On April 28, the Calcutta High Court rendered a significant decision in the case of Balasore Alloys Limited v. Medima LLC. The court held that Section 9 of the Arbitration and Conciliation Act should not be limited to its application in foreign arbitrations solely before or during arbitral proceedings.
A Division Bench comprising Justices Harish Tandon and Prasenjit Biswas concluded that Section 9 remains applicable even after an award has been passed. The bench emphasized that restricting the provision's scope would render the amendment made to Section 2 of the Act concerning international commercial arbitration redundant.
The judgment stated, "There is no logic to the contention of the appellant that the language used in Section 9 has to be given a restrictive meaning that it would apply to a foreign award only in pre or during the arbitral proceeding. The expressions 'before it is enforced under Section 36' must be harmoniously construed, considering the objective of incorporating the proviso to Section 2(2) of the Act, and should not be given a restrictive meaning."
The court further observed that any restrictive interpretation would frustrate the laudable purpose behind the amendment's incorporation. The language employed in the amendment indicates that no restrictions are imposed on the applicability of the proviso to Section 2(2) of the Act, except when there is an agreement between the parties.
The case involved the question of whether Section 9 of the Act is applicable to a foreign award even before any steps are taken for its enforcement, as per Section 2(2) of the Act, which applies when the place of arbitration is in India. The appellants, against whom an award was passed by the International Court of Arbitration, argued that their agreement's clause regarding British governing law would exclude the power of Indian courts to grant interim relief under Section 9.
Initially, a single-judge of the High Court held that an application for interim protection under Section 9 of the Act in relation to the London-seated arbitration was maintainable.
The appellants contended that foreign awards are not automatically enforceable in Indian courts, except when the conditions for enforcement under the Act are fulfilled. They argued that the legislative intent differentiates between domestic awards and foreign awards.
However, the High Court relied on the Supreme Court's judgment in PASL Wind Solutions Pvt Ltd v. GE Power Conversion India Pvt Ltd, where the apex court rejected the argument that Section 9 has no applicability to a foreign award.
Consequently, the appeal was dismissed, and the single-judge's order was upheld.
Senior Advocate Dhruba Ghosh and Advocates Rishad Medora and Meghajit Mukherjee represented the appellant, while Senior Advocate SN Mookherjee and Advocates Shounak Mitra, Nandini Khaitan, Shreya Singh, and Vishal Sinha represented the respondents.
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TAGS: Calcutta High Court April 28 Section 9 Arbitration and Conciliation Act foreign arbitration Division Bench Justices Harish Tandon Prasenjit Biswas award Section 2 international commercial arbitration language restrictive meaning proviso object purpose amendment interpretation agreement interim measures enforcement plea British governing law Indian courts London-seated arbitration single-judge High Court's judgment PASL Wind Solutions Pvt Ltd v. GE Power Conversion India Pvt Ltd dismissal representation Senior Advocate Dhruba Ghosh Advocates Rishad Medora Meghajit Mukherjee Senior Advocate SN Mookherjee Advocates Shounak Mitra Nandini Khaitan Shreya Singh Vishal Sinha.
