Delhi High Court Grants Ad-Interim Anti-Arbitration Injunction in International Commercial Arbitration
The plaintiff contended that there was no written arbitration agreement between the parties
;On January 19, a single-judge bench of the Delhi High Court, presided over by Justice Anup Jairam Bambhani, issued an ad-interim anti-arbitration injunction, thereby staying the ongoing arbitration proceedings in an international commercial arbitration.
The plaintiff, Techfab International Pvt. Ltd., filed a suit seeking an anti-arbitration injunction against the defendant, an entity based in Malawi, Africa. The plaintiff contended that there was no written arbitration agreement between the parties. It was further alleged that the defendant had voluntarily initiated commercial disputes before the High Court of Malawi since 2018.
Despite the absence of a written arbitration agreement, the defendant invoked the arbitration clause in another agreement between the parties, designating India as the governing jurisdiction or seat. Subsequently, the defendant sought the appointment of an appointing authority under the UNCITRAL Rules from the Permanent Court of Arbitration at The Hague.
The Council for National and International Commercial Arbitration, Chennai, was appointed as the appointing authority, which, in turn, appointed a Malaysian national as the sole arbitrator.
Considering the approach of the defendant and the fact that even if it were to be held that the arbitration agreement exists, the admitted position was that the arbitration proceedings would be held only in India.
Relying upon the judgments of the High Court of Delhi in Dr. Bina Modi vs. Lalit Modi 2020 SCC Online Del 1678 and McDonalds India Pvt. Ltd. v. Vikram Bakshi 2016 SCC Online Del 3949, it was submitted on behalf of the plaintiff that in a suit for anti-arbitration injunction, the Court is duty-bound to consider the existence and validity of an arbitration agreement and if foreign arbitrations would be maintainable thereunder as they involve significant expenditures.
Consequently, the court granted an ad-interim stay on the arbitration proceedings before the appointed sole arbitrator under the UNCITRAL Rules.
The plaintiff was represented by Senior Advocate Nidhesh Gupta, briefed by Advocates Joby Varghese, Shreesh Chadha, Divjot Singh Bhatia, and Aman Singh Bakhshi from Kaarya Law.
Case Title: Techfab International Private Limited v. Midima Holdings Limited