Anti-suit injunctions and conflicting decisions in international arbitration – practice of Indian courts

1. In India arbitrations are governed by the Arbitration & Conciliation Act, 1996 (“Act”). This Act has two distinct parts – Part 1 is applicable to domestic arbitrations, and Part 2 is applicable to international commercial arbitrations.

2. India is a party to the New York Convention and Geneva Convention for enforcement of foreign awards.

3. Foreign awards are required to first be recognised in India by the appropriate court under section 47 of the Act. The Respondent can oppose enforcement of the foreign award under section 48 of the Act on limited grounds, akin to those in the New York Convention, viz.:
• the parties to the agreement were, under the law applicable to them, under some incapacity; or
• the said agreement is not valid under the law to which the parties have subjected it, or failing any indication thereon, under the law of the country where the award was made; or
• the party against whom the award is invoked was not given proper notice of the appointment of the arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or
• the award deals with a difference not contemplated by or not falling within the terms of the submission to arbitration; or
• it contains decisions on matters beyond the scope of the submission to arbitration: Provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, that part of the award which contains decisions on matters submitted to arbitration may be enforced; or
• the composition of the arbitral authority or the arbitral procedure was not in accordance with the agreement of the parties, or, failing such agreement, was not in accordance with the law of the country where the arbitration took place; or
• the award has not yet become binding on the parties, or has been set aside or suspended by a competent authority of the country in which, or under the law of which, that award was made; or
• the subject-matter of the difference is not capable of settlement by arbitration under the law of India; or
• the enforcement of the award would be contrary to the public policy of India. Explanation 1.—For the avoidance of any doubt, it is clarified that an award is in conflict with the public policy of India, only if,— (i) the making of the award was induced or affected by fraud or corruption or was in violation of section 75 or section 81; or
• it is in contravention with the fundamental policy of Indian law; or
• it is in conflict with the most basic notions of morality or justice. Explanation 2.—For the avoidance of doubt, the test as to whether there is a contravention with the fundamental policy of Indian law shall not entail a review on the merits of the dispute.

4. After recognition, the award is a deemed decree of the Indian court and can be executed under the Indan Civil Procedure Code, 1908 (“CPC”) as a decree of a court.

5. If an arbitration involving a Russian party results in an award (i) in Russia, or (ii) outside Russia, it is likely that an Indian court will enforce it against assets/ the person of the Respondent situated in India.

6. Even if an Indian court is faced with a situation in which there are conflicting decisions from Russia under art. 248.1 and 248.2 APK (“Lugovoy Law”) and under contract/ western law in an arbitration, they should enforce the arbitral award in the manner stated above.

7. Enforcement is done by attachment of property of the Respondent, and having the property sold to realise the judgement debt. It can also be enforced by imprisonment of the Respondent, although that is very rarely done. Non-payment of a judgement debt does not of itself amount to contempt of court or a criminal act in India.

8. Execution of a judgement of a foreign court is done in one of two ways – if the court is listed under section 44A of the CPC, it’s judgement will be recognized as a judgement of an Indian court. If not, a suit must be filed in an Indian court to enforce the judgement. Section 44A does not apply to Russia as it is not currently considered a “reciprocating territory” under section 44A, so a Russian court’s judgment would need to be enforced by the judgement-holder filing a suit in an Indian court to enforce the decree. The suit would run the usual course, and generally the time taken in Indian trial courts is quite long, followed by at least one, if not two, appeals – which can also take significant time (a few years each) to be heard and decided.

9. Coming to the practice of Indian courts on anti-suit injunctions, Indian courts have given protective orders allowing continuance of proceedings and execution of orders passed, the main case being of Modi Entertainment in 2003 where the Supreme Court held that a court in India has the power to issue anti-suit injunction to a party over whom it has personal jurisdiction because Indian courts are courts of equity which exercise jurisdiction in personam. However, due to the principle of comity, this power will be exercised sparingly because such an anti-suit injunction in effect causes interference in the exercise of jurisdiction by another court. The Supreme Court laid down the following principles to be applied to decide whether to grant an anti-suit injunction: In exercising discretion to grant an anti-suit injunction, the court must be satisfied that:
(a) the defendant has consented to the jurisdiction of the court;
(b) if the injunction is declined, the ends of justice will be defeated, and injustice will be perpetuated; and
(c) the principle of comity i.e. respect for the court in which the commencement or continuance of action/proceeding is sought to be restrained must be borne in mind.
(d) A party to the contract containing a jurisdiction clause cannot normally be prevented from approaching the court of choice of the parties as it would amount to aiding breach of the contract; yet when one of the parties to the jurisdiction clause approaches the court of choice in which exclusive or non-exclusive jurisdiction is created, the proceedings in that court cannot per se be treated as vexatious or oppressive nor can the court be said to be forum non conveniens.
(e) The burden to prove that the forum of choice is a forum non conveniens or that the proceedings are “oppressive or vexatious” is on the party contending it.

10. The authority of the Indian courts to grant anti-anti-suit injunctions was first examined and upheld by the Calcutta High Court in Devi Resources Ltd. in 2019. The Court recognised its competence under the general principle of equitable jurisdiction and held that the authority to grant an injunction “also encompasses the authority to grant an anti-suit or anti-arbitration injunction or even an anti-anti-suit injunction”. However, it limited this authority by stating that it “is issued only in the most extreme of cases where the refusal of the injunction may result in palpable and gross injustice in the meanest sense”.

11. Indian courts can also grant an anti-enforcement injunction restraining enforcement of an anti-suit injunction passed by a foreign court. In the case of Interdigital Technology v. Xiaomi the Delhi High Court has also granted an anti-enforcement injunction i.e., injuncting a party from enforcing an anti-suit injunction granted by a foreign court. There a Wuhan court had granted an anti-suit injunction restraining a party from initiating action before Indian courts for infringement of its patent.

12. Chapter VIII of the Indian criminal law (“BNSS” – Sections 111 to 124) pertains to reciprocal arrangements between India and foreign countries to provide assistance in certain criminal matters – such as examination of persons or production of any document or attachment of property in India derived from an offence committed in a contracting state.

13. The Ministry of Home Affairs of India (“MHA”) has entered into Mutual Legal Assistance Treaties/Agreements on Criminal Matters with various countries – including Russia. https://cbi.gov.in/assets/files/mlats/416949633Russia.pdf

14. The MHA has issued guidelines on mutual legal assistance on criminal matters https://cdnbbsr.s3waas.gov.in/s3ec02bd85282513da4089c441926e1975/documents/circular/guidelines2-1-24_compressed.pdf and there are MHA FAQs on this – https://www.mea.gov.in/mutual-legal-assistance-in-criminal-matters.htm

15. India and Russia also have an extradition treaty
https://www.mea.gov.in/Images/CPV/leta/Russia.pdf

16. India and Russia also have a treaty on legal assistance and legal relations concerning civil and commercial matters. https://www.mea.gov.in/Portal/LegalTreatiesDoc/RUB1197.pdf

17. On a query raised – an arrest order passed by a Russian court in a contempt action will not in itself result in an arrest in India.