DATE OF JUDGMENT:
3rd August 2021
JUDGE:
Justice Moushumi Bhattacharya
PARTIES:
Medima LLC (Petitioner)
Balasore Alloys Limited (Respondent)
SUBJECT
The question raised before the court was whether the ‘Governing Law’ clause contained in the agreement, for referring the disputes between the petitioner and the respondent to arbitration before the ICC, excludes the operation of Section 9 of the Arbitration and Conciliation Act, 1996.
OVERVIEW
- Medima (Petitioner)had received an award amounting to USD 30,35,249.87 in its favour.
- It was passed by the International Chamber of Commerce (ICC) proceedings, governed by British law with the seat of arbitration in London.
- The petitioner, under Section 9 of the Arbitration and Conciliation Act, 1996, filed an application seeking protective orders to secure the dues payable by the respondent (Balasore).
RESPONDENT’S SUBMISSIONS
- The respondent challenged it on the ground, that the applicability of Section 9 was excluded since English law governed the parties.
- Moreover, that the arbitration took place before the ICC.
- The respondent also relied on Clause 23 of the agreement that stated that it would exclude the application of Section 9 or any Indian law.
- In addition, parties can only approach courts in England or the ICC to take any legal recourse.
- Further, Section 9 does not allow the grant of any form of interim relief after the arbitral award has already been made in foreign arbitration.
LEGAL PROVISIONS
- Section 9 of the Arbitration and Conciliation Act, 1996- Interim measures, etc. by Court.
- Section 2(2) of the Arbitration and Conciliation Act, 1996- This part shall apply where the place of arbitration is in India.
JUDGMENT ANALYSIS
- Justice Bhattacharya noted that Section 9 would also apply to international commercial arbitration unless there is an agreement to the contrary.
- The Court observed that under Section 2(2) of the Act, the application of Section 9 must be express and not implied.
- Unless an agreement expressly excludes its application, the provision would apply to foreign-seated arbitration as well.
- The argument, that the omission of the word 'express' in Section 2(2) would entail that the application of Section 9 can be excluded from international arbitration proceedings, was rejected.
- The Court also rejected the argument of the respondent that Section 9 would not apply once the arbitral award has been rendered in international arbitration.
- The Court stated that Section 2(2) contains the phrase 'an arbitral award made or to be made'.
- Therefore, Section 9 would be applicable even after an award has been rendered.
- The Court concludes that the instant application under Section 9 of the Arbitration and Conciliation Act, 1996, is maintainable.
- The petitioner is entitled to seek interim measures against the respondent.
- Further, the matter is to be, heard next on August 11.
CONCLUSION
The Supreme Court inPASL Wind Solutions v GE Power held that foreign-seated awards in arbitrations between Indian companies are valid and enforceable in India. In addition, Indian parties to a foreign-seated arbitration can apply for interim measures under the Arbitration and Conciliation Act, 1996.
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