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The High court of Calcutta comprising of Justice Sanjib Banerjee and Justice Suvra Ghosh, held that an anti-suit injunction passed by an Indian court staying a foreign arbitral reference and the subsequent enforcement of such foreign award, is without jurisdiction and held to be non est, if later vacated by a superior court.
Devi Resources Ltd. (appellant), is a Hong Kong Based company that purchased iron ore vide a contract dated February 29, 2012 from Ambo Exports Ltd (respondent). The agreement was governed by English Law with the provision that all disputes would be resolved by arbitral reference conducted by the London Maritime Arbitrators’ Association (LMMA), the seat of arbitration naturally being London.
The respondent, having failed to supply the material to the appellant within the time prescribed in the agreement, persuaded the appellant to accept the material from a third party supplier, namely a Muktar Mineral Pvt Ltd. However, to the appellant’s continued misfortune, Muktar Ltd also failed to supply the material within the time prescribed, on account of which the appellant had to pay demurrage, as a result of the goods vessel being stalled at a load port.
The party moved to arbitration proceedings under Clause 14 of agreement but the respondent objected to such arbitral reference and refused to take part in such arbitral proceedings and said that the agreement is a ‘stand alone agreement’ and was not governed by any arbitration clause.
The last leg of a series of court applications culminated in the impugned order of anti-suit injunction dated January 14, 2016, wherein the Court restrained the foreign arbitral proceedings on the basis that the appellant had continued with such proceedings notwithstanding the pendency of their application under Section 45 of the Arbitration Act.
The issue that was to be decided by the Hon’ble High Court in this appeal, therefore, was whether the arbitral award obtained by the appellant despite a subsisting order of injunction restraining the arbitral proceedings could stall the enforcement of a foreign award? And whether the subsequent order vacating such order of injunction can have retrospective effect, as if to render such injunction null and void ab
In conclusion, it was ended by borrowing an interesting analogy used by the appellant in the course of arguments in that the award of January 21, 2016 could never have been considered ‘still born’ simply because it was passed/obtained by the appellant after the order of injunction of January 14, 2016 was passed.
The Hon’ble Court, while ultimately agreeing with the proposition that the order of anti-suit injunction was passed without jurisdiction and therefore non est from the very outset, upheld the appeal in favour of Devi Resources Pvt Ltd.
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