In a Section 9 Arbitration Act ruling on a dispute between Russian LLC “LTB” and its Indian agent Vaibhavi Logistics, the Bombay High Court has held that an agent cannot retain the principal’s property to secure dues arising under separate agreements, and that interim relief can be granted against non-signatory depots holding the subject matter of the arbitration. The Court held that a composite Section 9 Petition based on multiple agreements with separate arbitration clauses is not maintainable as a single reference, but the Petitioner may restrict its Petition to one agreement and seek liberty to pursue the remaining claims separately, in line with the principle underlying Order XXIII Rule 1(3) CPC.
The Court further held that an agent cannot claim a cross-contractual lien over the principal’s property for dues arising under separate agreements in the absence of an express contractual provision permitting such retention, since Section 221 of the Indian Contract Act limits the agent’s lien to amounts due “in respect of the same” property. Also, the Court clarified that Section 9 relief can be granted against non-signatories who are in physical possession of the subject matter of the arbitration, as the focus of Section 9(ii)(c) is on protection of the subject matter and not on contractual liability of the non-signatory.
The balance of convenience favours return of the Petitioner’s identified property, and a mere apprehension that monetary recovery may become difficult does not create a right to retain specific property belonging to the Petitioner, added the Court.
A Single Judge Bench of Justice Amit Borkar observed that the original petition was a composite proceeding based on three separate agreements with independent arbitration clauses, which, on the strength of the Supreme Court’s decision in Duro Felguera, S.A. v. Gangavaram Port Limited [(2017) 9 SCC 729], would not have been maintainable as a single arbitral reference. However, since the Petitioner voluntarily restricted its case to the 4 March 2021 Agreement and sought liberty to pursue the remaining claims separately, the Court found no reason to dismiss the entire Petition, drawing guidance from Order XXIII Rule 1(3) of the CPC.
On the question of lien, the Court observed that Section 221 of the Indian Contract Act, 1872 entitles an agent to retain the principal’s property only for commission, disbursements or services “in respect of the same” property, and not for dues arising under separate contracts. The Court distinguished between particular lien (under Section 170) and general lien (under Section 171), noting that Respondent No. 1, being an agent, cannot claim a general lien as it does not fall within the specified categories of bankers, factors, wharfingers, attorneys of a High Court, or policy brokers.
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The Court further observed that the judgment in Ram Prasad v. State of Madhya Pradesh [(1969) 3 SCC 24] makes the question of lien a mixed question of fact and law, requiring a contractual and factual foundation which Respondent No. 1 had not established. On the maintainability of relief against non-signatories, the Court relied on Housing Development and Infrastructure Ltd. v. Mumbai International Airport Pvt Ltd. [2013 SCC OnLine Bom 1513], to hold that Section 9(ii)(c) focuses on the subject matter of the dispute and that the words “in the possession of any party” can include non-signatories holding the property.
The Court also observed that Respondent No. 2’s claim under the MoU dated 16 July 2026 was a claim against Respondent No. 1 and not against the Petitioner, and therefore could not justify retention of the Petitioner’s property. Respondent No. 4’s claim for service charges relating directly to the four containers in its custody was, however, treated differently, as Section 170 may give rise to a particular lien depending on the nature of services rendered.
Briefly, a Russian limited liability company, “LTB”, which owns 138 T-11 ISO tank containers, filed a petition under Section 9 of the Arbitration and Conciliation Act, 1996, seeking interim relief against Vaibhavi Logistics (its Indian agent) and three depot entities (E F C Logistics India, JMJ Container Solution, and Kashipur Infrastructure and Freight Terminal) where the containers were stored. The Petitioner had entered into three separate agreements with Respondent No. 1, an Agency Agreement dated 8 December 2020 appointing the Petitioner as agent in Russia, an Agency Agreement dated 4 March 2021 appointing Respondent No. 1 as agent in India, and a Master Tank Container Lease Agreement dated 20 November 2023, each containing its own arbitration clause.
During the hearing on 21 August 2026, the Petitioner restricted its relief to prayer clause (a) under the 4 March 2021 Agreement alone, seeking unconditional release of all 138 containers, and sought liberty to pursue claims under the other two agreements separately. Respondent No. 1 raised a claim of lien over the containers for alleged outstanding dues of USD 389,576.07 arising under separate contractual dealings. Respondent No. 2 admitted holding 132 tanks but stated that two containers (KUKU2500296 and SWIU2260102) were not at its depot and claimed Rs. 17.23 lakhs as outstanding under an MoU dated 16 July 2026 against Respondent No. 1. Respondent No. 4 admitted holding four containers and claimed Rs. 57,297.02 towards terminal and service charges.
