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Introduction
In Engineering Projects (India) Limited vs. MSA Global LLC (Oman), decided on 25 July 2025, a single bench of the Delhi High Court ("Court") examined the delicate balance between principle of judicial non-interference in arbitration proceedings and the imperative to preserve the impartiality and integrity of the adjudicatory process. This judgment addresses the crucial question of whether civil courts in India can grant anti-injunctions against foreign seated arbitrations when there appears to be fundamental issues of procedural fairness.
Brief Background
In 2015, Engineering Projects (India) Ltd ("EPIL"), a public sector enterprise in India, entered into a subcontract with MSA Global LLC (Oman) ("MSA"), a military and security systems company in Oman, for a border security system project at the Oman-Yemen border. The agreement contained an arbitration clause stipulating that courts in New Delhi will have exclusive jurisdiction, while arbitration would be conducted in accordance with the 'Rules of Arbitration of the International Chamber of Commerce, 2021' ("ICC Rules").
Disputes and differences arose between the parties regarding delay in performance of the obligations under the subcontract. MSA initiated arbitration and nominated one Mr. Andre Yeap SC as a co-arbitrator. Mr Yeap submitted a 'Statement of Acceptance, Availability, Impartiality, and Independence', declaring that he had nothing to disclose regarding his impartiality or independence. EPIL also appointed its nominee arbitrator. The arbitration proceedings commenced after the constitution of the arbitral tribunal and the tribunal even rendered a partial award and fixed dates for leading evidence by the parties. However, in the meantime, EPIL discovered that Mr. Yeap had a prior undisclosed association with MSA's managing director.
Accordingly, EPIL filed an application before the ICC challenging the appointment of Mr. Yeap as the arbitrator. While ICC acknowledged the non-disclosure to be "regrettable", it rejected EPIL's application. Parallelly, MSA also initiated proceedings before the Singapore High Court, which granted an injunction restraining EPIL from pursuing litigation before the Delhi High Court. Despite such injunction, EPIL approached the Delhi High Court by way of a civil suit praying for an anti-arbitration injunction on the ground that the proceedings are vexatious, unconscionable, oppressive, and violative of the public policy of India.
Key contentions of parties
EPIL argued that the continuation of the arbitration proceedings was legally untenable due to procedural impropriety and a breach of fundamental norms of disclosure, independence, and impartiality. It was further submitted that while the ICC Court acknowledged the omission by Mr. Yeap as "regrettable", its conclusion that the non-disclosure was not material enough to justify Mr. Yeap's removal compromised the integrity of the arbitral proceedings.
MSA argued that the EPIL's attempt to seek judicial intervention amounted to forum shopping and a strategic move to derail the arbitration proceedings initiated as per the procedure laid down under the ICC Rules. MSA relied on Section 45 of the Arbitration and Conciliation Act, 1996 ("Act"), arguing that courts are mandated to refer matters to arbitration when a valid arbitration agreement exists. MSA further argued that EPIL has adequate remedies under Section 48 to resist enforcement of any foreign award.
Analysis
Observations of the Court on Maintainability of the Suit
The Court examined whether it had jurisdiction to entertain a suit seeking anti-arbitration injunction against a foreign seated arbitration. Reference was made to the Supreme Court decision in S. Vanathan Muthuraja vs. Ramalingnam Krishnamurthy Gurukkal & Ors [(1997) 6 SCC 143], wherein it was held that when a legal right is infringed, civil courts are empowered to take cognizance, unless doing so is expressly barred.
The Court relied upon its judgment in Union of India vs. Dabhol Power Company [2004 SCC OnLine Del 1298], wherein it was held that neither Section 5 nor Section 45 of the Act barred civil courts from issuing injunctions where foreign-seated arbitral proceedings were shown to be oppressive. The Court also referred to international jurisprudence, including the English case of J. Jarvis & Sons Ltd. v. Blue Circle Dartford Estates Ltd. [[2007] A.P.P.L.R. 05/14], where an anti-arbitration injunction was granted on grounds of vexatious and oppressive conduct.
The Court observed that while arbitration is generally viewed at with a non-interventionist approach, civil courts are not rendered powerless when arbitral proceedings are vexatious and oppressive.
Litmus Test for vexatious and oppressive proceedings
To assess whether arbitral proceedings are vexatious or oppressive, the Court examined multiple legal dictionaries defining "vexatious", wherein the word has been defined as proceedings without sufficient legal basis, primarily intended to harass the opposing party.
In the above context, the Court focused on the non-disclosure under Article 11 of the ICC Rules, which mandates arbitrators to disclose any facts that may call into question their impartiality or independence. Despite the ICC Court acknowledging Mr. Yeap's non-disclosure as "regrettable", the Court noted that the ICC had concluded that this did not raise reasonable doubts about his impartiality as an arbitrator. The Court expressed strong reservations with this conclusion, characterizing it as a situation where "the operation was successful, but the patient died". In other words, as per the Court, while procedural formality may have been upheld, the substantive integrity of the arbitration process was compromised.
The Court found a clear prima facie case of vexatiousness and oppression, and that the triple test for injunctive relief (prima facie case, balance of convenience, and risk of irreparable harm) was satisfied in the facts and circumstances of the case. Consequently, the Court allowed EPIL's application seeking injunction against the continuation of arbitration proceedings before the ICC and stayed the arbitral proceedings pending the outcome of the suit.
The single bench decision was challenged by MSA by way of an appeal (FAO (OS) 88/2025) before the division bench of the Delhi High Court. The division bench reserved its judgment on the appeal on 27 August 2025 and the judgment is awaited. It will be interesting to see how the appellate court appreciates the issues raised before the single bench.
Comment
This judgment establishes that while Indian courts respect arbitral autonomy and adhere to the principle of no judicial intervention in arbitration matters, such principles cannot be pressed upon when the principles of impartiality and disclosure are at stake. It is clear that when one party is forced to participate in arbitration proceedings tainted by undisclosed conflicts; courts are not powerless and can intervene to preserve the impartiality and integrity of the arbitral process. Impartiality and independence of arbitrators being the essential tenets of the arbitration process, a party which has concrete grounds to establish conflict cannot be burdened to undergo the entire arbitration process. The judgment also highlights that parties can approach Indian courts in foreign seated arbitrations governed by foreign institutional rules of arbitration and affirms that the civil court may issue an injunction when it finds that arbitral proceedings against the plaintiff in a foreign country are oppressive.
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