Anti-arbitration injunctions and their compatibility with the New York convention and the Indian law of arbitration: future directions for Indian law and policy

Anti-arbitration injunctions and their compatibility with the New York convention and the Indian... Abstract Despite the controversial nature of anti-arbitration injunctions, they have emerged as one of the possible remedies in a number of jurisdictions. However, their existence under international law is far from clear. Consequently, each jurisdiction has its own rules regarding their existence and availability. In this connection, this article will address the question of whether anti-arbitration injunctions are legally compatible with the scheme of New York Convention and the UNCITRAL Model Law on International Commercial Arbitration. For this purpose, besides the legal analysis of the relevant provisions of the international instruments and the decisions of international arbitral bodies on them, the domestic legal practice of the UK, US, and France will also be considered. However, the main focus of the article will be to critically evaluate the Indian legal position on the issue. Finally, as a part of its Conclusion, it will outline the directions for the future of Indian law and policy relating to the grant of anti-arbitration injunctions in India. 1. INTRODUCTION Anti-arbitration injunctions are usually sought to restrain a party from instituting or continuing arbitration proceedings when that party, going beyond the agreed terms of contract, wrongly attempts to invoke or invokes the jurisdiction of the arbitrator.1 In other words, these remedies are granted by the national courts against the commencement or continuation of arbitration proceedings when parties have agreed that they will not take up the matter to arbitration or alternatively, when they have opted for litigation or such other alternative dispute resolution methods. Despite the prevalence of these remedies in some countries, they are highly controversial because their legal existence itself is very much in dispute. In particular, these injunctions are also viewed as threats to the authority of arbitral tribunals to rule on their jurisdiction, commonly known as the principle of kompetenz-kompetenz, considered to be a cornerstone of the arbitration system.2 However, there are also ample justifications for the grant of anti-arbitration injunctions. It needs to be remembered that although the system of international arbitration is autonomous and distinct and separate from the national legal system and its judicial bodies, the arbitral process is not completely insulated from interactions with the rules of national law. In fact, the international arbitration system’s interaction with the national legal system for its legitimacy, support, help, and effectiveness is well-recognized.3 Even in the context of domestic arbitration, it is observed that while the national courts cannot be too interventionist, there can be no objection to their performance of a supportive role to the process of arbitration, such as the grant of interim measures and the appointment of arbitrators in case of deadlock. Accordingly, with reference to the anti-arbitration injunctions, it is suggested that when there are justifiable reasons for the invocation of the jurisdiction of national courts, such as when there are claims that the arbitration agreement itself is forged by one party, in order to avoid unnecessary harassment of the innocent party, the national courts may assume jurisdiction although it seems to weaken the principle of kompetenz-kompetenz. Besides the above arguments justifying and opposing the grant of anti-arbitration injunctions, there is a great divergence of academic and judicial opinion across jurisdictions on the value and utility of anti-arbitration injunctions.4 Moreover, the absence of an express provision in the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards5 and in the UNCITRAL Model Law on International Commercial Arbitration6 also adds further complexity to this issue. In India, the legal existence of the anti-arbitration injunction is far from clear.7 The scanty legal opinion is divided as to whether the anti-arbitration injunction is permissible under the implicit language of section 45 of the Arbitration and Conciliation Act, 1996. In this connection, this article will address the question of whether the anti-arbitration injunction is legally compatible with the scheme of the New York Convention and the UNCITRAL Model Law on International Commercial Arbitration. For this purpose, besides the legal analysis of the relevant provisions of the international instruments and the decisions of international arbitral bodies on them, the domestic legal practice of the UK, US, and France will also be considered. However, the main focus of the article will be to critically evaluate the Indian legal position on the issue. In particular, it will consider the cases of Chatterjee Petrochem Co v Haldia Petrochemicals Ltd,8World Sport Group (Mauritius) v MSM Satellite (Singapore),9Board of Trustees of the Port of Kolkata v Louis Dreyfus Armatures SAS,10 and Vikram Bakshi v McDonalds India Pvt. Ltd.11 The next section, as a prelude to Conclusion, will examine the decision of British Caribbean Bank Ltd v The Government of Belize12 rendered by the Caribbean Court of Justice to see its relative merits over other solutions, especially in common law jurisdictions. Finally, as a part of its Conclusion, it will outline the directions for the future of Indian law and policy relating to the grant of anti-arbitration injunctions in India. 2. ANTI-ARBITRATION INJUNCTIONS UNDER INTERNATIONAL LAW As pointed out earlier, the New York Convention, one of the key instruments on international arbitration, is silent on the issue of anti-arbitration injunctions. The Convention, as its name suggests, governs the issues of the recognition and enforcement of foreign arbitral awards. Hence, it is natural that the Convention does not contain any direct provision on any interim remedies, including anti-arbitration injunctions. In fact, the question of application of the Convention arises only after the arbitral award has been passed by the tribunal. However, the other international instrument on arbitration, the UNCITRAL Model Law on International Commercial Arbitration contains provisions for the grant of interim measures. While Article 9 provides for the grant of interim measures by national courts, Article 17 enables the arbitral tribunal to grant interim remedies.13 A further analysis of the above provisions shows that while national courts have the power to grant provisional remedies even before the commencement of the arbitration, there is no express conferment of any power to enjoin the arbitral proceedings. However, the provision, which is of crucial significance for the legal basis of anti-arbitration injunctions, is contained in Article II.3 of the New York Convention. While discussing the power of domestic courts to refer the matter to arbitration, it provides that: [t]he court of a Contracting State, ‘when seized of an action in a matter in respect of which the parties have made an agreement within the meaning of this article, shall, at the request of one of the parties, refer the parties to arbitration, unless it finds that the said agreement is null and void, inoperative or incapable of being performed. Also, a provision of a similar nature is found in Article 8 of the UNCITRAL Model Law on International Commercial Arbitration. It is significant to note that the above provision not only confers the power and authority to the national courts to refer the parties to arbitration when the subject matter brought before them is covered by arbitration agreement, but it also makes such power conditional upon the determination that the arbitration agreement is not ‘null and void, inoperative or incapable of being performed’. It would mean that the national courts, as and when an arbitrable matter is brought before them, will first have to make an assessment of whether the arbitration agreement suffers from any one of the three legal infirmities mentioned above, and if the courts find that the agreement does not suffer from any one of them, only then will they have the legal obligation to have the matter referred to arbitration. In other words, the obligation to refer the matter to arbitration will not arise if the arbitration agreement suffers from any one of the three legal infirmities. In the context of anti-arbitration injunctions, this provision shows that there are extreme cases in which the court may not refer the matter to arbitration or that they may even enjoin arbitration.14 In summary, although it may be argued that Article II.3 of the New York Convention tacitly acknowledges the possibility of arbitration enjoinment proceedings by the court, in the absence of an express provision, it is opined that they do not formally exist in so far as the provisions of the Convention are concerned. In fact, the argument that anti-arbitration injunctions do not exist in the New York Convention regime gains more support if a reference is made to the principle of kompetenz-kompetenz.15 According to this principle, the arbitral tribunal shall have the power to rule on its own jurisdiction.16 Article 16 of the Model Law further clarifies that this power includes the power to rule on ‘objections with respect to the existence or validity of the arbitration agreement’.17 The intention behind this cherished principle is that with arbitration being an autonomous method of dispute resolution, the arbitral forum shall be able to decide whether it has the jurisdiction over the specified matter or not. Moreover, the forum shall also have the first opportunity to decide on all questions, including the question relating to jurisdiction.18 Moreover, as expressly mentioned in the latter part of Article 16 of the Model Law, even if one party alleges that the arbitration agreement does not exist or when he/she complains that it is invalid, the arbitral tribunal shall have the power to rule on those objections. Normally interpreted, there is every possibility of this power of the tribunal to rule on its own jurisdiction to be conflicting with the power of the national court to refer the matter to arbitration (or to enjoin the arbitration) as laid down in Article 8 of the Model Law. This raises the following questions: When an application is made before the national court by one party for reference of the dispute to arbitration and if a question arises as to the validity of the arbitration agreement, is it proper on the part of the national court to rule on the controversy in deference to the mandate of Article 8? If the judge rules on that question, would it be considered as a violation of the principle of kompetenz-kompetenz incorporated in Article 16? To resolve this issue, two options are available: Either we consider the principle of kompetenz-kompetenz to be inflexible and absolute or consider it to be relatively flexible. In the case of the former, the national court should not be deciding on the question of invalidity and instead defer it to the arbitral tribunal to be constituted later. Conversely, in the case of the latter, we may recognize the role of the national court in the arbitral process and its potential contributions in the protection of innocent parties, in which case, it may be allowed to rule on the validity of the agreement. Needless to say, the existence of the anti-arbitration injunction will be a possibility only in the latter option. Article 5 of the Model Law, which limits the power of national courts vis-à-vis the arbitral process, further complicates this situation by providing, ‘In matters governed by this law, no court shall intervene except where so provided in this law’.19 This would mean that once it is established that a specific provision relating to a contingency is available within the framework of the Model Law, then that provision alone will be applicable for such a contingency, and in any case, under the general pretext, the national court shall not make any judicial intervention. In other words, the preclusion contained in Article 5 necessitates that by relying upon the general powers to issue injunctions, as contained in the Civil Procedure Code or in any other statute, the national court is not allowed to make any obtrusive interventions.20 Although it may be argued that the power to issue injunctions under Article 9 includes the power to issue anti-arbitration injunctions and hence falls within the category of permissible judicial interventions referred to in Article 5, in the absence of an express provision or a clear indication in the Model Law, the practice of anti-arbitration injunctions will continue to be disputed. However, jurisdictions supporting the existence of anti-arbitration injunctions seem to have a different understanding of the phrase ‘in matters governed by this law’.21 They argue that no provision exists within the framework of the Model Law to address cases in which it is alleged that no valid and real arbitration agreement exists between the parties, the arbitration of a certain issue is barred by res judicata or the arbitration is contemplated on a matter that is clearly not subject to arbitration.22 Accordingly, they argue that if the national court exercises jurisdiction in any such scenario, it would not come within the scope of the expression ‘in matters governed by this law’ (i.e. Model Law) for the purposes of Article 5, and consequently, the jurisdiction of the national court would not be excluded. Moreover, it is argued that even if the final remedy lies with the national courts in the form of judicial recourse against arbitral awards under Article 34 of the Model Law, it is not very efficacious as the party has to unnecessarily spend time and money till the question is finally disposed of. It is argued that it is useless to compel a party to go for arbitration even though a final and conclusive judicial determination of that issue is already available. In other words, simply because the tribunal shall have the first opportunity to see and decide on the dispute, in terms of the requirements of the kompetenz-kompetenz principle, the party will be forced to go through the arbitral process though the outcome of that process will be already known. In that context, supporters of anti-arbitration injunctions claim that the provisions of Article 5 should be liberally and innovatively interpreted to avoid hardship to innocent parties. Besides the above-mentioned major themes on which the existence or non-existence of the arbitration enjoinment proceedings are contested, certain other arguments are also made by utilizing the provisions of the New York Convention and the Model Law.23 For instance, the obligation to recognize the arbitration agreement contained in Article II.1 of the New York Convention is used to argue that to give full effect to arbitration agreements, the courts shall refuse to entertain requests for intervention when such requests are in contravention of their agreement to go for the private dispute resolution system.24 In fact, the above point was taken up by the International Chamber of Commerce (ICC) tribunal in the case of Salini Costruttori SpA v Ethiopia.25 In this case, a contract was signed between the parties for the purpose of construction of an emergency raw water sewerage reservoir in the capital city of Addis Ababa with a provision for arbitration before the ICC. Subsequently, over the issue of unsuccessful challenge of arbitrators before the ICC Court, the Ethiopian authority approached the Federal Supreme Court of Ethiopia and had obtained an injunction to stay the arbitral proceedings. In this connection, the tribunal while generally speaking against the grant of anti-arbitration injunctions, observed that: ‘A central principle in this respect, recorded in Article II (1)[of the New York Convention], is that states shall recognise arbitration agreements’.26 ‘A correlative principle, recorded in Article II (3) [of the same Convention], is that a state’s court shall recognise and give effect to arbitration agreements’.27 Moreover, it was also of the opinion that even if anti-arbitration injunctions are issued by the courts, the arbitral tribunals are not bound by them, and remarked that ‘[i]n certain circumstances, it may be necessary to decline to comply with an order issued by a court of the seat, in the fulfilment of the tribunal’s larger duty to the parties’.28 Interestingly, in this case, though Ethiopia had not ratified the New York Convention, by considering the above principles of the Convention as ‘principles of general recognition’, the tribunal was of the opinion that they will bind Ethiopia.29 This incompatibility of anti-arbitration injunction with the obligation to recognize the arbitration agreement was further elaborated in the case of Saipem v Bangladesh30 by the International Convention for Settlement of Investment Disputes (ICSID) tribunal. In this case, the contract was between an Italian company, Saipem SpA and the Bangladeshi public sector oil major, also known as, Petrobangla over the construction of a gas pipeline to carry gas to various parts of Bangladesh.31 However, when differences arose, citing alleged misconduct of arbitrators and the breach of procedural rights of parties, Petrobangla initially approached the First Court of Subordinate Judge of Dhaka for revocation of the authority of the ICC tribunal and later the High Court Division of the Supreme Court of Bangladesh to stay all the proceedings pending before the ICC tribunal.32 After hearing the parties, the Supreme Court had granted an injunction and restrained Saipem to continue with ICC arbitration. When these facts were later brought to the knowledge of the ICC tribunal, it had decided to continue the proceedings, as it was of the opinion that challenge and replacement of arbitrators falls within the exclusive jurisdiction of ICC Court.33 Moreover, when the same issue was taken up as an investment dispute before the ICSID Tribunal, it had ruled that the revocation of the authority of arbitrators amounted to violation of the New York Convention.34 In this connection, it had observed that: It is ‘generally acknowledged that the issuance of an anti-arbitration injunction can amount to a violation of the principle embedded in Article II of the New York Convention’.35 ‘Technically, the courts of Bangladesh did not target the arbitration or the arbitration agreement in itself, but revoked the authority of the arbitrators. However, it is the Tribunal’s opinion that a decision to revoke the arbitrators’ authority can amount to a violation of Article II of the New York Convention whenever it de facto “prevents or immobilizes the arbitration that seeks to implement that [arbitration] agreement” thus completely frustrating if not the wording at least the spirit of the Convention’.36 Similarly, in the case of Himpurna v Indonesia,37 a question arose as to whether a party interested in continuing with the arbitration is bound by the anti-arbitration injunction granted against it or alternatively, whether it is justified for the party intending to avoid the arbitral proceedings to not to attend arbitral hearings? Or more specifically, if a party chose to not to participate in the arbitral proceedings in view of the injunction, whether it will be considered as a default without any ‘sufficient cause’ for the purposes of Article 30 of UNCITRAL Arbitration Rules 2010? In this case, Himpurna, a US subsidiary had entered into a contract with PLN, an Indonesian power entity for the development of geothermal resources in Indonesia. However, subsequently, dispute arose between them as PLN could not buy power as agreed. Initially, the parties had a round of arbitration proceedings under the UNCITRAL Arbitration Rules, which was followed by another round of investment arbitration as Indonesia had refused to comply with the previous award. In the meantime, the Indonesian government approached the local court and had obtained an injunction to suspend all arbitral proceedings. However, the tribunal had decided to set aside the injunction and continue the arbitral proceedings by observing that the injunction obtained by the Indonesian government will not excuse its non-appearance as it had not taken any steps to address the court against the grant of injunction. The tribunal had also pointed out that its conduct was inconsistent with its obligations as a party to the voluntary arbitration agreement.38 However, as international instruments give enormous leeway to national legal system, the above position under international law will not be complete unless the domestic legal practice of concerned jurisdiction is also apprised of. In this connection, the following section will examine the judicial approaches of major jurisdictions, such as UK, US, and France. 3. NATIONAL JUDICIAL APPROACHES RELATING TO ANTI-ARBITRATION INJUNCTIONS 3.1 Anti-arbitration injunctions in UK Anti-arbitration injunctions are not a new phenomenon in England. In fact, the English courts have asserted the authority to stay arbitral proceedings for the protection of legal or equitable rights much before the coming into force of the current Arbitration Act, 1996.39 Even as back as 1895, in Kitts v Moore,40 one of the early decisions involving anti-arbitration injunctions, the plaintiff sought injunction to restrain the defendant from proceeding with arbitration on equitable ground that the contract/sold note was invalid.41 The matter initially went before Lord Russell of Killowen who had granted an interim stay of arbitration until trial. On appeal, it was argued that ‘under no conceivable circumstances has the Court jurisdiction to stay by injunction proceedings by arbitration’.42 However, the Court of Appeal dismissed the appeal and ruled that the courts have jurisdiction to interfere by injunction where an action is brought to impeach the arbitral clause or agreement. However, this position has undergone radical change as the 1996 Act is premised on the general principle that courts should not intervene in matters governed by Part I, except as provided in that Part.43 In fact, the landmark decision of Elektrim SA v Vivendi Universal SA44 also supported this view. In that case, parties have entered into an agreement for transfer of certain shares.45 However, necessary approvals could not be obtained from competent authorities and as a consequence, Vivendi sought to avoid the contractual obligations, citing breach of contract by Elektrim.46 In this connection, it had launched arbitral proceedings before the London Court of International Arbitration (LCIA) pursuant to the agreement between the parties, wherein a partial award was rendered. In the meantime, quite unexpectedly, Vivendi alleged that a settlement was concluded between the parties and instituted an arbitration proceeding in the ICC, in accordance with the terms of the settlement agreement. Under the circumstances, Elektrim sought an injunction from the English Court to restrain London arbitration till the question of validity of the draft settlement agreement was decided by the ICC arbitration. During the hearing, Elektrim contended that the simultaneous pursuit of two arbitrations both before ICC and LCIA constituted vexatious and oppressive proceedings. However, the court was of the view that the pursuit of two arbitrations with different subject-matter would not constitute oppressive or vexatious action.47 It reasoned that even if it was established that the continuation of two proceedings would amount to oppressive or vexatious action, it may not be inclined to grant an injunction under Section 3748 of the Senior Courts Act49 as that would be contrary to the parties’ agreement to refer the disputes to LCIA arbitration.50 Also, with regard to the power of the English court to grant interim or permanent injunction to restrain arbitration that are subject to the 1996 Act, it was of the opinion that it must assume that there is such a jurisdiction,51 in view of the observations of Clarke LJ in the case of Cetelem SA v Robust Holdings Ltd52 and Lord Philips CJ in the case of Weissfisch v Julius.53 Thus, it becomes clear that the power to grant permanent anti-arbitration injunction is vested with the courts under section 37 of the 1981 Act, although interim anti-arbitration injunction may even be granted by the courts under section 4454 of the 1996 Act. Moreover, it may also be noted that though the English courts assert that they have the power to stay arbitration, in practice they were very much reluctant to interfere with the arbitration. However, in the case of Excalibur Ventures LLC v Texas Keystone Inc,55 the English court had in fact issued an anti-arbitration injunction. In this case, Excalibur, a US company engaged in the business of providing advisory and investment services in the energy sector had entered into a collaboration agreement with the Texas Keystone International, a US oil and gas company (shortly as, TKI) relating to the development of oil blocks in Iraqi Kurdistan.56 The agreement also reserved to TKI the right to introduce Gulf Keystone Petroleum Ltd (shortly as, GKP) as a party to the collaboration subject to the permission of Excalibur.57 GKP had two subsidiaries, namely, Gulf Keystone Petroleum International (shortly as, Gulf International) and Gulf Keystone Petroleum (UK) Ltd (shortly as, Gulf UK). Subsequently, a production sharing contract (PSC) was signed by TKI, Gulf International, the Kurdistan Regional Government and one more company to explore and develop Shaikhan block in the same region.58 In the PSC, while GKP was included as the party, the name of Excalibur was not mentioned as the party, as it could not meet the legal requirements of Kurdistan Oil and Gas Law for participation in the PSC.59 Aggrieved by this treatment, Excalibur commenced judicial proceedings against TKI and all the three Gulf companies in London Commercial Court alleging wrongful shut out and contractual and other violations. At the same time, Excalibur also started arbitration proceedings in the ICC against TKI and all the three Gulf companies pursuant to the arbitral clause contained in the collaboration agreement, though Gulf companies are not parties to the above agreement. Under the circumstances, Gulf companies have applied for an anti-arbitration injunction to stay the ICC arbitration proceedings seated at New York,60 while Excalibur sought stay of judicial proceedings before Commercial Court against all defendants pending determination of any jurisdictional challenges to the arbitration proceedings.61 The court, noting that there was a strong arguable case that the Gulf companies were not parties either to the collaboration agreement or to any arbitration agreement, observed that it is an exceptional case where the English court should invoke its jurisdiction to stay arbitration seated in a foreign country.62 It was also of the opinion that forcing the Gulf companies to participate in an arbitration in which they are not parties would be oppressive or unfair and unconscionable and would result in gross injustice and accordingly, it had issued an anti-arbitration injunction against Excalibur from continuing arbitration proceedings in New York.63 Besides this, in a number of prominent cases including Albon v Naza Motor Trading Sdn Bhd,64Republic of Kazaksthan v Istil Group Inc,65J Jarvis & Sons Ltd v Blue Circle Dartford Estates Ltd,66 and Claxton Engineering Services Ltd v TXM Olaj-Es Gazkutato Kft67 and the courts have considered the application of anti-arbitration injunctions and attempted to ensure a delicate balance between the autonomy of the arbitral process and the need to prevent the abuse of legal or arbitral process. 3.2 Anti-arbitration injunctions in US In the US, the legal regime governing the issues of arbitration is mainly contained in the Federal Arbitration Act, 1925 (FAA).68 It deals with both international commercial arbitration (Chapter 2 of the FAA) and interstate arbitration (Chapter 1 of the FAA). In addition to the above, intrastate arbitration is also governed by the respective state arbitration statutes. As Chapter 2 of the FAA implements the provisions of the New York Convention, it is natural that it does not contain any express provision on the grant of anti-arbitration injunctions. However, some of the state arbitration statutes have incorporated provisions for the issuance of these injunctions. In the US, there has been no definitive judicial pronouncement on the question of the legal basis and authority of the Federal Court to issue anti-arbitration injunctions in international context.69 In the absence of a legal decision from the Court of Appeals, the Federal District Courts have given conflicting opinions. This section will examine some of these decisions. In one of the earliest decisions, in the case of Satcom International Group PLC v Orbcomm International Partners, LP70 (shortly as ‘Satcom’), the Federal District Court for the Southern District of New York (SDNY) granted anti-arbitration injunction. The facts of the case are that Satcom International, a company based in the UK, filed litigation against Orbcomm, a company operating from the State of Delaware, in the New York Federal District Court. However, the company later filed a demand for arbitration in New York under the American Arbitration Association and sought to stay the litigation. Conversely, Orbcomm filed a petition to stay the arbitration. The court heavily relied on the case of Société Géneralé de Surveillance, SA, v Raytheon European Management and Systems Co71 (shortly as ‘SGS’), which had laid down that the Federal Court had the authority to enjoin arbitration and opined that the power to order anti-arbitration injunction ‘is concomitant of the power to compel arbitration’ in so far as the Chapter I arbitration is concerned. Accordingly, the court ruled that the power to enjoin arbitration under section 4 of Chapter 1 of the FAA will be equally applicable to section 206 of Chapter 2. The court further remarked that the failure to stay the arbitration in such cases ‘would frustrate the goals of arbitration since there would be delay and increased expense as the parties litigate in both fora’.72 The decision in Satcom was approvingly quoted in the subsequent case of Glen P Farrell v Subway International, BV.73 In this case, Subway International, a Dutch corporation with a sub-licence to franchise and operate Subway restaurants in Ireland, filed a demand for arbitration before the American Dispute Resolution Centre (ADRC) against Farrell, a citizen of Ireland operating three franchises in Dublin, Ireland. Farrell refused to participate in the arbitration and instead filed a petition in the New York Supreme Court for a stay of arbitration in accordance with section 7503(b) of the New York Civil Procedure Law and Rules (NYCPLR). Subsequently, the case was transferred to the Federal Court on the application of Subway International pursuant to 9 USC section 205 and 28 USC section 1441. At the outset, Farrell submitted that he did not object to arbitration and that he merely contested the designation of the ADRC to be the arbitral institution. He contended that the arbitration agreement did not allow one party to unilaterally choose the arbitrator or the appointing authority, and hence, the court should stay the arbitration before the ADRC. The Court found that the arbitral institution was not selected in accordance with the arbitration agreement and accordingly stayed the arbitration. The court did not have any difficulty in staying the arbitration proceedings although it had applied the New York Convention and Chapter 2 of the FAA to determine the subject matter jurisdiction. From the perspective of rejection of anti-arbitration injunctions, the case of URS Corporation v Lebanese Company for the Development and Reconstruction of Beirut Central District SAL74 merits special attention. In this case, URS, an engineering design firm organized under the laws of Delaware, filed an action against the defendant Lebanese Company for the Development and Reconstruction of Beirut, 203 Central District SAL known as ‘SOLIDERE’, a publicly traded joint stock company organized under the laws of Lebanon. SOLIDERE's business activities are the acquisition of real estate properties in the Beirut Central District and the restoration and commercial development of the area, in particular, the Normandy Landfill. In this connection, SOLIDERE and Radian had entered into a contract under which Radian was responsible for part of the work. The contract contained a choice of law clause providing for the laws of the Republic of Lebanon. It also required that all disputes arising out of the contract are to be resolved in accordance with the Rules of Arbitration of the ICC. At the time the contract was signed, Radian was owned by the Dames & Moore Group. However, URS purchased the Dames & Moore Group in June 1999, several months after the contract was signed. Eventually, a dispute arose between Radian and SOLIDERE regarding gas emissions which was submitted to ICC arbitration. The ICC rendered the award in favour of SOLIDERE which was pending for recognition before the French courts. In the meantime, SOLIDERE commenced a second arbitration against both URS and Radian. URS contended that it did not really agree to arbitrate with ‘SOLIDERE’ and accordingly requested a preliminary injunction enjoining arbitration. The District Court dismissed the request of URS, noting that the petition brought by it was not supported by the provisions of the FAA and the New York Convention. In this connection, the court observed that under the FAA, the Federal District Court can entertain only two types of petitions: either an action to refer the matter to arbitration when the matter is covered by an arbitration agreement or to confirm the arbitral award, paving the way for the eventual enforcement of the award. However, since the request of URS did not fall under any of these categories, it had no option but to reject it. It observed that the petitioner had not demonstrated how issuing an injunction against the ICC in Paris will further any of the goals of the New York Convention. It concluded, ‘issuing an injunction against arbitral proceeding abroad is inconsistent with the purposes of the New York Convention; therefore, the concomitant power to enjoin under Chapter I of the FAA is inapplicable to Chapter 2 actions’.75 The court also disagreed with the contention of URS that the District Court had the power to make a determination that an agreement to arbitrate exists between the parties when arbitral proceedings are pending before an international institution. It ruled that the power to compel the parties to go for arbitration is not synonymous with the power to enjoin arbitration in cases of international commercial arbitration. Similar views were recorded in the case of Firooz Ghassabian v Fatollah Hematian by the Federal District Court of the Southern District of New York.76 Moreover, it is interesting to note that in the absence of a clear provision in the FAA, some US states have incorporated express provisions for the grant of these injunctions. A notable example is the section 7503 NYCPLR, which provides77: Application to stay arbitration: Subject to the provisions of subdivision (c), a party who has not participated in the arbitration and who has not made or been served with an application to compel arbitration may apply to stay arbitration on the ground that a valid agreement was not made or has not been complied with or that the claim sought to be arbitrated is barred by limitation under subdivision (b) of section 7502. However, as the focus of state arbitration statutes is confined to intrastate arbitration, these provisions have limited application in the context of international arbitration. Also, the decision of ‘SGS’ suggests that such provisions are not in conflict with the FAA as they are not expressly prohibited by it. In the end, it can be observed that there is a lack of judicial consensus on the issue of anti-arbitration injunction and accordingly, it is quite uncertain whether a needy litigant in the US will have access to this remedy. 3.3 Anti-arbitration injunctions In France The New Code of Civil Procedure (NCCP) of France deals with both domestic and international arbitration. This is supplemented by the French Decree of 13 January 2011, which prescribes the new rules applicable to international arbitration.78 Added to this, the general power of the court to issue injunctions is contained in Article 809 of the French Civil Procedure Code. It provides that the President of the Tribunal of First Instance may order, through a summary procedure, such protective measures as required either to avoid imminent damage or to abate a manifestly illegal nuisance.79 However, Article 1448 of the NCCP prescribes the role of national courts relating to international arbitration. It stipulates, that ‘[w]hen a dispute subject to an arbitration agreement is brought before a court, such a court shall decline jurisdiction, except if an arbitral tribunal has not yet been seized of the dispute and if the arbitration agreement is manifestly void or manifestly not applicable’. This means that national courts can exercise jurisdiction relating to an arbitral matter only (i) if the arbitral tribunal has not yet been seized of the dispute and (ii) the arbitration agreement is manifestly void. Besides the above serious check on the powers of the court to interfere with the arbitral process, even in practice, French courts emphatically refuse the issuance of any orders or injunctions that tend to interfere with the conduct of international arbitration.80 Consequently, the issuance of anti-arbitration injunctions in France is generally considered as an assault on the integrity of the arbitral process.81 In recent history, two cases related to the issue of anti-arbitration injunctions were decided by French courts82: S.A. Elf Aquitaine and Total v Mattei, Lai, Kamara and Reiner, and Republic of Equatorial Guinea v Fitzpatrick Equatorial Guinea, de Ly, Owen and Leboulanger. In the former case, Elf Neftegaz, a subsidiary of Elf Aquitaine entered into an agreement with a number of Russian organizations for the exploitation of hydrocarbons in Russia.83 This international contract had an ad hoc arbitration clause with a seat in Paris. Subsequently, certain disputes arose between the parties to the agreement. However, since Elf Neftegaz was dissolved by then, the Russian parties had applied to the President of the Commercial Court of Nanterre to nominate a representative of Elf Neftegaz for the appointment of an arbitrator. Although the court nominated Mr Carboni as the representative, it recalled the above decision subsequent to the requests of Elf Aquitaine and Total. Also, the two companies petitioned the Paris Court of First Instance under Article 809 of the French Code of Civil Procedure to enjoin the arbitration proceedings. They contended that consequent to the withdrawal of the nomination of the court-nominated representative, the appointment of the presiding arbitrator would also suffer from infirmities. Accordingly, they argued that the continuation of arbitral proceedings should be stayed. However, the Paris Court of First Instance refused to stay the arbitration proceedings and ruled that the courts have no authority to enjoin the arbitral process once the panel is constituted. It observed that although the appointment of certain arbitrators is under a cloud, the question of the establishment of the tribunal or the regularity of its constitution has to be decided only by the arbitral tribunal. It declared that such questions cannot be decided by courts in summary proceedings. It finally observed that even if the court decides to intervene, it will be only for the purpose of supporting the arbitral process and not to upset it. It may be noted that although the parties opted for arbitration in Paris, and thereby, the court had subject-matter jurisdiction, the court declined to exercise jurisdiction. Also, in the latter case of Republic of Equatorial Guinea v Fitzpatrick Equatorial Guinea, de Ly, Owen and Leboulanger, the court, faced with a similar issue, reiterated its earlier ruling in S.A.Elf Aquitaine and Total v Mattei, Lai.Kamara and Reiner. In this case, the parties entered into a contract relating to the construction of highways. When differences arose between them, Fitzpatrick invoked ICC arbitration in Paris. The Republic of Equatorial Guinea challenged the jurisdiction of ICC on the ground that Fitzpatrick did not exhaust the local remedies requirement of the arbitration agreement and the laws of the Republic. It had also further submitted that since Fitzpatrick had been under insolvency proceedings, only the local court had the authority to appoint the receiver. However, the Arbitral Tribunal, through its partial award, rejected all the arguments on the lack of jurisdiction and proceeded to enter into the merits of the dispute. Consequently, the Republic took the matter of jurisdiction to the Paris Court of Appeal. Citing the pendency of appeal before the Paris Court of Appeal, the Republic also sought from the Paris Court of First Instance an interim stay of arbitral proceedings. On this occasion, the Court of First Instance once again confirmed its settled position and ruled that the arbitral tribunal will have priority to decide issues relating to its jurisdiction. Moreover, it also ruled that the French courts are deprived of any jurisdiction to interfere with the arbitral proceedings even if such arbitration is seated in France. This strongly establishes that French courts follow a very strict approach in the matter of issuance of any injunction to restrain arbitration. Besides the above decisions, French publicists are also strongly arguing against the issue of anti-suit injunctions. It is pertinent to remember that the French writers consider anti-arbitration injunctions as a category of anti-suit injunctions, and hence, they prefer to use the expression ‘anti-suit injunctions’ to refer to anti-arbitration injunctions.84 In fact, Prof Emmanuel Gaillard, a leading international arbitrator, argues, ‘anti-suit injunctions negate the very basis of arbitration, i.e., the parties consent to submit their disputes to arbitration’85 and ‘they may exacerbate, rather than solve, the problems created by [them] by triggering an escalation of injunctions that lead to the frustration of the arbitral process as a whole’.86 He further reasons, ‘when a party consents to an arbitration agreement, it undertakes to refer disputes that may arise with the other party to arbitration, to take part in the proceedings in good faith and to carry out the award that will be rendered’.87 Finally, the contrasting approaches of the UK and France bring out the best arguments of both the sides on anti-arbitration injunctions, which ideally serve as a background for a comparison with the evolving jurisprudence in India. 4. ANTI-ARBITRATION INJUNCTIONS IN INDIA In India, the legal regime concerning all aspects of arbitration is contained in the dedicated national legislation, Indian Arbitration and Conciliation Act, 1996.88 It is generally based on the UNCITRAL Model Law,89 though the extent of influence of the Model Law on the Indian statute is a debatable point.90 As against the original Model Law, section 9 of the Indian Act had a detailed provision for grant of interim measures by court. It provides that at any time, before or during or after the arbitral process, the court shall have the same power for making orders as it has for the purpose of, and in relation to, any proceedings before it. In other words, the powers of the civil court, even in respect of an arbitral subject-matter, is only limited by the general powers of the court to pass interim measures in any other legal proceedings. It may be noted that this is how the Civil Procedure Code (in particular, Order XXXIX), is indirectly connected to the arbitral process though otherwise the Act expressly excludes the application of the provisions of Civil Procedure Code in the conduct of arbitral proceedings, with a view to avoid formalism and the consequent delay.91 In this connection, it may also be noted that the Indian courts have consistently held that the power of courts under Order XXXIX is of very wide import,92 and it includes the power to grant anti-suit injunctions93 and anti-arbitration injunctions94 in appropriate cases. Thus, in view of the broader scope of section 9, it is not incompatible to have a remedy of the nature of anti-arbitration injunction. This is based on the reasoning that if the courts have the general power to issue injunctions, as a natural corollary they may also exercise the same power when an application is preferred under section 9 by one of the parties, even though the subject-matter is related to arbitration. However, two issues arise out of this proposition when it is applied in the international context: the first issue is, whether the provision of section 9 which is contained in part I will be applicable to foreign arbitrations and the second issue is the judicial propriety of issuing injunctions with extra-territorial effect and their consequent implications on the comity of nations. With regard to the first issue, it may be noted that though no provision of part II speaks of interim relief, no provision expressly prevents the grant of interim relief either. Moreover, the Indian courts always regard the power to order interim measures as ancillary to the power to award the main relief.95 This means that if any Indian court can exercise jurisdiction in respect of a matter coming under part II, they were not prevented from granting an interim relief when it is required in the interests of justice. Moreover, after the Arbitration and Conciliation (Amendment) Act, 2015, section 9 was made applicable to international commercial arbitrations and hence this issue does not arise.96 On the second issue also, in view of the clarifications of the English court that the anti-arbitration injunction is only directed against the party and/or the arbitral tribunals, which are private bodies, it is submitted that this objection may not carry much force.97 However, section 5 which codifies the extent of judicial intervention in arbitral matters complicates this position further. It stipulates that: [n]notwithstanding anything contained in any other law for the time being in force, in matters governed by this Part, no judicial authority shall intervene except where so provided in this Part. This, in effect means that the powers of the courts vis-à-vis arbitration is very limited to the occasions expressly provided under the Indian Arbitration and Conciliation Act, 1996. In this connection, a question is raised as to whether the Indian courts, by use of power to order interim measures, can enjoin arbitration, which is not specifically provided for in the Act. Moreover, it is arguable that this provision, being integral to part I, may not be applicable to part II which governs the foreign-seated arbitrations. However, in view of the recent decision in ‘BALCO’,98 part I will be exclusively applicable to arbitrations held in India and in no case provisions in part I can be applied to part II. Hence, it is opined that the extent of judicial intervention prescribed in section 5 of the Act may not pose much hurdle to the remedy of anti-arbitration injunctions. Moreover, in the context of foreign arbitration, the courts have the power to refer the matter to the arbitral tribunal as provided in section 45 of the Act. Section 45 is identical to Article II.3 of the New York Convention and Article 8 of the Model Law except for the addition of the words ‘Notwithstanding anything contained in part I or in the Code of Civil Procedure, 1908 (Act 5 of 1908)’. Yet, in view of the ruling in ‘BALCO’99 that ‘Part I of the Arbitration Act, 1996 is applicable only to all the arbitrations which take place within the territory of India’,100 the above non-obstante clause has lost much of its value. Similarly, the reference to Civil Procedure Code has also become irrelevant, as section 89 which provides for ‘Settlement of Disputes outside the Court’ has been introduced in the Code of Civil Procedure, 1908 by the Code of Civil Procedure (Amendment) Act, 1999.101 In this connection, it is quite instructive to look into the 176th Report of the Law Commission of India: ‘The Commission is of the view that there is no need to except Section 89 of the Code from Section 5 of the 1996 Act in as much as Section 89 merely requires the application of 1996 Act. There is no conflict between Section 5 of the 1996 Act and Section 89 of the Code.102 Thus, despite the variations, the effect of Section 45 of the Arbitration and Conciliation Act, 1996 is the same as that of Article 8 of the Model Law. Moreover, the scope of the latter part of section 45 was also under the judicial consideration of the Supreme Court in the case of Shin-Etsu Chemical Co Ltd v M/S Aksh Optifiber Ltd (shortly, ‘Shin-Etsu’).103 In this case, a question arose as to the nature of adjudication under section 45: Is it necessary for the court to offer a final expression as to the invalidity etc. of the arbitration agreement or a mere prima facie view of the matter (without a full-fledged trial) is sufficient). However, it was finally decided that the court is merely required to make a prima facie view of the matter and to leave to the parties the choice of full trial either before the arbitral panel or before the court at the post-award stage.104 Justice B.N. Srikrishna, who delivered the majority judgment, reasoned that: adopting a final and determinative approach under Section 45 may not only prolong proceedings at the initial stage but also correspondingly increase costs and uncertainty for all the parties concerned. Finally, having regard to the structure of the Act, consequences arising from particular interpretations, judgments in other jurisdictions, as well as the opinion of learned authors on the subject, I am of the view that, the correct approach to be adopted under Section 45 at the pre-reference stage, is one of prima facie finding by the trial court as to the validity or otherwise of the arbitration agreement’.105 It is pointed out that the issue of anti-arbitration injunction in India has not been authoritatively resolved so far by any decision of the Supreme Court. In the absence of any binding decision of the Supreme Court, various High Courts have dealt with the question in a haphazard manner. It is found out that excepting a few decisions, most decisions of the High Court assume that the Indian law (including the Arbitration and Conciliation Act, 1996 and the Civil Procedure Code, 1908) confer on them the power to enjoin arbitration. It is noted that the High Courts were mostly concerned with whether the applicant will be entitled to the remedy rather than focusing their judicial attention on whether such a remedy is available within the Indian legal framework. In this connection, this section will examine the major decisions in which the question of anti-arbitration injunctions has been involved.106 They are: Chatterjee Petrochem Co and Another v Haldia Petrochemicals Ltd,107World Sport Group (Mauritius) Ltd v MSM Satellite (Singapore) Pte Ltd,108Board of Trustees of the Port of Kolkata v Louis Dreyfus Armatures SAS,109 and Vikram Bakshi v McDonald’s India Pvt Ltd.110 4.1 Chatterjee Petrochem Co and another v Haldia Petrochemicals Ltd111 In this case, Dr Purnendu Chatterjee, a non-resident Indian industrialist through his Chatterjee Petrochem (Mauritius) Company (CPMC) invested in the project, Haldia Petrochemicals Ltd (HPL), an entity established for construction of a green-field petrochemical complex in Haldia in the State of West Bengal and promoted by the West Bengal Industrial Development Corporation (WBIDC).112 As a result, on 12 January 2002 an agreement of restructuring was entered into between CPMC, Government of West Bengal, WBIDC, and HPL to ensure that CPMC holds 51 per cent of the total paid up capital of HPL. Clause 15 of the above Agreement provided for reference of all disputes relating to the said Agreement to the ICC, Paris. Subsequently, when differences arose between the parties as to the transfer of shares to the Chatterjee Group companies, CPMC sought to invoke the arbitral clause and refer the matter to ICC arbitration.113 HPL, on the other hand, contended that the agreement of 12 January 2002 providing for arbitration, is superseded by another agreement of 8 March 2002, conferring an exclusive jurisdiction to the courts in Calcutta.114 Accordingly, it had contended that the arbitral clause is invalid and prayed for an anti-arbitration injunction to enjoin the arbitration in Paris. During the hearing before the Calcutta High Court, CPMC contended that the arbitral clause is unambiguous and hence the reference of the matter to arbitration is valid and legal.115 Moreover, it had argued that in view of Article 6 of ICC Arbitration Rules, the validity or existence of the arbitration agreement was to be decided by ICC’s International Court of Arbitration and hence the same cannot be decided by the civil courts. It had further argued that the civil suit instituted by the HPL and the remedy of injunction to restrain foreign arbitration was in violation of section 5 of the Arbitration and Conciliation Act, 1996. On the contrary, HPL argued that the power of the civil court is inherent and under section 45 of the Act the court can examine whether the agreement is valid, operative or incapable of being performed.116 It had contended that this position was in no way affected by section 5 of the Act, as it will be applicable only if a valid arbitration agreement is established. The Division Bench of the Calcutta High Court, though agreed that the Arbitration and Conciliation Act, 1996 ‘is a complete Code and no judicial intervention beyond its provisions is permissible’, held that the power of the judicial authority to decide invalidity of the arbitration agreement under section 45 of the Act will prevail over the provisions contained in part I of the Act or the Civil Procedure Code, due to the operation of the non-obstante clause contained in section 45.117 The Court also maintained that as the power of the judicial authority in this regard is provided in the statute itself, the same cannot be whittled down by operation of section 5 of the Act.118 However, the High Court had clarified that the power to entertain an action or cause by a Civil Court is an inherent power and it need not be traceable to any statute. It had further observed that section 45 of the Act does not limit the nature of the legal action to be taken by a civil court and it merely lays down the procedure to be followed by the court when seized of an action relating to an arbitration agreement. However, the High Court had qualified its ruling and observed that it is not necessary for the court to exercise its power to examine the validity of the arbitration agreement in every case brought before it. As a matter of discretion, it would be well within the powers of the court to refrain from exercising its power to pronounce on the validity of the arbitration agreement, especially, in cases where ‘the issues are debatable and not ex-facie or patent in nature’.119 On the other hand, ‘where the issue as to the invalidity or non-existence of the arbitration agreement brooks no controversy or where the claim is patently stale making the agreement inoperative or incapable of being performed, the court has jurisdiction not to refer the parties to a vexatious and futile arbitration which would be an abuse of process of law’. 120 Yet, the High Court finally ruled that the appellant by inviting the court to adjudicate on merits deemed to have abandoned his right to seek arbitration in respect of the same claim. However, the case took a surprising turn, when CPMC appealed to the Supreme Court of India. On appreciation of facts, the court was of the opinion that the agreement of 12 January 2002 was not superseded by another subsequent agreement of 8 March 2002 and accordingly, ruled that the arbitral clause contained in the earlier agreement was valid and enforceable. Hence, the question of grant of anti-arbitration injunction did not arise in the Supreme Court. The court merely used the opportunity to reiterate the point laid down in the case of SBP and Co v Patel Engineering Ltd and Another,121 that where a plea is raised before a judicial authority that the subject-matter of the claim is covered by the arbitration agreement which is valid and enforceable, then the dispute ought to be resolved by arbitration.122 Moreover, the court opined that the litigations initiated by the Chatterjee Petrochem (I) Pvt Ltd (as against the CPMC, the original party to the contract and arbitration) will not constitute a waiver on the part of CPMC and it will not jeopardize the arbitration clause in any manner.123 In summary, it may be noted that though the High Court did not analyse the compatibility of the remedy of anti-arbitration injunction with reference to the provisions of the New York Convention and its state practice in relevant jurisdictions, it had made an appropriate analysis of the relevant provisions of the Indian Arbitration and Conciliation Act, 1996 to enjoin the arbitral proceedings in foreign jurisdictions. Moreover, it had also opined that the remedy of anti-arbitration injunction is not prohibited under the framework of the Arbitration and Conciliation Act, 1996, including with reference to section 5 of the Act. 4.2 World Sport Group (Mauritius) Ltd. v MSM Satellite (Singapore) Pte. Ltd124 Subsequent to the above decision, the issue of anti-arbitration injunction arose once again in the case of World Sport Group (Mauritius) Ltd v MSM Satellite (Singapore) Pte Ltd. In this case, the Board of Control for Cricket in India (BCCI) had floated certain tenders with regard to the broadcast of the cricket matches of the Indian Premier League.125 While the World Sports Group (Mauritius) Ltd (shortly known as, WSG) had won the global media rights, the MSM Satellite (Singapore) Pte Ltd (shortly known as, Sony) bagged the media rights for the Indian sub-continent.126 However, soon after the first IPL season was over, BCCI terminated the agreement with Sony and commenced negotiation with WSG.127 Sony challenged the termination in the Bombay High Court and sought to restrain BCCI from awarding the contract to any third party. In the meantime, BCCI awarded the media rights for Indian sub-continent to WSG for a value of Rs.4791.08 crores. However, for the operationalization of the contract, BCCI required WSG to submit a licensee within 72 hours, which was deliberately allowed to be lapsed to facilitate a new media licence agreement between Sony and BCCI. It may be noted that the though WSG could have facilitated a direct agreement between Sony and BCCI, it had persuaded Sony to sign a facilitation deed with itself for a facilitation fee of Rs 425 crores.128 Under the circumstances, Sony paid three instalments amounting to Rs 125 crores but subsequently, realized that it was defrauded and chose to rescind the contract on grounds of fraud and misrepresentation. Yet, WSG demanded the balance payment sent a notice to Sony for invoking the arbitration before the ICC. Aggrieved by this, Sony filed a civil suit in the Bombay High Court and applied for an anti-arbitration injunction. The matter initially went before the Single Bench of the Bombay High Court which supported the invocation of arbitration and declined the issue of anti-arbitration injunction. However, the Division Bench reversed the decision of the Single Judge and held that in cases where serious fraud is alleged against a party, it is desirable that the matter is tried in open court and observed that the facts and circumstances of the case would justify the non-reference of the dispute to arbitration.129 Furthermore, the court had also invoked the ground of public policy and opined that the adjudication of disputes without the BCCI, a public body, cannot be held to be in public interest or in furtherance of public policy of India.130 The court further reasoned that in view of the pending status of the larger dispute involving Mr Lalit Modi, the then IPL Commissioner and BCCI, the dispute between the parties to the Facilitation Deed alone cannot be referred to arbitration and accordingly issued the anti-arbitration injunction to stay the arbitration before the ICC.131 It is submitted that the opinion of the court that the case should be better tried in open court rather than through arbitration, as it involves allegations of fraud would be wholly unsustainable within the framework of section 45 of the Arbitration and Conciliation Act, 1996. It is submitted that the arbitral clause is separable from the rest of the terms of the underlying contract and accordingly, the alleged fraudulent circumstances will not vitiate the arbitrability of the dispute. On the point of existence of anti-arbitration injunction in India, the counsel for the appellant vehemently argued that the courts have the authority to enjoin arbitral proceedings, citing the language of section 45 of the Act.132 To this end, he had also drawn support from the leading text of Russell on Arbitration:133 7-058 Injunctions to restrain arbitral proceedings: Injunctions to restrain arbitrations are, at least in England, few and far between and becoming fewer still over time. This is principally because of the acceptance of the principle that the arbitrator should usually determine his own jurisdiction and so to restrain arbitration by way of injunction would be inconsistent with the scheme of the Arbitration Act 1996. However, there are exceptional circumstances where an injunction to restrain an arbitration may be obtained. Such an injunction is different in nature from an injunction granted in support of arbitral proceedings, but it is convenient to mention this type of injunction at this stage. It is interesting to note that the counsel for the respondent had also partially agreed with these contentions of the appellant. In fact, he had also admitted the availability of the remedy of anti-arbitration injunction within the Indian framework, but merely argued that it can be granted only in the rarest of rare cases and its grant will be subject to the discretion of the judge.134 Yet, it may be noted that the court did not examine the compatibility of this remedy with the scheme of the New York Convention or the framework of the Indian Arbitration and Conciliation Act, 1996 and accordingly limited the inquiry to find out whether the appellant is entitled to the remedy. When the matter went on appeal to the Supreme Court, the Counsel for Sony attempted to justify the decision of the Division Bench of the High Court by arguing that the courts in India as well as in England ‘have the power to issue injunctions to restrain parties from proceeding with arbitration proceedings in foreign countries’.135 In this regard, he had also relied upon two earlier decisions of the Supreme Court rendered prior to the enactment of the 1996 Act: VO Tractor Export, Moscow v Tarapore and Co136 and Oil and Natural Gas Commission v Western Company of Northern American137 wherein the courts have stayed the arbitral or similar proceedings. However, as in the case of High Court, WSG did not make any serious contention on this point. Accordingly, the Supreme Court decided the case on the narrow point that Sony did not fulfil the requirements of section 45 for not referring the matter to arbitration. The Court opined that Sony was not able to prove that the arbitral clause is ‘null and void or inoperative or incapable of being performed’. Furthermore, the court had explained each of the grounds with the help of leading authorities such as, Redfern and Hunter, Albert Jan van den Berg and Herbert Kronke, etal.138 and concluded that the fraud alleged to have been committed by WSG did not fall within any of the grounds specified in section 45.139 Accordingly, the court opined that it had no other choice but to refer the matter to arbitration as laid down in section 45 of the Act. Moreover, the court maintained that even the perpetration of fraud does not affect the validity of the arbitral clause, as the clause is always separable from the rest of the provision of the Facilitation Deed. However, despite the contentions of Sony, the court was silent on the issue of anti-arbitration injunctions, as it was of the opinion that the question did not directly arise out of the facts. Consequently, the case was disposed of without recording any authoritative opinion on the question of anti-arbitration injunctions. 4.3 Board of Trustees of the Port of Kolkata v Louis Dreyfus Armatures SAS140 In this case, the Kolkata Port Trust (KPT), the plaintiff, had awarded a contract for operation and maintenance of Berth Nos 2 and 8 of the Haldia Dock Complex to the Haldia Bulk Terminals Private Ltd (HBT).141 As per the agreement reached between the parties, HBT will function as a subsidiary of an Indian company ALBA Asia Pvt Ltd. in which Louis Dreyfus Armatures SAS (LDA) will hold 49 per cent of shares.142 Claiming lack of cooperation and creation of several impediments in the execution of the project, HBT had initiated arbitration proceedings against the Port Trust in accordance with the arbitral clause contained in the agreement.143 Accordingly, an arbitral tribunal, comprising of three retired judges of the Supreme Court of India, was constituted to hear the matter.144 It was intended to be a purely domestic arbitration governed by Indian laws. In the arbitral proceedings commenced by HBT, KPT entered appearance and had also filed counter-statement and counter-claim. It was found out that the claim of HBT against KPT is essentially one for damages allegedly suffered by HBT, as a result of alleged breach of contract by KPT. However, subsequently, LDA, in its capacity as the ‘(foreign) investor’, began investment arbitration against Republic of India with KPT as one of the respondents under the India–France Bilateral Investment Treaty (BIT).145 Aggrieved by this second round of arbitration proceedings, KPT approached the Calcutta High Court praying for the grant of anti-arbitration injunction to enjoin the arbitral proceedings. Before the High Court, KPT contended that the claim proposed to be pursued under the BIT is substantially the same as already pending before the arbitral tribunal and hence, it would lead to risks of oppression and injustice.146 It had also argued that ‘intricate complexities might arise’, ‘in case, courts of India and France were to exercise concurrent jurisdiction in these matters’. Furthermore, relying upon the express language of section 45 of the Indian Arbitration and Conciliation Act, 1996, it had contended that the Indian courts have the power to make judicial determination as to the existence or validity of the arbitration agreement in foreign arbitration and to grant anti-arbitration injunctions.147 Towards this end, it had drawn support not only from the Indian decisions of Dr Devinder Kumar Gupta v Realogy Corporation148 and Chatterjee Petrochem (Mauritius) Co and Anr v Haldia Petrochemicals and Ors,149 but also two other English decisions, Excalibur Ventures LLC v Texas Keystone Inc and Others150 and Claxton Engineering Services v TXM.151 In other words, it had argued that the Indian courts have the power to grant such injunctions and that in the facts and circumstances of the case, it is also entitled to claim the same. On the other hand, LDA argued that the ‘same set of facts could give rise to different causes of action’, one under the domestic law and the other under international law152 and ‘the principle of parallel proceedings’ has no application in arbitration.153 It also submitted that in view of the Supreme Court decision in Venture Global Engineering v Satyam Computer Services Ltd,154 that the general principles of part I will apply to part II of the Arbitration and Conciliation Act, 1996, section 5 (of part I) will also be applicable to foreign arbitrations and hence there should be minimal judicial intervention in foreign arbitrations.155 It had also stoutly resisted the contention of the KPT that the Indian courts have the power to grant anti-arbitration injunctions and argued that the ‘anti-arbitration suit and/or anti-injunction suit is not ordinarily maintainable [in India], unless the statute gives a right to the court to exercise its jurisdiction against initiation of such proceeding’.156 It was also of the opinion that unlike the English law, the Indian Arbitration and Conciliation Act, 1996 does not confer any power on the civil court to interfere with foreign arbitration by grant of anti-arbitration injunction.157 In this respect, a reference was also made to section 37 of the UK Senior Courts Act, 1981, which confers a very wide discretion on the English courts to grant any interim injunction.158 The above rival contentions on the very existence of the anti-arbitration injunction and its compatibility with the Indian legal framework has forced the court to reply on this vital question, which many courts including the Supreme Court had avoided (or was unable to consider) in the past. The Calcutta High Court, while agreeing with the view that section 5 of the Arbitration and Conciliation Act, 1996 would be applicable to all arbitrations, irrespective of whether it is domestic or international arbitrations,159 was of the opinion that section 5 cannot in anyway curb the power expressly vested in the court under section 45 of the Act.160 Accordingly, it held that the Indian courts have the power to grant anti-arbitration injunction and also laid down the circumstances under which such injunctions may be granted. They are: if an issue is raised whether there is any valid arbitration agreement between the parties and the court is of the view that no agreement exists between the parties if the arbitration agreement is null and void, inoperative or incapable of being performed [in cases, where] continuation of foreign arbitration proceeding might be oppressive or vexatious or unconscionable.161 Moreover, it was of the opinion that the arbitration clause contained in the BIT is only enforceable against Republic of India and not against KPT and consequently, it had viewed the issuance of notice of investment arbitration against KPT as an oppressive action, in particular, when the other arbitral proceedings for contractual claim was already pending against KPT. Accordingly, it had issued anti-arbitration injunction restraining LDA to proceed with the investment arbitral proceedings as against KPT. Though this decision does not take into account the relevant landmark decision such as Shin-Etsu v Aksh Optifiber162 and also lacks adequate discussion on the powers of the civil court under section 9 of the Civil Procedure Code, a dedicated analysis of the issue of compatibility of anti-arbitration injunction under the Indian legal framework along with the comparative legal analysis of English decisions, is certainly a remarkable contribution. However, as could be noted, it was a decision laid down by a Single Judge Bench of the High Court and accordingly, it will have a limited precedential role. 4.4 Vikram Bakshi v Mcdonald’s India Pvt Ltd163 The facts of the case are that a joint venture agreement was signed between the US food major McDonald Corporation, its Indian subsidiary and Mr Vikram Bakshi for the incorporation and management of a joint venture company, namely, Connaught Plaza Restaurants Pvt Ltd (CPRL). The joint venture agreement had a provision for reference of disputes to arbitration before the London Court of International Arbitration (LCIA). Subsequently, by 2013, McDonald India Pvt Ltd exercised a right available to it under the agreement to acquire the shares in CPRL held by Mr Vikram Bakshi. Though Vikram Bakshi petitioned the Company Law Board (CLB) challenging the action of McDonald India Pvt Ltd, the matter ultimately landed in the Delhi High Court for issuance of the injunction to restrain the arbitration. In this case, the Delhi High Court decided to issue an anti-arbitration injunction against the LCIA, on the reasoning that when the matter is pending before the CLB, the same cannot be referred to arbitration. In this connection, it was also of the opinion that there will be some amount of overlapping between issues pending before the CLB and issues sought to be raised before the LCIA. Accordingly, it was of the opinion that the arbitral agreement was prima facie incapable of being performed or was inoperative ‘at least till the time the question of oppression and mismanagement is decided by the CLB’.164 Moreover, the court also approvingly quoted the decision of the Bombay High Court in the case of Rakesh Malhotra v Rajinder Kumar Malhotra,165 wherein the court had expressed the view that disputes involving oppression and mismanagement are not referable to arbitration.166 This decision has been vehemently criticized for a number of reasons, including on the point that reference to arbitration cannot be denied on the ground that a similar issue is pending before another authority.167 However, recently, when the same matter was taken up in appeal before the Division Bench of the Delhi High Court, the court disagreed with the opinion of the Single Judge. It held that the arbitral clause does not suffer from any fatal error and accordingly allowed the appeal.168 The court in this case, reacting to the scathing criticisms against its earlier decision, recognized the special nature of anti-arbitration injunctions and applied the parameters laid down in the English decision of ‘Excalibur’.169 It ruled that anti-arbitration injunctions would be admissible only in ‘exceptional cases’ where the holding of arbitration proceedings would be oppressive or unconscionable such as where the issue is whether or not the parties have consented to the arbitration or where there was an allegation that the arbitration agreement itself is a forged one.170 However, as none of the exceptional circumstances requiring the grant of anti-arbitration injunctions arise in the present case, the Division Bench vacated the injunction granted earlier. Though this decision is to be welcomed both for its outcome as well as for its judicial approach in an important jurisdiction (court from which such injunctions have been sought on numerous occasions), in the absence of a national-level ruling by the Supreme Court, the relief may be short-lived. 4.5 Summary The analysis of these decisions shows that anti-arbitrations injunctions have certainly entered into India, as parties are seeking them and at times courts (especially High Courts) are granting them. However, even on theoretical lines, it is not clear whether such a remedy is compatible with the Indian legal framework. Though the Calcutta High Court in the case of Board of Trustees of the Port of Kolkata v Louis Dreyfus Armatures SAS171 had taken a remarkable initiative to lay down the correct law in this respect, which was followed by the Delhi High Court in the case of McDonald’s India Pvt Ltd. v Vikram Bakshi,172 the Supreme Court did not get any opportunity so far to express its opinion on the legal admissibility of these injunctions. Furthermore, it is submitted that in the case of Chatterjee Petrochem Co and another v Haldia Petrochemicals Ltd, though the Calcutta High Court proceeded on the right reasoning that the Act of 1996 is a complete Code and accordingly legal justifications for judicial intervention must be founded within the provisions of the Act, its views on section 45, especially on the non-obstante clause, is completely misplaced. It is suggested that in view of the law prevailing in different jurisdictions in this respect, as examined above, it is desirable that the Indian courts clarify the nature, scope, and limitations of this controversial remedy. 5. THE CARIBBEAN EXPERIENCE Meanwhile, it is quite instructive to look into the decision of British Caribbean Bank Ltd v The Government of Belize,173 rendered by the Caribbean Court of Justice.174 This decision is notable for its approach of following the English decision of Elektrim SA v Vivendi Universal SA175 and illustrates how a common law jurisdiction by applying the above parameters can deal with the problems associated with the anti-arbitration injunctions. In this case, when the Government of Belize nationalized the country’s telecommunications industry in the sole hands of ‘Telemedia’, it had compulsorily acquired the rights of the British Caribbean Bank (BCB) under the various loans and mortgage facilities with ‘Telemedia’.176 Also, in terms of the Belize Telecommunications (Amendment) Act, 2009, the payment of principal and interest on the loan facilities ceased and no compensation was paid to BCB.177 The constitutionality of the above legislation was challenged in the case of British Caribbean Bank Ltd v Attorney General of Belize and the Minister of Public Utilities178 and the Belize Court of Appeal struck down the above law as unconstitutional. To overcome the problem, the Government of Belize brought out a constitutional amendment and reacquired the assets held by BCB.179 Subsequently, BCB initiated investment treaty arbitration under the BIT between the governments of Belize and UK.180 The Government of Belize approached the national courts and sought interim anti-arbitration injunction restraining BCB to continue with the arbitration.181 The trial court had restrained BCB from pursing the arbitration as it was of the opinion that the simultaneous pursuit of arbitration when litigation challenging the constitutionality of the statute was pending before the national courts would be oppressive or vexatious.182 It was also of the opinion that in case of refusal of injunction by the court, damages would not be an adequate remedy to the Government of Belize and accordingly, ruled that the balance of convenience was in favour of the government. Aggrieved by this decision, BCB appealed to the Court of Appeal which had upheld the trial court decision though on similar grounds, forcing the bank to appeal again to the Caribbean Court of Justice (CCJ).183 During the hearing, one crucial issue arose for consideration was the legal basis and the conditions for the grant of injunctions restraining arbitration. Though the task of the court, especially with regard to the first part, was not an insurmountable one, given the express and unambiguous provision contained in section 106A (8) of the Belize Supreme Court of Judicature Act,184 the detailed articulation of the conditions and limitations which should govern the issue of anti-arbitration injunctions was noteworthy. The court while defining the general approach which the courts should follow in this regard, observed that ‘the jurisdiction to grant an anti-arbitration injunction must be exercised with caution’.185 In fact, it observed that: the court must redouble the caution it normally exercises in restraining foreign proceedings because of the importance of recognising and enforcing the agreement of parties to the mechanism for dispute resolution and the accepted principle of international law that the arbitral tribunal should not be subject to the control of the domestic courts before it makes an award.186 Moreover, in cases involving investment treaty arbitration, the general approach is to recognize the international arbitration and accordingly, the domestic courts should intervene ‘only with extreme hesitation’.187 Also, with regard to the bases on which an injunction restraining international arbitration could be granted, the court had approvingly quoted the English decision of Elektrim SA v Vivendi Universal SA: First, if the proceedings are an infringement of a legal or equitable right of a party; secondly, where those proceedings are vexatious, oppressive or unconscionable. The first analysis is usually applied to cases where the parties have contractually agreed to submit disputes to a particular court or arbitration and one party has started proceedings in breach of that agreement. The second analysis applies where there is not such agreement but the court concluded that the ends of justice require an injunction to restrain foreign proceedings that are vexatious or oppressive’.188 Furthermore, the court also clarified that every instance of multiple proceedings is not to be considered as amounting to vexatious or oppressive proceedings or the abuse of the process of court. Similarly, if the party seeking the arbitration stands benefited by the arbitration, the same should not be considered as vexatious or oppressive proceedings. Accordingly, the court ruled that, the concurrency of domestic and foreign court proceedings or simultaneous pursuit of domestic legal proceedings and the investment arbitration, by the fact itself, does not amount to vexation or oppression.189 Also, on the question of burden of proof, the court ruled that the ‘burden is on the party seeking the injunction and he must discharge that burden to a higher level than that required to restrain foreign proceedings which do not involve a contract to litigate in the foreign court’.190 In the end, based on all the above reasoning, the court had finally set aside the injunction granted by the trial court. It is submitted that this decision is very valuable, especially for jurisdictions which are unable to agree to the view that courts have no authority to restrain arbitration. While it is ensuring that the beneficial effects of anti-arbitration injunction can be retained, it also addresses the potential areas of concern. Though there may be a criticism that the parameters laid down by the court themselves can be abused, it can be better avoided if the court strictly adheres to the above parameters. 6. CONCLUSION Despite the controversial nature of anti-arbitration injunctions, they have emerged as one of the possible remedies in a number of jurisdictions. However, their existence either under the New York Convention or the Model Law is far from clear: Neither there is an express provision authorizing their grant nor there is a provision for making them illegal. Consequently, each jurisdiction has its own approach regarding their existence and availability. Generally, common law jurisdictions are unable to deny their courts any power to intervene in cases of abuse of legal or arbitral process. English courts lead this school of thought and openly acknowledge the existence of anti-arbitration injunctions. These courts derive their powers under section 37 of the Senior Courts Act 1981 and have also laid down clear parameters for their grant. While US courts are ambivalent on this issue, there is a general sentiment against the issue of anti-arbitration injunctions in France. While the approach of France is understandable given the recent changes in its arbitration law in this respect, some find the rule of priority even in cases of abuse of arbitral or legal process as not satisfactory. In the case of India, the issue of anti-arbitration injunction has not been authoritatively resolved so far by any decision of the Supreme Court. In the absence of any binding decision of the Supreme Court, various High Courts have dealt with the question in a haphazard manner. From out of the limited judicial attention that the Indian courts had given to the anti-arbitration injunctions, no judicial opinion has so far been expressed on the legal incompatibility of such injunctions within the Indian legal framework. On the other hand, in a number of cases, especially, at the level of High Courts, such injunctions exist in reality. In comparison, while the courts of certain countries such as UK, US, and France have always grappled with the issue of whether anti-arbitration injunction is available in their legal systems, in India, most often, the question has been whether or not the applicant is entitled to the remedy of anti-arbitration injunction even without any clarity on its availability under the legal system. In India, while at times, litigants have pleaded on the compatibility (or non-compatibility) of such injunctions, the courts have the general tendency to assume that they have the power to issue any injunction (including anti-arbitration injunction), provided the applicant fulfils the general conditions for grant of injunctions (such as prima facie case, irreparable injury and balance of convenience). Moreover, it is also noticed that except a few decisions, the Indian courts are generally reluctant to use the expression ‘anti-arbitration injunction’. This raises doubts as to whether Indian courts really appreciate the special nature of these injunctions and their negative implications on the arbitral process. In this connection, it is submitted that these omissions does not seem to be an issue of language but demonstrate the lack of adequate sensitization towards this exceptional remedy. It is true that in a number of cases where the High Courts have issued these injunctions, the parties have preferred appeals to the Supreme Court. However, in none of them, the Supreme Court had to rule on the issue of anti-arbitration injunctions. Unfortunately, it also never thought it fit to issue any instructions or guidelines on how to adjudicate on the application of such injunctions. It seems that the Indian Supreme Court is currently following the wait and watch approach on this issue. Also, it is extremely cautious about interfering with international arbitration, especially, in view of the strong sentiments in favour of international arbitration. However, it needs to realize that in the absence of a clear enunciation of judicial approach towards the problem of anti-arbitration injunction, mere observance of judicial self-restraint may seem to work for the time-being, but the dangers of judicial intervention will still be there. Hence, it is incumbent upon the Supreme Court to lay down a clear policy on the admissibility of such injunctions, on the lines Elektrim SA v Vivendi Universal SA. In fact, this approach is already followed by the Indian High Courts in some recent decisions, such as the Board of Trustees of the Port of Kolkata v Louis Dreyfus Armatures SAS and McDonald’s India Pvt Ltd v Vikram Bakshi as well as by the Caribbean Court of Justice in the case of British Caribbean Bank Ltd v The Government of Belize, as examined above. Pending a global consensus on this issue, it is suggested that India should follow a highly restrictive approach with regard to the grant of these injunctions. As highlighted above, a sensible approach would be to allow the arbitral tribunals to decide all questions relating to the dispute including the questions on their jurisdiction but in cases of manifest abuse of legal or arbitral process, the court may invoke its jurisdiction to issue anti-arbitration injunctions. The author wishes to record his sincere appreciation for the University of Michigan Law School for support of his stay as a Michigan Grotius Fellow that has made a part of this work possible. This article was completed as of August 2017. Footnotes 1 Jennifer L Gorskie, ‘US Courts and the Anti-Arbitration Injunction’ (2012) 28 Arb Int’l 295; Julian DM Lew, ‘Does National Court Involvement Undermine the International Arbitration Process?’ (2009) 24 Am U Int'l L Rev 489; Hakeem Seriki, Injunctive Relief and International Arbitration, (Informa Law from Routledge 2015); Giulia Carbone, ‘Interference of the Court of the Seat with International Arbitration’ [2012] J Disp Resol 217; John Gaffney, ‘Non-Party Autonomy: Displacing the Negative Effect of the Principle of “Competence-Competence” in England?’ (2012) 29 J Int Arb 107; Sandra Synkova, Courts' Inquiry into Arbitral Jurisdiction at the Pre-Award Stage: A Comparative Analysis of the English, German and Swiss Legal Order (Springer 2013); Thomas E Carbonneau, ‘“Arbitracide”: The Story of Anti-Arbitration Sentiment in the US Congress’ (2007) 18 Am Rev Int’l Arb 233; Sharad Bansal and Divyanshu Agarwal, ‘Are Anti-Arbitration Injunctions A Malaise? An Analysis in the Context of Indian Law’ (2015) 31 Arb Int’l 613. 2 Emmanuel Gaillard, ‘Reflections on the Use of Anti-Suit Injunction in International Arbitration’ in Loukas Mistelis and Julian Lew (eds), Pervasive Problems in International Arbitration (Kluwer Law International 2006) 203–15; Nicholas Poon, ‘The Use and Abuse of Anti-Arbitration Injunctions: A Way Forward for Singapore’ (2013) 25 Singapore Academy L J 244–95. 3 Lew (n 1) at 492. 4 Matthias Scherer and Werner Jahnel, ‘Anti-Suit and Anti-Arbitration Injunctions International Arbitration: A Swiss Perspective’ (2009) 12 Int’l Arb L Rev 66; Doak Bishop, ‘Combating Arbitral Terrorism: Anti-Arbitration Injunctions Increasingly Threaten to Frustrate the International Arbitral System’ < http://www.kslaw.com/library/pdf/bishop7.pdf> accessed 23 May 2017; Andre de A Cavalcanti Abbud and Gustavo Santos Kulesza, ‘Interim Measures and Anti-Arbitration Injunctions in Brazil’ < http://kluwerarbitrationblog.com/2014/08/04/interim-measures-and-anti-arbitration-injunctions-in-brazil/> accessed 23 May 2017; Mostafa A Hagras, ‘The Egyptian Arbitration Law and Anti-Arbitation Injunctions Due to Expiry the Timelimit for the Final Award: Case Study’ <http://www.youngicca-blog.com/the-egyptian-arbitration-law-and-anti-arbitration-injunctions-due-to-expiry-the-time-limit-for-the-final-award-case-study/> accessed 23 May 2017. 5 Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958, 330 UNTS 38 (No 4739). 6 UNCITRAL Model Law on International Commercial Arbitration, 1985 with amendments as adopted in 2006 (United Nations General Assembly. Res 40/72, UN Doc A/RES/40/72 (11 December 1985) < https://www.uncitral.org/pdf/english/texts/arbitration/ml-arb/07-86998_Ebook.pdf> accessed on 23 May 2017. (hereafter ‘Model Law’). 7 In the pre-1996 era, the Indian Supreme Court held that anti-arbitration injunctions are available under the Indian law. See VO Tractoroexport, Moscow v Tarapore & Co AIR 1971 SC 1. 8 Chatterjee Petrochem Co v Haldia Petrochemicals Ltd, Supreme Court, MANU/SC/1258/2013. Also See Chatterjee Petrochem (Mauritius) Co & Anr v Haldia Petrochemical Ltd and Ors, Calcutta High Court, MANU/WB/0328/2013. 9 World Sport Group (Mauritius) v MSM Satellite (Singapore), Supreme Court, AIR2014 SC 968. Also See MSM Satellite (Singapore) Pte Ltd v World Sport Group (Mauritius) Ltd, Bombay High Court, 2010 (112) BOMLR 4292. 10 Board of Trustees of the Port of Kolkata v Louis Dreyfus Armatures SAS, Calcutta High Court, MANU/WB/0695/2014. 11 Vikram Bakshi v McDonalds India Pvt Ltd, Delhi High Court, MANU/DE/3483/2014. Also See McDonald’s India Pvt Ltd v Vikram Bakshi, Delhi High Court (Division Bench), MANU/DE/1684/2016 (hereafter ‘Vikram Bakshi (Division Bench)’). 12 [2013] CCJ 3 (AJ). 13 It may be noted that under the Revised Articles of the Model Law on International Commercial Arbitration of the UNCITRAL adopted in 2006, a new Chapter titled ‘Chapter IV A’ has been added to deal with interim measures and preliminary orders. 14 In addition to this argument, the other provisions of the New York Convention which grants the national courts the power relating to the arbitral process are also usually cited. For instance, See Linda Silberman, ‘The New York Convention After Fifty Years: Some Reflections on the Role of National Law’ (2009) 38 Ga J Int’l & Comp L 25; Jack Graves, ‘Court Litigation Over Arbitration Agreements: Is It Time for a New Default Rule’ (2012) 23 Am Rev Int Arb 113. Emphasis added. 15 Stephen Schwebel, ‘Anti-Suit Injunctions in International Arbitration: An Overview’ in Emmanuel Gaillard (ed), Anti-Suit Injunctions in International Arbitration (2005) 10. 16 Simon Greenberg, Christopher Kee and Romesh Weeramantry, International Commercial Arbitration: An Asia-Pacific Perspective (CUP 2011) 214–15. 17 art 16(1), UNCITRAL Model Law on International Commercial Arbitration, n 6, at 8–9. 18 Also See Emmanuel Gaillard and Yas Banifatemi , ‘Negative Effect Of Competence-Competence: The Rule of Priority in Favour of the Arbitrators, in Emmanuel Gaillard and Domenico di Pietro (eds), Enforcement of Arbitration Agreements and International Arbitral Awards: The New York Convention 1958 in Practice (Cameron May 2008). Emphasis added. 19 While explaining the rationale behind this provision, the UNCITRAL Secretariat commented that the ‘[p]rotecti[on] [of] the arbitral process from unpredictable or disruptive court interference is essential to parties who choose arbitration (in particular foreign parties)’. Model Law (n 6) at 27, para 17. 20 The UNCITRAL Secretariat notes certain grounds under which a justifiable judicial intervention of the courts may be sought. They are: ‘consolidation of arbitral proceedings, contractual relationship between arbitrators and parties or arbitral institutions, or fixing of costs and fees, including deposits’. For further details, See Model Law (n 6) at 27, para 17. 21 For instance, Poon (n 2) at 268, para 47. 22 In fact, even in jurisdictions where anti-arbitration injunctions are allowed, there is a difference of opinion on the grounds for issuance of these injunctions. 23 Poon (n 2) at 249–66. Also See Hakeem Seriki, ‘Anti-Arbitration Injunctions and the English Courts: Judicial Intervention or Judicial Protection’ (2013) 16 Int’l Arb L Rev 43. 24 Gary Born observes that ‘[i]n agreeing to arbitrate, the parties do not merely negatively waive their access to judicial remedies, but also affirmatively agree to participate in the resolution of their disputes through the arbitral process’. See Gary B Born, International Arbitration: Law and Practice (Kluwer Law International 2009) 1005. On the other hand, it might be argued that ‘[w]ithout a proper, enforceable, and controlling arbitration agreement, there was no legal obligation to refer disputes to arbitration’. Thomas E Carbonneau, Toward a New Federal Law on Arbitration (OUP 2014) 16. 25 Salini Costruttori S.p.A. v Federal Democratic Republic of Ethiopia, ICC Case No 10623, (Award regarding the Suspension of the Proceedings and Jurisdiction (7 December 2001). 26 ibid at 43, para 130. 27 ibid para 131. 28 ibid at 42, para 128. 29 ibid at 44, para 132. 30 Saipem SpA v People’s Republic of Bangladesh, ICSID Case No ARB/05/07, Decision on Jurisdiction and Recommendation on Provisional Measures, 21 March 2007. 31 ibid at 6, para 7. 32 ibid pp 8–11, para 18–30. 33 ibid at 11, para 31. 34 Saipem SpA v People’s Republic of Bangladesh, ICSID Case No ARB/05/07, Award, 30 June 2009. 35 ibid at 61, para 167. 36 ibid. 37 Himpurna California Energy Ltd (Bermuda) v Republic of Indonesia, Interim award of 26 September 1999 and Final award of 16 October 1999, XXV Yearbook of Commercial Arbitration, 109 (2000). 38 art 30 of the revised UNCITRAL Arbitration Rules 2010 provides that if the claimant has failed to communicate his claim within the time fixed by the arbitral tribunal without showing sufficient cause, the tribunal shall terminate the arbitral proceedings. Also for similar cases, See SGS Société Générale de Surveillance S.A v Islamic Republic of Pakistan, ICSID ARB/01/13 (Decision of the Tribunal on Objections to Jurisdiction), 6 August 2003; EN-Procuración del Tesoro v Cámara de Comercio Internacional, Lexis No 35010977. Also See Guido Barbarosch and Pablo Richards, ‘Arbitration Review of the Americas 2008’ Global Arbitration Review, 10 October 2007 (‘the panel of arbitrators refused to follow the order of the CNCAF’). 39 Seriki (n 23) at 43. 40 [1895] 1 Q.B. 253. 41 Seriki (n 1) para 7.08, at 113. 42 North London Railway Co v Great Northern Railway Co, [1883] 11 QBD 30. 43 s 1(c). 44 [2007] EWHC 571 (Comm.) (hereafter ‘Elektrim’). 45 ibid, para 6. 46 ibid, para 13. 47 ibid, para 80. 48 The language of s 37 is quite broader in comparison to any similar provision in national legislations. It provides that ‘the High Court may by order (whether interlocutory or final) grant an injunction or appoint a receiver in all cases in which it appears to the court to be just and convenient to do so’ (emphasis added). 49 By virtue of the Constitutional Reforms Act 2005, the Supreme Court Act 1981 may be cited as the Senior Courts Act 1981. 50 Elektrim (n 44) para 75. 51 ibid, para 51. Also, with regard to the discussion on the power of the court to grant interim injunction in the pre-award stage, See ibid, para 68. 52 [2005] 1 CLC 821, para 74. 53 [2006] CLC 424, para 33(v). 54 s 44 deals with the powers of the court to support arbitral proceedings. 55 [2011] EWHC 1624 (Comm) (hereafter ‘Excalibur’). 56 ibid, paras 2–8. 57 ibid, para 18. 58 ibid, paras 21–23. 59 ibid. 60 ibid, para 38. 61 ibid, para 28. 62 ibid, para 70. 63 ibid, para 71. 64 [2007] EWCA Civ 1124. 65 [2007] EWHC 2729 (Comm). 66 [2007] EWHC 1262 (TCC). 67 [2011] EWHC 345 (Comm). 68 Edward Brunet and others, Arbitration Law in America: A Critical Assessment (CUP 2006) 30. Also See Mary Bedikian, ‘Triumph of Progress: The Embrace of International Commercial Arbitration’ in Russell A. Miller and Rebecca M. Bratspies (ed), Progress in International Law (Martinus Nijhoff 2008) 518. For US judicial policy on arbitration, See Thomas E Carbonneau, ‘“Arbitracide”: The Story of Anti-Arbitration Sentiment in the US Congress’ (2007) 18 Am Rev Int’l Arb 233. 69 Gorskie (n 1) 295. 70 49 F 2d 331 (SDNY 1999); Yearbook Commercial Arbitration 949 XXV (2000). 71 643 F 2d. 863 (1st Cir 1981). 72 ibid, at 342. 73 No 11 Civ 08(JFK), 2011 WL 1085017 (SDNY 23 March 2011). 74 512 F. Supp. 2d 199 (D.Del, 2007); Yearbook Commercial Arbitration, 1024, XXXIII (2008). 75 ibid, at 1031. Also See, Jarred Pinkston, ‘Toward a Uniform Interpretation of the Federal Arbitration Act: The Role of 9 U.S.C. § 208 in the Arbitral Statutory Scheme’ 22 Emory Int’L L Rev 639 (2008). 76 No 08 Civ. 4400 (SAS) 2008 WL 3982885 at *2 (SDNY 27 August 2008) Yearbook Commercial Arbitration, 1224 XXXIII (2008). 77 The other frequently cited example for State arbitration law providing for grant of anti-arbitration injunction is the Massachusetts State Arbitration Statute. Mass Ann Laws Ch 251, s 2 (2011). 78 The English translation of the Title II is available at <www.iaiparis.com/lois_en.asp> accessed 23 May 2017. 79 The English translation of the above provision is available at <www.legifrance.gouv.fr/content/download/1962/13735/…/Code_39.pdf> accessed 23 May 2017. It reads as: The President may always, even where confronted with a serious challenge, order in a summary procedure such protective measures or measures to restore (the parties) to (their) previous state as required, either to avoid an imminent damage or to abate a manifestly illegal nuisance. In cases where the existence of the obligation is not seriously challenged, he may award an interim payment to the creditor or order the mandatory performance of the obligation even where it is an obligation to do a particular thing. 80 Emmanuel Gaillard, ‘Introduction’ in Emmanuel Gaillard (ed), Anti-Suit Injunctions in International Arbitration (Juris Publishing 2005); Alexis Mourre, ‘French Courts Firmly Reject Anti-Arbitration Injunctions’ Kluwer Arb Blog, (6 May 2010) accessed 23 May 2017. 81 Also See, Michael Reisman and Heide Iravani, ‘The Changing Relation of National Courts and International Commercial Arbitration’ (2010) 21 Am Rev Intl Arb 33. 82 SA Elf Aquitaine and Total v Mattei, Lai, Kamara and Reiner (6 January 2010) (Tribunal de Grande Instance, Paris) and Republic of Equatorial Guinea v Fitzpatrick Equatorial Guinea (29 March 2010) (Tribunal de Grande Instance, Paris) [2010] Revue de l’arbitrage 390. 83 Mourre (n 80); Herbert Smith Freehills LLP, ‘French Court Cannot Interfere with Arbitration Once Tribunal Constituted’ <http://www.lexology.com/library/detail.aspx?g=59ee1d70-0e25-4400-8f0a-2f3f12a417de> accessed 23 May 2017. 84 For instance, See Emmanuel Gaillard, ‘Anti-Suit Injunctions Issued by Arbitrators’ in Albert Jan van den Berg (ed), International Arbitration 2006: Back to Basics? (Kluwer Law International 2007) 235. Also See, Gaillard and Banifatemi (n 18) at 257; Emmanuel Gaillard, ‘Reflections on the Use of Anti-Suit Injunctions in International Arbitration’ in Loukas Mistelis and Julian DM Lew (eds), Pervasive Problems in International Arbitration (Kluwer Law International 2006) 201. 85 Mistelis and Lew, ibid at 213, para 10.19. 86 ibid at 213, para 10.18. 87 ibid. Also See, Gaillard and Banifetemi (n 18) at 259. In this article, the authors state that in view of the negative effect of competence-competence, ‘the arbitrators must be the first (as opposed to the sole) judges of their own jurisdiction’ and that ‘a court that is confronted with the question of the existence or validity of the arbitration agreement must refrain from hearing substantive arguments as to the arbitrators’ jurisdiction until such time as the arbitrators themselves have had an opportunity to do so’. Gaillard and Banifatemi (n 18) at 259–60. Also See Emmanuel Gaillard, ‘Prima Facie Review of Existence, Validity of Arbitration Agreement’ New York L J 1 December 2005. Also See, Shin-Etsu Chemical Co Ltd v Aksh Optifibre Ltd (2005) 7 SCC 234. 88 Act No 26 of 1996. For further details on the position of anti-arbitration injunction prior to the enactment of the Arbitration and Conciliation Act, 1996, See Bansal and Agarwal (n 1). 89 Model Law (n 6); See, Preamble and Statement of Objects and Reasons, to the Arbitration and Conciliation Act, 1996. 90 For instance, See Bhatia International v Bulk Trading SA 2002 (4) SCC 105; Venture Global Engineering v Satyam Computer Services Ltd 2008 (4) SCC 190; Bharat Aluminium Co v Kaiser Aluminium Technical Service Inc 2012 (8) SCALE 333. For detailed analysis of these decisions, See SR Subramanian, ‘BITs and Pieces in International Investment Law: Enforcement of Investment Treaty Awards in the Non-ICSID States: The Case of India’ (2013) 14 J World Investment & Trade 198–239. 91 s 19(2) (‘The arbitral tribunal shall not be bound by the provisions of the Code of Civil Procedure, 1908’). Order XXXIX of the Indian Civil Procedure Code deals with temporary injunctions. 92 For instance, the Indian Supreme Court held that not only the courts but even statutory tribunals have all incidental and ancillary powers to make their final orders effective. See In Re Cauvery Water Disputes Tribunal, AIR 1992 SC 522 (para 16). 93 See Modi Entertainment Network and Anr v WSG Cricket Pte Ltd AIR 2003 SC 1177 (‘The Courts in India like the Courts in England are Courts of both law and equity. The principles governing grant of injunction, an equitable relief, by a Court will also govern grant of anti-suit injunction which is but a species of injunction’). 94 Tractor Export, Moscow v M/S Tarapore & Co AIR 1971 SC 1. The court had approvingly quoted the Halsbury’s Laws of England (Vol 21, Page 407) and stated that the court can restrain a person within its jurisdiction from instituting or prosecuting suits in a foreign court whenever the circumstances of the case make such an interposition necessary or proper. It may be noted that on this point, ie the power of the Indian court to order anti-arbitration injunctions, there is no much disagreement. However, whether such a power remains within the framework of the Indian Arbitration and Conciliation Act, 1996 is a debatable point. 95 In Re Cauvery Water Disputes Tribunal (n 92). 96 Currently, the newly added proviso to sub-section 2 of Section 2 provides that ‘the provisions of Sections 9, 27 and clause (a) of sub-section (1) and sub-section (3) of section 37 shall also apply to international commercial arbitration’. 97 In fact, the Indian Supreme Court had considered this point in the case of Tractor Export, Moscow v M/S Tarapore & Co, wherein it had quoted the Owners of Cargo on Board the Merak v The Merak (Owners)(1965) 2 WLR 250): ‘If statutory enactments are clear in meaning, they must be construed according to their meaning even though they are contrary to the comity of nations or International Law.’ For difference between anti-suit injunctions and anti-arbitration injunctions in this respect, See Romesh Weeramantry, ‘Anti-Arbitration Injunctions: The Core Concepts’ <http://cil.nus.edu.sg/wp/wp-content/uploads/2014/06/Note-on-anti-arbitration-injunctions.pdf> accessed 23 May 2017. 98 Bharat Aluminium Co v Kaiser Aluminium Technical Service Inc (n 90). 99 ibid. 100 ibid, para 200 (emphasis added). 101 s 89 of the Code of Civil Procedure provides that ‘where it appears to the court that there exists elements of a settlement which may be acceptable to the parties, the court shall formulate the terms of settlement and give them to the parties for their observations and after receiving observations from the parties, the court may reformulate the terms of a possible settlement and refer the same for a) arbitration b) conciliation c) judicial settlement including settlement through Lok Adalat or d) mediation. 102 Report of the Law Commission of India on the Arbitration and Conciliation (Amendment) Bill, 2001 (Report No 176), p 32 (emphasis added). Also See, Report of the Law Commission of India on Amendment of s 89 of Code of Civil Procedure, 1908 and Allied Provisions (Report No 238). 103 Shin-Etsu Chemical Co Ltd (n 87). 104 ibid, at para 47 and 51. 105 ibid, at para 46. 106 For details of some of the popular decisions in which the issue of anti-arbitration injunctions are involved but which are not examined in this article are: Union of India v Dabhol Power Co, IA No 6663/2003, Suit No 1268/2003, Delhi High Court, 2004; Jagson International Ltd v Frontier Drilling, IA Nos 3743/2003, 5819/2003 and 5639/2003; PPN Power Generating Co v PPN (Mauritius) Co, (2005) 3 ArbLR 354; CG Holdings Pvt Ltd v Ramasamy Athappan, MANU/TN/3161/2011; Boston Scientific International v Trivitron Healthcare Pvt Ltd, Madras High Court, Application No 3650 of 2015 in CS No 380 of 2015 dated 14 August 2015. 107 Chatterjee Petrochem Co and Another (n 8). 108 World Sport Group (Mauritius) Ltd (n 9). 109 Board of Trustees of the Port of Kolkata (n 10). 110 Vikram Bakshi (n 11). 111 Chatterjee Petrochem Co and Another (n 8). 112 For elaborate discussion of the factual dispute between the parties, See Chatterjee Petrochem (I) Pvt Ltd v Haldia Petrochemicals Ltd and Ors, MANU/SC/1149/2011. 113 Chatterjee Petrochem Co and Another (n 8) at para 7. 114 ibid at para 12. 115 ibid at para 8. 116 ibid at paras 12, 13, and 53. 117 Chatterjee Petrochem (Mauritius) Co and Anr v Haldia Petrochemical Ltd and Ors, MANU/WB/0328/2013 (Division Bench) para 48. 118 ibid at para 54. 119 ibid at para 65. 120 ibid at para 66. 121 MANU/SC/1787/2005. 122 Chatterjee Petrochem Co and Another v Haldia Petrochemicals Ltd, MANU/SC/1258/2013, n 8 para 34. 123 ibid at para 36. The court was referring to the litigation against the decision of the Company Law Board. For further details, See Chatterjee Petrochem (I) Pvt Ltd v Haldia Petrochemicals Ltd, MANU/SC/1149/2011, n 112. 124 World Sport Group (Mauritius) Ltd (n 9). 125 ibid at para 3. 126 ibid. 127 ibid. Also See, MSM Satellite (Singapore) Pte Ltd v World Sport Group (Mauritius) Ltd 2010 (112) BOMLR 4292, para 3.2. 128 ibid. 129 MSM Satellite (n 127), at para 17. 130 ibid. at para 54. 131 ibid. at para 60. 132 ibid. at para 19. 133 ibid. at para 20. 134 ibid. at para 35. 135 World Sport Group (Mauritius) Ltd (n 9) para 15. 136 (1969) 3 SCC 562. 137 (1987) 1 SCC 496. 138 The full titles of the referenced works are: Nigel Blackaby and others (eds), Redfern and Hunter on International Arbitration (OUP 2009) 148; Albert Jan van den Berg, The New York Convention of 1958: An Overview, International Council for Commercial Arbitration (ICCA) website; Herbert Kronke and others, Recognition and Enforcement of Foreign Arbitral Awards: A Global Commentary on the New York Convention (Kluwer Law International 2010) 82. 139 World Sport Group (Mauritius) Ltd (n 9) para 29. 140 Board of Trustees of the Port of Kolkata (n 10). 141 ibid at 17, para 54. 142 ibid at 28, para 83. 143 ibid at 18, para 61 and at 8, para 8. 144 ibid at 5, para 13. 145 ibid at 2, para 6. 146 ibid at 2, para 7. 147 ibid at 13, para 43. 148 MANU/DE/2738/2011. 149 MANU/WB/0328/2013 (Division Bench). 150 Excalibur Ventures LLC v Texas Keystone Inc & Ors, MANU/UKCM,/0022/2011; (2011) EWHC 1624 (Comm.). 151 Claxton Engineering Services Ltd v TXM Olaj-Es Gazkutato KTF, (2011) EWHC 345. 152 Board of Trustees of the Port of Kolkata (n10) at 28, para 83. 153 ibid at 7, para 18. 154 MANU/SC/0333/2008. 155 Board of Trustees of the Port of Kolkata (n 10) at 5, para 14. 156 ibid. 157 ibid at 14, para 46. 158 For further reference, See Lawrence W Newman and Colin Ong (eds), Interim Measures in International Arbitration (JurisNet LLC 2014) 254. 159 Board of Trustees of the Port of Kolkata (n 10) at 19, para 65. 160 ibid at 11, para 28. 161 ibid 28, para 84. 162 Shin-Etsu Chemical Co. Ltd (n 87). 163 Vikram Bakshi (n 11). 164 ibid, para 59. 165 Company Appeal No 10 of 2013. 166 ibid, para 9. 167 Ashurst Singapore, ‘Anti-arbitration Injunctions: Mixed Signals from India’ (January 2015) <https://www.ashurst.com/en/news-and-insights/legal-updates/anti-arbitration-injunctions-mixed-signals-from-india/> accessed 23 May 2017; Mohit Mahla, Indian Arbitration Cart: Moving Forward or Backward, Kluwer Arb Blog (6 June 2015) accessed 23 May 2017. 168 McDonald’s India Pvt Ltd v Vikram Bakshi, MANU/DE/1684/2016 (hereafter ‘Vikram Bakshi (Division Bench)’). 169 Excalibur (n 55). Vikram Bakshi (Division Bench) (n 168) para 48. 170 ibid. 171 Board of Trustees of the Port of Kolkata (n 10). 172 Vikram Bakshi (Division Bench) (n 168). 173 [2013] CCJ 3 (AJ). For a complete case-study of this decision, See SI Strong, ‘Anti-arbitration Injunctions in Cases Involving Investor-State Arbitration: British Caribbean Bank Ltd. v The Government of Belize’ (2014) 15 J World Invest & Trade 324. 174 This court was established by the Caribbean Community (CARICOM) as its judicial organ. It functions in dual capacity both as an original forum and an appellate court. While the court will apply the rules of international law as relevant to interpret the Community legal order, it will also hear appeals in both civil and criminal matters from the member-states of Community. In the instant case, it functioned as an appellate court and heard an appeal from Belize. Agreement Establishing the Caribbean Court of Justice, 14 February 2001, (entered into force 23 July 2002), 2255 UNTS 319. 175 Elektrim (n 44). 176 British Caribbean Bank Ltd (n 12) para 4. 177 ibid, paras 4 and 5. 178 Civil Appeal No 30 of 2010. 179 British Caribbean Bank Ltd (n 12) para 5. 180 ibid, para 7. 181 ibid, para 10. 182 ibid, para 11. 183 ibid, para 12. 184 s 106 (8) provides that the court shall have jurisdiction to issue an injunction against a party or arbitrators (or both) restraining them from commencing or continuing any arbitral proceedings (whether sited in Belize or abroad) where it is shown that such proceedings are or would be oppressive or vexatious or inequitable or would constitute an abuse of the legal or arbitral process. 185 British Caribbean Bank Ltd (n 12) para 40. 186 ibid, para 41. 187 ibid, para 38. 188 ibid, para 39. 189 ibid, paras 37 and 38. 190 ibid, para 39. © The Author(s) 2018. Published by Oxford University Press on behalf of the London Court of International Arbitration. All rights reserved. For permissions, please email: journals.permissions@oup.com This article is published and distributed under the terms of the Oxford University Press, Standard Journals Publication Model (https://academic.oup.com/journals/pages/about_us/legal/notices) http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Arbitration International Oxford University Press

Anti-arbitration injunctions and their compatibility with the New York convention and the Indian law of arbitration: future directions for Indian law and policy

Arbitration International , Volume Advance Article (2) – May 25, 2018

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Abstract

Abstract Despite the controversial nature of anti-arbitration injunctions, they have emerged as one of the possible remedies in a number of jurisdictions. However, their existence under international law is far from clear. Consequently, each jurisdiction has its own rules regarding their existence and availability. In this connection, this article will address the question of whether anti-arbitration injunctions are legally compatible with the scheme of New York Convention and the UNCITRAL Model Law on International Commercial Arbitration. For this purpose, besides the legal analysis of the relevant provisions of the international instruments and the decisions of international arbitral bodies on them, the domestic legal practice of the UK, US, and France will also be considered. However, the main focus of the article will be to critically evaluate the Indian legal position on the issue. Finally, as a part of its Conclusion, it will outline the directions for the future of Indian law and policy relating to the grant of anti-arbitration injunctions in India. 1. INTRODUCTION Anti-arbitration injunctions are usually sought to restrain a party from instituting or continuing arbitration proceedings when that party, going beyond the agreed terms of contract, wrongly attempts to invoke or invokes the jurisdiction of the arbitrator.1 In other words, these remedies are granted by the national courts against the commencement or continuation of arbitration proceedings when parties have agreed that they will not take up the matter to arbitration or alternatively, when they have opted for litigation or such other alternative dispute resolution methods. Despite the prevalence of these remedies in some countries, they are highly controversial because their legal existence itself is very much in dispute. In particular, these injunctions are also viewed as threats to the authority of arbitral tribunals to rule on their jurisdiction, commonly known as the principle of kompetenz-kompetenz, considered to be a cornerstone of the arbitration system.2 However, there are also ample justifications for the grant of anti-arbitration injunctions. It needs to be remembered that although the system of international arbitration is autonomous and distinct and separate from the national legal system and its judicial bodies, the arbitral process is not completely insulated from interactions with the rules of national law. In fact, the international arbitration system’s interaction with the national legal system for its legitimacy, support, help, and effectiveness is well-recognized.3 Even in the context of domestic arbitration, it is observed that while the national courts cannot be too interventionist, there can be no objection to their performance of a supportive role to the process of arbitration, such as the grant of interim measures and the appointment of arbitrators in case of deadlock. Accordingly, with reference to the anti-arbitration injunctions, it is suggested that when there are justifiable reasons for the invocation of the jurisdiction of national courts, such as when there are claims that the arbitration agreement itself is forged by one party, in order to avoid unnecessary harassment of the innocent party, the national courts may assume jurisdiction although it seems to weaken the principle of kompetenz-kompetenz. Besides the above arguments justifying and opposing the grant of anti-arbitration injunctions, there is a great divergence of academic and judicial opinion across jurisdictions on the value and utility of anti-arbitration injunctions.4 Moreover, the absence of an express provision in the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards5 and in the UNCITRAL Model Law on International Commercial Arbitration6 also adds further complexity to this issue. In India, the legal existence of the anti-arbitration injunction is far from clear.7 The scanty legal opinion is divided as to whether the anti-arbitration injunction is permissible under the implicit language of section 45 of the Arbitration and Conciliation Act, 1996. In this connection, this article will address the question of whether the anti-arbitration injunction is legally compatible with the scheme of the New York Convention and the UNCITRAL Model Law on International Commercial Arbitration. For this purpose, besides the legal analysis of the relevant provisions of the international instruments and the decisions of international arbitral bodies on them, the domestic legal practice of the UK, US, and France will also be considered. However, the main focus of the article will be to critically evaluate the Indian legal position on the issue. In particular, it will consider the cases of Chatterjee Petrochem Co v Haldia Petrochemicals Ltd,8World Sport Group (Mauritius) v MSM Satellite (Singapore),9Board of Trustees of the Port of Kolkata v Louis Dreyfus Armatures SAS,10 and Vikram Bakshi v McDonalds India Pvt. Ltd.11 The next section, as a prelude to Conclusion, will examine the decision of British Caribbean Bank Ltd v The Government of Belize12 rendered by the Caribbean Court of Justice to see its relative merits over other solutions, especially in common law jurisdictions. Finally, as a part of its Conclusion, it will outline the directions for the future of Indian law and policy relating to the grant of anti-arbitration injunctions in India. 2. ANTI-ARBITRATION INJUNCTIONS UNDER INTERNATIONAL LAW As pointed out earlier, the New York Convention, one of the key instruments on international arbitration, is silent on the issue of anti-arbitration injunctions. The Convention, as its name suggests, governs the issues of the recognition and enforcement of foreign arbitral awards. Hence, it is natural that the Convention does not contain any direct provision on any interim remedies, including anti-arbitration injunctions. In fact, the question of application of the Convention arises only after the arbitral award has been passed by the tribunal. However, the other international instrument on arbitration, the UNCITRAL Model Law on International Commercial Arbitration contains provisions for the grant of interim measures. While Article 9 provides for the grant of interim measures by national courts, Article 17 enables the arbitral tribunal to grant interim remedies.13 A further analysis of the above provisions shows that while national courts have the power to grant provisional remedies even before the commencement of the arbitration, there is no express conferment of any power to enjoin the arbitral proceedings. However, the provision, which is of crucial significance for the legal basis of anti-arbitration injunctions, is contained in Article II.3 of the New York Convention. While discussing the power of domestic courts to refer the matter to arbitration, it provides that: [t]he court of a Contracting State, ‘when seized of an action in a matter in respect of which the parties have made an agreement within the meaning of this article, shall, at the request of one of the parties, refer the parties to arbitration, unless it finds that the said agreement is null and void, inoperative or incapable of being performed. Also, a provision of a similar nature is found in Article 8 of the UNCITRAL Model Law on International Commercial Arbitration. It is significant to note that the above provision not only confers the power and authority to the national courts to refer the parties to arbitration when the subject matter brought before them is covered by arbitration agreement, but it also makes such power conditional upon the determination that the arbitration agreement is not ‘null and void, inoperative or incapable of being performed’. It would mean that the national courts, as and when an arbitrable matter is brought before them, will first have to make an assessment of whether the arbitration agreement suffers from any one of the three legal infirmities mentioned above, and if the courts find that the agreement does not suffer from any one of them, only then will they have the legal obligation to have the matter referred to arbitration. In other words, the obligation to refer the matter to arbitration will not arise if the arbitration agreement suffers from any one of the three legal infirmities. In the context of anti-arbitration injunctions, this provision shows that there are extreme cases in which the court may not refer the matter to arbitration or that they may even enjoin arbitration.14 In summary, although it may be argued that Article II.3 of the New York Convention tacitly acknowledges the possibility of arbitration enjoinment proceedings by the court, in the absence of an express provision, it is opined that they do not formally exist in so far as the provisions of the Convention are concerned. In fact, the argument that anti-arbitration injunctions do not exist in the New York Convention regime gains more support if a reference is made to the principle of kompetenz-kompetenz.15 According to this principle, the arbitral tribunal shall have the power to rule on its own jurisdiction.16 Article 16 of the Model Law further clarifies that this power includes the power to rule on ‘objections with respect to the existence or validity of the arbitration agreement’.17 The intention behind this cherished principle is that with arbitration being an autonomous method of dispute resolution, the arbitral forum shall be able to decide whether it has the jurisdiction over the specified matter or not. Moreover, the forum shall also have the first opportunity to decide on all questions, including the question relating to jurisdiction.18 Moreover, as expressly mentioned in the latter part of Article 16 of the Model Law, even if one party alleges that the arbitration agreement does not exist or when he/she complains that it is invalid, the arbitral tribunal shall have the power to rule on those objections. Normally interpreted, there is every possibility of this power of the tribunal to rule on its own jurisdiction to be conflicting with the power of the national court to refer the matter to arbitration (or to enjoin the arbitration) as laid down in Article 8 of the Model Law. This raises the following questions: When an application is made before the national court by one party for reference of the dispute to arbitration and if a question arises as to the validity of the arbitration agreement, is it proper on the part of the national court to rule on the controversy in deference to the mandate of Article 8? If the judge rules on that question, would it be considered as a violation of the principle of kompetenz-kompetenz incorporated in Article 16? To resolve this issue, two options are available: Either we consider the principle of kompetenz-kompetenz to be inflexible and absolute or consider it to be relatively flexible. In the case of the former, the national court should not be deciding on the question of invalidity and instead defer it to the arbitral tribunal to be constituted later. Conversely, in the case of the latter, we may recognize the role of the national court in the arbitral process and its potential contributions in the protection of innocent parties, in which case, it may be allowed to rule on the validity of the agreement. Needless to say, the existence of the anti-arbitration injunction will be a possibility only in the latter option. Article 5 of the Model Law, which limits the power of national courts vis-à-vis the arbitral process, further complicates this situation by providing, ‘In matters governed by this law, no court shall intervene except where so provided in this law’.19 This would mean that once it is established that a specific provision relating to a contingency is available within the framework of the Model Law, then that provision alone will be applicable for such a contingency, and in any case, under the general pretext, the national court shall not make any judicial intervention. In other words, the preclusion contained in Article 5 necessitates that by relying upon the general powers to issue injunctions, as contained in the Civil Procedure Code or in any other statute, the national court is not allowed to make any obtrusive interventions.20 Although it may be argued that the power to issue injunctions under Article 9 includes the power to issue anti-arbitration injunctions and hence falls within the category of permissible judicial interventions referred to in Article 5, in the absence of an express provision or a clear indication in the Model Law, the practice of anti-arbitration injunctions will continue to be disputed. However, jurisdictions supporting the existence of anti-arbitration injunctions seem to have a different understanding of the phrase ‘in matters governed by this law’.21 They argue that no provision exists within the framework of the Model Law to address cases in which it is alleged that no valid and real arbitration agreement exists between the parties, the arbitration of a certain issue is barred by res judicata or the arbitration is contemplated on a matter that is clearly not subject to arbitration.22 Accordingly, they argue that if the national court exercises jurisdiction in any such scenario, it would not come within the scope of the expression ‘in matters governed by this law’ (i.e. Model Law) for the purposes of Article 5, and consequently, the jurisdiction of the national court would not be excluded. Moreover, it is argued that even if the final remedy lies with the national courts in the form of judicial recourse against arbitral awards under Article 34 of the Model Law, it is not very efficacious as the party has to unnecessarily spend time and money till the question is finally disposed of. It is argued that it is useless to compel a party to go for arbitration even though a final and conclusive judicial determination of that issue is already available. In other words, simply because the tribunal shall have the first opportunity to see and decide on the dispute, in terms of the requirements of the kompetenz-kompetenz principle, the party will be forced to go through the arbitral process though the outcome of that process will be already known. In that context, supporters of anti-arbitration injunctions claim that the provisions of Article 5 should be liberally and innovatively interpreted to avoid hardship to innocent parties. Besides the above-mentioned major themes on which the existence or non-existence of the arbitration enjoinment proceedings are contested, certain other arguments are also made by utilizing the provisions of the New York Convention and the Model Law.23 For instance, the obligation to recognize the arbitration agreement contained in Article II.1 of the New York Convention is used to argue that to give full effect to arbitration agreements, the courts shall refuse to entertain requests for intervention when such requests are in contravention of their agreement to go for the private dispute resolution system.24 In fact, the above point was taken up by the International Chamber of Commerce (ICC) tribunal in the case of Salini Costruttori SpA v Ethiopia.25 In this case, a contract was signed between the parties for the purpose of construction of an emergency raw water sewerage reservoir in the capital city of Addis Ababa with a provision for arbitration before the ICC. Subsequently, over the issue of unsuccessful challenge of arbitrators before the ICC Court, the Ethiopian authority approached the Federal Supreme Court of Ethiopia and had obtained an injunction to stay the arbitral proceedings. In this connection, the tribunal while generally speaking against the grant of anti-arbitration injunctions, observed that: ‘A central principle in this respect, recorded in Article II (1)[of the New York Convention], is that states shall recognise arbitration agreements’.26 ‘A correlative principle, recorded in Article II (3) [of the same Convention], is that a state’s court shall recognise and give effect to arbitration agreements’.27 Moreover, it was also of the opinion that even if anti-arbitration injunctions are issued by the courts, the arbitral tribunals are not bound by them, and remarked that ‘[i]n certain circumstances, it may be necessary to decline to comply with an order issued by a court of the seat, in the fulfilment of the tribunal’s larger duty to the parties’.28 Interestingly, in this case, though Ethiopia had not ratified the New York Convention, by considering the above principles of the Convention as ‘principles of general recognition’, the tribunal was of the opinion that they will bind Ethiopia.29 This incompatibility of anti-arbitration injunction with the obligation to recognize the arbitration agreement was further elaborated in the case of Saipem v Bangladesh30 by the International Convention for Settlement of Investment Disputes (ICSID) tribunal. In this case, the contract was between an Italian company, Saipem SpA and the Bangladeshi public sector oil major, also known as, Petrobangla over the construction of a gas pipeline to carry gas to various parts of Bangladesh.31 However, when differences arose, citing alleged misconduct of arbitrators and the breach of procedural rights of parties, Petrobangla initially approached the First Court of Subordinate Judge of Dhaka for revocation of the authority of the ICC tribunal and later the High Court Division of the Supreme Court of Bangladesh to stay all the proceedings pending before the ICC tribunal.32 After hearing the parties, the Supreme Court had granted an injunction and restrained Saipem to continue with ICC arbitration. When these facts were later brought to the knowledge of the ICC tribunal, it had decided to continue the proceedings, as it was of the opinion that challenge and replacement of arbitrators falls within the exclusive jurisdiction of ICC Court.33 Moreover, when the same issue was taken up as an investment dispute before the ICSID Tribunal, it had ruled that the revocation of the authority of arbitrators amounted to violation of the New York Convention.34 In this connection, it had observed that: It is ‘generally acknowledged that the issuance of an anti-arbitration injunction can amount to a violation of the principle embedded in Article II of the New York Convention’.35 ‘Technically, the courts of Bangladesh did not target the arbitration or the arbitration agreement in itself, but revoked the authority of the arbitrators. However, it is the Tribunal’s opinion that a decision to revoke the arbitrators’ authority can amount to a violation of Article II of the New York Convention whenever it de facto “prevents or immobilizes the arbitration that seeks to implement that [arbitration] agreement” thus completely frustrating if not the wording at least the spirit of the Convention’.36 Similarly, in the case of Himpurna v Indonesia,37 a question arose as to whether a party interested in continuing with the arbitration is bound by the anti-arbitration injunction granted against it or alternatively, whether it is justified for the party intending to avoid the arbitral proceedings to not to attend arbitral hearings? Or more specifically, if a party chose to not to participate in the arbitral proceedings in view of the injunction, whether it will be considered as a default without any ‘sufficient cause’ for the purposes of Article 30 of UNCITRAL Arbitration Rules 2010? In this case, Himpurna, a US subsidiary had entered into a contract with PLN, an Indonesian power entity for the development of geothermal resources in Indonesia. However, subsequently, dispute arose between them as PLN could not buy power as agreed. Initially, the parties had a round of arbitration proceedings under the UNCITRAL Arbitration Rules, which was followed by another round of investment arbitration as Indonesia had refused to comply with the previous award. In the meantime, the Indonesian government approached the local court and had obtained an injunction to suspend all arbitral proceedings. However, the tribunal had decided to set aside the injunction and continue the arbitral proceedings by observing that the injunction obtained by the Indonesian government will not excuse its non-appearance as it had not taken any steps to address the court against the grant of injunction. The tribunal had also pointed out that its conduct was inconsistent with its obligations as a party to the voluntary arbitration agreement.38 However, as international instruments give enormous leeway to national legal system, the above position under international law will not be complete unless the domestic legal practice of concerned jurisdiction is also apprised of. In this connection, the following section will examine the judicial approaches of major jurisdictions, such as UK, US, and France. 3. NATIONAL JUDICIAL APPROACHES RELATING TO ANTI-ARBITRATION INJUNCTIONS 3.1 Anti-arbitration injunctions in UK Anti-arbitration injunctions are not a new phenomenon in England. In fact, the English courts have asserted the authority to stay arbitral proceedings for the protection of legal or equitable rights much before the coming into force of the current Arbitration Act, 1996.39 Even as back as 1895, in Kitts v Moore,40 one of the early decisions involving anti-arbitration injunctions, the plaintiff sought injunction to restrain the defendant from proceeding with arbitration on equitable ground that the contract/sold note was invalid.41 The matter initially went before Lord Russell of Killowen who had granted an interim stay of arbitration until trial. On appeal, it was argued that ‘under no conceivable circumstances has the Court jurisdiction to stay by injunction proceedings by arbitration’.42 However, the Court of Appeal dismissed the appeal and ruled that the courts have jurisdiction to interfere by injunction where an action is brought to impeach the arbitral clause or agreement. However, this position has undergone radical change as the 1996 Act is premised on the general principle that courts should not intervene in matters governed by Part I, except as provided in that Part.43 In fact, the landmark decision of Elektrim SA v Vivendi Universal SA44 also supported this view. In that case, parties have entered into an agreement for transfer of certain shares.45 However, necessary approvals could not be obtained from competent authorities and as a consequence, Vivendi sought to avoid the contractual obligations, citing breach of contract by Elektrim.46 In this connection, it had launched arbitral proceedings before the London Court of International Arbitration (LCIA) pursuant to the agreement between the parties, wherein a partial award was rendered. In the meantime, quite unexpectedly, Vivendi alleged that a settlement was concluded between the parties and instituted an arbitration proceeding in the ICC, in accordance with the terms of the settlement agreement. Under the circumstances, Elektrim sought an injunction from the English Court to restrain London arbitration till the question of validity of the draft settlement agreement was decided by the ICC arbitration. During the hearing, Elektrim contended that the simultaneous pursuit of two arbitrations both before ICC and LCIA constituted vexatious and oppressive proceedings. However, the court was of the view that the pursuit of two arbitrations with different subject-matter would not constitute oppressive or vexatious action.47 It reasoned that even if it was established that the continuation of two proceedings would amount to oppressive or vexatious action, it may not be inclined to grant an injunction under Section 3748 of the Senior Courts Act49 as that would be contrary to the parties’ agreement to refer the disputes to LCIA arbitration.50 Also, with regard to the power of the English court to grant interim or permanent injunction to restrain arbitration that are subject to the 1996 Act, it was of the opinion that it must assume that there is such a jurisdiction,51 in view of the observations of Clarke LJ in the case of Cetelem SA v Robust Holdings Ltd52 and Lord Philips CJ in the case of Weissfisch v Julius.53 Thus, it becomes clear that the power to grant permanent anti-arbitration injunction is vested with the courts under section 37 of the 1981 Act, although interim anti-arbitration injunction may even be granted by the courts under section 4454 of the 1996 Act. Moreover, it may also be noted that though the English courts assert that they have the power to stay arbitration, in practice they were very much reluctant to interfere with the arbitration. However, in the case of Excalibur Ventures LLC v Texas Keystone Inc,55 the English court had in fact issued an anti-arbitration injunction. In this case, Excalibur, a US company engaged in the business of providing advisory and investment services in the energy sector had entered into a collaboration agreement with the Texas Keystone International, a US oil and gas company (shortly as, TKI) relating to the development of oil blocks in Iraqi Kurdistan.56 The agreement also reserved to TKI the right to introduce Gulf Keystone Petroleum Ltd (shortly as, GKP) as a party to the collaboration subject to the permission of Excalibur.57 GKP had two subsidiaries, namely, Gulf Keystone Petroleum International (shortly as, Gulf International) and Gulf Keystone Petroleum (UK) Ltd (shortly as, Gulf UK). Subsequently, a production sharing contract (PSC) was signed by TKI, Gulf International, the Kurdistan Regional Government and one more company to explore and develop Shaikhan block in the same region.58 In the PSC, while GKP was included as the party, the name of Excalibur was not mentioned as the party, as it could not meet the legal requirements of Kurdistan Oil and Gas Law for participation in the PSC.59 Aggrieved by this treatment, Excalibur commenced judicial proceedings against TKI and all the three Gulf companies in London Commercial Court alleging wrongful shut out and contractual and other violations. At the same time, Excalibur also started arbitration proceedings in the ICC against TKI and all the three Gulf companies pursuant to the arbitral clause contained in the collaboration agreement, though Gulf companies are not parties to the above agreement. Under the circumstances, Gulf companies have applied for an anti-arbitration injunction to stay the ICC arbitration proceedings seated at New York,60 while Excalibur sought stay of judicial proceedings before Commercial Court against all defendants pending determination of any jurisdictional challenges to the arbitration proceedings.61 The court, noting that there was a strong arguable case that the Gulf companies were not parties either to the collaboration agreement or to any arbitration agreement, observed that it is an exceptional case where the English court should invoke its jurisdiction to stay arbitration seated in a foreign country.62 It was also of the opinion that forcing the Gulf companies to participate in an arbitration in which they are not parties would be oppressive or unfair and unconscionable and would result in gross injustice and accordingly, it had issued an anti-arbitration injunction against Excalibur from continuing arbitration proceedings in New York.63 Besides this, in a number of prominent cases including Albon v Naza Motor Trading Sdn Bhd,64Republic of Kazaksthan v Istil Group Inc,65J Jarvis & Sons Ltd v Blue Circle Dartford Estates Ltd,66 and Claxton Engineering Services Ltd v TXM Olaj-Es Gazkutato Kft67 and the courts have considered the application of anti-arbitration injunctions and attempted to ensure a delicate balance between the autonomy of the arbitral process and the need to prevent the abuse of legal or arbitral process. 3.2 Anti-arbitration injunctions in US In the US, the legal regime governing the issues of arbitration is mainly contained in the Federal Arbitration Act, 1925 (FAA).68 It deals with both international commercial arbitration (Chapter 2 of the FAA) and interstate arbitration (Chapter 1 of the FAA). In addition to the above, intrastate arbitration is also governed by the respective state arbitration statutes. As Chapter 2 of the FAA implements the provisions of the New York Convention, it is natural that it does not contain any express provision on the grant of anti-arbitration injunctions. However, some of the state arbitration statutes have incorporated provisions for the issuance of these injunctions. In the US, there has been no definitive judicial pronouncement on the question of the legal basis and authority of the Federal Court to issue anti-arbitration injunctions in international context.69 In the absence of a legal decision from the Court of Appeals, the Federal District Courts have given conflicting opinions. This section will examine some of these decisions. In one of the earliest decisions, in the case of Satcom International Group PLC v Orbcomm International Partners, LP70 (shortly as ‘Satcom’), the Federal District Court for the Southern District of New York (SDNY) granted anti-arbitration injunction. The facts of the case are that Satcom International, a company based in the UK, filed litigation against Orbcomm, a company operating from the State of Delaware, in the New York Federal District Court. However, the company later filed a demand for arbitration in New York under the American Arbitration Association and sought to stay the litigation. Conversely, Orbcomm filed a petition to stay the arbitration. The court heavily relied on the case of Société Géneralé de Surveillance, SA, v Raytheon European Management and Systems Co71 (shortly as ‘SGS’), which had laid down that the Federal Court had the authority to enjoin arbitration and opined that the power to order anti-arbitration injunction ‘is concomitant of the power to compel arbitration’ in so far as the Chapter I arbitration is concerned. Accordingly, the court ruled that the power to enjoin arbitration under section 4 of Chapter 1 of the FAA will be equally applicable to section 206 of Chapter 2. The court further remarked that the failure to stay the arbitration in such cases ‘would frustrate the goals of arbitration since there would be delay and increased expense as the parties litigate in both fora’.72 The decision in Satcom was approvingly quoted in the subsequent case of Glen P Farrell v Subway International, BV.73 In this case, Subway International, a Dutch corporation with a sub-licence to franchise and operate Subway restaurants in Ireland, filed a demand for arbitration before the American Dispute Resolution Centre (ADRC) against Farrell, a citizen of Ireland operating three franchises in Dublin, Ireland. Farrell refused to participate in the arbitration and instead filed a petition in the New York Supreme Court for a stay of arbitration in accordance with section 7503(b) of the New York Civil Procedure Law and Rules (NYCPLR). Subsequently, the case was transferred to the Federal Court on the application of Subway International pursuant to 9 USC section 205 and 28 USC section 1441. At the outset, Farrell submitted that he did not object to arbitration and that he merely contested the designation of the ADRC to be the arbitral institution. He contended that the arbitration agreement did not allow one party to unilaterally choose the arbitrator or the appointing authority, and hence, the court should stay the arbitration before the ADRC. The Court found that the arbitral institution was not selected in accordance with the arbitration agreement and accordingly stayed the arbitration. The court did not have any difficulty in staying the arbitration proceedings although it had applied the New York Convention and Chapter 2 of the FAA to determine the subject matter jurisdiction. From the perspective of rejection of anti-arbitration injunctions, the case of URS Corporation v Lebanese Company for the Development and Reconstruction of Beirut Central District SAL74 merits special attention. In this case, URS, an engineering design firm organized under the laws of Delaware, filed an action against the defendant Lebanese Company for the Development and Reconstruction of Beirut, 203 Central District SAL known as ‘SOLIDERE’, a publicly traded joint stock company organized under the laws of Lebanon. SOLIDERE's business activities are the acquisition of real estate properties in the Beirut Central District and the restoration and commercial development of the area, in particular, the Normandy Landfill. In this connection, SOLIDERE and Radian had entered into a contract under which Radian was responsible for part of the work. The contract contained a choice of law clause providing for the laws of the Republic of Lebanon. It also required that all disputes arising out of the contract are to be resolved in accordance with the Rules of Arbitration of the ICC. At the time the contract was signed, Radian was owned by the Dames & Moore Group. However, URS purchased the Dames & Moore Group in June 1999, several months after the contract was signed. Eventually, a dispute arose between Radian and SOLIDERE regarding gas emissions which was submitted to ICC arbitration. The ICC rendered the award in favour of SOLIDERE which was pending for recognition before the French courts. In the meantime, SOLIDERE commenced a second arbitration against both URS and Radian. URS contended that it did not really agree to arbitrate with ‘SOLIDERE’ and accordingly requested a preliminary injunction enjoining arbitration. The District Court dismissed the request of URS, noting that the petition brought by it was not supported by the provisions of the FAA and the New York Convention. In this connection, the court observed that under the FAA, the Federal District Court can entertain only two types of petitions: either an action to refer the matter to arbitration when the matter is covered by an arbitration agreement or to confirm the arbitral award, paving the way for the eventual enforcement of the award. However, since the request of URS did not fall under any of these categories, it had no option but to reject it. It observed that the petitioner had not demonstrated how issuing an injunction against the ICC in Paris will further any of the goals of the New York Convention. It concluded, ‘issuing an injunction against arbitral proceeding abroad is inconsistent with the purposes of the New York Convention; therefore, the concomitant power to enjoin under Chapter I of the FAA is inapplicable to Chapter 2 actions’.75 The court also disagreed with the contention of URS that the District Court had the power to make a determination that an agreement to arbitrate exists between the parties when arbitral proceedings are pending before an international institution. It ruled that the power to compel the parties to go for arbitration is not synonymous with the power to enjoin arbitration in cases of international commercial arbitration. Similar views were recorded in the case of Firooz Ghassabian v Fatollah Hematian by the Federal District Court of the Southern District of New York.76 Moreover, it is interesting to note that in the absence of a clear provision in the FAA, some US states have incorporated express provisions for the grant of these injunctions. A notable example is the section 7503 NYCPLR, which provides77: Application to stay arbitration: Subject to the provisions of subdivision (c), a party who has not participated in the arbitration and who has not made or been served with an application to compel arbitration may apply to stay arbitration on the ground that a valid agreement was not made or has not been complied with or that the claim sought to be arbitrated is barred by limitation under subdivision (b) of section 7502. However, as the focus of state arbitration statutes is confined to intrastate arbitration, these provisions have limited application in the context of international arbitration. Also, the decision of ‘SGS’ suggests that such provisions are not in conflict with the FAA as they are not expressly prohibited by it. In the end, it can be observed that there is a lack of judicial consensus on the issue of anti-arbitration injunction and accordingly, it is quite uncertain whether a needy litigant in the US will have access to this remedy. 3.3 Anti-arbitration injunctions In France The New Code of Civil Procedure (NCCP) of France deals with both domestic and international arbitration. This is supplemented by the French Decree of 13 January 2011, which prescribes the new rules applicable to international arbitration.78 Added to this, the general power of the court to issue injunctions is contained in Article 809 of the French Civil Procedure Code. It provides that the President of the Tribunal of First Instance may order, through a summary procedure, such protective measures as required either to avoid imminent damage or to abate a manifestly illegal nuisance.79 However, Article 1448 of the NCCP prescribes the role of national courts relating to international arbitration. It stipulates, that ‘[w]hen a dispute subject to an arbitration agreement is brought before a court, such a court shall decline jurisdiction, except if an arbitral tribunal has not yet been seized of the dispute and if the arbitration agreement is manifestly void or manifestly not applicable’. This means that national courts can exercise jurisdiction relating to an arbitral matter only (i) if the arbitral tribunal has not yet been seized of the dispute and (ii) the arbitration agreement is manifestly void. Besides the above serious check on the powers of the court to interfere with the arbitral process, even in practice, French courts emphatically refuse the issuance of any orders or injunctions that tend to interfere with the conduct of international arbitration.80 Consequently, the issuance of anti-arbitration injunctions in France is generally considered as an assault on the integrity of the arbitral process.81 In recent history, two cases related to the issue of anti-arbitration injunctions were decided by French courts82: S.A. Elf Aquitaine and Total v Mattei, Lai, Kamara and Reiner, and Republic of Equatorial Guinea v Fitzpatrick Equatorial Guinea, de Ly, Owen and Leboulanger. In the former case, Elf Neftegaz, a subsidiary of Elf Aquitaine entered into an agreement with a number of Russian organizations for the exploitation of hydrocarbons in Russia.83 This international contract had an ad hoc arbitration clause with a seat in Paris. Subsequently, certain disputes arose between the parties to the agreement. However, since Elf Neftegaz was dissolved by then, the Russian parties had applied to the President of the Commercial Court of Nanterre to nominate a representative of Elf Neftegaz for the appointment of an arbitrator. Although the court nominated Mr Carboni as the representative, it recalled the above decision subsequent to the requests of Elf Aquitaine and Total. Also, the two companies petitioned the Paris Court of First Instance under Article 809 of the French Code of Civil Procedure to enjoin the arbitration proceedings. They contended that consequent to the withdrawal of the nomination of the court-nominated representative, the appointment of the presiding arbitrator would also suffer from infirmities. Accordingly, they argued that the continuation of arbitral proceedings should be stayed. However, the Paris Court of First Instance refused to stay the arbitration proceedings and ruled that the courts have no authority to enjoin the arbitral process once the panel is constituted. It observed that although the appointment of certain arbitrators is under a cloud, the question of the establishment of the tribunal or the regularity of its constitution has to be decided only by the arbitral tribunal. It declared that such questions cannot be decided by courts in summary proceedings. It finally observed that even if the court decides to intervene, it will be only for the purpose of supporting the arbitral process and not to upset it. It may be noted that although the parties opted for arbitration in Paris, and thereby, the court had subject-matter jurisdiction, the court declined to exercise jurisdiction. Also, in the latter case of Republic of Equatorial Guinea v Fitzpatrick Equatorial Guinea, de Ly, Owen and Leboulanger, the court, faced with a similar issue, reiterated its earlier ruling in S.A.Elf Aquitaine and Total v Mattei, Lai.Kamara and Reiner. In this case, the parties entered into a contract relating to the construction of highways. When differences arose between them, Fitzpatrick invoked ICC arbitration in Paris. The Republic of Equatorial Guinea challenged the jurisdiction of ICC on the ground that Fitzpatrick did not exhaust the local remedies requirement of the arbitration agreement and the laws of the Republic. It had also further submitted that since Fitzpatrick had been under insolvency proceedings, only the local court had the authority to appoint the receiver. However, the Arbitral Tribunal, through its partial award, rejected all the arguments on the lack of jurisdiction and proceeded to enter into the merits of the dispute. Consequently, the Republic took the matter of jurisdiction to the Paris Court of Appeal. Citing the pendency of appeal before the Paris Court of Appeal, the Republic also sought from the Paris Court of First Instance an interim stay of arbitral proceedings. On this occasion, the Court of First Instance once again confirmed its settled position and ruled that the arbitral tribunal will have priority to decide issues relating to its jurisdiction. Moreover, it also ruled that the French courts are deprived of any jurisdiction to interfere with the arbitral proceedings even if such arbitration is seated in France. This strongly establishes that French courts follow a very strict approach in the matter of issuance of any injunction to restrain arbitration. Besides the above decisions, French publicists are also strongly arguing against the issue of anti-suit injunctions. It is pertinent to remember that the French writers consider anti-arbitration injunctions as a category of anti-suit injunctions, and hence, they prefer to use the expression ‘anti-suit injunctions’ to refer to anti-arbitration injunctions.84 In fact, Prof Emmanuel Gaillard, a leading international arbitrator, argues, ‘anti-suit injunctions negate the very basis of arbitration, i.e., the parties consent to submit their disputes to arbitration’85 and ‘they may exacerbate, rather than solve, the problems created by [them] by triggering an escalation of injunctions that lead to the frustration of the arbitral process as a whole’.86 He further reasons, ‘when a party consents to an arbitration agreement, it undertakes to refer disputes that may arise with the other party to arbitration, to take part in the proceedings in good faith and to carry out the award that will be rendered’.87 Finally, the contrasting approaches of the UK and France bring out the best arguments of both the sides on anti-arbitration injunctions, which ideally serve as a background for a comparison with the evolving jurisprudence in India. 4. ANTI-ARBITRATION INJUNCTIONS IN INDIA In India, the legal regime concerning all aspects of arbitration is contained in the dedicated national legislation, Indian Arbitration and Conciliation Act, 1996.88 It is generally based on the UNCITRAL Model Law,89 though the extent of influence of the Model Law on the Indian statute is a debatable point.90 As against the original Model Law, section 9 of the Indian Act had a detailed provision for grant of interim measures by court. It provides that at any time, before or during or after the arbitral process, the court shall have the same power for making orders as it has for the purpose of, and in relation to, any proceedings before it. In other words, the powers of the civil court, even in respect of an arbitral subject-matter, is only limited by the general powers of the court to pass interim measures in any other legal proceedings. It may be noted that this is how the Civil Procedure Code (in particular, Order XXXIX), is indirectly connected to the arbitral process though otherwise the Act expressly excludes the application of the provisions of Civil Procedure Code in the conduct of arbitral proceedings, with a view to avoid formalism and the consequent delay.91 In this connection, it may also be noted that the Indian courts have consistently held that the power of courts under Order XXXIX is of very wide import,92 and it includes the power to grant anti-suit injunctions93 and anti-arbitration injunctions94 in appropriate cases. Thus, in view of the broader scope of section 9, it is not incompatible to have a remedy of the nature of anti-arbitration injunction. This is based on the reasoning that if the courts have the general power to issue injunctions, as a natural corollary they may also exercise the same power when an application is preferred under section 9 by one of the parties, even though the subject-matter is related to arbitration. However, two issues arise out of this proposition when it is applied in the international context: the first issue is, whether the provision of section 9 which is contained in part I will be applicable to foreign arbitrations and the second issue is the judicial propriety of issuing injunctions with extra-territorial effect and their consequent implications on the comity of nations. With regard to the first issue, it may be noted that though no provision of part II speaks of interim relief, no provision expressly prevents the grant of interim relief either. Moreover, the Indian courts always regard the power to order interim measures as ancillary to the power to award the main relief.95 This means that if any Indian court can exercise jurisdiction in respect of a matter coming under part II, they were not prevented from granting an interim relief when it is required in the interests of justice. Moreover, after the Arbitration and Conciliation (Amendment) Act, 2015, section 9 was made applicable to international commercial arbitrations and hence this issue does not arise.96 On the second issue also, in view of the clarifications of the English court that the anti-arbitration injunction is only directed against the party and/or the arbitral tribunals, which are private bodies, it is submitted that this objection may not carry much force.97 However, section 5 which codifies the extent of judicial intervention in arbitral matters complicates this position further. It stipulates that: [n]notwithstanding anything contained in any other law for the time being in force, in matters governed by this Part, no judicial authority shall intervene except where so provided in this Part. This, in effect means that the powers of the courts vis-à-vis arbitration is very limited to the occasions expressly provided under the Indian Arbitration and Conciliation Act, 1996. In this connection, a question is raised as to whether the Indian courts, by use of power to order interim measures, can enjoin arbitration, which is not specifically provided for in the Act. Moreover, it is arguable that this provision, being integral to part I, may not be applicable to part II which governs the foreign-seated arbitrations. However, in view of the recent decision in ‘BALCO’,98 part I will be exclusively applicable to arbitrations held in India and in no case provisions in part I can be applied to part II. Hence, it is opined that the extent of judicial intervention prescribed in section 5 of the Act may not pose much hurdle to the remedy of anti-arbitration injunctions. Moreover, in the context of foreign arbitration, the courts have the power to refer the matter to the arbitral tribunal as provided in section 45 of the Act. Section 45 is identical to Article II.3 of the New York Convention and Article 8 of the Model Law except for the addition of the words ‘Notwithstanding anything contained in part I or in the Code of Civil Procedure, 1908 (Act 5 of 1908)’. Yet, in view of the ruling in ‘BALCO’99 that ‘Part I of the Arbitration Act, 1996 is applicable only to all the arbitrations which take place within the territory of India’,100 the above non-obstante clause has lost much of its value. Similarly, the reference to Civil Procedure Code has also become irrelevant, as section 89 which provides for ‘Settlement of Disputes outside the Court’ has been introduced in the Code of Civil Procedure, 1908 by the Code of Civil Procedure (Amendment) Act, 1999.101 In this connection, it is quite instructive to look into the 176th Report of the Law Commission of India: ‘The Commission is of the view that there is no need to except Section 89 of the Code from Section 5 of the 1996 Act in as much as Section 89 merely requires the application of 1996 Act. There is no conflict between Section 5 of the 1996 Act and Section 89 of the Code.102 Thus, despite the variations, the effect of Section 45 of the Arbitration and Conciliation Act, 1996 is the same as that of Article 8 of the Model Law. Moreover, the scope of the latter part of section 45 was also under the judicial consideration of the Supreme Court in the case of Shin-Etsu Chemical Co Ltd v M/S Aksh Optifiber Ltd (shortly, ‘Shin-Etsu’).103 In this case, a question arose as to the nature of adjudication under section 45: Is it necessary for the court to offer a final expression as to the invalidity etc. of the arbitration agreement or a mere prima facie view of the matter (without a full-fledged trial) is sufficient). However, it was finally decided that the court is merely required to make a prima facie view of the matter and to leave to the parties the choice of full trial either before the arbitral panel or before the court at the post-award stage.104 Justice B.N. Srikrishna, who delivered the majority judgment, reasoned that: adopting a final and determinative approach under Section 45 may not only prolong proceedings at the initial stage but also correspondingly increase costs and uncertainty for all the parties concerned. Finally, having regard to the structure of the Act, consequences arising from particular interpretations, judgments in other jurisdictions, as well as the opinion of learned authors on the subject, I am of the view that, the correct approach to be adopted under Section 45 at the pre-reference stage, is one of prima facie finding by the trial court as to the validity or otherwise of the arbitration agreement’.105 It is pointed out that the issue of anti-arbitration injunction in India has not been authoritatively resolved so far by any decision of the Supreme Court. In the absence of any binding decision of the Supreme Court, various High Courts have dealt with the question in a haphazard manner. It is found out that excepting a few decisions, most decisions of the High Court assume that the Indian law (including the Arbitration and Conciliation Act, 1996 and the Civil Procedure Code, 1908) confer on them the power to enjoin arbitration. It is noted that the High Courts were mostly concerned with whether the applicant will be entitled to the remedy rather than focusing their judicial attention on whether such a remedy is available within the Indian legal framework. In this connection, this section will examine the major decisions in which the question of anti-arbitration injunctions has been involved.106 They are: Chatterjee Petrochem Co and Another v Haldia Petrochemicals Ltd,107World Sport Group (Mauritius) Ltd v MSM Satellite (Singapore) Pte Ltd,108Board of Trustees of the Port of Kolkata v Louis Dreyfus Armatures SAS,109 and Vikram Bakshi v McDonald’s India Pvt Ltd.110 4.1 Chatterjee Petrochem Co and another v Haldia Petrochemicals Ltd111 In this case, Dr Purnendu Chatterjee, a non-resident Indian industrialist through his Chatterjee Petrochem (Mauritius) Company (CPMC) invested in the project, Haldia Petrochemicals Ltd (HPL), an entity established for construction of a green-field petrochemical complex in Haldia in the State of West Bengal and promoted by the West Bengal Industrial Development Corporation (WBIDC).112 As a result, on 12 January 2002 an agreement of restructuring was entered into between CPMC, Government of West Bengal, WBIDC, and HPL to ensure that CPMC holds 51 per cent of the total paid up capital of HPL. Clause 15 of the above Agreement provided for reference of all disputes relating to the said Agreement to the ICC, Paris. Subsequently, when differences arose between the parties as to the transfer of shares to the Chatterjee Group companies, CPMC sought to invoke the arbitral clause and refer the matter to ICC arbitration.113 HPL, on the other hand, contended that the agreement of 12 January 2002 providing for arbitration, is superseded by another agreement of 8 March 2002, conferring an exclusive jurisdiction to the courts in Calcutta.114 Accordingly, it had contended that the arbitral clause is invalid and prayed for an anti-arbitration injunction to enjoin the arbitration in Paris. During the hearing before the Calcutta High Court, CPMC contended that the arbitral clause is unambiguous and hence the reference of the matter to arbitration is valid and legal.115 Moreover, it had argued that in view of Article 6 of ICC Arbitration Rules, the validity or existence of the arbitration agreement was to be decided by ICC’s International Court of Arbitration and hence the same cannot be decided by the civil courts. It had further argued that the civil suit instituted by the HPL and the remedy of injunction to restrain foreign arbitration was in violation of section 5 of the Arbitration and Conciliation Act, 1996. On the contrary, HPL argued that the power of the civil court is inherent and under section 45 of the Act the court can examine whether the agreement is valid, operative or incapable of being performed.116 It had contended that this position was in no way affected by section 5 of the Act, as it will be applicable only if a valid arbitration agreement is established. The Division Bench of the Calcutta High Court, though agreed that the Arbitration and Conciliation Act, 1996 ‘is a complete Code and no judicial intervention beyond its provisions is permissible’, held that the power of the judicial authority to decide invalidity of the arbitration agreement under section 45 of the Act will prevail over the provisions contained in part I of the Act or the Civil Procedure Code, due to the operation of the non-obstante clause contained in section 45.117 The Court also maintained that as the power of the judicial authority in this regard is provided in the statute itself, the same cannot be whittled down by operation of section 5 of the Act.118 However, the High Court had clarified that the power to entertain an action or cause by a Civil Court is an inherent power and it need not be traceable to any statute. It had further observed that section 45 of the Act does not limit the nature of the legal action to be taken by a civil court and it merely lays down the procedure to be followed by the court when seized of an action relating to an arbitration agreement. However, the High Court had qualified its ruling and observed that it is not necessary for the court to exercise its power to examine the validity of the arbitration agreement in every case brought before it. As a matter of discretion, it would be well within the powers of the court to refrain from exercising its power to pronounce on the validity of the arbitration agreement, especially, in cases where ‘the issues are debatable and not ex-facie or patent in nature’.119 On the other hand, ‘where the issue as to the invalidity or non-existence of the arbitration agreement brooks no controversy or where the claim is patently stale making the agreement inoperative or incapable of being performed, the court has jurisdiction not to refer the parties to a vexatious and futile arbitration which would be an abuse of process of law’. 120 Yet, the High Court finally ruled that the appellant by inviting the court to adjudicate on merits deemed to have abandoned his right to seek arbitration in respect of the same claim. However, the case took a surprising turn, when CPMC appealed to the Supreme Court of India. On appreciation of facts, the court was of the opinion that the agreement of 12 January 2002 was not superseded by another subsequent agreement of 8 March 2002 and accordingly, ruled that the arbitral clause contained in the earlier agreement was valid and enforceable. Hence, the question of grant of anti-arbitration injunction did not arise in the Supreme Court. The court merely used the opportunity to reiterate the point laid down in the case of SBP and Co v Patel Engineering Ltd and Another,121 that where a plea is raised before a judicial authority that the subject-matter of the claim is covered by the arbitration agreement which is valid and enforceable, then the dispute ought to be resolved by arbitration.122 Moreover, the court opined that the litigations initiated by the Chatterjee Petrochem (I) Pvt Ltd (as against the CPMC, the original party to the contract and arbitration) will not constitute a waiver on the part of CPMC and it will not jeopardize the arbitration clause in any manner.123 In summary, it may be noted that though the High Court did not analyse the compatibility of the remedy of anti-arbitration injunction with reference to the provisions of the New York Convention and its state practice in relevant jurisdictions, it had made an appropriate analysis of the relevant provisions of the Indian Arbitration and Conciliation Act, 1996 to enjoin the arbitral proceedings in foreign jurisdictions. Moreover, it had also opined that the remedy of anti-arbitration injunction is not prohibited under the framework of the Arbitration and Conciliation Act, 1996, including with reference to section 5 of the Act. 4.2 World Sport Group (Mauritius) Ltd. v MSM Satellite (Singapore) Pte. Ltd124 Subsequent to the above decision, the issue of anti-arbitration injunction arose once again in the case of World Sport Group (Mauritius) Ltd v MSM Satellite (Singapore) Pte Ltd. In this case, the Board of Control for Cricket in India (BCCI) had floated certain tenders with regard to the broadcast of the cricket matches of the Indian Premier League.125 While the World Sports Group (Mauritius) Ltd (shortly known as, WSG) had won the global media rights, the MSM Satellite (Singapore) Pte Ltd (shortly known as, Sony) bagged the media rights for the Indian sub-continent.126 However, soon after the first IPL season was over, BCCI terminated the agreement with Sony and commenced negotiation with WSG.127 Sony challenged the termination in the Bombay High Court and sought to restrain BCCI from awarding the contract to any third party. In the meantime, BCCI awarded the media rights for Indian sub-continent to WSG for a value of Rs.4791.08 crores. However, for the operationalization of the contract, BCCI required WSG to submit a licensee within 72 hours, which was deliberately allowed to be lapsed to facilitate a new media licence agreement between Sony and BCCI. It may be noted that the though WSG could have facilitated a direct agreement between Sony and BCCI, it had persuaded Sony to sign a facilitation deed with itself for a facilitation fee of Rs 425 crores.128 Under the circumstances, Sony paid three instalments amounting to Rs 125 crores but subsequently, realized that it was defrauded and chose to rescind the contract on grounds of fraud and misrepresentation. Yet, WSG demanded the balance payment sent a notice to Sony for invoking the arbitration before the ICC. Aggrieved by this, Sony filed a civil suit in the Bombay High Court and applied for an anti-arbitration injunction. The matter initially went before the Single Bench of the Bombay High Court which supported the invocation of arbitration and declined the issue of anti-arbitration injunction. However, the Division Bench reversed the decision of the Single Judge and held that in cases where serious fraud is alleged against a party, it is desirable that the matter is tried in open court and observed that the facts and circumstances of the case would justify the non-reference of the dispute to arbitration.129 Furthermore, the court had also invoked the ground of public policy and opined that the adjudication of disputes without the BCCI, a public body, cannot be held to be in public interest or in furtherance of public policy of India.130 The court further reasoned that in view of the pending status of the larger dispute involving Mr Lalit Modi, the then IPL Commissioner and BCCI, the dispute between the parties to the Facilitation Deed alone cannot be referred to arbitration and accordingly issued the anti-arbitration injunction to stay the arbitration before the ICC.131 It is submitted that the opinion of the court that the case should be better tried in open court rather than through arbitration, as it involves allegations of fraud would be wholly unsustainable within the framework of section 45 of the Arbitration and Conciliation Act, 1996. It is submitted that the arbitral clause is separable from the rest of the terms of the underlying contract and accordingly, the alleged fraudulent circumstances will not vitiate the arbitrability of the dispute. On the point of existence of anti-arbitration injunction in India, the counsel for the appellant vehemently argued that the courts have the authority to enjoin arbitral proceedings, citing the language of section 45 of the Act.132 To this end, he had also drawn support from the leading text of Russell on Arbitration:133 7-058 Injunctions to restrain arbitral proceedings: Injunctions to restrain arbitrations are, at least in England, few and far between and becoming fewer still over time. This is principally because of the acceptance of the principle that the arbitrator should usually determine his own jurisdiction and so to restrain arbitration by way of injunction would be inconsistent with the scheme of the Arbitration Act 1996. However, there are exceptional circumstances where an injunction to restrain an arbitration may be obtained. Such an injunction is different in nature from an injunction granted in support of arbitral proceedings, but it is convenient to mention this type of injunction at this stage. It is interesting to note that the counsel for the respondent had also partially agreed with these contentions of the appellant. In fact, he had also admitted the availability of the remedy of anti-arbitration injunction within the Indian framework, but merely argued that it can be granted only in the rarest of rare cases and its grant will be subject to the discretion of the judge.134 Yet, it may be noted that the court did not examine the compatibility of this remedy with the scheme of the New York Convention or the framework of the Indian Arbitration and Conciliation Act, 1996 and accordingly limited the inquiry to find out whether the appellant is entitled to the remedy. When the matter went on appeal to the Supreme Court, the Counsel for Sony attempted to justify the decision of the Division Bench of the High Court by arguing that the courts in India as well as in England ‘have the power to issue injunctions to restrain parties from proceeding with arbitration proceedings in foreign countries’.135 In this regard, he had also relied upon two earlier decisions of the Supreme Court rendered prior to the enactment of the 1996 Act: VO Tractor Export, Moscow v Tarapore and Co136 and Oil and Natural Gas Commission v Western Company of Northern American137 wherein the courts have stayed the arbitral or similar proceedings. However, as in the case of High Court, WSG did not make any serious contention on this point. Accordingly, the Supreme Court decided the case on the narrow point that Sony did not fulfil the requirements of section 45 for not referring the matter to arbitration. The Court opined that Sony was not able to prove that the arbitral clause is ‘null and void or inoperative or incapable of being performed’. Furthermore, the court had explained each of the grounds with the help of leading authorities such as, Redfern and Hunter, Albert Jan van den Berg and Herbert Kronke, etal.138 and concluded that the fraud alleged to have been committed by WSG did not fall within any of the grounds specified in section 45.139 Accordingly, the court opined that it had no other choice but to refer the matter to arbitration as laid down in section 45 of the Act. Moreover, the court maintained that even the perpetration of fraud does not affect the validity of the arbitral clause, as the clause is always separable from the rest of the provision of the Facilitation Deed. However, despite the contentions of Sony, the court was silent on the issue of anti-arbitration injunctions, as it was of the opinion that the question did not directly arise out of the facts. Consequently, the case was disposed of without recording any authoritative opinion on the question of anti-arbitration injunctions. 4.3 Board of Trustees of the Port of Kolkata v Louis Dreyfus Armatures SAS140 In this case, the Kolkata Port Trust (KPT), the plaintiff, had awarded a contract for operation and maintenance of Berth Nos 2 and 8 of the Haldia Dock Complex to the Haldia Bulk Terminals Private Ltd (HBT).141 As per the agreement reached between the parties, HBT will function as a subsidiary of an Indian company ALBA Asia Pvt Ltd. in which Louis Dreyfus Armatures SAS (LDA) will hold 49 per cent of shares.142 Claiming lack of cooperation and creation of several impediments in the execution of the project, HBT had initiated arbitration proceedings against the Port Trust in accordance with the arbitral clause contained in the agreement.143 Accordingly, an arbitral tribunal, comprising of three retired judges of the Supreme Court of India, was constituted to hear the matter.144 It was intended to be a purely domestic arbitration governed by Indian laws. In the arbitral proceedings commenced by HBT, KPT entered appearance and had also filed counter-statement and counter-claim. It was found out that the claim of HBT against KPT is essentially one for damages allegedly suffered by HBT, as a result of alleged breach of contract by KPT. However, subsequently, LDA, in its capacity as the ‘(foreign) investor’, began investment arbitration against Republic of India with KPT as one of the respondents under the India–France Bilateral Investment Treaty (BIT).145 Aggrieved by this second round of arbitration proceedings, KPT approached the Calcutta High Court praying for the grant of anti-arbitration injunction to enjoin the arbitral proceedings. Before the High Court, KPT contended that the claim proposed to be pursued under the BIT is substantially the same as already pending before the arbitral tribunal and hence, it would lead to risks of oppression and injustice.146 It had also argued that ‘intricate complexities might arise’, ‘in case, courts of India and France were to exercise concurrent jurisdiction in these matters’. Furthermore, relying upon the express language of section 45 of the Indian Arbitration and Conciliation Act, 1996, it had contended that the Indian courts have the power to make judicial determination as to the existence or validity of the arbitration agreement in foreign arbitration and to grant anti-arbitration injunctions.147 Towards this end, it had drawn support not only from the Indian decisions of Dr Devinder Kumar Gupta v Realogy Corporation148 and Chatterjee Petrochem (Mauritius) Co and Anr v Haldia Petrochemicals and Ors,149 but also two other English decisions, Excalibur Ventures LLC v Texas Keystone Inc and Others150 and Claxton Engineering Services v TXM.151 In other words, it had argued that the Indian courts have the power to grant such injunctions and that in the facts and circumstances of the case, it is also entitled to claim the same. On the other hand, LDA argued that the ‘same set of facts could give rise to different causes of action’, one under the domestic law and the other under international law152 and ‘the principle of parallel proceedings’ has no application in arbitration.153 It also submitted that in view of the Supreme Court decision in Venture Global Engineering v Satyam Computer Services Ltd,154 that the general principles of part I will apply to part II of the Arbitration and Conciliation Act, 1996, section 5 (of part I) will also be applicable to foreign arbitrations and hence there should be minimal judicial intervention in foreign arbitrations.155 It had also stoutly resisted the contention of the KPT that the Indian courts have the power to grant anti-arbitration injunctions and argued that the ‘anti-arbitration suit and/or anti-injunction suit is not ordinarily maintainable [in India], unless the statute gives a right to the court to exercise its jurisdiction against initiation of such proceeding’.156 It was also of the opinion that unlike the English law, the Indian Arbitration and Conciliation Act, 1996 does not confer any power on the civil court to interfere with foreign arbitration by grant of anti-arbitration injunction.157 In this respect, a reference was also made to section 37 of the UK Senior Courts Act, 1981, which confers a very wide discretion on the English courts to grant any interim injunction.158 The above rival contentions on the very existence of the anti-arbitration injunction and its compatibility with the Indian legal framework has forced the court to reply on this vital question, which many courts including the Supreme Court had avoided (or was unable to consider) in the past. The Calcutta High Court, while agreeing with the view that section 5 of the Arbitration and Conciliation Act, 1996 would be applicable to all arbitrations, irrespective of whether it is domestic or international arbitrations,159 was of the opinion that section 5 cannot in anyway curb the power expressly vested in the court under section 45 of the Act.160 Accordingly, it held that the Indian courts have the power to grant anti-arbitration injunction and also laid down the circumstances under which such injunctions may be granted. They are: if an issue is raised whether there is any valid arbitration agreement between the parties and the court is of the view that no agreement exists between the parties if the arbitration agreement is null and void, inoperative or incapable of being performed [in cases, where] continuation of foreign arbitration proceeding might be oppressive or vexatious or unconscionable.161 Moreover, it was of the opinion that the arbitration clause contained in the BIT is only enforceable against Republic of India and not against KPT and consequently, it had viewed the issuance of notice of investment arbitration against KPT as an oppressive action, in particular, when the other arbitral proceedings for contractual claim was already pending against KPT. Accordingly, it had issued anti-arbitration injunction restraining LDA to proceed with the investment arbitral proceedings as against KPT. Though this decision does not take into account the relevant landmark decision such as Shin-Etsu v Aksh Optifiber162 and also lacks adequate discussion on the powers of the civil court under section 9 of the Civil Procedure Code, a dedicated analysis of the issue of compatibility of anti-arbitration injunction under the Indian legal framework along with the comparative legal analysis of English decisions, is certainly a remarkable contribution. However, as could be noted, it was a decision laid down by a Single Judge Bench of the High Court and accordingly, it will have a limited precedential role. 4.4 Vikram Bakshi v Mcdonald’s India Pvt Ltd163 The facts of the case are that a joint venture agreement was signed between the US food major McDonald Corporation, its Indian subsidiary and Mr Vikram Bakshi for the incorporation and management of a joint venture company, namely, Connaught Plaza Restaurants Pvt Ltd (CPRL). The joint venture agreement had a provision for reference of disputes to arbitration before the London Court of International Arbitration (LCIA). Subsequently, by 2013, McDonald India Pvt Ltd exercised a right available to it under the agreement to acquire the shares in CPRL held by Mr Vikram Bakshi. Though Vikram Bakshi petitioned the Company Law Board (CLB) challenging the action of McDonald India Pvt Ltd, the matter ultimately landed in the Delhi High Court for issuance of the injunction to restrain the arbitration. In this case, the Delhi High Court decided to issue an anti-arbitration injunction against the LCIA, on the reasoning that when the matter is pending before the CLB, the same cannot be referred to arbitration. In this connection, it was also of the opinion that there will be some amount of overlapping between issues pending before the CLB and issues sought to be raised before the LCIA. Accordingly, it was of the opinion that the arbitral agreement was prima facie incapable of being performed or was inoperative ‘at least till the time the question of oppression and mismanagement is decided by the CLB’.164 Moreover, the court also approvingly quoted the decision of the Bombay High Court in the case of Rakesh Malhotra v Rajinder Kumar Malhotra,165 wherein the court had expressed the view that disputes involving oppression and mismanagement are not referable to arbitration.166 This decision has been vehemently criticized for a number of reasons, including on the point that reference to arbitration cannot be denied on the ground that a similar issue is pending before another authority.167 However, recently, when the same matter was taken up in appeal before the Division Bench of the Delhi High Court, the court disagreed with the opinion of the Single Judge. It held that the arbitral clause does not suffer from any fatal error and accordingly allowed the appeal.168 The court in this case, reacting to the scathing criticisms against its earlier decision, recognized the special nature of anti-arbitration injunctions and applied the parameters laid down in the English decision of ‘Excalibur’.169 It ruled that anti-arbitration injunctions would be admissible only in ‘exceptional cases’ where the holding of arbitration proceedings would be oppressive or unconscionable such as where the issue is whether or not the parties have consented to the arbitration or where there was an allegation that the arbitration agreement itself is a forged one.170 However, as none of the exceptional circumstances requiring the grant of anti-arbitration injunctions arise in the present case, the Division Bench vacated the injunction granted earlier. Though this decision is to be welcomed both for its outcome as well as for its judicial approach in an important jurisdiction (court from which such injunctions have been sought on numerous occasions), in the absence of a national-level ruling by the Supreme Court, the relief may be short-lived. 4.5 Summary The analysis of these decisions shows that anti-arbitrations injunctions have certainly entered into India, as parties are seeking them and at times courts (especially High Courts) are granting them. However, even on theoretical lines, it is not clear whether such a remedy is compatible with the Indian legal framework. Though the Calcutta High Court in the case of Board of Trustees of the Port of Kolkata v Louis Dreyfus Armatures SAS171 had taken a remarkable initiative to lay down the correct law in this respect, which was followed by the Delhi High Court in the case of McDonald’s India Pvt Ltd. v Vikram Bakshi,172 the Supreme Court did not get any opportunity so far to express its opinion on the legal admissibility of these injunctions. Furthermore, it is submitted that in the case of Chatterjee Petrochem Co and another v Haldia Petrochemicals Ltd, though the Calcutta High Court proceeded on the right reasoning that the Act of 1996 is a complete Code and accordingly legal justifications for judicial intervention must be founded within the provisions of the Act, its views on section 45, especially on the non-obstante clause, is completely misplaced. It is suggested that in view of the law prevailing in different jurisdictions in this respect, as examined above, it is desirable that the Indian courts clarify the nature, scope, and limitations of this controversial remedy. 5. THE CARIBBEAN EXPERIENCE Meanwhile, it is quite instructive to look into the decision of British Caribbean Bank Ltd v The Government of Belize,173 rendered by the Caribbean Court of Justice.174 This decision is notable for its approach of following the English decision of Elektrim SA v Vivendi Universal SA175 and illustrates how a common law jurisdiction by applying the above parameters can deal with the problems associated with the anti-arbitration injunctions. In this case, when the Government of Belize nationalized the country’s telecommunications industry in the sole hands of ‘Telemedia’, it had compulsorily acquired the rights of the British Caribbean Bank (BCB) under the various loans and mortgage facilities with ‘Telemedia’.176 Also, in terms of the Belize Telecommunications (Amendment) Act, 2009, the payment of principal and interest on the loan facilities ceased and no compensation was paid to BCB.177 The constitutionality of the above legislation was challenged in the case of British Caribbean Bank Ltd v Attorney General of Belize and the Minister of Public Utilities178 and the Belize Court of Appeal struck down the above law as unconstitutional. To overcome the problem, the Government of Belize brought out a constitutional amendment and reacquired the assets held by BCB.179 Subsequently, BCB initiated investment treaty arbitration under the BIT between the governments of Belize and UK.180 The Government of Belize approached the national courts and sought interim anti-arbitration injunction restraining BCB to continue with the arbitration.181 The trial court had restrained BCB from pursing the arbitration as it was of the opinion that the simultaneous pursuit of arbitration when litigation challenging the constitutionality of the statute was pending before the national courts would be oppressive or vexatious.182 It was also of the opinion that in case of refusal of injunction by the court, damages would not be an adequate remedy to the Government of Belize and accordingly, ruled that the balance of convenience was in favour of the government. Aggrieved by this decision, BCB appealed to the Court of Appeal which had upheld the trial court decision though on similar grounds, forcing the bank to appeal again to the Caribbean Court of Justice (CCJ).183 During the hearing, one crucial issue arose for consideration was the legal basis and the conditions for the grant of injunctions restraining arbitration. Though the task of the court, especially with regard to the first part, was not an insurmountable one, given the express and unambiguous provision contained in section 106A (8) of the Belize Supreme Court of Judicature Act,184 the detailed articulation of the conditions and limitations which should govern the issue of anti-arbitration injunctions was noteworthy. The court while defining the general approach which the courts should follow in this regard, observed that ‘the jurisdiction to grant an anti-arbitration injunction must be exercised with caution’.185 In fact, it observed that: the court must redouble the caution it normally exercises in restraining foreign proceedings because of the importance of recognising and enforcing the agreement of parties to the mechanism for dispute resolution and the accepted principle of international law that the arbitral tribunal should not be subject to the control of the domestic courts before it makes an award.186 Moreover, in cases involving investment treaty arbitration, the general approach is to recognize the international arbitration and accordingly, the domestic courts should intervene ‘only with extreme hesitation’.187 Also, with regard to the bases on which an injunction restraining international arbitration could be granted, the court had approvingly quoted the English decision of Elektrim SA v Vivendi Universal SA: First, if the proceedings are an infringement of a legal or equitable right of a party; secondly, where those proceedings are vexatious, oppressive or unconscionable. The first analysis is usually applied to cases where the parties have contractually agreed to submit disputes to a particular court or arbitration and one party has started proceedings in breach of that agreement. The second analysis applies where there is not such agreement but the court concluded that the ends of justice require an injunction to restrain foreign proceedings that are vexatious or oppressive’.188 Furthermore, the court also clarified that every instance of multiple proceedings is not to be considered as amounting to vexatious or oppressive proceedings or the abuse of the process of court. Similarly, if the party seeking the arbitration stands benefited by the arbitration, the same should not be considered as vexatious or oppressive proceedings. Accordingly, the court ruled that, the concurrency of domestic and foreign court proceedings or simultaneous pursuit of domestic legal proceedings and the investment arbitration, by the fact itself, does not amount to vexation or oppression.189 Also, on the question of burden of proof, the court ruled that the ‘burden is on the party seeking the injunction and he must discharge that burden to a higher level than that required to restrain foreign proceedings which do not involve a contract to litigate in the foreign court’.190 In the end, based on all the above reasoning, the court had finally set aside the injunction granted by the trial court. It is submitted that this decision is very valuable, especially for jurisdictions which are unable to agree to the view that courts have no authority to restrain arbitration. While it is ensuring that the beneficial effects of anti-arbitration injunction can be retained, it also addresses the potential areas of concern. Though there may be a criticism that the parameters laid down by the court themselves can be abused, it can be better avoided if the court strictly adheres to the above parameters. 6. CONCLUSION Despite the controversial nature of anti-arbitration injunctions, they have emerged as one of the possible remedies in a number of jurisdictions. However, their existence either under the New York Convention or the Model Law is far from clear: Neither there is an express provision authorizing their grant nor there is a provision for making them illegal. Consequently, each jurisdiction has its own approach regarding their existence and availability. Generally, common law jurisdictions are unable to deny their courts any power to intervene in cases of abuse of legal or arbitral process. English courts lead this school of thought and openly acknowledge the existence of anti-arbitration injunctions. These courts derive their powers under section 37 of the Senior Courts Act 1981 and have also laid down clear parameters for their grant. While US courts are ambivalent on this issue, there is a general sentiment against the issue of anti-arbitration injunctions in France. While the approach of France is understandable given the recent changes in its arbitration law in this respect, some find the rule of priority even in cases of abuse of arbitral or legal process as not satisfactory. In the case of India, the issue of anti-arbitration injunction has not been authoritatively resolved so far by any decision of the Supreme Court. In the absence of any binding decision of the Supreme Court, various High Courts have dealt with the question in a haphazard manner. From out of the limited judicial attention that the Indian courts had given to the anti-arbitration injunctions, no judicial opinion has so far been expressed on the legal incompatibility of such injunctions within the Indian legal framework. On the other hand, in a number of cases, especially, at the level of High Courts, such injunctions exist in reality. In comparison, while the courts of certain countries such as UK, US, and France have always grappled with the issue of whether anti-arbitration injunction is available in their legal systems, in India, most often, the question has been whether or not the applicant is entitled to the remedy of anti-arbitration injunction even without any clarity on its availability under the legal system. In India, while at times, litigants have pleaded on the compatibility (or non-compatibility) of such injunctions, the courts have the general tendency to assume that they have the power to issue any injunction (including anti-arbitration injunction), provided the applicant fulfils the general conditions for grant of injunctions (such as prima facie case, irreparable injury and balance of convenience). Moreover, it is also noticed that except a few decisions, the Indian courts are generally reluctant to use the expression ‘anti-arbitration injunction’. This raises doubts as to whether Indian courts really appreciate the special nature of these injunctions and their negative implications on the arbitral process. In this connection, it is submitted that these omissions does not seem to be an issue of language but demonstrate the lack of adequate sensitization towards this exceptional remedy. It is true that in a number of cases where the High Courts have issued these injunctions, the parties have preferred appeals to the Supreme Court. However, in none of them, the Supreme Court had to rule on the issue of anti-arbitration injunctions. Unfortunately, it also never thought it fit to issue any instructions or guidelines on how to adjudicate on the application of such injunctions. It seems that the Indian Supreme Court is currently following the wait and watch approach on this issue. Also, it is extremely cautious about interfering with international arbitration, especially, in view of the strong sentiments in favour of international arbitration. However, it needs to realize that in the absence of a clear enunciation of judicial approach towards the problem of anti-arbitration injunction, mere observance of judicial self-restraint may seem to work for the time-being, but the dangers of judicial intervention will still be there. Hence, it is incumbent upon the Supreme Court to lay down a clear policy on the admissibility of such injunctions, on the lines Elektrim SA v Vivendi Universal SA. In fact, this approach is already followed by the Indian High Courts in some recent decisions, such as the Board of Trustees of the Port of Kolkata v Louis Dreyfus Armatures SAS and McDonald’s India Pvt Ltd v Vikram Bakshi as well as by the Caribbean Court of Justice in the case of British Caribbean Bank Ltd v The Government of Belize, as examined above. Pending a global consensus on this issue, it is suggested that India should follow a highly restrictive approach with regard to the grant of these injunctions. As highlighted above, a sensible approach would be to allow the arbitral tribunals to decide all questions relating to the dispute including the questions on their jurisdiction but in cases of manifest abuse of legal or arbitral process, the court may invoke its jurisdiction to issue anti-arbitration injunctions. The author wishes to record his sincere appreciation for the University of Michigan Law School for support of his stay as a Michigan Grotius Fellow that has made a part of this work possible. This article was completed as of August 2017. Footnotes 1 Jennifer L Gorskie, ‘US Courts and the Anti-Arbitration Injunction’ (2012) 28 Arb Int’l 295; Julian DM Lew, ‘Does National Court Involvement Undermine the International Arbitration Process?’ (2009) 24 Am U Int'l L Rev 489; Hakeem Seriki, Injunctive Relief and International Arbitration, (Informa Law from Routledge 2015); Giulia Carbone, ‘Interference of the Court of the Seat with International Arbitration’ [2012] J Disp Resol 217; John Gaffney, ‘Non-Party Autonomy: Displacing the Negative Effect of the Principle of “Competence-Competence” in England?’ (2012) 29 J Int Arb 107; Sandra Synkova, Courts' Inquiry into Arbitral Jurisdiction at the Pre-Award Stage: A Comparative Analysis of the English, German and Swiss Legal Order (Springer 2013); Thomas E Carbonneau, ‘“Arbitracide”: The Story of Anti-Arbitration Sentiment in the US Congress’ (2007) 18 Am Rev Int’l Arb 233; Sharad Bansal and Divyanshu Agarwal, ‘Are Anti-Arbitration Injunctions A Malaise? An Analysis in the Context of Indian Law’ (2015) 31 Arb Int’l 613. 2 Emmanuel Gaillard, ‘Reflections on the Use of Anti-Suit Injunction in International Arbitration’ in Loukas Mistelis and Julian Lew (eds), Pervasive Problems in International Arbitration (Kluwer Law International 2006) 203–15; Nicholas Poon, ‘The Use and Abuse of Anti-Arbitration Injunctions: A Way Forward for Singapore’ (2013) 25 Singapore Academy L J 244–95. 3 Lew (n 1) at 492. 4 Matthias Scherer and Werner Jahnel, ‘Anti-Suit and Anti-Arbitration Injunctions International Arbitration: A Swiss Perspective’ (2009) 12 Int’l Arb L Rev 66; Doak Bishop, ‘Combating Arbitral Terrorism: Anti-Arbitration Injunctions Increasingly Threaten to Frustrate the International Arbitral System’ < http://www.kslaw.com/library/pdf/bishop7.pdf> accessed 23 May 2017; Andre de A Cavalcanti Abbud and Gustavo Santos Kulesza, ‘Interim Measures and Anti-Arbitration Injunctions in Brazil’ < http://kluwerarbitrationblog.com/2014/08/04/interim-measures-and-anti-arbitration-injunctions-in-brazil/> accessed 23 May 2017; Mostafa A Hagras, ‘The Egyptian Arbitration Law and Anti-Arbitation Injunctions Due to Expiry the Timelimit for the Final Award: Case Study’ <http://www.youngicca-blog.com/the-egyptian-arbitration-law-and-anti-arbitration-injunctions-due-to-expiry-the-time-limit-for-the-final-award-case-study/> accessed 23 May 2017. 5 Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958, 330 UNTS 38 (No 4739). 6 UNCITRAL Model Law on International Commercial Arbitration, 1985 with amendments as adopted in 2006 (United Nations General Assembly. Res 40/72, UN Doc A/RES/40/72 (11 December 1985) < https://www.uncitral.org/pdf/english/texts/arbitration/ml-arb/07-86998_Ebook.pdf> accessed on 23 May 2017. (hereafter ‘Model Law’). 7 In the pre-1996 era, the Indian Supreme Court held that anti-arbitration injunctions are available under the Indian law. See VO Tractoroexport, Moscow v Tarapore & Co AIR 1971 SC 1. 8 Chatterjee Petrochem Co v Haldia Petrochemicals Ltd, Supreme Court, MANU/SC/1258/2013. Also See Chatterjee Petrochem (Mauritius) Co & Anr v Haldia Petrochemical Ltd and Ors, Calcutta High Court, MANU/WB/0328/2013. 9 World Sport Group (Mauritius) v MSM Satellite (Singapore), Supreme Court, AIR2014 SC 968. Also See MSM Satellite (Singapore) Pte Ltd v World Sport Group (Mauritius) Ltd, Bombay High Court, 2010 (112) BOMLR 4292. 10 Board of Trustees of the Port of Kolkata v Louis Dreyfus Armatures SAS, Calcutta High Court, MANU/WB/0695/2014. 11 Vikram Bakshi v McDonalds India Pvt Ltd, Delhi High Court, MANU/DE/3483/2014. Also See McDonald’s India Pvt Ltd v Vikram Bakshi, Delhi High Court (Division Bench), MANU/DE/1684/2016 (hereafter ‘Vikram Bakshi (Division Bench)’). 12 [2013] CCJ 3 (AJ). 13 It may be noted that under the Revised Articles of the Model Law on International Commercial Arbitration of the UNCITRAL adopted in 2006, a new Chapter titled ‘Chapter IV A’ has been added to deal with interim measures and preliminary orders. 14 In addition to this argument, the other provisions of the New York Convention which grants the national courts the power relating to the arbitral process are also usually cited. For instance, See Linda Silberman, ‘The New York Convention After Fifty Years: Some Reflections on the Role of National Law’ (2009) 38 Ga J Int’l & Comp L 25; Jack Graves, ‘Court Litigation Over Arbitration Agreements: Is It Time for a New Default Rule’ (2012) 23 Am Rev Int Arb 113. Emphasis added. 15 Stephen Schwebel, ‘Anti-Suit Injunctions in International Arbitration: An Overview’ in Emmanuel Gaillard (ed), Anti-Suit Injunctions in International Arbitration (2005) 10. 16 Simon Greenberg, Christopher Kee and Romesh Weeramantry, International Commercial Arbitration: An Asia-Pacific Perspective (CUP 2011) 214–15. 17 art 16(1), UNCITRAL Model Law on International Commercial Arbitration, n 6, at 8–9. 18 Also See Emmanuel Gaillard and Yas Banifatemi , ‘Negative Effect Of Competence-Competence: The Rule of Priority in Favour of the Arbitrators, in Emmanuel Gaillard and Domenico di Pietro (eds), Enforcement of Arbitration Agreements and International Arbitral Awards: The New York Convention 1958 in Practice (Cameron May 2008). Emphasis added. 19 While explaining the rationale behind this provision, the UNCITRAL Secretariat commented that the ‘[p]rotecti[on] [of] the arbitral process from unpredictable or disruptive court interference is essential to parties who choose arbitration (in particular foreign parties)’. Model Law (n 6) at 27, para 17. 20 The UNCITRAL Secretariat notes certain grounds under which a justifiable judicial intervention of the courts may be sought. They are: ‘consolidation of arbitral proceedings, contractual relationship between arbitrators and parties or arbitral institutions, or fixing of costs and fees, including deposits’. For further details, See Model Law (n 6) at 27, para 17. 21 For instance, Poon (n 2) at 268, para 47. 22 In fact, even in jurisdictions where anti-arbitration injunctions are allowed, there is a difference of opinion on the grounds for issuance of these injunctions. 23 Poon (n 2) at 249–66. Also See Hakeem Seriki, ‘Anti-Arbitration Injunctions and the English Courts: Judicial Intervention or Judicial Protection’ (2013) 16 Int’l Arb L Rev 43. 24 Gary Born observes that ‘[i]n agreeing to arbitrate, the parties do not merely negatively waive their access to judicial remedies, but also affirmatively agree to participate in the resolution of their disputes through the arbitral process’. See Gary B Born, International Arbitration: Law and Practice (Kluwer Law International 2009) 1005. On the other hand, it might be argued that ‘[w]ithout a proper, enforceable, and controlling arbitration agreement, there was no legal obligation to refer disputes to arbitration’. Thomas E Carbonneau, Toward a New Federal Law on Arbitration (OUP 2014) 16. 25 Salini Costruttori S.p.A. v Federal Democratic Republic of Ethiopia, ICC Case No 10623, (Award regarding the Suspension of the Proceedings and Jurisdiction (7 December 2001). 26 ibid at 43, para 130. 27 ibid para 131. 28 ibid at 42, para 128. 29 ibid at 44, para 132. 30 Saipem SpA v People’s Republic of Bangladesh, ICSID Case No ARB/05/07, Decision on Jurisdiction and Recommendation on Provisional Measures, 21 March 2007. 31 ibid at 6, para 7. 32 ibid pp 8–11, para 18–30. 33 ibid at 11, para 31. 34 Saipem SpA v People’s Republic of Bangladesh, ICSID Case No ARB/05/07, Award, 30 June 2009. 35 ibid at 61, para 167. 36 ibid. 37 Himpurna California Energy Ltd (Bermuda) v Republic of Indonesia, Interim award of 26 September 1999 and Final award of 16 October 1999, XXV Yearbook of Commercial Arbitration, 109 (2000). 38 art 30 of the revised UNCITRAL Arbitration Rules 2010 provides that if the claimant has failed to communicate his claim within the time fixed by the arbitral tribunal without showing sufficient cause, the tribunal shall terminate the arbitral proceedings. Also for similar cases, See SGS Société Générale de Surveillance S.A v Islamic Republic of Pakistan, ICSID ARB/01/13 (Decision of the Tribunal on Objections to Jurisdiction), 6 August 2003; EN-Procuración del Tesoro v Cámara de Comercio Internacional, Lexis No 35010977. Also See Guido Barbarosch and Pablo Richards, ‘Arbitration Review of the Americas 2008’ Global Arbitration Review, 10 October 2007 (‘the panel of arbitrators refused to follow the order of the CNCAF’). 39 Seriki (n 23) at 43. 40 [1895] 1 Q.B. 253. 41 Seriki (n 1) para 7.08, at 113. 42 North London Railway Co v Great Northern Railway Co, [1883] 11 QBD 30. 43 s 1(c). 44 [2007] EWHC 571 (Comm.) (hereafter ‘Elektrim’). 45 ibid, para 6. 46 ibid, para 13. 47 ibid, para 80. 48 The language of s 37 is quite broader in comparison to any similar provision in national legislations. It provides that ‘the High Court may by order (whether interlocutory or final) grant an injunction or appoint a receiver in all cases in which it appears to the court to be just and convenient to do so’ (emphasis added). 49 By virtue of the Constitutional Reforms Act 2005, the Supreme Court Act 1981 may be cited as the Senior Courts Act 1981. 50 Elektrim (n 44) para 75. 51 ibid, para 51. Also, with regard to the discussion on the power of the court to grant interim injunction in the pre-award stage, See ibid, para 68. 52 [2005] 1 CLC 821, para 74. 53 [2006] CLC 424, para 33(v). 54 s 44 deals with the powers of the court to support arbitral proceedings. 55 [2011] EWHC 1624 (Comm) (hereafter ‘Excalibur’). 56 ibid, paras 2–8. 57 ibid, para 18. 58 ibid, paras 21–23. 59 ibid. 60 ibid, para 38. 61 ibid, para 28. 62 ibid, para 70. 63 ibid, para 71. 64 [2007] EWCA Civ 1124. 65 [2007] EWHC 2729 (Comm). 66 [2007] EWHC 1262 (TCC). 67 [2011] EWHC 345 (Comm). 68 Edward Brunet and others, Arbitration Law in America: A Critical Assessment (CUP 2006) 30. Also See Mary Bedikian, ‘Triumph of Progress: The Embrace of International Commercial Arbitration’ in Russell A. Miller and Rebecca M. Bratspies (ed), Progress in International Law (Martinus Nijhoff 2008) 518. For US judicial policy on arbitration, See Thomas E Carbonneau, ‘“Arbitracide”: The Story of Anti-Arbitration Sentiment in the US Congress’ (2007) 18 Am Rev Int’l Arb 233. 69 Gorskie (n 1) 295. 70 49 F 2d 331 (SDNY 1999); Yearbook Commercial Arbitration 949 XXV (2000). 71 643 F 2d. 863 (1st Cir 1981). 72 ibid, at 342. 73 No 11 Civ 08(JFK), 2011 WL 1085017 (SDNY 23 March 2011). 74 512 F. Supp. 2d 199 (D.Del, 2007); Yearbook Commercial Arbitration, 1024, XXXIII (2008). 75 ibid, at 1031. Also See, Jarred Pinkston, ‘Toward a Uniform Interpretation of the Federal Arbitration Act: The Role of 9 U.S.C. § 208 in the Arbitral Statutory Scheme’ 22 Emory Int’L L Rev 639 (2008). 76 No 08 Civ. 4400 (SAS) 2008 WL 3982885 at *2 (SDNY 27 August 2008) Yearbook Commercial Arbitration, 1224 XXXIII (2008). 77 The other frequently cited example for State arbitration law providing for grant of anti-arbitration injunction is the Massachusetts State Arbitration Statute. Mass Ann Laws Ch 251, s 2 (2011). 78 The English translation of the Title II is available at <www.iaiparis.com/lois_en.asp> accessed 23 May 2017. 79 The English translation of the above provision is available at <www.legifrance.gouv.fr/content/download/1962/13735/…/Code_39.pdf> accessed 23 May 2017. It reads as: The President may always, even where confronted with a serious challenge, order in a summary procedure such protective measures or measures to restore (the parties) to (their) previous state as required, either to avoid an imminent damage or to abate a manifestly illegal nuisance. In cases where the existence of the obligation is not seriously challenged, he may award an interim payment to the creditor or order the mandatory performance of the obligation even where it is an obligation to do a particular thing. 80 Emmanuel Gaillard, ‘Introduction’ in Emmanuel Gaillard (ed), Anti-Suit Injunctions in International Arbitration (Juris Publishing 2005); Alexis Mourre, ‘French Courts Firmly Reject Anti-Arbitration Injunctions’ Kluwer Arb Blog, (6 May 2010) accessed 23 May 2017. 81 Also See, Michael Reisman and Heide Iravani, ‘The Changing Relation of National Courts and International Commercial Arbitration’ (2010) 21 Am Rev Intl Arb 33. 82 SA Elf Aquitaine and Total v Mattei, Lai, Kamara and Reiner (6 January 2010) (Tribunal de Grande Instance, Paris) and Republic of Equatorial Guinea v Fitzpatrick Equatorial Guinea (29 March 2010) (Tribunal de Grande Instance, Paris) [2010] Revue de l’arbitrage 390. 83 Mourre (n 80); Herbert Smith Freehills LLP, ‘French Court Cannot Interfere with Arbitration Once Tribunal Constituted’ <http://www.lexology.com/library/detail.aspx?g=59ee1d70-0e25-4400-8f0a-2f3f12a417de> accessed 23 May 2017. 84 For instance, See Emmanuel Gaillard, ‘Anti-Suit Injunctions Issued by Arbitrators’ in Albert Jan van den Berg (ed), International Arbitration 2006: Back to Basics? (Kluwer Law International 2007) 235. Also See, Gaillard and Banifatemi (n 18) at 257; Emmanuel Gaillard, ‘Reflections on the Use of Anti-Suit Injunctions in International Arbitration’ in Loukas Mistelis and Julian DM Lew (eds), Pervasive Problems in International Arbitration (Kluwer Law International 2006) 201. 85 Mistelis and Lew, ibid at 213, para 10.19. 86 ibid at 213, para 10.18. 87 ibid. Also See, Gaillard and Banifetemi (n 18) at 259. In this article, the authors state that in view of the negative effect of competence-competence, ‘the arbitrators must be the first (as opposed to the sole) judges of their own jurisdiction’ and that ‘a court that is confronted with the question of the existence or validity of the arbitration agreement must refrain from hearing substantive arguments as to the arbitrators’ jurisdiction until such time as the arbitrators themselves have had an opportunity to do so’. Gaillard and Banifatemi (n 18) at 259–60. Also See Emmanuel Gaillard, ‘Prima Facie Review of Existence, Validity of Arbitration Agreement’ New York L J 1 December 2005. Also See, Shin-Etsu Chemical Co Ltd v Aksh Optifibre Ltd (2005) 7 SCC 234. 88 Act No 26 of 1996. For further details on the position of anti-arbitration injunction prior to the enactment of the Arbitration and Conciliation Act, 1996, See Bansal and Agarwal (n 1). 89 Model Law (n 6); See, Preamble and Statement of Objects and Reasons, to the Arbitration and Conciliation Act, 1996. 90 For instance, See Bhatia International v Bulk Trading SA 2002 (4) SCC 105; Venture Global Engineering v Satyam Computer Services Ltd 2008 (4) SCC 190; Bharat Aluminium Co v Kaiser Aluminium Technical Service Inc 2012 (8) SCALE 333. For detailed analysis of these decisions, See SR Subramanian, ‘BITs and Pieces in International Investment Law: Enforcement of Investment Treaty Awards in the Non-ICSID States: The Case of India’ (2013) 14 J World Investment & Trade 198–239. 91 s 19(2) (‘The arbitral tribunal shall not be bound by the provisions of the Code of Civil Procedure, 1908’). Order XXXIX of the Indian Civil Procedure Code deals with temporary injunctions. 92 For instance, the Indian Supreme Court held that not only the courts but even statutory tribunals have all incidental and ancillary powers to make their final orders effective. See In Re Cauvery Water Disputes Tribunal, AIR 1992 SC 522 (para 16). 93 See Modi Entertainment Network and Anr v WSG Cricket Pte Ltd AIR 2003 SC 1177 (‘The Courts in India like the Courts in England are Courts of both law and equity. The principles governing grant of injunction, an equitable relief, by a Court will also govern grant of anti-suit injunction which is but a species of injunction’). 94 Tractor Export, Moscow v M/S Tarapore & Co AIR 1971 SC 1. The court had approvingly quoted the Halsbury’s Laws of England (Vol 21, Page 407) and stated that the court can restrain a person within its jurisdiction from instituting or prosecuting suits in a foreign court whenever the circumstances of the case make such an interposition necessary or proper. It may be noted that on this point, ie the power of the Indian court to order anti-arbitration injunctions, there is no much disagreement. However, whether such a power remains within the framework of the Indian Arbitration and Conciliation Act, 1996 is a debatable point. 95 In Re Cauvery Water Disputes Tribunal (n 92). 96 Currently, the newly added proviso to sub-section 2 of Section 2 provides that ‘the provisions of Sections 9, 27 and clause (a) of sub-section (1) and sub-section (3) of section 37 shall also apply to international commercial arbitration’. 97 In fact, the Indian Supreme Court had considered this point in the case of Tractor Export, Moscow v M/S Tarapore & Co, wherein it had quoted the Owners of Cargo on Board the Merak v The Merak (Owners)(1965) 2 WLR 250): ‘If statutory enactments are clear in meaning, they must be construed according to their meaning even though they are contrary to the comity of nations or International Law.’ For difference between anti-suit injunctions and anti-arbitration injunctions in this respect, See Romesh Weeramantry, ‘Anti-Arbitration Injunctions: The Core Concepts’ <http://cil.nus.edu.sg/wp/wp-content/uploads/2014/06/Note-on-anti-arbitration-injunctions.pdf> accessed 23 May 2017. 98 Bharat Aluminium Co v Kaiser Aluminium Technical Service Inc (n 90). 99 ibid. 100 ibid, para 200 (emphasis added). 101 s 89 of the Code of Civil Procedure provides that ‘where it appears to the court that there exists elements of a settlement which may be acceptable to the parties, the court shall formulate the terms of settlement and give them to the parties for their observations and after receiving observations from the parties, the court may reformulate the terms of a possible settlement and refer the same for a) arbitration b) conciliation c) judicial settlement including settlement through Lok Adalat or d) mediation. 102 Report of the Law Commission of India on the Arbitration and Conciliation (Amendment) Bill, 2001 (Report No 176), p 32 (emphasis added). Also See, Report of the Law Commission of India on Amendment of s 89 of Code of Civil Procedure, 1908 and Allied Provisions (Report No 238). 103 Shin-Etsu Chemical Co Ltd (n 87). 104 ibid, at para 47 and 51. 105 ibid, at para 46. 106 For details of some of the popular decisions in which the issue of anti-arbitration injunctions are involved but which are not examined in this article are: Union of India v Dabhol Power Co, IA No 6663/2003, Suit No 1268/2003, Delhi High Court, 2004; Jagson International Ltd v Frontier Drilling, IA Nos 3743/2003, 5819/2003 and 5639/2003; PPN Power Generating Co v PPN (Mauritius) Co, (2005) 3 ArbLR 354; CG Holdings Pvt Ltd v Ramasamy Athappan, MANU/TN/3161/2011; Boston Scientific International v Trivitron Healthcare Pvt Ltd, Madras High Court, Application No 3650 of 2015 in CS No 380 of 2015 dated 14 August 2015. 107 Chatterjee Petrochem Co and Another (n 8). 108 World Sport Group (Mauritius) Ltd (n 9). 109 Board of Trustees of the Port of Kolkata (n 10). 110 Vikram Bakshi (n 11). 111 Chatterjee Petrochem Co and Another (n 8). 112 For elaborate discussion of the factual dispute between the parties, See Chatterjee Petrochem (I) Pvt Ltd v Haldia Petrochemicals Ltd and Ors, MANU/SC/1149/2011. 113 Chatterjee Petrochem Co and Another (n 8) at para 7. 114 ibid at para 12. 115 ibid at para 8. 116 ibid at paras 12, 13, and 53. 117 Chatterjee Petrochem (Mauritius) Co and Anr v Haldia Petrochemical Ltd and Ors, MANU/WB/0328/2013 (Division Bench) para 48. 118 ibid at para 54. 119 ibid at para 65. 120 ibid at para 66. 121 MANU/SC/1787/2005. 122 Chatterjee Petrochem Co and Another v Haldia Petrochemicals Ltd, MANU/SC/1258/2013, n 8 para 34. 123 ibid at para 36. The court was referring to the litigation against the decision of the Company Law Board. For further details, See Chatterjee Petrochem (I) Pvt Ltd v Haldia Petrochemicals Ltd, MANU/SC/1149/2011, n 112. 124 World Sport Group (Mauritius) Ltd (n 9). 125 ibid at para 3. 126 ibid. 127 ibid. Also See, MSM Satellite (Singapore) Pte Ltd v World Sport Group (Mauritius) Ltd 2010 (112) BOMLR 4292, para 3.2. 128 ibid. 129 MSM Satellite (n 127), at para 17. 130 ibid. at para 54. 131 ibid. at para 60. 132 ibid. at para 19. 133 ibid. at para 20. 134 ibid. at para 35. 135 World Sport Group (Mauritius) Ltd (n 9) para 15. 136 (1969) 3 SCC 562. 137 (1987) 1 SCC 496. 138 The full titles of the referenced works are: Nigel Blackaby and others (eds), Redfern and Hunter on International Arbitration (OUP 2009) 148; Albert Jan van den Berg, The New York Convention of 1958: An Overview, International Council for Commercial Arbitration (ICCA) website; Herbert Kronke and others, Recognition and Enforcement of Foreign Arbitral Awards: A Global Commentary on the New York Convention (Kluwer Law International 2010) 82. 139 World Sport Group (Mauritius) Ltd (n 9) para 29. 140 Board of Trustees of the Port of Kolkata (n 10). 141 ibid at 17, para 54. 142 ibid at 28, para 83. 143 ibid at 18, para 61 and at 8, para 8. 144 ibid at 5, para 13. 145 ibid at 2, para 6. 146 ibid at 2, para 7. 147 ibid at 13, para 43. 148 MANU/DE/2738/2011. 149 MANU/WB/0328/2013 (Division Bench). 150 Excalibur Ventures LLC v Texas Keystone Inc & Ors, MANU/UKCM,/0022/2011; (2011) EWHC 1624 (Comm.). 151 Claxton Engineering Services Ltd v TXM Olaj-Es Gazkutato KTF, (2011) EWHC 345. 152 Board of Trustees of the Port of Kolkata (n10) at 28, para 83. 153 ibid at 7, para 18. 154 MANU/SC/0333/2008. 155 Board of Trustees of the Port of Kolkata (n 10) at 5, para 14. 156 ibid. 157 ibid at 14, para 46. 158 For further reference, See Lawrence W Newman and Colin Ong (eds), Interim Measures in International Arbitration (JurisNet LLC 2014) 254. 159 Board of Trustees of the Port of Kolkata (n 10) at 19, para 65. 160 ibid at 11, para 28. 161 ibid 28, para 84. 162 Shin-Etsu Chemical Co. Ltd (n 87). 163 Vikram Bakshi (n 11). 164 ibid, para 59. 165 Company Appeal No 10 of 2013. 166 ibid, para 9. 167 Ashurst Singapore, ‘Anti-arbitration Injunctions: Mixed Signals from India’ (January 2015) <https://www.ashurst.com/en/news-and-insights/legal-updates/anti-arbitration-injunctions-mixed-signals-from-india/> accessed 23 May 2017; Mohit Mahla, Indian Arbitration Cart: Moving Forward or Backward, Kluwer Arb Blog (6 June 2015) accessed 23 May 2017. 168 McDonald’s India Pvt Ltd v Vikram Bakshi, MANU/DE/1684/2016 (hereafter ‘Vikram Bakshi (Division Bench)’). 169 Excalibur (n 55). Vikram Bakshi (Division Bench) (n 168) para 48. 170 ibid. 171 Board of Trustees of the Port of Kolkata (n 10). 172 Vikram Bakshi (Division Bench) (n 168). 173 [2013] CCJ 3 (AJ). For a complete case-study of this decision, See SI Strong, ‘Anti-arbitration Injunctions in Cases Involving Investor-State Arbitration: British Caribbean Bank Ltd. v The Government of Belize’ (2014) 15 J World Invest & Trade 324. 174 This court was established by the Caribbean Community (CARICOM) as its judicial organ. It functions in dual capacity both as an original forum and an appellate court. While the court will apply the rules of international law as relevant to interpret the Community legal order, it will also hear appeals in both civil and criminal matters from the member-states of Community. In the instant case, it functioned as an appellate court and heard an appeal from Belize. Agreement Establishing the Caribbean Court of Justice, 14 February 2001, (entered into force 23 July 2002), 2255 UNTS 319. 175 Elektrim (n 44). 176 British Caribbean Bank Ltd (n 12) para 4. 177 ibid, paras 4 and 5. 178 Civil Appeal No 30 of 2010. 179 British Caribbean Bank Ltd (n 12) para 5. 180 ibid, para 7. 181 ibid, para 10. 182 ibid, para 11. 183 ibid, para 12. 184 s 106 (8) provides that the court shall have jurisdiction to issue an injunction against a party or arbitrators (or both) restraining them from commencing or continuing any arbitral proceedings (whether sited in Belize or abroad) where it is shown that such proceedings are or would be oppressive or vexatious or inequitable or would constitute an abuse of the legal or arbitral process. 185 British Caribbean Bank Ltd (n 12) para 40. 186 ibid, para 41. 187 ibid, para 38. 188 ibid, para 39. 189 ibid, paras 37 and 38. 190 ibid, para 39. © The Author(s) 2018. Published by Oxford University Press on behalf of the London Court of International Arbitration. All rights reserved. For permissions, please email: journals.permissions@oup.com This article is published and distributed under the terms of the Oxford University Press, Standard Journals Publication Model (https://academic.oup.com/journals/pages/about_us/legal/notices)

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Arbitration InternationalOxford University Press

Published: May 25, 2018

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