In an ongoing decision, a solitary Judge of the High Court of Delhi ("High Court") had the event to outline the importance and extent of anti-arbitration injunction suits in India. At the same time, the High Court emphasized that anti-arbitration activities which look for an assertion that the hidden arbitration agreement is invalid and unenforceable, are inside the degree and intensity of the arbitral under Section 16 of the Arbitration and Conciliation Act, 1996 (Arbitration Act).
A trust deed dated April 9, 2014 ("Restated Trust Deed") executed by K.K Modi as the settlor/overseeing trustee and Bina Modi, Lalit Modi, Charu Modi, and Samir Modi as the trustees (on the whole the "Trustees") of the K.K Modi Family Trust. Provision 36 of the Restated Trust Deed accommodated the goal of questions emerging under the Restated Trust Deed by arbitration under the Rules of Arbitration of the International Chamber of Commerce, Singapore ("ICC"). At a gathering of the Trustees held in Dubai, questions emerged corresponding to the understanding and execution of the Restated Trust Deed, and one of the trustees, Lalit Modi summoned the arbitration arrangement and recorded an application looking for crisis measures under the steady gaze of the International Court of Arbitration of the ICC in Singapore, against Bina Modi, Charu Modi, and Samir Modi. During the arbitral procedures, a crisis judge was delegated.
In the interim, in regard to the arbitration procedures started in Singapore, Bina Modi, Charu Modi and Samir Modi ("Plaintiffs") initiated anti-arbitration injunction ("Suits"), looking for a revelation of the arbitration procedures as unenforceable and as opposed to the public approach of India and looked for a perpetual injunction limiting the challenging litigant, Lalit Modi ("Defendant") from continuing with the forthcoming arbitral procedures. The Plaintiffs further claimed that as held by the Supreme Court of India ("Supreme Court") in Vimal Kishor Shah v. Jayesh Dinesh Shah, questions entomb se trustees or between trustees from one viewpoint and recipients then again or between recipients bury se, are not arbitrable and are dependent upon the selective jurisdiction of courts under the Indian Trusts Act, 1882.
The High Court, while inspecting the importance and extent of anti-arbitration injunction suits in India, alluded to the judgment passed by the Supreme Court in Kvaerner Cementation India Limited v. Bajranglal Agarwal just as a prior judgment passed by the High Court in Mcdonald's India Pvt. Ltd. v. Vikram Bakshi, and saw that inexorably, courts in India have themselves abstained from managing or meddling in issues inside the jurisdiction and skill of the arbitral council and rather host consigned gatherings to upset the equivalent before the separate arbitral courts. Likewise, the High Court held that, normally, under Section 16 of the Arbitration Act, an arbitral council had the capability and jurisdiction to choose inquiries of the legitimacy of the basic arbitration agreement. The High Court additionally held that accordingly, polite courts should not limit an arbitral council from practicing its legal jurisdiction under Section 16 of the Arbitration Act in such cases.
The High Court additionally held that the standards administering anti-suit injunction suits couldn't be applied to anti-arbitration injunction suits, since the guideline of self-rule of the arbitral council to manage a test to its jurisdiction under Section 16 of the Arbitration Act (kompetenz-kompetenz), separated anti-arbitration injunctions suits from anti-suit injunction suits. At the same time, the High Court additionally repeated the standard of gathering self-sufficiency under the Arbitration Act and held that since the gatherings were from business foundations and had purposely gone into and executed the Restated Trust Deed, they were limited by the terms thereof remembering the particular type of arbitration for Singapore.
The High Court additionally held that Section 41(h) of the Specific Relief Act, 1963, banned courts from granting injunctions in situations where an equivalent and adequate cure could be acquired through some other method of continuing, similar to procedures under Section 16 of the Arbitration Act, in the current case. Ultimately, the High Court held that the revised Section 8 of the Arbitration Act didn't change the bar on Indian courts to meddle in arbitration matters and subsequently, would not allow a legal position to choose the presence of a substantial arbitration agreement. Considering the abovementioned, the High Court excused the Suits and guided the gatherings to upset the jurisdictional issues before the arbitral council, including the non-arbitrability of questions emerging out of trust deeds under Indian law.
In an appeal documented by the Plaintiffs, a Division Bench of the High Court, vide a request dated March 5, 2020, controlled the Defendant from continuing with the crisis arbitration procedures, till additional becoming aware of the said offer. The said bid is forthcoming. A Special Leave Petition recorded by the Defendant against the stay request dated March 5, 2020, has been excused by the Supreme Court.
This article does not intend to hurt the sentiments of any individual, community, sect, or religion, etcetera. This article is based purely on the author’s personal opinion and views in the exercise of the Fundamental Rights guaranteed under Article 19(1)(A) and other related laws being enforced in India for the time being.