In a recent decision, the Division Bench of Calcutta High Court clarified the applicability of Section 9 of the Arbitration and Conciliation Act even after the passing of a foreign award.
Background of the Case
The dispute before the Court revolved around the question of whether Section 9 of the Arbitration and Conciliation Act applies to foreign awards before the commencement of enforcement proceedings. The appellants, who were subject to an award issued by the International Court of Arbitration, argued that the inclusion of a clause in their agreement relating to British governing law excluded the power of Indian courts to grant interim relief under Section 9.
The High Court’s Decision
The Court stated that giving a restrictive meaning to the provision would render the amendment to Section 2(2) of the Act redundant. It emphasized that the language used in Section 9 should be construed harmoniously, considering the purpose behind incorporating the proviso to Section 2(2) of the Act. The Court also observed that the objective and purpose behind the amendment were praiseworthy, and a restrictive interpretation would frustrate its intent.
Precedent and Legal Reasoning
The Calcutta High Court relied on the Supreme Court’s judgment in the case of PASL Wind Solutions Pvt Ltd v. GE Power Conversion India Pvt Ltd to support its conclusion. The Supreme Court, in that case, rejected the contention that Section 9 has no applicability to foreign awards. The High Court also noted that a clear distinction can be observed in the legislative intent between domestic and foreign awards, thereby rejecting the appellants’ argument that Section 9 ceases to apply upon the passage of a foreign award.
The judgment emphasizes the need for a harmonious interpretation of the provision and the importance of the amendment to Section 2(2) of the Act. By dismissing the appeal and upholding the single-judge’s order, the Court reaffirmed its stance on the applicability of Section 9 to foreign awards, ensuring that interim relief can be sought from Indian courts even before enforcement proceedings commence.