A tussle between two separate jurisdictions in international arbitrations can lead to an undesirable entanglement. The recent case of Anupam Mittal vs Westbridge Ventures II Investment Holdings underscores this, bringing to the fore, the jurisdictional complexities that arise when the country of the seat of arbitration and the country of the law governing the contract differs.
The crux of the issue in the Anupam Mittal Case was the arbitrability of oppression and mismanagement disputes. While Singapore law allows arbitration in oppression and mismanagement disputes, this is not the case in India. In India, the National Company Law Tribunal has exclusive jurisdiction over O&M disputes and as such O&M disputes are not arbitrable in India. This difference led to a jurisdictional tussle of sorts between the Singapore and the Indian courts in the Anupam Mittal case.
Anupam Mittal and Westbridge had entered into a Shareholders Agreement governed by Indian law, with Singapore as the seat of arbitration. The arbitration clause also provided that enforcement of the award would be as per the Arbitration & Conciliation Act, 1996 of India. Prior to invocation of arbitration as per the rules of the International Chamber of Commerce, Anupam Mittal alleged acts of O&M against Westbridge and initiated proceedings before the National Company Law Tribunal, Mumbai.
Given that the arbitration clause provided Singapore as the Seat, Westbridge sought an anti-suit injunction against the NCLT proceedings before the Singapore High Court. The Singapore High Court granted the anti-suit injunction and directed Anupam Mittal to withdraw the NCLT proceedings. This decision was appealed by Anupam Mittal before the Singapore Court of Appeal. While the Singapore Court of Appeal upheld the anti-suit-injunction against Anupam Mittal, as a counter, Anupam Mittal sought an anti-enforcement injunction against the anti-suit-injunction before the Bombay High Court. The Bombay High Court granted the injunction considering that oppression and mismanagement disputes are non-arbitrable in India. Subsequently, the NCLT also granted an anti-arbitration injunction in favour of Mittal.
The contrasting decisions of the Indian and Singapore Courts in this case highlight the potential inconsistencies in interpretation of the very same contract by courts in different jurisdictions especially at the pre-award stage. This case is an example of how the principles of comity of nations are dealt with when courts of different jurisdictions come to conflicting positions.
Findings Of The Singapore & Indian Courts
While deliberating on the issue of pre-award arbitrability, the Singapore Courts have observed that whereas the seat law would determine the arbitrability of a particular subject matter, enforceability of an award would be determined by the law of the state in which the court enforcing such award is established. In this case, O&M disputes are not arbitrable in India, where the eventual award would likely be enforced, the Singapore Courts gave precedence to the intent of the parties which had chosen Singapore as the seat while deciding the arbitrability of the dispute at the pre-award stage. Accordingly, the Singapore High Court had granted the anti-suit-injunction as prayed for by Westbridge.
The Singapore Court of Appeal cited two reasons for not interfering with the decision of the Singapore High Court. The first reason was in relation to the expected timeline for disposal of the O&M action in India, and the second, that it was too speculative to conclude that the arbitration would be a fruitless exercise just because of the possibility that the award may not be enforceable in India.
Although the Singapore Courts in their wisdom came to their respective conclusions given the actions initiated before them, how did the Bombay High Court deal with such findings?
In this regard, the Bombay High Court decided to tread a delicate path. While stating that it was not sitting in appeal over the decision of the Singapore Courts, it expressed concerns over the enforceability of the anti-suit-injunction which essentially restrained Anupam Mittal from availing of his right to initiate O&M proceedings before Indian Courts. With respect to the second reason cited by the Singapore Court of Appeal, the Bombay High Court cited Vijay Karia vs. Prysmian Cavi E Sistemi SRL [(2020) 11 SCC 1] which had held that when the subject matter is held non-arbitrable under Indian law, the enforcement of an award pertaining to such a subject matter would not be enforceable under Section 48 of the Arbitration & Conciliation Act, 1996.
While being cognizant of the principles of comity of nations, the Bombay High Court opined that such principles could not override the valuable right of a litigant to access of justice, particularly when an injunction, in this case, an anti-suit injunction, is issued by a foreign court having the effect of interference with or preventing a party from pursuing the only legal remedy available to it, in this case, the O&M proceedings.
Courts in Singapore had their reasons for restricting the jurisdiction of the Indian Courts in light of the arbitration clause, the Indian Courts had their reasons for assuming jurisdiction in light of the non-arbitrability of the subject matter of arbitration. Further, both jurisdictions approached the applicable law of the contract in a different manner. The Singapore Courts, being the Seat Court, held the law of the Seat to be paramount at the pre-arbitral stage and which is also to be applied while deciding the arbitrability of the dispute. On the other hand, the Indian Courts chose to consider the governing law of arbitration and the contract, being Indian law and the fact that the award was to be enforced as per Indian law.
The Model Law on International Commercial Arbitration, 1985 (Model Law) provides for grounds on which a court may reject enforcement of an award but does not deal with the question of arbitrability of disputes at a pre-award stage. Pertinently, the UNCITRAL 2012 Digest of Case Law on the Model Law on International Commercial Arbitration (United Nations, 2012), signifies the importance of applying the same law that the seat court would apply in ascertaining the subject matter arbitrability of a dispute at a pre-award stage. However, public policy has also played a pivotal role in determining the arbitrability of a subject matter a dispute. Various jurisdictions have adopted the concept of lex fori, i.e., applying the law of the country in which the arbitration seat is situated. Although, the Model Law remains silent on this issue, which is also noted by the Singapore Court of Appeal.
One might contemplate whether a guiding principle on how the principles of comity of nations are to be dealt with in such cases may help add some predictability to how courts in different jurisdictions might deal with such issues. However, the fact remains that principles of comity of nations relies mostly on mutual respect and due deference. In this case, both the Singapore and Indian Courts demonstrate a tussle of sorts and how they can come to different conclusions while maintaining mutual respect.
With the rise in international disputes arising from pre-award arbitrations, there are bound to be occasions where one jurisdiction differs from the other, grants injunctions against proceedings in another, while providing due justifications for diluting the principles of comity of nations. The Anupam Mittal matter being a case in point. This case underscores the pressing need for parties to international commercial contracts to be cognizant of the multi-jurisdictional complexities involved while resolving arbitration disputes.
Contributors: Vidhur Malhotra, Shalvika Nachankar, Siddharth Ratho