03 August 2021 | Medima LLC v. Balasore Alloys | AP 267 of 2021 | Moushumi Bhattacharya J |

An award was made in a London seated arbitration. The substantive as well the arbitration agreements were governed by English laws. An award was made in Medima’s favour. It applied under Section 9 ACA to secure the awarded amount.

Balasore raised two arguments. One, choosing a foreign seat and foreign laws was an “agreement to the contrary” within the meaning of Section 2 (2) ACA (the provision that makes Section 9 applicable to foreign seated arbitrations). Two, post-award remedy under Section 9 ACA is only for domestic awards enforceable under Section 36 ACA.

The court rejected both arguments.

It examined the first argument in detail and concluded that “there must be something more to an arbitration agreement governed by a foreign law and with a foreign seat; the agreement must indicate in clear and express terms that the parties intend to exclude the operation of section 9 from the purview of the said arbitration agreement.”

On the second question, it reasoned that:

1. “The language "..........and an arbitral award made or to be made........" in Section 2(2) read with the proviso makes it clear that Section 9 would apply in a post-award scenario subject to the other conditions of the proviso being satisfied.”
2. The respondent’s interpretation would defeat the very purpose of introducing the proviso to Section 2(2) if allowed to magnify into a conflict.
3. “Section 9 read with the proviso to Section 2(2) would require a purposive construction which would be in line with the intention of the framers for bringing in the proviso by the Amendment Act of 2016. The objective of the amendment was to make the proviso workable, not stultify it by reason of a conflict with Section 9.”
4. Every attempt should be made to harmonise the provisions of a statute wherever there appears to be a conflict. (citing JK Cotton Spinning and Weaving Mills Co. Ltd. v. State of Uttar Pradesh AIR 1961 SC 1170)
5. While the court is not entitled to re-write the statute itself, it is not debarred from "ironing out the creases." (citing Gujarat v. Gujarat Kishan Mazdoor Panchayat (2003) 4 SCC 712)
6. In a conflict, the later intention prevails (citing King v. Dominion Engineering AIR 1947 PC 94). Thus, the last intention of the legislature in the present case to ascertain the true scope and meaning of Section 9 is the proviso to Section 2(2) ACA, and the power of the court to make interim measures in a foreign seated arbitration post-award.
7. The parties’ arbitration agreement permits enforcement of the award in any court having jurisdiction over the party against whom enforcement is sought.

Read the judgment here.