Recently, the Bombay High Court held that the jurisdiction to grant interim measures under Section 9 of the Arbitration and Conciliation Act, 1996, (hereinafter referred to as ‘the Act’) is not extinguished merely because proceedings have been initiated for recognition and enforcement of a foreign arbitral award under Part II of the Act. The Court clarified that interim protection may continue until the foreign award is positively recognised and declared enforceable as a decree under Section 49 of the Act. Emphasising the legislative scheme, the Court observed that a foreign award becomes a decree only upon a positive affirmation by the Part II Court, unlike a domestic award, which automatically acquires such status under Section 36.
Brief Facts:
The case arose from a foreign arbitral award in favour of the petitioner, who approached the Bombay High Court under Section 9 of the Act, seeking interim protection to secure the awarded amount pending enforcement. Simultaneously, the petitioner initiated proceedings under Sections 47 and 48 of the Act for recognition and enforcement of the award under Part II of the Act. The Respondent challenged the maintainability of the Section 9 petition, contending that once enforcement proceedings under Part II are initiated, the court cannot grant interim relief under Section 9, as such proceedings already encompass recognition, enforcement, and execution of the foreign award.
Contentions of the Petitioner:
The petitioner argued that interim protection under Section 9 of the Act remains available even after the issuance of a foreign arbitral award and until the award is formally recognised as enforceable by an Indian court. Relying on judicial precedent, including Heligo Charters Pvt. Ltd. v. Aircon Feibars FZE, the Counsel submitted that a foreign award does not automatically attain the status of a decree in India. Therefore, interim measures are necessary to ensure that the award does not become a “paper award” and that the award-debtor does not dissipate assets during the pendency of enforcement proceedings.
Contentions of the Respondent:
The Respondent, on the other hand, argued that once proceedings are initiated under Part II of the Act, the process effectively transitions into enforcement and execution of the foreign award. In such circumstances, the jurisdiction under Section 9 should cease. Reliance was placed on multiple judicial precedents to argue that permitting a Section 9 petition alongside enforcement proceedings could lead to conflicting orders and jurisdictional overlap.
Observation of the Court:
The Court noted that Section 9 expressly allows a party to seek interim protection “before or during arbitral proceedings or at any time after the making of the arbitral award but before it is enforced in accordance with section 36.” However, the Court emphasised that this temporal limitation is linked specifically to Section 36, which governs the enforcement of domestic arbitral awards, and cannot automatically be extended to foreign awards governed by Part II of the Act.
The Court drew a crucial distinction between the two regimes. A domestic arbitral award becomes enforceable as a decree once the challenge period under Section 34 of the Act expires or a challenge is rejected. By contrast, a foreign award acquires the status of a decree only when the court, after examining the requirements under Sections 47 and 48 of the Act, positively declares it enforceable under Section 49 of the Act. The Court explained that “For a foreign award, a positive affirmation has to be made by the Part II Court to declare the foreign award as being enforceable for it to become a decree.”
The Bench further observed that when Parliament amended the Act in 2015 to extend the application of Section 9 of the Act to foreign awards through the proviso to Section 2(2) of the Act, it consciously refrained from introducing any limitation similar to that applicable to domestic awards. Therefore, courts cannot read into the statute a restriction that the legislature deliberately chose not to impose.
The Court also rejected the respondent’s argument that concurrent jurisdiction between the Section 9 Court and the Part II Court would create an anomaly. According to the Court, such overlap is part of the statutory scheme and cannot justify refusing jurisdiction. Until the foreign award is formally recognised as a decree under Section 49 of the Act, the court retains the power to grant protective measures under Section 9 of the Act to safeguard the interests of the award-creditor.
The decision of the Court:
In light of the foregoing discussion, the Court dismissed the respondent’s jurisdictional objection and held that a petition under Section 9 of the Act remains maintainable even after a petition for enforcement of a foreign award is filed under Part II, at least until the award is declared enforceable under Section 49 of the Act. The Court directed the respondent to deposit the awarded amount of USD 269,105.08 (or its INR equivalent) within four weeks and restrained it from alienating its assets until compliance.
Case Title: Osterreichischer Lloyd Seereederei (Cyprus) Ltd. Vs. Victore Ships Pvt. Ltd.
Case No.: Commercial Arbitration Petition No. 398 Of 2025
Coram: Hon’ble Mr. Justice. Somasekhar Sundaresan,
Advocate for the Petitioner: Adv. Prathamesh N. Kamat Adv. Shiv Iyer, Adv. Ankita Sen, Adv. Arpeeta Panvalkar, Adv. Vishesh R. Kulkarni, Adv. Kayush Zaiwalla,
Advocate for the Respondent: Adv. Vishal Kanade. Adv. Prachiti Naik, Adv. Tanaya Patankar, Adv. Manish Rai,
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