Summary: In a landmark ruling, the Delhi High Court in Engineering Projects (India) Ltd v. MSA Global LLC clarified that Indian civil courts retain limited but real jurisdiction to stay foreign-seated arbitrations if the proceedings are shown to be vexatious or abusive. The decision strengthens procedural safeguards for parties, by reaffirming the courts’ power to intervene in cases of deliberate non-disclosure and procedural misconduct, notwithstanding the “minimal intervention” principle under Indian arbitration law.
Introduction
On July 25, 2025, the Delhi High Court in Engineering Projects (India) Ltd v. MSA Global LLC (CS(OS) 243/2025) (“Engineering Projects case”) delivered a significant judgment on the power of Indian courts to grant anti-arbitration injunctions in foreign-seated arbitrations. The Court stayed an ICC arbitration seated in Singapore after finding a prima facie case of deliberate non-disclosure by a party-nominated arbitrator and a pattern of vexatious, oppressive conduct by the claimant. The judgment clarifies that Indian civil courts retain a narrow but important jurisdiction to intervene in such proceedings, notwithstanding the “minimal intervention” ethos of the Arbitration and Conciliation Act, 1996 (“1996 Act”).
Prior to this judgment, Indian courts had taken divergent views on whether civil courts could enjoin foreign-seated arbitrations. In Bina Modi v. Lalit Modi, 2020 SCC OnLine Del 1678 (“Bina Modi case”), the Court held that anti-arbitration injunctions were not maintainable, as challenges to arbitrability must be decided by the arbitral tribunal under Section 16 of the 1996 Act. In contrast, the Calcutta High Court in Balasore Alloys Limited v. Medima LLC, 2020 SCC OnLine Cal 1699 (“Balasore Alloys case”), upheld the power of civil courts to grant anti-arbitration injunctions in exceptional cases where the arbitration agreement was null or the proceedings were abusive or unconscionable. The Supreme Court had not conclusively addressed this issue in the context of foreign-seated arbitrations, leaving scope for clarification.
Engineering Projects case
In 2015, Engineering Projects (India) Ltd (“EPI”), a Government of India PSU, subcontracted border-security works to MSA Global LLC, an Omani entity. The contract provided for ICC arbitration under the ICC Rules, 2021 (“ICC Rules”), with the seat in Singapore, Omani substantive law, and exclusive jurisdiction with New Delhi courts. In 2023, MSA initiated arbitration and nominated Andre Yeap SC as a co-arbitrator. Mr Yeap submitted a “nothing to disclose” declaration under Article 11 of the ICC Rules.
In 2024, EPI discovered that Mr Yeap had previously been appointed by MSA’s promoter in a separate arbitration. Although the ICC Court deemed the non-disclosure “regrettable”, it upheld Mr Yeap’s appointment. EPI approached the Delhi High Court seeking an anti-arbitration injunction. In parallel, MSA pursued evidentiary hearings and filed anti-suit and wasted-costs applications in Singapore.
The Delhi High Court held that Section 9 of the Civil Procedure Code, 1908, confers plenary jurisdiction unless expressly or impliedly barred, and that neither Section 5 nor Section 45 of the 1996 Act preclude the civil court’s powers in cases of procedural abuse. Relying on the test laid down in Dhulabhai v. State of Madhya Pradesh, 1968 SCC OnLine SC 40, the Court observed that civil court jurisdiction is preserved where arbitral proceedings violate fundamental norms of justice.
To assess whether the arbitration was “vexatious and oppressive”, the Court adopted a two-limb test from Indian and English authorities:
- Vexatious: Proceedings initiated without sufficient legal basis, with the intent to harass or burden the opponent.
- Oppressive: Proceedings that impose unjust, harsh burdens, such as forcing a PSU to expend public funds before a tribunal compromised by undisclosed connections.
Applying this test, the Court found that MSA’s insistence on proceeding with arbitration, despite pending challenges, coupled with its pursuit of procedural remedies in multiple forums, was oppressive. Further, Mr Yeap’s admission that he withheld the prior appointment to avoid challenge was deemed as conscious breach that struck at the root of party consent. The duty of disclosure under ICC Rules was held to be party-centric, to be assessed in the eyes of the parties, and not solely from the arbitrator’s viewpoint.
The Court applied the standard test for interim injunctions under Order XXXIX Rules 1-2 of the CPC and concluded that:
- A prima facie case existed based on deliberate non-disclosure and procedural abuse;
- The balance of convenience favoured EPI as continuation of arbitration would risk public funds and legitimacy;
- There would be irreparable injury if EPI was compelled to arbitrate before a tainted tribunal.
Accordingly, the Court restrained both parties from participating in ICC Arbitration No. 27726/HTG/YMK and stayed the proceedings until the suit’s final disposal.
Conclusion and Implications
The Delhi High Court’s judgment in Engineering Projects case reconciles the earlier split in Indian jurisprudence by confirming that civil courts can, in exceptional circumstances, enjoin foreign-seated arbitrations that are procedurally abusive. This marks a departure from the restrictive approach taken in Bina Modi case and affirms the more interventionist position adopted in Balasore Alloys case in abusive cases. The judgment also clarifies that arbitrator disclosures under institutional rules like the ICC must meet a strictly party-centric threshold of transparency.
For commercial parties, the judgment has practical implications. Contractual dispute resolution clauses should be revisited to incorporate enhanced disclosure requirements and embed cooling-off or mediation phases to de-escalate early disputes. Public sector undertakings, in particular, should promptly raise and document concerns about arbitrator bias or procedural irregularities. The judgment also serves as a caution that multi-forum procedural strategies, such as simultaneous anti-suit, wasted-cost, or enforcement applications, may collectively be viewed as oppressive.
Ultimately, the Engineering Projects case reaffirms that while Indian courts are committed to the principle of minimal intervention, they will not hesitate to exercise supervisory jurisdiction where arbitral processes are shown to be misused. The decision offers important doctrinal clarity and reinforces a judicial safeguard against procedural abuse in international commercial arbitration.
For further information, please contact:
Adarsh Saxena, Cyril Amarchand Mangaldas
adarsh.saxena@cyrilshroff.com
