Ashok Kumar Goel Vs Vyoman India Private Limited (Bombay High Court)
The Bombay High Court considered a petition seeking interim reliefs under Section 9 of the Arbitration and Conciliation Act, 1996, in the context of an international commercial arbitration governed by the SIAC Rules. After hearing the parties at length and examining the rival contentions and cited case law, the Court held that the petitioner had made out a clear case for grant of interim reliefs.
At the outset, the Court rejected the respondents’ preliminary objection that the Emergency Arbitrator (EA) Decision constituted an arbitral award enforceable only under Part II of the Arbitration Act. The Court held that the determination of whether a decision is an award depends on its substance and effect, not its nomenclature. What is material is whether the decision finally determines or disposes of the disputes between the parties. In the present case, it was not even the respondents’ contention that the EA Decision had finally resolved any part of the disputes pending in arbitration. Accordingly, the Court found that the EA Decision could not be treated as an arbitral award under Part II and was not enforceable as such.
The Court further observed that the SIAC Rules make a clear distinction between “awards” and “orders.” Relying on the Supreme Court’s observations in Amazon.com NV Investment Holdings LLC, the Court held that decisions of an Emergency Arbitrator and orders of the arbitral tribunal are orders and not awards, irrespective of how they are titled.
The respondents’ contention that Clause 20 of the Shareholders’ Agreement (SHA) excluded the applicability of Part I of the Arbitration Act, including Section 9, was also rejected. The Court noted that Clause 20 merely provided for arbitration under SIAC Rules in case of disputes but did not expressly exclude Part I of the Arbitration Act. The proviso to Section 2(2) specifically makes Section 9 applicable to international commercial arbitrations unless there is an agreement to the contrary. In the absence of an express written agreement excluding Part I, the respondents’ argument was held to be contrary to the proviso to Section 2(2) and untenable.
In support of this conclusion, the Court relied on its earlier decision in Ultra Deep Subsea Pvt. Ltd., which held that exclusion of Section 9 in foreign-seated arbitrations requires a clear, unequivocal, and unambiguous agreement between the parties. The Court found that no such intention was reflected in Clause 20 of the SHA. The Court also noted that similar contentions had been rejected in several judgments of the Supreme Court and various High Courts.
The Court held that the respondents’ reliance on the Supreme Court judgments in BGS SGS Soma and Imax Corporation was misplaced, as those decisions dealt with Section 34 of the Arbitration Act and did not consider the applicability of the proviso to Section 2(2). Likewise, the Delhi High Court’s decision in Ashwani Minda was found inapplicable, as it had expressly left open the issue of applicability of Part I to foreign-seated arbitrations.
While acknowledging that relief under Section 9 is discretionary, the Court emphasized that the provision is intended to support arbitration rather than defeat it. Party autonomy, being fundamental to arbitration, extends from the arbitration agreement through to the final award. Having agreed to arbitration under SIAC Rules, the parties were bound by the procedure prescribed therein, including the EA Decision. Importantly, the respondents did not raise any grievance regarding the fairness of the emergency arbitration proceedings or the merits of the EA Decision, opposing the petition solely on the ground of maintainability.
Upon examining the EA Decision, the Court found it to be well-reasoned and detailed, having been rendered after extensive hearings. As no challenge to its merits was raised, the Court saw no reason to disregard its findings. Relying on the Supreme Court’s ruling in Amazon.com NV Investment Holdings LLC, the Court reiterated that once parties agree to institutional rules and participate in emergency arbitration, they are bound by the Emergency Arbitrator’s ruling and must comply with it.
The Court further held that even independent of the EA Decision, the petitioners had established a strong case for interim relief due to the respondents’ obstructionist conduct. The Court noted that the first arbitral award and the cost award had attained finality and that the respondents’ obligation to purchase the petitioner’s shares at the enhanced call price was binding. The respondents had not opposed enforcement proceedings of these awards before the Delhi High Court. The Court also found untenable the respondents’ objections to valuation by PwC, which was expressly designated as an independent valuer under the SHA.
The respondents’ conduct after the EA Decision—including representations of intended compliance, claims of inability to furnish a bank guarantee due to asset attachment, attempts to substitute the bank guarantee with less secure alternatives, and applications to modify status quo orders—was found to reflect an attempt to delay or defeat enforcement. The Court held that such obstructionist conduct was a relevant factor while granting interim relief.
For these reasons, the Court concluded that the petitioners had made out a fit case for interim relief under Section 9 and granted reliefs in terms of the specified prayer clauses. The petition was disposed of, with the matter listed for compliance on a later date.
FULL TEXT OF THE JUDGMENT/ORDER OF BOMBAY HIGH COURT
