The Indian law is silent with respect to anti arbitration injunctions. However, Indian Courts have relied on the Civil Procedure Code, 1908 and the Specific Relief Act, 1963 to injunct arbitration proceedings. The Supreme Court of India has laid down that anti arbitration injunction can be granted only where the arbitration agreement is null and void, or inoperative, or incapable of being performed. However, in such cases the court must satisfy itself that the case meets the three-pronged test for granting injunctions i.e., (i) prima facie case for granting the relief; (ii) grave and irreparable loss in absence of the relief claimed, and (iii) balance of convenience in favor of the party seeking the order.
Arbitrability as a Ground for Granting Anti-Arbitration Injunction
In addition to the grounds mentioned hereinabove, courts in various jurisdictions have pondered over whether a foreign seated arbitration can be injuncted on the ground that the dispute being referred to arbitration is non-arbitrable under the governing law of the contract. This is because allowing a foreign tribunal to adjudicate a dispute by way of arbitration in contravention of the governing law of the contract may pose public policy issues during enforcement of the arbitral award.
Recently, the Bombay High Court in India effectively granted an anti-enforcement order against an anti-suit injunction granted by Singapore High Court on the basis that the dispute which was referred to arbitration is non-arbitrable under Indian law (which is the governing law of the contract). The Bombay High Court’s order had the effect of injuncting the arbitration proceedings before the arbitral tribunal seated in Singapore. The court opined that the subject matter of the arbitration (oppression and mismanagement) is non-arbitrable under Indian Law and National Company Law Tribunals (established under the Indian Companies Act, 2013) have exclusive jurisdiction to adjudicate such disputes. Thus, the Bombay High Court found that the anti-suit injunction order effectively curtailed the sole legal remedy available to the Plaintiff. Furthermore, the Court also noted that even if the arbitration proceedings were allowed to continue, the resultant award would be unenforceable in India on the grounds of being violating public policy of the country.
Judicial Trends Pertaining to Anti-Arbitration Injunctions
The position of UK Courts regarding anti-arbitration injunctions is akin to the position of Indian Courts. The English Supreme Court had ruled that although an arbitration tribunal has jurisdiction to rule upon its own jurisdiction, but it does not mean that it has the ‘exclusive’ jurisdiction towards the same. Therefore, while granting relief pertaining to enjoining foreign arbitration proceedings, the English Courts have been conscious of the obligations under the New York Convention and the precepts of International Arbitration. Only on rare occasions when the court is satisfied that the arbitral tribunal’s jurisdiction is undisputedly without any legal basis, an injunctive relief has been granted.
Similar to common law jurisdictions, the U.S. Courts have injuncted arbitration proceedings when it has been established that the arbitration proceedings are inappropriate. Under the statutory provision (be it the Federal Arbitration Act or the New York Convention or the Panama Convention), there are no provisions which enunciate the power of a court to enjoin an arbitral proceeding. However, the courts have referred to state laws and ruled that as long as the state law (stipulating a provision of an anti-arbitration injunction) is not in conflict with the Federal Arbitration Act, an anti-arbitration injunction can be granted by the circuit courts. However, similar to the common law jurisdictions, U.S. Courts have been hesitant to grant injunctive relief and therefore restricted this remedy to exceptional circumstances where the vexatious nature of the proceedings is made apparent.
The courts in most civil law countries (including France and Switzerland) have generally refused to allow injunctions against arbitration proceedings.
Our Thoughts
A bird’s eye view over the statutory provisions across jurisdictions would reveal a uniformity in the absence of specific provisions regarding the scope of the court’s jurisdiction and its power to grant such a relief. While the provisions of the UNCITRAL Model Law clearly point out that the arbitral tribunal has the jurisdiction to decide upon its own jurisdiction, it does not bar the courts from ruling on the jurisdiction of the tribunal. While an argument can be made that the UNCITRAL Model Law (read with the New York Convention or Panama Convention) clearly lays down that the courts interference is allowed in a post-award stage, the absence of an express bar in a pre-award or post-notice stage is glaring. As the statutory provisions in most of the countries have been drafted in reference to the UNCITRAL Model Law, apart from certain civil law countries, most of them are on the same lines as the UNCITRAL Model law.
As regarding granting injunctions against foreign-seated arbitration proceedings, the courts of both U.S. and UK have ensured that the injunction is not granted in contravention of the New York Convention or the principles of comity. The rationale behind the same rests on the fact that the principles of the New York Convention moves with the presumption that there is a valid and enforceable arbitration clause.
Based on the findings in Anupam Mittal, it is clear that although Indian Courts respect the principle of comity, they will not shy away from granting anti arbitration injunctions in appropriate cases on the grounds of non-arbitrability of subject matter of the dispute. Pre – Anupam Mittal, the grounds for anti-arbitration injunctions have been limited in India to the validity of the arbitration agreement and the arbitrability of the dispute. However, the Bombay High Court reasoned that the grounds of enforceability of the award are also to be considered when deciding the issue of whether to grant an anti-arbitration injunction.
The result of this finding is that despite the parties having a valid arbitration clause, the Arbitral Tribunal has been deprived of its jurisdiction by the Indian Courts on the grounds of the disputes being non arbitrable. The complexity of the situation is further exacerbated by the fact that the Singaporean Court of Appeal had held in January 2023 that the disputes between Anupam Mittal and People Interactive (India) Pvt. Ltd. were arbitrable as per Singaporean Law. Although the principles of anti-suit injunctions have been considered while granting the reliefs claimed by the Plaintiff, the principles of anti-arbitration injunction laid down in Bina Modi case have not been considered.
The enforceability of the arbitral award is intrinsically linked with the issue of arbitrability and also the public policy of the country of enforcement. In Anupam Mittal, the factual background was comparatively simpler as the governing law was Indian Law and the country of enforcement was India. However, cases where there is a difference between the jurisdiction of the governing law and the country of enforcement, the court deciding the anti-arbitration injunction would be burdened with the responsibility to ensure validity of an arbitration agreement, the arbitrability of the dispute and the enforceability of the award as and when it is passed (taking into consideration the governing law and the public policy of the place of enforcement). Imbibing a civil court with a jurisdiction to decide upon such grave issues that inevitably affect the jurisdiction of the tribunal may be in conflict with the spirit of international commercial arbitration.
We believe that the matter of Anupam Mittal will be taken in appeal in due course and perhaps the appellate courts shall provide further clarity on the issue.
