Case Note & Summary
The dispute arose out of an agreement dated 20.10.2010 between Harmony Innovation Shipping Ltd. (appellant) and Gupta Coal India Ltd. (first respondent) for 24 voyages of coal shipment from Indonesia to India. The respondent undertook only 15 voyages, leading to a dispute. The appellant filed an application under Section 9 of the Arbitration and Conciliation Act, 1996 before the Additional District Judge, Ernakulam, seeking interim measures. On 25.9.2014, the Additional District Judge in I.A. No. 4345 of 2014 in O.P. (ARB) No. 802/2014 directed the first respondent to furnish security for US$ 11,15,400 or its equivalent approximately Indian Rupees 6,60,00,000/- or to show cause by 01.10.2014, and conditionally attached the cargo belonging to the first respondent. The first respondent challenged this order before the High Court, which set it aside on the ground that Section 9 of the Act is limited to arbitrations that take place in India and has no applicability to arbitrations which take place outside India, relying on the pronouncement in Bharat Aluminium Co. v. Kaiser Aluminium Technical Services Inc., (2012) 9 SCC 552. The arbitration clause in the contract provided that the contract is to be governed and construed according to English law and disputes are to be referred to arbitration in London, with small claims conducted under the London Maritime Arbitration Association procedure. The appellant then approached the Supreme Court by special leave petition, and the Supreme Court heard the civil appeal to determine whether the High Court was justified in setting aside the interim order on the basis of the limited applicability of Section 9 to foreign-seated arbitrations. The judgment does not contain a final decision or ratio.
Headnote
A) Arbitration Law - Section 9 Interim Measures - Foreign-Seated Arbitration - Arbitration and Conciliation Act, 1996, Section 9 - The appellant sought interim measures by way of security and conditional attachment of the respondent's cargo under Section 9, but the High Court set aside the order on the foundation that Section 9 applies only to domestic arbitrations, relying on Bharat Aluminium Co. v. Kaiser Aluminium Technical Services Inc. The Supreme Court examined whether the High Court's interpretation was correct given the arbitration clause providing for English governing law and London as the arbitral seat. Held: Not mentioned (Paras Not mentioned).
Issue of Consideration
Whether the High Court was justified in setting aside the order of the Additional District Judge that had directed security and attachment of cargo, on the ground that Section 9 of the Arbitration and Conciliation Act, 1996 is limited to arbitrations taking place in India and does not apply to arbitrations seated outside India, in view of the ruling in Bharat Aluminium Co. v. Kaiser Aluminium Technical Services Inc.
Law Points
- Interim measures under Section 9 of the Arbitration and Conciliation Act
- 1996
- applicability to foreign-seated arbitrations
- scope of Part I of the Act after Bharat Aluminium
- interpretation of arbitration clauses specifying foreign seat and governing law
- nature of security and attachment orders under Section 9
