Challenging Comity

Introduction

The Hon’ble Delhi High Court in Engineering Projects (India) Limited through its Managing Director v. MSA Global LLC (Oman)[i] passed an anti-arbitration injunction order, against the defendants, citing vexatious and oppressive arbitration proceedings against the plaintiff. It was not any ordinary injunction order, rather, it was an anti-arbitration injunction order against a foreign-seated international commercial arbitration.

The Hon’ble Court cited various judgements of the Supreme Court as well as of courts of other foreign jurisdictions to substantiate its claim that indeed, an anti-arbitration injunction order can be passed by a court whose jurisdiction has been excluded by the parties in their arbitration agreement.

This article critically examines the Hon’ble High Court’s reasoning, arguing that its expansive interpretation of jurisdiction not only contravenes the legislative scheme of the Arbitration and Conciliation Act, 1996[ii], but also risks undermining established principles of comity and global arbitral norms.

Maintainability of the Suit vis-à-vis the Legislative Scheme of the Arbitration and Conciliation Act

While deciding in favour of the plaintiff, the Hon’ble Court held that the suit is maintainable under Section 9 of The Civil Procedure Code, 1908[iii], as under Section 9, the civil courts have the jurisdiction to try all civil suits, unless those are expressly or impliedly barred. When evaluated through the lens of The Arbitration and Conciliation Act, 1996[iv] (“the Act”), it would appear that generally, arbitrations would fall under those categories of proceedings, which are statutorily barred from being tried by ordinary civil courts keeping in mind the intent of the legislature and the purpose of the Act. A cursory reading of Section 5[v] of the Act solidifies this position. It states that “Notwithstanding anything contained in any other law for the time being in force in matters governed by this part, no judicial authority shall intervene except where so provided in this part.” The keywords in the above-stated section are “except where so provided in this part”.

Permissible Judicial Intervention

The Act itself makes room for some judicial intervention, but that intervention is limited to specific scenarios only, like the power to refer parties to arbitration when there is an arbitration agreement as per Section 8[vi] of the Act or Section 9[vii], which provides for interim measures by the court or the power of the Court under Section 11[viii] to appoint arbitrators or Section 27[ix] of the Act which provides for court assistance in taking evidence etc.

Demarcation within the Act between Part I and Part II

Section 2(2)[x] of the Act, expressly states that Part I of the Act shall apply where the place of arbitration is in India. Moreover, Section 2(7)[xi] of the Act states that an arbitral award made under this part (i.e. Part I) shall be considered as a domestic award. This makes it abundantly clear that Part I of the Act is supposed to be for domestic arbitrations and does not govern arbitrations seated outside India. Part II of the Act deals with “Enforcement of Certain Foreign Awards.” From the scheme of the Act and from the language of Sections 45[xii] and 46[xiii] of the Act, it can be deduced that the jurisdiction of a judicial authority only extends to referring the parties to arbitration and the enforcement of certain foreign awards. Beyond this, domestic civil courts do not possess any other power with reference to foreign-seated arbitration, and certainly not the power to issue an anti-arbitration injunction against a foreign-seated international commercial arbitration, wherein the parties have subjected themselves to the jurisdiction of a foreign state.

Principles of Minimal Judicial Interference, Party Autonomy and Comity of Courts

The statutory scheme of the Act also envisions minimal judicial interference and party autonomy. Therefore, it could be said that the issuance of an anti-arbitration injunction order against an foreign-seated international commercial arbitration goes against the very grain of the purpose and scheme of the Act. Domestic courts cannot usurp the power of foreign courts, which are duly exercising, their jurisdiction. Principle of comity of courts must be respected and adhered to. This position is also reinforced by the decision of the Supreme Court in the case of Indus Mobile Distribution Private Limited v. Datawind Innovations Private Limited & Ors.[xiv], wherein the Court held that once the seat of arbitration is fixed, it would be in nature of an exclusive jurisdiction clause as to the Courts which exercise supervisory powers over the arbitration…any claim for remedy is agreed to be made only in the courts of the place designated as the seat of arbitration (¶12-14). Although this case dealt with domestic arbitration, the principle of excluding jurisdiction of courts, which do not fall within the seat of arbitration, certainly applies. This disregard of the principle of comity can cause weakening of arbitrations in India and could potentially lead to reciprocal disregard for Indian awards abroad.

Misapplication of Judicial Precedents

The Hon’ble Court in the present case while trying to justify its jurisdiction under Section 9 of The Code of Civil Procedure, 1908[xv] relied on several cases such as Dhulabhai v State of Madhya Pradesh[xvi] and S. Vanathan Muthuraja v. Ramalingam @ Krishnamurthy Gurukkal & Ors.[xvii] In Dhulabhai, the Supreme Court was dealing with a maintainability issue pertaining to the Sales Tax statute which had overreaching repercussions on the Constitution as well, in particular Article 301 of the Constitution of India, since tax was already declared to be offending Article 301 of the Constitution. Therefore, it can be said that the ratio of the Supreme Court in Dhulabhai simply could not be transplanted as a precedent in the present case since Dhulabhai dealt with larger Constitutional issues. In S. Vanthan Muthuraja, the Court was dealing with tenancy laws, but the interesting part was that the Court in this case upheld the exclusion of civil courts jurisdiction and stated that “when Land Reform Act, extinguishes, pre-existing rights, creates new rights and provides jurisdiction of tribunals to enquire into rival claims and decide and also provides for appeal and finality of orders passed under the Act, held, by necessary implication, civil courts, jurisdiction excluded.”[¶3] This case law instead of supporting the proposition that civil courts have unfettered jurisdiction, disputes that same proposition and solidifies the position that the jurisdiction of civil courts can be excluded by special statutes.

Keeping in mind the arbitration agreement between the parties in the present case, it could be said that the parties intended to oust the jurisdiction of Indian courts since they chose Singapore as their seat of arbitration and rules of the International Chamber of Commerce to govern their arbitration proceedings. This clearly reflects the concept of party autonomy as is enshrined in the Act. Once the parties choose a foreign seat for their arbitration proceedings and internationally accepted rules to govern their arbitration, it could safely be deduced that the parties want to exclude the jurisdiction of the courts in India or rather they want to be governed by the jurisdiction of some other foreign court. The complete disregard of party autonomy by the Hon’ble Court in the present case not only reflects a willful violation of the arbitration agreement, but also a lack of deference to the sovereign jurisdiction of the Courts of the seat of arbitration.

The Hon’ble Court in the present case sought to rely on McDonald’s India Private Limited v. Vikram Bakshi[xviii] to state that arbitration proceedings could be injuncted in cases wherein the attending circumstances would render continuation of the arbitration proceeding, oppressive or unconscionable. But the court failed to address a key jurisdictional fact and to take into consideration the fact that the arbitration in the case of McDonald’s India Private Limited was not international commercial arbitration.

The Court also used the Oil and Natural Gas Commission (ONGC) v. Western Company of North America[xix] case to strengthen its position that arbitration proceedings can be stayed which take place in foreign seated arbitrations if the proceedings are vexatious and oppressive. But the factual matrix of the ONGC case differs from that of the present one. The ONGC case dealt with enforcement proceedings of an arbitral award by a foreign court as opposed to arbitration proceedings held in a foreign seated arbitration, same as the one in the present case. So, to implant the ratio of the ONGC judgement and use it as a crutch to balance the decision of the Court in the present case is not rooted in facts since the very scheme of the Act allows the judicial authority to refuse enforcement of foreign awards if it violates the conditions mentioned under Section 48[xx] of the Act.

The Hon’ble Court also relied on two judgements of English courts, viz. J. Jarvis & Sons Ltd. v. Blue Circle Datford Estates Ltd.[xxi], and Minister of Finance (Inc) and Malaysian Development Berhad v. International Petroleum Investment Coy[xxii] to concretely establish its position that indeed, courts can grant an anti-arbitration injunction. But the error that the Hon’ble Court made, was that both of these judgements dealt with arbitrations that were seated within the jurisdiction of England i.e. the parties willfully subjected themselves to the jurisdiction of the Courts of England by expressly stating it within their arbitration agreements. Now, this situation is not comparable to the present case where the parties willingly subjected themselves to the jurisdiction of a foreign state (i.e. Singapore) by specifically choosing foreign seated arbitration in their arbitration agreements. And when the parties have willfully subjected themselves to the jurisdiction of a foreign seat in a foreign seated arbitration, the principle of comity of courts is paramount and deference must be shown to the decisions of the Courts of appropriate jurisdiction.

Contrary to the Hon’ble Court’s reasoning in the present case there exist multiple judgements of foreign courts where the principle of comity of courts has been upheld, for e.g., the case of the Republic of India v. Deutsche Telekom AG[xxiii], involved enforcement proceedings in Singapore for an award seated in Switzerland. The Republic of India sought to re-litigate issues in Singapore that had already been decided by the Swiss Federal Tribunal (the seat court). The Court of Appeal unanimously held that a transnational issue estoppel applies when the seat court has determined issues related to the validity of an arbitral award. This prevents parties from re-litigating those points in enforcement proceedings in Singapore. The majority also provisionally opined that Singapore courts should accord primacy to the seat court’s decision, treating it as presumptively determinative of the award’s validity, reflecting comity towards the seat court’s supervisory role. The Court emphasized that the seat court has exclusive jurisdiction to set aside an award, and Singapore, as an enforcement court, should respect those findings unless exceptional circumstances (example public policy violations) arise.

U.K. courts consistently emphasize that only the courts at the seat have jurisdiction to set aside arbitral awards, reflecting comity towards the seat’s supervisory role. The Privy Council in the case of Cukurova Finance International Ltd v. Alfa Telecom Turkey Ltd.[xxiv] affirmed that the courts at the seat have exclusive jurisdiction to set aside or annul the award. It emphasized that comity requires other courts to respect the seat court’s supervisory role, and enforcement courts should not entertain challenges to the awards validity unless the New York Convention’s limited grounds (e.g. public policy) apply. The decision reinforces that the seat court jurisdiction is exclusive, and other courts should not assume that role, aligning with the principle of comity.

The US Second Circuit in the case of Baker Marine (Nig.) Ltd. v. Chevron (Nig.) Ltd.[xxv] refused to enforce the award, recognizing Nigerian Court’s annulment. The Court held that comity dictates deference to the seat court’s authority to set aside awards under Article V(1)(e) of the New York Convention. The decision reinforces that US courts respect the exclusive jurisdiction of the seat court, limiting their role to enforcement decisions and upholding comity.

Conclusion

In conclusion, the Hon’ble Delhi High Court’s decision in Engineering Projects (India) Limited v. MSA Global LLC[xxvi] to grant an anti-arbitration injunction against a foreign-seated international commercial arbitration seated in Singapore appears to overstep the boundaries established by the Act. By invoking Section 9 of the Code of Civil Procedure, 1908, to assert jurisdiction, the Court overlooked the Act’s clear delineation: Part I governs domestic arbitrations with limited judicial intervention under Section 5, while foreign-seated arbitrations fall outside this purview, emphasizing minimal interference, party autonomy, and the exclusive supervisory role of the seat court’s jurisdiction. The precedents relied upon, such as McDonald’s India Private Limited v. Vikram Bakshi[xxvii], Union of India v. Dabhol Power Company[xxviii], and ONGC v. Western Company of North America[xxix], are distinguishable as they pertain to domestic contexts, enforcement of awards, or ad-interim measures rather than indefinite stays of ongoing foreign proceedings. Similarly, the English cases cited involve arbitrations seated within their own jurisdictions, rendering them inapplicable here. This ruling not only disregards the parties’ explicit choice of a foreign seat and ICC rules, reflecting their intent to exclude Indian courts, but also contravenes the principle of comity, as evidenced by foreign judgments like Republic of India v. Deutsche Telekom AG[xxx], Cukurova Finance International Ltd v. Alfa Telecom Turkey Ltd[xxxi], and Baker Marine (Nig.) Ltd. v. Chevron (Nig.) Ltd[xxxii], which uphold deference to the seat court’s authority. Ultimately, such judicial overreach risks eroding India’s pro-arbitration stance, undermining international confidence in party autonomy, and inviting reciprocal disregard for Indian awards abroad, underscoring the need for stricter adherence to the Act’s scheme and global arbitral norms.

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[i] Engineering Projects (India) Limited v MSA Global LLC (Oman) [2025] DHC 6093.

[ii] The Arbitration and Conciliation Act 1996 (India).

[iii] The Code of Civil Procedure 1908, s 9 (India).

[iv] The Arbitration and Conciliation Act 1996 (India).

[v] The Arbitration and Conciliation Act 1996, s 5 (India).

[vi] The Arbitration and Conciliation Act 1996, s 8 (India).

[vii] The Arbitration and Conciliation Act 1996, s 9 (India).

[viii] The Arbitration and Conciliation Act 1996, s 11 (India).

[ix] The Arbitration and Conciliation Act 1996, s 27 (India).

[x] The Arbitration and Conciliation Act 1996, s 2(2) (India).

[xi] The Arbitration and Conciliation Act 1996, s 2(7) (India).

[xii] The Arbitration and Conciliation Act 1996, s 45 (India).

[xiii] The Arbitration and Conciliation Act 1996, s 46 (India).

[xiv] Indus Mobile Distribution Private Limited v Datawind Innovations Private Limited & Ors [2017] 4 SCR 744.

[xv] The Code of Civil Procedure 1908, s 9 (India).

[xvi] Dhulabhai v State of Madhya Pradesh 1968 SCC OnLine SC 40.

[xvii] S Vanathan Muthuraja v Ramalingam @ Krishnamurthy Gurukkal & Ors (1997) 6 SCC 143.

[xviii] McDonald’s India Private Limited v Vikram Bakshi 2016 SCC OnLine Del 3949.

[xix] Oil and Natural Gas Commission v Western Company of North America (1987) 1 SCC 496.

[xx] The Arbitration and Conciliation Act 1996, s 48 (India).

[xxi] J Jarvis & Sons Ltd v Blue Circle Datford Estates Ltd [2007] APPLR 05/14.

[xxii] Minister of Finance (Inc) and Malaysian Development Berhad v International Petroleum Investment Coy [2019] EWCA Civ 2080.

[xxiii] Republic of India v Deutsche Telekom AG [2023] SGCA(I) 10.

[xxiv] Cukurova Finance International Ltd v Alfa Telecom Turkey Ltd [2013] UKPC 2 (Privy Council, on appeal from Bermuda).

[xxv] Baker Marine (Nig) Ltd v Chevron (Nig) Ltd 191 F.3d 194 (2d Cir. 1999).

[xxvi] Engineering Projects (India) Limited v MSA Global LLC (Oman) [2025] DHC 6093.

[xxvii] McDonald’s India Private Limited v Vikram Bakshi 2016 SCC OnLine Del 3949.

[xxviii] Union of India v Dabhol Power Company 2004 SCC OnLine Del 1298.

[xxix] Oil and Natural Gas Commission v Western Company of North America (1987) 1 SCC 496.

[xxx] Republic of India v Deutsche Telekom AG [2023] SGCA(I) 10.

[xxxi] Cukurova Finance International Ltd v Alfa Telecom Turkey Ltd [2013] UKPC 2 (Privy Council, on appeal from Bermuda).

[xxxii] Baker Marine (Nig) Ltd v Chevron (Nig) Ltd 191 F.3d 194 (2d Cir. 1999).

Author(s)