Introduction Anti-Arbitration Injunctions In India: Evolving Judicial Approaches And The Implication Of ‘Engineering Projects (India) Ltd. vs. MSA Global LLC’

Order XXXIX, Rule 1 of the Civil Procedure Code (CPC), 1908, empowers Civil Courts to grant Temporary Injunctions in situations where any property in dispute is in danger of being wasted, damaged, alienated, sold, removed or disposed off (from the possession of the Plaintiff) or otherwise causing injury to the Plaintiff, upon proof of such danger by Affidavit or otherwise produced by the Plaintiff. Rule 2 on the other hand extends such power to matters where the Plaint is filed to restrain the Defendant from committing breach of Contract or other injury of any kind; Plaintiff in this case, may apply for a Temporary Injunction to restrain the Defendant from committing such breach or cause such injury or any other breach or injury arising out of the same Contract or Property or Right. 

The Hon’ble Supreme Court in the case of “Modi Entertainment Network v. W.S.G. Cricket Pte. Ltd.”¹ the Court must be satisfied of the following aspects before granting an Anti-Suit Injunction: 

1. The Defendant must be amenable to the personal jurisdiction of the Court. 
2. Ends of Justice will be defeated, and injustice would prevail, if Injunction not granted. 
3. Principle of Comity (respect for the Court in which commencement or continuance of proceeding is sought to be restrained) must be borne in mind before granting the Injunction. 

There is no separate Provision for Anti-Arbitration Injunction, neither in the Arbitration and Conciliation Act, 1996 (The Act) nor in CPC. Parties rely on Order XXXIX, Rule 1 and/or 2 of CPC, to seek Anti-Arbitration Injunction. The Suit is bought before a Court of competent jurisdiction to either restrict initiation or continuation of Arbitration proceedings for numerous reasons. 

The 1996 Act favors minimal Court intervention in Arbitration proceedings. Section 5 of the Act explicitly states that no Judicial Authority shall intervene except where provided in the Act itself. Section 16 inculcates the Doctrine of Kompetenz-Kompetenze in the Indian Law stating that the Arbitral Tribunal has power to rule on its own jurisdiction, including objections with reference to existence and validity of the Agreement. On the other hand, Sections 8 and 45 grant power to the Court to refer parties to Arbitration unless prima facie the Court is of the opinion that no Arbitration Agreement exists or in case of International Arbitration Agreement if the Agreement is void, inoperative or incapable of being performed. 

Judicial Precedents on Anti-Arbitration Injunctions 

• Kvaerner Cementation India Ltd. v. Bajranglal Agarwal²: The Hon’ble Supreme Court held that Section 16 of the Act makes it clear that the Arbitral Tribunal has power to rule on its own Jurisdiction, including objections with reference to existence and validity of the Agreement. The Court upheld the decision of the Bombay High Court which had held that in light of Section 5 and 16 of the Act the Civil Court cannot grant an Anti-Arbitration Injunction. 

• World Sport Group (Mauritius) Ltd. v. MSM Satellite (Singapore) Pte. Ltd.³: The Hon’ble Supreme Court gave an Arbitration friendly approach by holding that in cases where fraud is alleged by one party, the Court approached under Section 45 of the Act should only determine whether the Arbitration Agreement is null and void, inoperative or incapable of being performed. The allegations of fraud shall be enquired into by the Arbitral Tribunal only as it is empowered under Section 16 of the Act to do so. 

• McDonald’s India Private Limited v. Vikram Bakshi⁴: The Division Bench of the Delhi High Court overturned an order of the Single Judge Bench granting Anti-Arbitration Injunction holding that the Agreement was inoperative and incapable of being performed due to multiple proceedings filed before various forums, the Court granted the Injunction on the principles of CPC holding that the Plaintiff was able to satisfy the grounds for granting an Injunction, which are; (i) Prima Facie Case exists, (ii) Balance of Convenience in favor of the Plaintiff, (iii) Possibility of Irreparable Damage. The Division Bench held that the Agreement is not rendered inoperative merely because simultaneous proceedings are going on before different Forum as the issues before each Forum was different. The Division Bench concluded that Courts while granting an Anti-Arbitration Injunction must keep in mind the principles laid down in Sections 8 and 45 of the Act. 

• Bina Modi v. Lalit Modi⁵: The Division Bench of the Delhi Court overturned an order of the Single Judge Bench not granting an Anti-Arbitration Injunction holding that the Courts do not have the power to interfere with Arbitral Proceedings and as such cannot grant an Injunction against Arbitration Proceedings. The Division Bench overturned the Single Judge’s decision holding that the Courts have a duty to investigate the operability and validity of an Agreement under Sections 8 and 45 of the Act respectively before referring the Parties to Arbitration. The Division Bench held that Disputes pertaining from the Trusts Act, 1882 fall under the exclusive jurisdiction of Courts and are not Arbitrable. The Division Bench relied on ‘McDonald’s India Private Limited v. Vikram Bakshi’ holding that the Courts have the power to grant an Anti-Arbitration Injunction, but they shall always rely on the principles of the Act before granting or not granting an Anti-Arbitration Injunction. 

Analysis of ‘Engineering Projects (India) Ltd. Vs. MSA Global LLC’ 

In this recent case⁶ the Learned Single Judge Bench of Justice Purushaindra Kumar Kaurav was posed with the question of the Court’s powers to grant Anti-Arbitration Injunction. 

Facts: 

Engineering Projects (India) Ltd. (EPI), a government owned enterprise, was engaged by the Ministry of Defence, Oman, for a border security project. EPI, in turn, subcontracted some works to MSA Global LLC (MSA), an Oman based Company. Their Contract included an Arbitration Clause with a Seat in Singapore and proceedings under ICC Rules. A dispute arose between the Parties regarding delays and performance failures. MSA invoked Arbitration Clause initiating proceedings in Singapore. Andre Yeap SC was nominated as Co-Arbitrator by MSA, Mr. Yeap submitted his Statement of Acceptance, Availability, Impartiality and Independence to the ICC, expressly declaring that he had “Nothing to Disclose” as according to Article 11(2) of Rules of Arbitration of the ICC, 2021 (ICC Rules). Subsequently, EPI found out about Mr. Yeap’s prior relationship with the Managing Director of MSA and filed a Challenge Application before the ICC Court. ICC Court vide its decision dated 28.02.2025 held that Mr. Yeap’s non-disclosure although regrettable does not establish doubts regarding his Impartiality. Thereafter on 27.03.2025, EPI filed an Application before the High Court of Singapore seeking determination of the validity of Mr. Yeap’s continuance (subsequently withdrawn). In April 2025, MSA filed an Application before the Tribunal seeking reimbursement of wasted costs incurred due to cancellation of Evidentiary hearing scheduled for January 2025. Considering these circumstances, EPI approached the Delhi High Court, seeking a Decree of Declaration that MSA is not entitled to continue with the ICC Arbitration with the present quorum as the proceedings are Vexatious, Unconscionable, Oppressive and against the Public Policy of India and a Decree of Permanent Injunction restraining the Defendant to continue with the Arbitration Proceedings. Subsequently, EPI filed an Interlocutory Application before the Delhi High Court (present Petition) seeking declaration that MSA cannot continue with the present quorum and seeking Temporary Injunction restraining MSA to continue with the present Arbitration.  

Issue: 

Whether Indian Courts have jurisdiction to grant Anti-Arbitration Injunction in Foreign Seated Arbitration. 

Judgment: 

The Court relied on Section 9 of the CPC which states that Civil Courts have Jurisdiction to Try all Suits of Civil Nature unless expressly or impliedly barred. The Court ruled that Sections 5 or 45 of the Act do not put a Bar on the Jurisdiction of the Civil Court but restricts it to certain circumstances. The Court held that intervention can be done in an Arbitration Proceeding in extraordinary circumstances. 

The Court held that Civil Courts under Sections 9 and 151 of the CPC have powers to grant Anti Arbitration Injunction where the Proceedings are Oppressive and Vexatious. It was held that Injunctions under Order XXXIX, Rule 1 and 2 of CPC can only be granted when: 

1. Prima Facie Case of the Plaintiff exists. 
2. “Balance of Convenience” is in favor of the Plaintiff. 
3. Not granting Injunction would lead to Irreparable Damage to the Plaintiff. 

The Court ruled that there exists a Prima Facie case of Procedural Misconduct with regard to the nomination of Mr. Yeap, Balance of Convenience was in favor of the Plaintiff as continuing with the Arbitration Proceedings would lead to violation of Principles of Fairness and Equity, not granting such Injunction would lead to Irreparable Damage to the Plaintiff.  

The Court granted the Injunction restraining the Parties to continue with the Arbitration Proceedings. 

Conclusion 

Anti-Arbitration Injunction is a necessary exception to the rule of Law. Courts have over the years interpreted it cautiously and sparingly, in order to not interfere with Party autonomy and Contractual Freedom. However, there have been times when the Court has deemed it fit to grant an Injunction in order to protect the Applicant Party from Oppressive and Vexatious Proceedings. 

The Hon’ble Delhi High Court in the case of ‘Engineering Projects (India) Ltd. Vs. MSA Global LLC’ was of the opinion that the 1996 Act does not bar the Jurisdiction of Civil Courts. The Court affirmed the power of the Civil Court under Section 9 of CPC to intervene in Foreign Seated Arbitration. However, it was stated that the Court’s power is limited and Anti-Arbitration Injunction can only be granted in situations where the Proceedings are Oppressive and Vexatious for the Applicant Party and denying such Injunction could cause permanent injury to the Applicant. 

The Decision highlights the importance of Party Autonomy in Arbitration Proceedings but also shows that Anti Arbitration Injunction is an imperative aspect of Law. The Court took a balanced approach on one hand the Court carved out a way for the Applicant Party to seek Injunction if the Party is able to satisfy the prerequisites established in this Judgment, on the other hand the Court also clarified that such Injunction is not the norm, the onus is on the Applicant Party to prove that Balance of Convenience lies in its favor, the Court only after being satisfied on all three grounds may grant an Injunction. 

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