The Delhi High Court has dismissed a petition filed by Belvedere Resources DMCC (‘Petitioner), seeking interim relief under Section 9 of the Arbitration and Conciliation Act, 1996, in a dispute involving a failed coal supply agreement with OCL Iron and Steel Ltd. and its subsidiaries. The petitioner had sought directions for the respondents to furnish monetary security of USD 2.77 million (approximately â‚ą23.34 crore), citing concerns over the enforceability of a potential arbitral award in ongoing proceedings before the Singapore International Arbitration Centre (SIAC).
The Single Judge Bench comprising of Justice Jasmeet Singh held that a valid arbitration agreement had been formed through a combination of email and WhatsApp communications between the parties, which referenced the Standard Coal Trading Agreement (ScoTA). The Court affirmed that such digital exchanges, even if informal, may amount to a binding arbitration clause under Indian law.
However, the Court went on to dismiss the petition on two primary grounds:
Lack of Territorial Jurisdiction – The Court noted that no part of the cause of action arose in Delhi. The negotiations took place via brokers in Singapore, the repudiation occurred in Kolkata, and the coal shipment was routed from South Africa to Indian ports, with no material connection to Delhi.
Uncrystallized and Unsecured Claim – On merits, the Court found that Belvedere’s claim was unliquidated and had not matured into an enforceable debt. Relying on precedents interpreting Order XXXVIII Rule 5 CPC, the Court emphasized that interim security or attachment could only be granted when there is prima facie evidence of the respondent’s intent to defeat or obstruct enforcement of a future award—conditions not met in this case.
The Court reiterated that powers under Section 9 must be exercised with caution and cannot be invoked to convert an unsecured, speculative claim into a secured one merely through pre-emptive judicial intervention.
The petition was accordingly dismissed, with the Court clarifying that its observations were confined to the interim stage and would not prejudice the merits of the pending arbitration.
Advocates appearing in the case:Â
Petitioner: Mr. Gauhar Mirza, Ms. Shivi Chola, Advs.
Respondents: Mr. Krishnaraj Thaker, Sr. Adv. with Mr. Anand Sukumar, Mr. S. Sukumaran, Mr. Bhupesh Kumar, Ms. Ruche Anand, Advs
