Section 9 Arbitration Act shall be applicable to Foreign Arbitration unless expressly excluded by Parties in Arbitration Agreement.

In the matter of Medima LLC v. Balasore Alloys Limited in AP/267/2021 decided by the Calcutta High Court on 03.08.2021.

BACKGROUND OF THE CASE: The petitioner had been awarded an amount of price USD 30,35,249.87 (equivalent to INR 22,08,75,133/-) in its favour. The award had been passed by the International Chamber of Commerce (ICC) in proceedings governed by the British law with the bench of arbitration in London, United Kingdom. Accordingly, the petitioner filed the instant application under Section 9 of the Arbitration and Conciliation Act seeking protective orders to secure the dues payable by the respondent. However, the respondent opposed the maintainability of the plea on the ground that the applicability of Section 9 was excluded since the parties were governed by British law and since the arbitration took place before the International Chamber.

Another submission made by the respondent was that Section 9 of the Act does not allow the grant of any form of interim relief after the arbitral award has already been made in a foreign arbitration.

Reliance was also placed by the respondent on Clause 23 of the agreement (dealing with the governing law i.e., British law) to contend that it would exclude the application of Section 9 of the Act or any Indian law. Further, it was also submitted that parties can only approach courts in England or the ICC to take any legal recourse

HELD:

The Hon’ble Justice Moushumi Bhattacharya observed that an ‘agreement to the contrary’ as mentioned under Section 2(2) of the Act must be express and not implied. Unless an arbitration agreement expressly excludes the application of Section 9 of the Act, the provision would apply to foreign seated arbitration as well.

Opining further on the meaning of ‘agreement to the contrary’ under Section 2(2) of the Act, the court stated, “the contracting parties must evince and articulate an intention not to subject the arbitration agreement to the application of section 9 of the Act”.

In regards to the argument of the respondent that Section 9 of the Act would not apply once the arbitral award has already been rendered in an international arbitration, the Court observed that Section 2(2) of the Act contains the phrase ‘an arbitral award made or to be made‘ and coupled with the proviso to Section 9 it is evident that Section 9 of the Act would be applicable even after an award has been rendered.

Hence, the Court held that the instant application under Section 9 of the Act is maintainable and that the petitioner is entitled to seek interim measures against the respondent award debtor.