Court Directs Victore Ships Pvt. Ltd. to Secure USD 269,105.08 in Foreign Award Case
In a landmark decision, the Bombay High Court has affirmed its jurisdiction under Section 9 of the Arbitration and Conciliation Act, 1996, to grant interim protective measures on foreign arbitral awards, even when a petition for recognition and enforcement under Part II of the Act has been initiated. The ruling came in the case of Osterreichischer Lloyd Seereederei (Cyprus) Ltd. versus Victore Ships Pvt. Ltd., where the petitioner sought interim protection measures pending the enforcement of a foreign arbitral award amounting to USD 269,105.08.
Justice Somasekhar Sundaresan presided over the case and dismissed the respondent's contention that Section 9 jurisdiction should cease once a petition under Part II is filed. The court clarified that Section 9 explicitly applies to foreign awards until they are recognized as decrees under Section 49 of the Act. The court further directed Victore Ships Pvt. Ltd. to deposit the awarded amount in its Indian Rupee equivalent and prohibited the sale or encumbrance of assets until compliance.
The petitioner, represented by advocate Mr. Prathamesh N. Kamat, argued for the continuation of Section 9 jurisdiction to secure the interests of the award-creditor. The respondent, represented by Mr. Vishal Kanade, contended that the filing of a petition under Part II should preclude the application of Section 9, citing potential conflicts.
The court's decision emphasized the legislative intent of Section 9 to protect award-creditors, ensuring that foreign awards do not become mere paper awards pending recognition as decrees. The judgment also highlighted the distinction between domestic and foreign awards, where domestic awards automatically become decrees upon expiry of the challenge period under Section 34, while foreign awards require a court's positive affirmation under Section 49.
This ruling is significant for international arbitration in India, as it reinforces the availability of interim reliefs to safeguard the interests of foreign award-creditors while awaiting formal recognition and enforcement of their awards.
Bottom Line:
Arbitration and Conciliation Act, 1996 - Section 9 - Jurisdiction of Section 9 Court to grant interim protection measures in respect of foreign arbitral awards is not barred merely because a petition for recognition and enforcement under Part II of the Act has been filed. Section 9 applies to foreign awards until they are recognized as decrees under Section 49 of the Act.
Statutory provision(s): Arbitration and Conciliation Act, 1996 - Sections 9, 36, 47, 48, 49
