The Bombay High Court has clarified a critical jurisdictional ambiguity in international arbitration practice, holding that parties may seek interim relief under Section 9 of the Arbitration and Conciliation Act even after initiating enforcement proceedings for a foreign arbitral award. This decision resolves conflicting interpretations and reinforces the legislative intent to protect award creditors from asset dissipation during the recognition phase.
Background & Facts
The Dispute
The petitioner, Osterreichischer Lloyd Seereederei (Cyprus) Ltd., obtained a foreign arbitral award dated March 23, 2020, awarding USD 269,105.08 against the respondent, Victore Ships Pvt. Ltd. The petitioner filed a petition under Section 9 of the Arbitration and Conciliation Act, 1996, seeking interim measures to preserve the award amount pending enforcement. Simultaneously, it filed a petition under Sections 47 and 48 of the Act to enforce the foreign award.
Procedural History
- March 2020: Foreign arbitral award rendered in Cyprus.
- 2024: Petitioner files Commercial Arbitration Petition No. 398 of 2025 under Section 9 seeking interim protection.
- 2024: Contempt petition filed alleging asset dissipation by respondent.
- 2025: Respondent objects to jurisdiction under Section 9, arguing that once a Part II enforcement petition is filed, Section 9 remedies are barred.
- March 2026: Bombay High Court hears arguments on jurisdictional bar.
Relief Sought
The petitioner sought: (1) an order directing the respondent to deposit the full award amount in Indian Rupees with the Court registry; (2) a restraint on disposal of respondent’s assets; and (3) full disclosure of all assets, liabilities, and transactions.
The Legal Issue
The central question was whether Section 9 of the Arbitration and Conciliation Act, 1996, remains available to seek interim relief after a petition for recognition and enforcement of a foreign award has been filed under Part II of the Act, particularly when the award has not yet been declared enforceable as a decree.
Arguments Presented
For the Petitioner
The petitioner relied on Heligo Charters Private Limited v. Aircon Feibars FZE to argue that Section 9 jurisdiction is not extinguished upon filing a Part II petition. It emphasized that a foreign award does not automatically become a decree under Indian law, unlike domestic awards under Section 36. Until Section 49 is triggered - i.e., until the Court affirmatively declares the award enforceable - the award remains vulnerable to dissipation. The petitioner contended that Section 2(2) explicitly extends Section 9 to foreign awards and Parliament deliberately omitted any temporal restriction linking Section 9 to Part II proceedings.
For the Respondent
The respondent relied on Centrient Pharmaceuticals India Pvt. Ltd. v. Hindustan Antibiotics Ltd. and Supreme Court decisions in Fuerst Day Lawson v. Jindal Exports Ltd. and LMJ International Ltd. v. Sleepwell Industries Company Ltd. to argue that Part II proceedings roll up recognition and enforcement into a single composite process. It contended that once a petition under Part II is filed, it assumes the character of execution proceedings, thereby barring recourse to Section 9. The respondent asserted that allowing concurrent jurisdiction would lead to conflicting orders and undermine the statutory scheme.
The Court's Analysis
The Court undertook a detailed statutory interpretation of Section 9, Section 2(2), Section 36, and Part II provisions. It observed that Section 36 governs domestic awards, where enforcement as a decree arises automatically upon expiry of the Section 34 challenge period. In contrast, Section 49 requires a positive judicial determination for foreign awards to attain decree status.
"For a foreign award, a positive affirmation has to be made by the Part II Court to declare the foreign award as being enforceable for it to become a decree to then be subjected to enforcement proceedings. Put differently, a further positive affirmation and validation is necessary for the Indian Courts to treat a foreign award as a decree, but for a domestic award, unless the Section 34 Court intercedes, the arbitral award is statutorily treated as a decree."
The Court rejected the respondent’s attempt to import the domestic award framework into foreign award enforcement. It noted that Parliament, in amending Section 2(2) in 2015 to extend Section 9 to foreign awards, deliberately retained the phrase "but before it is enforced in accordance with Section 36" without substituting it with a Part II reference. This silence was not an oversight but a conscious legislative choice.
The Court distinguished Centrient, which involved a domestic award where execution had already commenced, from the present case where recognition was still pending. It emphasized that Section 9’s purpose - to prevent asset dissipation - is most critical during the gap between filing a Part II petition and the Court’s final determination under Section 49. Allowing interim relief during this phase aligns with the overarching legislative objective of ensuring effective enforcement of international awards.
The Court also rejected the argument that concurrent jurisdiction would cause chaos, noting that similar coexistence between Section 9 and Section 17 was previously accepted and later regulated by Section 9(3), not by outright exclusion.
The Verdict
The petitioner won. The Court held that Section 9 relief remains available even after a petition under Part II is filed, so long as the foreign award has not yet been declared enforceable as a decree under Section 49. The Court directed the respondent to deposit the award amount with the registry and imposed asset restraint and disclosure obligations.
What This Means For Similar Cases
Interim Relief Is Not Barred by Part II Filing
- Practitioners may now confidently file Section 9 petitions alongside Part II enforcement applications without fear of jurisdictional challenge.
- Courts must assess Section 9 applications on their merits, irrespective of pending Part II proceedings.
- Delay in seeking interim relief after filing Part II petitions will not automatically disentitle the applicant, provided the award remains unenforced.
Recognition Precedes Enforcement
- The distinction between "recognition" and "enforcement" is now legally settled: recognition under Section 48 is a prerequisite to enforcement under Section 49.
- Until Section 49 is invoked, the award is not a decree and remains subject to interim protection.
- Award creditors must act promptly to secure assets during the recognition phase, as this is the most vulnerable period.
Legislative Silence Is Meaningful
- Courts must resist judicially imposing temporal limits on Section 9 where Parliament has not done so.
- The extension of Section 9 to foreign awards under Section 2(2) must be interpreted expansively to fulfill India’s treaty obligations under the New York Convention.
- Future challenges to Section 9 applications in foreign award cases must be grounded in statutory text, not inferred procedural uniformity.
