The Delhi High Court stayed arbitral proceedings initiated before the International Chamber of Commerce (ICC), Singapore, in a dispute involving Engineering Projects (India) Ltd. (EPIL), a public sector undertaking under the Government of India. The Court found the arbitration proceedings to be prima facie “vexatious, unconscionable, and oppressive,” and passed interim relief in favour of EPIL, restraining the respondent, MSA Global LLC (Oman), from continuing with the ongoing arbitration.
The dispute arose out of a subcontract awarded by EPIL to MSA Global for the construction of border security infrastructure in Oman. Although the agreement included an arbitration clause under the ICC Rules with Singapore as the seat of arbitration, it also conferred exclusive jurisdiction upon courts in New Delhi. When disputes arose, MSA Global invoked arbitration before the ICC.
EPIL challenged the constitution of the arbitral tribunal after discovering that the Mr. AndreYeap SC, appointed as MSA’s nominee arbitrator, had previously acted in a separate arbitration involving Mr. Manbhupinder Singh Atwal, the promoter of MSA Global. This prior professional engagement was not disclosed by the arbitrator, in violation of the disclosure obligations under ICC Rules. While the ICC Court acknowledged the non-disclosure as “regrettable,” it dismissed EPIL’s formal challenge to the arbitrator’s appointment.
Aggrieved, EPIL approached the Delhi High Court seeking an anti-arbitration injunction. It argued that the failure to disclose the arbitrator’s past association with MSA’s promoter vitiated the fairness of the tribunal and infringed upon principles of natural justice and Indian public policy. It was also contended that the arbitration proceedings, as constituted, were inherently biased and could not ensure a fair hearing.
Justice Purushaindra Kumar Kaurav, while granting the injunction, held that the civil suit was maintainable under Section 9 of the CPC, and that Indian courts retain jurisdiction to intervene in foreign-seated arbitrations in exceptional circumstances. Citing precedents including Dhulabhai v. State of M.P. and ONGC v. Western Company of North America, 1968 SCC OnLine SC 40, the Court reaffirmed that anti-arbitration injunctions may be granted where the arbitration process is shown to be oppressive, inequitable, or against public policy.
The Court noted that EPIL had simultaneously initiated proceedings in Singapore under Article 13(3) of the UNCITRAL Model Law, challenging the appointment of the arbitrator, and that MSA had sought an anti-suit injunction to restrain EPIL from proceeding in Indian courts. However, the High Court found that allowing the arbitration to continue in its present form would amount to permitting a process tainted by procedural unfairness, thereby causing irreparable harm to EPIL.
Accordingly, the Court restrained MSA Global LLC from continuing with the arbitration proceedings before the ICC tribunal, as currently constituted. The order underscores the Court’s willingness to protect Indian parties especially public sector undertakings from unjust or biased arbitral mechanisms, even in cross-border disputes where the seat of arbitration lies outside India.
Appearances:Â
Petitioner: Mr. Sandeep Sethi, Sr. Adv. with Mr. Ajit Warrier, Mr. Angad Kochhar, Mr. Himanshu Setia, Mr. Vedant Kashyap, Mr. Sumer Dev Seth, Ms. Richa Khare and Ms. Riya Kumar, Advs.
Respondent: Mr. Rajiv Nayar, Sr. Adv. with Mr. Kirat Singh Nagra, Mr. Kartik Yadav, Mr. Pranav Vyas, Ms. Sumedha Chadha, Mr. Sankalp Singh, Mr. Esh Gupta and Mr. Pritesh Raj, Advs