The Calcutta High Court, in a recent ruling, emphasized that Section 9 of the Arbitration and Conciliation Act should not be narrowly interpreted to apply solely to foreign arbitration proceedings before or during arbitration. The Division Bench, consisting of Justices Harish Tandon and Prasenjit Biswas, held that Section 9 remains applicable even after the issuance of an award.
The Bench highlighted that restricting the scope of Section 9 would render the amendment made to Section 2 of the Act, relating to international commercial arbitration, redundant. The Court stated that the provision’s language, specifically the phrase “before it is enforced under Section 36,” should be construed harmoniously in light of the objective behind incorporating the proviso to Section 2(2) of the Act, without imposing unnecessary restrictions.
The Court further emphasized that the amendment’s purpose was commendable, and a restrictive interpretation would undermine its intended effect. It noted that the proviso to Section 2(2) does not impose limitations on its applicability, except in cases where the exclusion is based on an agreement between the parties.
The case before the Court involved a question regarding the applicability of Section 9 to a foreign award before any steps are taken to enforce it, pursuant to Section 2(2) of the Act. The appellants, who were subject to an award by the International Court of Arbitration, contended that their agreement, which invoked British governing law, excluded the power of Indian courts to grant interim relief under Section 9.
A single-judge of the High Court had previously held that an application for interim protection under Section 9 was maintainable for a London-seated arbitration. However, the appellants argued that foreign awards are not automatically enforceable in Indian courts, highlighting a distinction between domestic and foreign awards under the legislative intent.
In its ruling, the High Court relied on the Supreme Court’s decision in the case of PASL Wind Solutions Pvt Ltd v. GE Power Conversion India Pvt Ltd, which rejected the argument that Section 9 has no applicability to foreign awards. Consequently, the appeal was dismissed, and the single-judge’s order was upheld.
The appellant was represented by Senior Advocate Dhruba Ghosh and Advocates Rishad Medora and Meghajit Mukherjee, while the respondents were represented by Senior Advocate SN Mookherjee and Advocates Shounak Mitra, Nandini Khaitan, Shreya Singh, and Vishal Sinha.
