Court Declines to Accept Russian Judgment as Conclusive Evidence Due to Doubts over Jurisdiction and Ongoing Arbitration
In a significant ruling, the Bombay High Court has dismissed an interim application filed by a Limited Liability Company seeking an injunction against Tecnimont S.P.A. The plaintiff sought to restrain the defendant from transferring assets out of India, citing a Russian court judgment as conclusive evidence of debt. The case centers around a complex commercial dispute involving contracts related to the construction of a fertilizer complex in Russia, with the plaintiff alleging unjust enrichment and damages amounting to over Rs. 19.5 thousand crores.
Justice Gauri Godse, presiding over the case, emphasized the need for a thorough examination of the jurisdictional competence of the Russian court, particularly in light of existing arbitration agreements between the parties and ongoing international arbitration proceedings. The court noted that the arbitration clause in the agreements explicitly excluded the jurisdiction of other courts, designating arbitration under ICC Rules with a seat in London.
The plaintiff had relied on Article 248.1 of the Russian Procedure Code, which grants jurisdiction to Russian courts under specific circumstances, such as obstacles to accessing justice in foreign jurisdictions. However, the Bombay High Court found that the applicability of this provision could not be determined at the pre-trial stage, especially given the plaintiff's active participation in the ongoing arbitration proceedings.
The court further observed that the plaintiff had suppressed material facts, including anti-suit injunctions issued by the English court, thereby disentitling them from any discretionary relief of injunction. The defendant's objections, based on the exceptions under Section 13 of the Code of Civil Procedure, 1908 (CPC), raised serious concerns about the breach of natural justice and the incorrect application of international law by the Russian court.
Highlighting the principle that parties are bound by their chosen forum for dispute resolution, Justice Godse concluded that the balance of convenience lay in favor of the defendant. The court emphasized that the mere apprehension of asset transfer was insufficient to grant an injunction without prima facie evidence supporting the plaintiff's claim.
In dismissing the interim application, the court reaffirmed the importance of adhering to arbitration agreements and the need for conclusive evidence before accepting foreign judgments in Indian courts.
Bottom line:-
Foreign Judgment - Conclusiveness under Section 13 of the CPC and presumption of competence under Section 14 of the CPC cannot be applied at a pre-trial stage when the jurisdiction of the foreign court is doubtful due to existing arbitration agreements between the parties and ongoing international arbitration proceedings.
Statutory provision(s): Section 13 of the CPC, Section 14 of the CPC, Article 248.1 of the Russian Procedure Code
Limited Liability Company, (Bombay) : Law Finder Doc id # 2918787
