Safiya Malik

The High Court of Delhi Single Bench of Justice Purushaindra Kumar Kaurav held that a civil court has jurisdiction to entertain a civil suit seeking an anti-arbitration injunction when arbitral proceedings are prima facie vexatious and oppressive in nature. The Court directed that the proceedings of the Arbitral Tribunal shall remain stayed until the pendency of the suit, further restraining the parties from participating in the said proceedings. The Court determined that the conditions warranting the grant of interim injunction stood satisfied in the present case. Accordingly, the interlocutory application was disposed of with clear instructions regarding further pleadings in the suit.

The plaintiff is a public sector enterprise under the administrative control of the Ministry of Heavy Industries and Public Enterprises (Department of Heavy Industry), Government of India. The dispute originated from a sub-contract agreement dated 21.09.2015 entered between the plaintiff and the defendant, a military and security systems integrator company based out of Oman. The contract pertained to the design, supply, installation, integration, and commissioning of a border security system for Sections 3 and 4 of the Engineer-3 Project on the Oman-Yemen border. This sub-contract formed part of a principal agreement dated 29.06.2015 between the Ministry of Defence, Oman and the plaintiff, which appointed the plaintiff as the main contractor for the project.

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Clause 19 of the sub-contract agreement dealt with law and arbitration. It provided for resolution of disputes amicably in the first instance, or otherwise through arbitration under the Rules of Arbitration of the International Chamber of Commerce. It further stated that the jurisdiction of the contract agreement shall lie with the Courts at New Delhi, India. The governing law was stipulated as the laws and regulations of the Sultanate of Oman. The clause also mandated a three-member arbitral panel and required the place of arbitration to be mutually agreed upon.

A dispute arose regarding delays in contractual obligations, and the defendant initiated arbitral proceedings under the ICC Rules by nominating Mr. Andre Yeap SC as its co-arbitrator. Mr. Yeap submitted his Statement of Acceptance, Availability, Impartiality and Independence on 20.04.2023, declaring "Nothing to disclose". Subsequently, on 09.06.2023, the plaintiff nominated Hon'ble Mr. Justice Arjan Kumar Sikri (Retd.) as its co-arbitrator. Mr. Jonathan Acton Davis KC was later appointed as the presiding arbitrator. The Tribunal was fully constituted on 05.09.2023.

The first procedural hearing took place on 26.10.2023. The procedural timetable provided for the completion of pleadings and evidence between 03.11.2023 and 23.12.2024. On 03.11.2023, the defendant filed an application seeking urgent interim measures. The plaintiff filed its reply, and the defendant submitted written submissions on 05.01.2024. The Tribunal issued its First Partial Award on interim measures on 19.06.2024, which the plaintiff challenged before the High Court of Singapore.

Meanwhile, the Tribunal fixed evidential hearing dates from 20.01.2025 to 25.01.2025. During preparation for the hearing, the plaintiff came across a judgment of the Gujarat High Court dated 05.07.2024 in the matter of Neeraj Kumarpal Shah v. Manbhupinder Singh Atwal. This revealed Mr. Yeap's prior involvement in arbitral proceedings concerning Mr. Manbhupinder Singh Atwal, the Managing Director and Promoter of the defendant.

On 19.01.2025, the plaintiff filed a challenge application under Article 14(1) of the ICC Rules before the ICC Court, citing lack of disclosure by Mr. Yeap and raising doubts about his independence. Mr. Yeap and the defendant submitted their respective responses. On 28.02.2025, the ICC Court found the challenge admissible but dismissed it on merits, terming the non-disclosure "regrettable" but insufficient to raise justifiable doubts.

Around March 2025, the defendant filed an enforcement petition before the Delhi High Court seeking recognition of the First Partial Award (O.M.P. (EFA)(COMM.) 4 of 2025). On 27.03.2025, the plaintiff approached the High Court of Singapore under Article 13(3) of the UNCITRAL Model Law read with Section 3(1) of the Singapore International Arbitration Act, 1994. Around April 2025, the defendant also sought reimbursement of costs allegedly wasted due to cancellation of the evidentiary hearing.

In these circumstances, the plaintiff instituted a civil suit before the Delhi High Court. The suit sought a declaration that the arbitration proceedings under ICC Case No. 27726/HTG/YMK were unconscionable, vexatious, oppressive, and violative of public policy. A permanent injunction was prayed for, restraining the defendant from continuing the arbitration with the present constitution of the tribunal.

The Court considered the issue of maintainability of the civil suit and recorded that "a bare perusal of Section 9 of the CPC would indicate that the Civil Courts have the jurisdiction to try all civil suits except those which are expressly or impliedly barred." The Court held that "there exists a strong presumption in favour of the jurisdiction of the Civil Courts." Referring to relevant precedent, the Court observed that "such exclusion does not apply in cases where the provisions of a particular Act have not been complied with or the statutory Tribunal has not acted in conformity with the fundamental principles of judicial procedure."

Distinguishing between anti-suit and anti-arbitration injunctions, the Court noted that "the principles which apply to an anti-suit injunction will not necessarily apply to an anti-arbitration injunction." It further stated that "in exceptional cases, arbitration proceedings could be injuncted, wherein the attending circumstances would render continuation of the arbitration proceeding oppressive or unconscionable." The Court remarked that "Courts are slow in granting an anti-arbitration injunction unless it comes to the conclusion that the proceeding initiated is vexatious and/or oppressive."

Referring to the relevant provisions of the ICC Rules, the Court recorded that "every arbitrator must be and remain impartial and independent of the parties involved in the arbitration." Citing Article 11(2), it noted that "the prospective arbitrator shall disclose in writing to the Secretariat any facts or circumstances which might be of such a nature as to call into question the arbitrator's independence in the eyes of the parties." The Court observed that "a bare perusal of the said disclosure would indicate that Mr. Yeap, despite having an opportunity and being bound by the ICC Rules to fully disclose any information that could call into question his impartiality in the eyes of the parties, willingly chose not to do so and declared that no such circumstance existed."

The Court referred to the ICC Court's own finding that the non-disclosure was "regrettable" and stated that "the integrity of the arbitral process rests on the unassailable confidence of the parties in the neutrality of the arbitrator, and to that end, full disclosure cannot be said to be merely 'advisable'." It stated that "the standard for disclosure is 'in the eyes of the parties', meaning what the parties may reasonably perceive to be a cause for concern, that forms the litmus test for disclosure." The Court further noted that "the arbitrator cannot withhold disclosure on the ground that, in his or her view, the fact or association is benign or too remote to influence impartiality."

Regarding the defendant's conduct, the Court stated that "the sequence of events unmistakably reveals a concerted and calculated attempt by the defendant to entangle the plaintiff in vexatious, coercive and strategically manipulative litigation." It further recorded that "the totality of this conduct unequivocally suggests a mala fide and oppressive litigation strategy, one which is intended to exhaust, delay, coerce and manoeuvre the plaintiff by compelling it to defend itself across multiple legal forums simultaneously, irrespective of the merits of the dispute."

The Court stated that "such tactics, which are neither fair nor in consonance with the objectives of arbitration or civil litigation, amount to a weaponisation of the judicial process for collateral purposes." It concluded that "this Court, therefore, cannot remain a silent spectator where one litigant has clearly been subjected to undue procedural torment by another under the pretext of arbitration, that too when the arbitration proceeding in question is itself based on the foundation of a grave and incurable error of non-disclosure giving rise to legitimate doubts in the mind of the plaintiff qua the fairness, impartiality and independence of the entire arbitration proceedings."

The Court held that "the present suit for grant of an anti-arbitration injunction is maintainable before this Court as the arbitration proceedings are prima facie vexatious and oppressive in nature." The Court further recorded that "in the facts and circumstances of the present case, the three pre-conditions for granting an interim injunction namely prima facie case, balance of convenience and irreparable injury, all tilt in favour of the plaintiff."

Accordingly, the Court directed that "the proceedings of the Arbitral Tribunal in ICC Arbitration Case No. 27726/HTG/YMK shall remain stayed until the pendency of the present suit." It also ordered that "the parties to the present suit shall not participate in the said arbitral proceedings till further orders."

The Court disposed of the application for injunction in I.A. 9724/2025. With respect to the main suit CS(OS) 243/2025 and I.A. 9723/2025 & I.A. 13166/2025, the Court ordered that "the plaint be registered as a suit." The defendant's counsel acknowledged receipt of the suit paperbook and waived the right to formal service of summons.

The Court directed that "written statement be filed within thirty (30) days from the date of receipt of the suit paperbook." It added that "the defendant shall also file affidavits of admission/denial of the documents filed by the plaintiff, failing which the written statement shall not be taken on record." The plaintiff was granted liberty to file replication within thirty days after the written statement, along with an affidavit of admission/denial of documents filed by the defendant.

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The Court clarified that "any unjustified denial of documents may lead to an order of costs against the concerned party." Any party seeking inspection of documents was directed to proceed in accordance with the Delhi High Court (Original Side) Rules, 2018.

The matter was directed to be listed before the Joint Registrar for completion of service and pleadings, marking of exhibits and admission/denial of documents on 06.10.2025.

Advocates Representing the Parties:
For the Plaintiff: Mr. Sandeep Sethi, Senior Advocate with Mr. Ajit Warrier, Mr. Angad Kochhar, Mr. Himanshu Setia, Mr. Vedant Kashyap, Mr. Sumer Dev Seth, Ms. Richa Khare, and Ms. Riya Kumar, Advocates
For the Defendant: Mr. Rajiv Nayar, Senior Advocate with Mr. Kirat Singh Nagra, Mr. Kartik Yadav, Mr. Pranav Vyas, Ms. Sumedha Chadha, Mr. Sankalp Singh, Mr. Esh Gupta, and Mr. Pritesh Raj, Advocates

Case Title: Engineering Projects (India) Limited Through Its Managing Director Versus MSA Global LLC (Oman)

Neutral Citation: 2025: DHC:6093

Case Number: CS(OS) 243/2025

Bench: Justice Purushaindra Kumar Kaurav