Twists And Turns In An Arbitration Proceedings - A Tale Of Drama, Suspense And Resolution

Recently, the Delhi High Court was confronted with an arbitration dispute that unfolded like an endless cinematic labyrinth, where every procedural turn revealed a fresh twist, each development adding a new layer of intrigue, much like a Christopher Nolan narrative that keeps the audience guessing till the very end. The dispute was brought by a beleaguered Indian PSU that found itself trapped in a complex chessboard of procedural manoeuvring at the hands of an international giant, compelling it to knock on the doors of the Delhi High Court in search of fair play, protection and neutrality in an international commercial arbitration. The centre of this dispute lies in the Civil Courts' plenary powers and their usual reluctance to pass an anti-arbitration injunction. However, a decision of the Delhi High Court, which was recently affirmed by the Division Bench^[2] is a much-needed reminder of the plenary powers of the Civil Courts as guaranteed under Section 9 of CPC and puts them on the pedestal of a sentinel on qui vive as a watchful guardian.

The dramatic turns in arbitration proceedings

The dispute began when in 2015, the Engineering Projects India Pvt Ltd. ('Plaintiff'), an Indian PSU, entered into an agreement with an Oman-based company MSA Global LLC ('Defendant') for a supply and build project at the Oman-Yemen border. In 2023, defendants invoked an arbitration Clause and nominated one Mr. Andre Yeap as an Arbitrator and the said Arbitrator, while giving the Statement of Acceptance and Impartiality, said that “he had nothing to disclose”. The proceedings continued and the Tribunal passed a First Partial Award on 19.06.2024, which burdened the Plaintiff with financial liability to the tune of Rs. 30 crores. However, in the meantime, in 2025 while preparing for the evidential hearing in the ICC Arbitration, the plaintiff came to know from a judgment passed by the Gujarat High Court in 2024 wherein Mr. Yeap was engaged by the Defendant in one of the previous arbitrations and in said Arbitration, the Award was passed in Defendant's favor. However, the said fact was not disclosed by Mr. Yeap in the present case. Consequently, Mr. Yeap's appointment was challenged before the ICC on 19.01.2025 citing a lack of disclosure. The ICC invited comments from Mr. Yeap and Mr. Yeap responded that though he became aware of the conflict in October 2024, he did not disclose it, stating, inter alia, that “had I made the disclosure, the possibility of the Respondent seeking to challenge my impartiality could not be discounted”. Surprisingly, ICC while passing the decision on this challenge held that the situation is “regrettable” but rejected this challenge.

In the interregnum, though Plaintiff objected to the continuance of the Arbitration proceedings, but the Tribunal fixed the evidentiary hearings. Meanwhile, on 13.11.2024, the Plaintiff partially challenged the First Partial Award before the Singapore High Court and also filed an application seeking a permission to add the ground of biasness in the same. On 27.03.2025, the Singapore High Court rejected the said application. Meanwhile, defendant filed an enforcement and execution petition of First Partial Award before Delhi High Court.

Furthermore, the Plaintiff preferred an application before the Singapore High Court seeking termination of mandate of Mr. Yeap as an Arbitrator. Meanwhile, giving another throw of dice, the Defendant filed an application before the ICC Court seeking recovery of purported wasted cost for the cancelled evidential hearings in January 2025. The said application was admitted by the Tribunal and it directed the Plaintiff to file reply. Plaintiff filed another application before Tribunal seeking deferment of the arbitration proceedings on account of an application challenging the Mr. Yeap's mandate pending before the Singapore High Court, however, the said application was rejected by the Tribunal and the Tribunal continued with the hearings.

Against this background, the Plaintiff filed a suit before the Delhi High Court seeking an anti-arbitration injunction on the ground that arbitration proceedings are vexatious and oppressive in nature. Before Delhi High Court, Defendant objected the maintainability of the suit and also submitted that simultaneous proceedings regarding the termination of Mr. Yeap's mandate cannot continue at both Singapore and Delhi High Court and that too at the instance of the Plaintiff. To this objection, Plaintiff agreed to withdraw the Singapore High Court application and filed the discontinuance application before Singapore High Court. Interestingly, before the Tribunal when the Plaintiff requested for adjournment on the ground that suit is pending before the Delhi High Court, the Defendant heavily contested the same and therefore, the Tribunal continued with the evidential hearing. The most shocking event in this saga was when the Plaintiff's discontinuance application was listed before the Singapore High Court, the Defendant moved an injunction application to prevent the Plaintiff to proceed with the suit before the Delhi High Court and also objected to the discontinuance application filed by the Plaintiff. Interestingly, Singapore High Court issued an anti-suit injunction and injuncted the Plaintiff from continuing the suit before the Delhi High Court. Furthermore, before the judgment was reserved by the Single Judge of Delhi High Court, the Singapore High Court summarily rejected the Plaintiff's challenge to the ICC decision, however the reasons were not communicated. Thus, the entire saga of this dispute looks like a Snakes and Ladders game marred by the cross-border jurisdictional tourism and at the center of this dispute lies the plenary powers of the all-mighty Indian Civil Courts.

Plenary powers of Civil Courts vis-à-vis anti-arbitration injunction.

The arbitration clause in the underlying contract indicates that the jurisdiction of the agreement lies with the Courts at New Delhi however, the arbitration shall be conducted in accordance with the ICC rules. Furthermore, the ICC designated Singapore as the place of arbitration. Against this backdrop, the plaintiff filed a suit for an anti-arbitration injunction on the ground that proceedings before the Tribunal are vexatious and oppressive in nature.

The learned Single Judge while deciding the maintainability of the suit before the Civil Court resorted to Section 9 CPC principles and a seminal decision of Constitutional bench of the Supreme Court in the case of Dhula bhai v. State of Madhya Pradesh^[3] to come to the conclusion that there exists a strong presumption in favor of jurisdiction of Civil Courts. Moreover, it was held that when the Arbitral Tribunal acts contrary to fundamental tenets of the judicial procedure or governing statute, the Civil Courts shall retain jurisdiction. Building on this, the learned Single Judge held that there is no unblemished embargo on the jurisdiction of Civil Courts in entertaining a suit for an anti-arbitration injunction.

Furthermore, while relying on the decisions of Union of India v. Dabhol Power Company^[4] and O.N.G.C. v. Western Co. of North America^[5], the Court held that statutory preference for arbitration does not, and indeed cannot, render the jurisdiction of Civil Courts entirely nugatory. Furthermore, it was held that the judicial authority of the Civil Court under Section 9 of the CPC and its inherent powers under Section 151 CPC remain preserved to safeguard against the misuse of the arbitral process, unless expressly barred by the statute.

This decision reminded the Civil Courts of their plenary powers and held that the legislative scheme of the Arbitration and Conciliation Act, 1996 does not envisage a blanket ouster of the Civil Court's jurisdiction in all cases, particularly in circumstances where the initiation or continuance of arbitral proceedings is demonstrated to be vexatious and oppressive. The Court held that in cases where the very institution of arbitration is being used to perpetuate unfairness, would amount to a mechanical application of statutory principles, contrary to both equity and the broader constitutional mandate of access to justice. It is in these exceptional cases that the Civil Court must act as a sentinel on the qui vive i.e., watchful guardian, ensuring that the party alleging vexation and oppression is not left remediless.

Vexatious and Oppressive arbitral proceedings – A narrow window in the principle of minimum judicial interference

The principle of minimum judicial interference in the arbitration mechanism does not mean negligible interference and through this decision, the Delhi High Court gave a window, though a narrow one to interdict the arbitration proceedings if it can be shown that proceedings are vexatious and oppressive in nature. The High Court noted the significance of how non-disclosure of Mr Yeap's prior engagement with Defendant goes to the root of the matter and makes the entire arbitration proceedings that rested on the anvil of fairness and impartiality 'otiose'. The High Court also noted the extreme haste shown by the Tribunal and the conduct of Defendant in dragging the Plaintiff to numerous cross-border forums and held that it demonstrates a clear pattern of abuse of process intended not to resolve disputes in good faith, but rather to subject the plaintiff to procedural hardship and jurisdictional entanglement. In such a peculiar scenario, the Division Bench of the High Court held that this case is of the “rarest of rare” category and in such circumstances, an anti-arbitration injunction was warranted.

Road Ahead

Civil Courts, though positioned at the lowest rung of the judicial hierarchy, are often unjustly perceived as the weaklings within the Indian judicial system, reduced to a subordinate status in the larger institutional framework. This decision of the Delhi High Court, on the thrust of plenary powers of Civil Courts repositioned the Civil Court's jurisdiction in the arbitration cases, particularly in international commercial arbitration matters. This approach though, runs contrary to the principle of minimum judicial interference but gives a leeway to a party who stands oppressed at the hands of the other party to knock on the doors of the Indian Civil Courts and seek a remedy. This narrow window, if used judiciously and sparingly in cases where the arbitration proceedings are shown to be vexatious and oppressive in nature, will not only strengthen the position of Indian parties in the international commercial arbitration arena but also uphold the commitment of our constitutional ethos to impartiality and fair adjudication process even in a private and a party-chosen forum like arbitration.

Advocate, Supreme Court and a former Law Researcher, Delhi High Court. Views Are Personal.

References:

2. FAO(OS) 88/2025, MSA Global LLC Oman v. Engineering India Projects India Ltd, decision dated 12.12.2025. ↑

3. 1968 SCC OnLine SC 40. ↑

4. 2004 SCC OnLine Del 1298. ↑

5. (1987) 1 SCC 496. ↑