Calcutta HC: Section 9 Of Arbitration Act Will Apply To Foreign Arbitration Unless Expressly Excluded By Parties In Arbitration Agreement

Factual Background

• The name of the case was Medima LLC V. Balasore Alloys LTD.
• The petitioner received an award of USD 30,35,249.87 by an order of the ICC, with proceedings under the British law, with the seat of arbitration in London.
• A plea was filed before the Calcutta High Court raising the issue of exclusion of the operation of Section 9 of the Act in case of governing clause, giving jurisdiction to the International Chamber of Commerce.
• The application was filed under Section 9 of the Act for orders to secure dues payable by the respondent party.

Contentions Raised

• The respondent put forward the Clause 23 of the arbitration agreement that since the clause calls for governing the matter according to British law, the case can be contended before the ICC or the England Court and Section 9 would not come into action.
• Section 9 does not permit interim relief after the award has been granted and in this case, the ICC has awarded the arbitral award.

Court’s Observation

• Application of Section 9 of the Arbitration and Conciliation Act, 1996 would not be excluded if a foreign law is being chosen for governing the arbitration, unless the parties have decided to exclude the application in the arbitration agreement itself.
• The proviso to Section 2 (2) of the Act provides for the application of Section 9 of the Act, which applies to arbitration in India in general, but would also apply to international commercial arbitration, unless there’s an agreement against it.
• The agreement must be express and not implied under Section 2 (2) and an intention of both the parties for not subjecting the arbitration to the proceedings under Section should be articulated.
• The words of Section 2 (2), with regards to the award either made or to be made, read with Section 9, make it applicable, in case award has been passed already.
• The petitioner’s suit is maintainable and he can seek interim reliefs; the matter is set for hearing.

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