing of the Tamil Nadu SPA constituted a CP for the Bihar SPA. The SPAs were designed as parts of a single transaction and were not intended to operate independently. In such circumstances, the Court held that the courts must give effect to the commercial structure agreed between the parties and refrain from altering it while exercising jurisdiction under the Act.
Further, it was observed that the NA Conversion Condition was expressly treated as a CP and was required to be fulfilled within the CLSD, which stood extended only once till 31 May 2025. The contention that the CP was converted into a CS or that the CLSD was extended through correspondence was rejected. Clause 17.5 and Clause 17.10 of the SPAs require any amendment or modification to be in writing and executed by all parties and such provisions reflects a deliberate commercial choice to exclude informal or implied variations. Since the draft amendment remained unsigned, the email exchanges did not constitute a concluded agreement in terms of the SPAs. The Court rejected the reliance placed on Clause 5.8.3 of SPAs for extension of the CLSD or conversion of the CP and held that the said clause cannot be read in isolation so as to override the mandatory requirements of Clause 17.5 of the SPAs and that the SPAs must be construed as a whole without rendering any provision otiose.
While rejecting the Appellant’s case on modification, the Court held that the NA Conversion Condition continued as a CP and remained unfulfilled within the stipulated timeline. In view of Clause 5.6 of the SPAs, such non-fulfilment resulted in automatic termination of the SPAs by operation of contract. The Court emphasised that the termination clause was self-operative and did not depend on attribution of fault. It was clarified that Clause 5.6 does not predicate termination on breach or default and any attempt to introduce a fault-based requirement would amount to rewriting of the agreed contractual terms. The Appellant’s allegations of delay, lack of best efforts and dishonest conduct were found to be unsubstantiated and not supported by the material on record. The Court noted that the SPAs did not cast any exclusive or absolute obligation upon the Respondents to secure NA conversion nor prescribe any defined standard of best efforts and that such vague assertions cannot displace the contractual scheme. The process of NA conversion dependent on statutory authorities and external factors and could not be attributed solely to the Respondents.
The Court also observed that the structure of the SPAs and the nature of the transaction indicated that time was of the essence and the parties had consciously agreed to a time-bound framework with clear consequences for non-fulfilment. In this regard, the Court distinguished agreements relating to immovable property and observed that the present transaction concerned transfer of shares in commercial entities where certainty and timelines assume greater significance. Once the SPAs had stood terminated no subsisting contractual right existed which could be protected under Section 9 of the Act and grant of interim relief in such circumstances would amount to reviving a terminated contract. The jurisdiction under Section 9 of the Act is protective in nature and cannot be invoked to resurrect or revive a contract that has ceased to subsist. The contention that refusal of interim relief rendered the arbitration infructuous was rejected, with the Court clarifying that the arbitral tribunal remained competent to adjudicate the disputes and that the observations made were only prima facie.
On the issue of enforceability, the Court upheld the view that grant of specific performance would involve obligations contingent upon statutory approvals which were not within the control of the parties. Emergency Award being a product of the parties’ agreement under the SIAC Rules is not binding on the Court while exercising jurisdiction under Section 9 of the Act and such an award is rendered on a limited and provisional standard based on a reasonably arguable case and cannot displace the independent assessment required to be undertaken by the Court under Indian law. In this regard reliance was placed on the judgment of Hon’ble Supreme Court in Nand Kishore Lalbhai Mehta v. New Era Fabrics4Nand Kishore Lalbhai Mehta v. New Era Fabrics (2015) 9 SCC 755, wherein it was held that where the performance of a contract is subject to grant of permission by a statutory authority and such permission is not obtained the contract cannot be specifically enforced and the purchasers remedy.
Lastly, the Court examined the requirements for grant of interim relief and held that the Appellant had failed to establish a prima facie case, that the balance of convenience did not lie in its favour and no irreparable injury was demonstrated. The SPAs contemplate monetary consequences upon termination and any alleged loss suffered by the Appellant is capable of being adequately compensated as damages. Reliance was placed on Colgate Palmolive Ltd. v. Hindustan Lever Ltd5Colgate Palmolive Ltd. v. Hindustan Lever Ltd (1997) 7 SCC 1, wherein the Hon’ble Supreme Court held that interlocutory injunctions are not to be granted merely on assertions of apprehended injury, but only where the cumulative requirements of prima facie case, balance of convenience and irreparable harm are satisfied. The interim relief sought would impose disproportionate commercial burdens on the Respondents by continuing restraints over high-value assets despite the transaction not having closed and no consideration having been paid. The Court noted that the relief sought would effectively confer the benefits of the transaction upon the Appellant without performance of its reciprocal obligations, which was impermissible. In this background, the Court found no infirmity in the Impugned Judgment and declined to interfere.
Conclusion
The judgment reaffirms the limited scope of appellate interference under Section 37 of the Act and underscores the principle that courts must exercise restraint in interfering with discretionary orders particularly in matters arising out of commercial contracts. The Court emphasised that contractual terms especially those relating to conditions precedent and timelines must be strictly enforced in accordance with the agreed commercial framework.
The decision also clarifies that automatic termination clauses operate independently of fault and cannot be diluted by introducing equitable considerations at the interim stage. Further, it reinforces that the jurisdiction under Section 9 of the Act is protective in nature and cannot be invoked to revive a contract that has ceased to subsist.
Importantly, the judgment highlights that interim relief cannot be granted where the underlying contract has terminated and that arbitral proceedings do not become infructuous merely because interim protection is declined. The arbitral tribunal continues to retain full jurisdiction to adjudicate disputes on merits.
This Case Brief is authored by Himesh Thakur, Associate Partner and Syed Moosa, Associate.
