Anti- Arbitration Injunctions
An anti-arbitration injunction tries to prevent the commencement or continuation of arbitration procedures. In contrast, an anti-suit injunction seeks to prevent the commencement, initiation or continuation of court procedures.
A "anti-arbitration injunction" is an order whereby one party looks for controlling requests and orders against the other party to continue or begin with an arbitration proceedings in pursuance of the arbitration agreement between the parties. Despite the fact that the idea of "anti-arbitration injunction" is not defined in the Arbitration and Conciliation Act, 1996 ("the Act"), it has been appropriately perceived and received by the Indian Courts. Usually, the Courts in India while considering section 8 of the Act allude the parties to arbitration regarding arbitration agreement between the parties. It might be noticed that in specific conditions, alluding the parties for mediation might be against the interests of equity and it might be important to give an anti-arbitration injunction. There are judicial precedents wherein the Courts in India have explained the conditions under which such alleviation or relief of "anti-arbitration injunction" might be conceded to the parties. However, notwithstanding, it tends to be securely said that the Courts in India are, on a basic level, hesitant to allow an anti-arbitration injunction.
The Hon'ble High Court of Delhi, while dealing with the idea of "anti-arbitration injunction", in the matter of "McDonalds India Private Limited vs. Vikram Bakshi" observed that the standards and principles which are applicable to an "anti-suit injunction" won't really be applied to an anti-arbitration injunction as the mere presence or plausibility of existence of different procedures is certainly not an adequate reason to render the arbitration agreement defective or unequipped for being performed.
Additionally, in the matter of "Ravi Arya and ors vs. Palmview Overseas Limited and ors" the Hon'ble Bombay High Court held that once the issue is before the Arbitral Tribunal, the Civil Court cannot engage any procedures seeking for directive against the Arbitral Tribunal throughout mediation procedures and that section 16 of the Act confers power on the Arbitral Tribunal to govern on its own purview which incorporates settling upon the existence or validity of the arbitration agreement.
The Hon'ble High Court of Delhi in the matter of "Himachal Sorang Power Private Limited vs. NCC Infrastructure Holdings Limited" has set out the following parameters governing anti-arbitration injunction:
- The standards governing anti-suit injunction are not identical from those that administer an anti-arbitration injunction.
- Courts are slow in granting an anti arbitration injunction except if it arrives at the resolution that the procedure started is vexatious and/or oppressive.
- The Court which has administrative and supervisory jurisdiction or even close or personal jurisdiction over parties has the ability to refuse initiation of new procedures on the ground of res judicata or constructive res judicata. Whenever convinced to do so the Court could hold such continuing to be vexatious or potentially severe. This bar could acquire in regard of an issue of law or actuality or even a blended inquiry of law and truth.
- The fact that in the appraisal or assessment of the Court a trail would be required would be a factor which would weigh against grant anti-arbitration injunction.
- The aggrieved should to be urged to approach either the Arbitral Tribunal or the Court which has the supervisory jurisdiction in the issue. An undertaking ought to be made to help and help arbitration as opposed to permit parties to move away from the selected adjudicatory procedure."
As is obvious from the judicial precedents, Indian Courts do have the ability to grant an anti-arbitration injunction in residential just as international discretions (in compatibility of Section 45 of the Act). It very well may be securely induced that an anti-arbitration injunction might be allowed by a Court under the following conditions:-
- The arbitration initiated is vexatious and/ or oppressive in nature.
- Fresh arbitration procedures would be banned by res-judicata or constructive res-judicata, which could prompt procedures that perhaps vexatious and/or oppressive in nature.
- A current Arbitral Tribunal has already seized of the debates between the gatherings and as such some other arbitral council would do not have the jurisdiction to attempt the issue.
- The party seeking injunction is under some incapacity or overwhelming inconvenience.
- Egregious misrepresentation or fraud has been committed by the party trying to start or seek the second arbitral reference.