India: Delhi High Court Sets Aside Anti-Arbitration Injunction Issued Against McDonalds

Delhi High Court: 

  • Upholds the sanctity of the arbitration agreement
  • The forum of arbitration and the place of such proceedings, when agreed upon by the parties to an agreement, cannot be held to be 'inconvenient'
  • Holds that the mere existence of multiple proceedings is not sufficient to render an arbitration agreement inoperative.


A Division Bench of the Delhi High Court ("Court") in the case of McDonalds India Private Limited ("MIPL") vs. Vikram Bakshi and Ors.1("Respondents") has set aside an order of the learned Single Judge of the Delhi High Court, thus vacating an order of injunction restraining the Appellant from pursuing institutional arbitral proceedings in London.

Acknowledging that the focus under the Arbitration and Conciliation Act, 1996 ("Act") has shifted towards directing parties towards arbitration, the Court in its judgment has, inter alia, stated that the principle of forum non conveniens would only be applicable where the court deciding not to exercise jurisdiction, has jurisdiction to decide the case and when there are competing courts with concurrent jurisdiction to deal with the same subject matter of a dispute. The Court also stated that a civil court has no jurisdiction to entertain a dispute the subject matter of which is covered under an arbitration agreement and must refer the parties to arbitration, unless it finds that the said agreement is null and void, inoperative or incapable of being performed.


The facts of the case have been dealt with in detail in our earlier hotline on the Delhi High Court's Order (see here), which order has been challenged by way of an appeal before a Division Bench of the Delhi High Court.


  • Whether civil courts had jurisdiction to entertain a dispute arising from an agreement wherein parties had agreed to resolve their disputes through arbitration.
  • Under which circumstances can an anti-arbitration injunction be granted by a civil court under the doctrine of forum non conveniens.


  1. Forum non-conveniens

    The Respondents did not press their arguments in this respect. Nonetheless, the Court noted that the view of the learned Single Judge in the order under appeal was incorrect and proceeded to provide clarity on the applicability of the doctrine of forum non conveniens. The Court referred to the Black's Law Dictionary and to a number of Indian and Common Law precedents2 to hold that the doctrine of forum non conveniens could only be invoked where the court deciding not to exercise jurisdiction, infact had jurisdiction to decide the case, but came to the conclusion that some other court, which also had jurisdiction, would be the more convenient forum.

    The Court applied the principle of forum non conveniens to the facts of the case and held that:

    1. There was no competing court; there was a court and an arbitral tribunal, an altogether different situation;

    2. The subject matter of dispute before the Court was different from that before the arbitral tribunal. The subject matter before the Court was the plea of an anti-arbitration injunction while the subject matter before the arbitral tribunal was the substantive dispute under the Joint Venture Agreement;

    3. The forum and place of arbitration was consciously chosen by the parties as an alternative forum of dispute resolution, alternative to the forum of a court. Therefore the same could not be regarded as an 'inconvenient forum' or 'inconvenient place'.

  2. Anti-Arbitration Injunctions

    The Respondents had relied upon the judgments of Modi Entertainment Network and Another v.W.S.G Cricket Pte Limited 3and Essel Sports Pvt. Ltd. v. Board of Control for Cricket in India & Others4 which were essentially decisions pertaining to anti-suit injunctions and not anti-arbitration injunctions. The Court stated that the principles governing an anti-suit injunction would not be applicable to arbitrations because of the principles of autonomy of arbitration and the competence-competence (Kompetenz-kompetenz) principle.

    Thereafter, the Court referred to the cases of Albon (T/A NA Carriage Co.) v. Naza Motor Training SDN BHD5 and Excalibur Venture LLC v. Texas Keystone Inc & Others6 wherein it was held that a court had the power to grant an injunction restraining arbitrations in exceptional cases and with caution. Such situations could be where both the parties had not consented to the arbitration or where the arbitration agreement was forged. However, since no such circumstance had been made out by the Respondents, the Court did not find a reason compelling enough to uphold the anti-arbitration injunction.

  3. Jurisdiction of the Civil Court

    The Court citing the decision of the Supreme Court in World Sport Group (Mauritius) Limited v. MSM Satellite (Singapore) Pte. Ltd7 noted that once a judicial authority, was asked by the parties to refer the disputes to arbitration, it would have to oblige, unless it found the agreement to be null and void, inoperative or incapable of being performed. Further, the Court noted that the expression 'null and void' would mean a situation where the arbitration agreement was affected by some invalidity right from the beginning, such as lack of consent due to misrepresentation, duress, fraud or undue influence. Insofar as the word 'inoperative' was concerned, it covered those cases where the arbitration agreement had ceased to have effect, such as the case of revocation by the parties. This was clearly not the case in the facts of the present proceedings.

    Finally the Court observed that the mere existence of multiple proceedings (proceedings before the Company Law Board ("CLB") and those before the arbitral tribunal) was not sufficient to render the arbitration agreement inoperative or incapable of being performed. Moreover, the subject matter of the proceedings before the CLB fell within the ambit of the alleged oppression and mismanagement whereas the subject matter of the dispute before the arbitral tribunal was related to the termination of the Joint Venture Agreement and the rights flowing therefrom.

  4. Waiver of the arbitration clause

    The Court held that the mere withdrawal of an application under Section 45 of the Act which had been previously presented before the CLB, in light of the fact that the Joint Venture Agreement had been terminated after the institution of the application, and arbitration proceedings had been commenced in pursuance of the termination would not constitute abandonment of the arbitration clause.


Although India Courts have adopted a pro arbitration approach in the past couple of years, they have often sent mixed signals to the international community through precedents that run contrary to the UNICITRAL model, often infringing upon the jurisdiction of arbitral tribunals and the finality of their awards. However, in the present case the Court has sent a strong message by setting aside the anti-arbitration injunction and by curbing judicial interventionism to further the ends of justice.

The courts have to be careful and involve a degree of circumspection when dealing with arbitral proceedings and the same has been reiterated by the Court in the present case. Civil Courts have the power to issue anti-arbitration injunctions but such power should be used in exceptional circumstances and not as a general rule. The Court has also set aside the contention of forum non conveniens on the ground that a consensual agreement to use arbitration as a mode for dispute resolution with a particular seat cannot be subsequently rescinded on the basis of the principle in question. The court's decision of vacating the injunction and setting aside the order is a welcome move which hopefully will generate more confidence amongst the business community in India and abroad.


1 FAO(OS) 9/2015

2 Sim v. Robinow: (1892) 19 K.665; Mayar (H.K.) Ltd v. Owners & Parties, Vessel M.V. Fortune Express: (2006) 3 SCC 100; Spiliada Maritime Corpn. v. Cansulex Ltd: (1986) All ER 843; Tehrani v. Secy of State for the Home Department: [2006] UKHL 47; Gulf Oil Corp. v. Gilbert: 330 U.S. 501.

3 2003 (1) Arb. LR 533 (SC)

4 ILR (2011) V Delhi 585

5 2008 (1) Lloyds Law Reports 1

6 2011 EWHC 1624 (Comm)

7 2014 (11) SCC 639

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Sahil Kanuga
Similar Articles
Relevancy Powered by MondaqAI
Vaish Associates Advocates
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Vaish Associates Advocates
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions