Civil Courts Can Restrain Foreign Arbitrations if Vexatious: Delhi High Court

The Delhi High Court recently ruled that civil courts retain jurisdiction under Section 9 of the Code of Civil Procedure, 1908, to grant anti-arbitration injunctions even in foreign-seated arbitrations, if the proceedings are marked by vexation, oppression, or are contrary to India’s public policy.

In a detailed 70-page judgment, Justice Purushaindra Kumar Kaurav quoted Lon L. Fuller from The Morality of Law and observed, “Even in the most benevolent of legal orders, if adjudication is not impartial, law degenerates into mere command".

 Court was dealing with a plea filed by Engineering Projects (India) Limited (EPIL), a Government of India enterprise, seeking an injunction against the ongoing Singapore-seated arbitration before the International Chamber of Commerce (ICC). The company alleged that the proceedings were unfair, biased, oppressive, and violative of Indian public policy.

“In view of the foregoing analysis, this Court has the jurisdiction to entertain this civil suit as the arbitration proceedings are prima facie vexatious and oppressive in nature. Moreover, since all three pre-conditions i.e., prima facie case, balance of convenience and irreparable injury tilt in favour of the plaintiff, it is a fit case to grant an interim injunction,” court held.

EPIL, a public sector undertaking under the Ministry of Heavy Industries, Government of India, was appointed on 29 June 2015 by the Ministry of Defence, Oman, as the main contractor for a supply-and-build project to design, supply, install, integrate, and commission a border security system along the Oman-Yemen border.

Subsequently, on 21 September 2015, EPIL entered into a sub-contract with the defendant for executing the Engineer-3 Project, specifically covering Sections 3 and 4 of the border. The sub-contract included an arbitration clause conferring jurisdiction on the courts in New Delhi, while also providing that any arbitration would be conducted under the ICC Rules, 2021.

A dispute arose over delays in the performance of contractual obligations, following which the defendant invoked the arbitration clause and initiated ICC arbitration, nominating Mr. Andre Yeap SC as its co-arbitrator.

During the evidentiary hearings, EPIL discovered that Mr. Yeap had previously been involved in arbitration proceedings concerning Mr. Manbhupinder Singh Atwal, the Managing Director and Promoter of the defendant.

Alleging non-disclosure and potential bias, the plaintiff challenged his appointment before the ICC Court under Article 14(1) of the ICC Rules.

While the ICC Court acknowledged the non-disclosure as “regrettable”, it dismissed the challenge, holding that there were no justifiable doubts regarding Mr. Yeap’s impartiality.

In parallel, the plaintiff also moved the High Court of Singapore under Article 13(3) of the UNCITRAL Model Law, seeking to determine the validity of Mr. Yeap’s continued participation.

In this backdrop, EPIL approached the Delhi High Court seeking an anti-arbitration injunction, citing lack of impartiality, procedural impropriety, and oppressive conduct.

Senior Advocate Sandeep Sethi, appearing for EPIL, argued that the proceedings stood vitiated by material non-disclosure, violating principles of natural justice. He termed the arbitration “vexatious and oppressive.”

On the other hand, Senior Advocate Rajiv Nayar, appearing for the defendant, contested the maintainability of the suit, alleging that EPIL was indulging in forum shopping and that the Singapore courts alone had supervisory jurisdiction over the dispute.

The High Court found that the proceedings were marred by co-arbitrator Mr. Andre Yeap’s deliberate non-disclosure of a prior arbitration involving the defendant’s counsel, amounting to a breach of the mandatory disclosure obligation under Article 11(2) of the ICC Rules.

“What is significant is the deliberate concealment of the mandatory disclosure. Even in his own comments, Mr. Yeap acknowledged that had he disclosed the aforesaid aspect, the plaintiff would have objected to the same. This clearly indicates that the disclosure was capable of disqualifying him from acting as co-arbitrator not just in the eyes of the parties, but in his own view as well. These facts, at this stage, are sufficient to indicate that the plaintiff has a prima facie case for grant of interim injunction,” court said.

On balance of convenience, court observed that continuation of the arbitration would not only cause serious and irreparable prejudice to the plaintiff, but would also be contrary to the larger interests of justice.

Commenting on the defendant’s conduct, court said,“The conduct of the defendant across various forums further fortifies the apprehension of mala fides and tactical manipulation. The defendant has shown an unusual sense of urgency in seeking relief before the Singapore Court, has vehemently opposed the plaintiff’s decision to withdraw its own anti-suit application before that Court, and has simultaneously pressed ahead with the arbitral proceedings in a manner that appears calculated to defeat the jurisdiction of this Court. The cumulative effect of these actions discloses a strategic attempt to short-circuit the legal process and to pre-empt the plaintiff's right to have its objections heard in an appropriate forum".

Emphasising the need for integrity in arbitral forums, the Court observed, “The expectation of fairness and neutrality that inherently governs the judicial proceedings in a Civil Court is not diminished in arbitration; if anything, it assumes even greater significance".

“A tribunal that is not, or is not perceived to be, neutral ceases to draw legitimacy from the parties’ consent and thereby renders the entire proceeding liable to collapse. The sanctity of arbitration depends on an unwavering adherence to this principle; the moment impartiality is compromised, the entire edifice of alternate dispute resolution stands on perilous ground,” court added.

For Plaintiffs: Mr. Sandeep Sethi, Sr. Adv. with Mr. Ajit Warrier, Mr. Angad Kochhar, Mr. Himanshu Setia, Mr. Vedant Kashyap, Mr.Sumer Dev Seth, Ms. Richa Khare and Ms. Riya Kumar, Advs.

For Defendants: Mr. Rajiv Nayar, Sr. Adv. with Mr. Kirat Singh Nagra, Mr. Kartik Yadav, Mr. Pranav Vyas, Ms. Sumedha Chadha, Mr. Sankalp Singh, Mr. Esh Gupta and Mr. Pritesh Raj, Advs.

Case Title: Engineering Projects (India) Limited v. MSA Global LLC (Oman)

Judgment Date: 25 July 2025

Bench: Justice Purushaindra Kumar Kaurav