A Foreign Award Must First Be "Recognised" Before It Becomes A Decree: Bombay High Court

"Until The Part II Court Positively Declares A Foreign Award Enforceable Under Section 49, The Section 9 Court Cannot Be Told To Stand Down", In a significant ruling on the interplay between interim protection and enforcement of foreign arbitral awards under the Arbitration and Conciliation Act, 1996, the Bombay High Court on March 10, 2026 held that an award-creditor seeking to enforce a foreign arbitral award does not lose the right to seek interim protection under Section 9 merely because it has simultaneously filed a petition for recognition and enforcement under Part II of the Act.

Justice Somasekhar Sundaresan rejected the award-debtor's jurisdictional objection and directed it to deposit the award amount of USD 269,105.08 in its Indian Rupee equivalent with the Court Registry within four weeks, while simultaneously prohibiting it from alienating or encumbering its assets pending such deposit.

Background of the Case

The petitioner, an Austrian shipping company incorporated in Cyprus, held a foreign arbitral award dated March 23, 2020 for USD 269,105.08 against the respondent, Victore Ships Private Limited. Simultaneously with filing a petition for recognition and enforcement of the foreign award under Sections 47 and 48 of the Arbitration and Conciliation Act, 1996 (the Part II Petition), the petitioner filed the present petition under Section 9 of the Act seeking interim measures of protection to secure the award amount pending the enforcement proceedings. The respondent raised a threshold objection to the maintainability of the Section 9 petition, contending that once a Part II petition for enforcement of a foreign award has been filed, the jurisdiction under Section 9 ceases to be available since enforcement and execution are rolled up into one under Part II, making a parallel Section 9 petition legally impermissible and potentially productive of conflicting orders.

Legal Issues

The central legal question was whether the filing of a petition under Part II of the Arbitration and Conciliation Act, 1996 for recognition and enforcement of a foreign award bars the award-creditor from simultaneously seeking interim protective measures under Section 9 of the Act. The related statutory question was whether the phrase "but before it is enforced in accordance with section 36" in Section 9(1) — which governs the temporal limit on Section 9 jurisdiction — must be read, by analogy, as also covering the filing of a Part II petition for a foreign award, even though Section 36 by its own terms applies only to domestic awards.

Court's Observations and Judgment

Justice Sundaresan began by isolating the precise statutory architecture. Section 9 of the Act, which falls in Part I dealing with domestic arbitral proceedings, was extended to international commercial arbitration and foreign awards by a proviso inserted into Section 2(2) with effect from October 23, 2015. The proviso expressly declared that Section 9 shall apply to international commercial arbitration even if the place of arbitration is outside India and even if the award is enforceable and recognised under Part II. The Court noted that Parliament, while inserting this proviso and simultaneously re-numbering Section 9 and adding sub-sections, consciously chose not to include any reference to Part II as a temporal bar on Section 9 jurisdiction for foreign awards.

The Court then drew a sharp and decisive distinction between how domestic awards and foreign awards respectively achieve the status of a decree under Indian law. Under Section 36, a domestic arbitral award automatically becomes enforceable as a decree upon the expiry of the Section 34 challenge period — unless a stay is granted. No positive act of recognition by any court is required. The decree status is conferred by the efflux of time and statutory operation alone. In contrast, a foreign award under Part II must travel a very different road. The award-creditor must apply with evidence under Section 47, the award-debtor may resist under Section 48, and it is only upon the Part II Court being positively satisfied under Section 49 that the award "shall be deemed to be a decree of that Court." The Court articulated this distinction with precision: "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. 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."

"Parliament Did Not Include Any Reference To Part II To Bring About A Time Limit For The Operation Of Section 9 Insofar As It Relates To Foreign Awards"

Proceeding from this critical distinction, the Court rejected the respondent's reliance on the decision in Centrient, which had held that Section 9 jurisdiction was unavailable once execution proceedings had been filed for a domestic award. The Court distinguished Centrient on two grounds: first, it related to a domestic award where the execution proceedings had actually been commenced after the decree status had been automatically conferred by operation of Section 36; and second, the phrase "but before it is enforced in accordance with section 36" in Section 9(1) was applied in a context where Section 36 was directly applicable. In the case of a foreign award, Section 36 has no application whatsoever. To extrapolate from Centrient and read into Section 9(1) an unstated reference to Part II proceedings would be, the Court held, an impermissible judicial inference that substitutes what Parliament consciously chose not to enact.

The Court also addressed the respondent's argument that allowing concurrent Section 9 and Part II jurisdiction would create a schematic anomaly with a risk of conflicting orders from different courts. The Court pointed to the analogous situation of Section 9 and Section 17 — where the interim jurisdiction of the court and the arbitral tribunal ran concurrently until Section 9(3) was inserted to require ordinary deference to Section 17. No similar provision was inserted to make Section 9 subservient to the Part II Court. "It is not for the Court to read into the scheme of the Act and refuse to exercise jurisdiction" in the absence of a specific statutory prohibition, the Court held. The Part II petition, the Court clarified, is first and foremost a petition for recognition — it translates into execution proceedings only after the foreign award is conferred decree status under Section 49, and it is only at that later stage that the Section 9 Court would have reason to refrain from entertaining fresh protective measures.

The Court accordingly dismissed the jurisdictional objection and directed the respondent to deposit the equivalent of USD 269,105.08 in Indian Rupees with the Court Registry within four weeks. Pending such deposit, the respondent was restrained from selling, disposing, alienating, encumbering or creating third-party interests in its movable or immovable property, except for generating proceeds for the required deposit. The respondent was further directed to disclose on affidavit within two weeks a detailed list of all its assets including bank accounts, assets sold in the last two years with sale documents, a complete list of creditors and debtors, all pending legal proceedings including winding-up proceedings, and details of all encumbered assets with full particulars of the encumbrances.

The Bombay High Court disposed of the Section 9 petition with the above directions, holding that the jurisdiction under Section 9 of the Arbitration and Conciliation Act to seek interim protection for a foreign award survives the filing of a Part II enforcement petition and continues until the foreign award is positively declared enforceable and treated as a decree by the Part II Court under Section 49. The Part II enforcement petition was simultaneously directed to be listed within two weeks. The ruling is a significant precedent for international commercial arbitration practitioners, firmly securing the position that a foreign award-creditor's right to interim asset protection cannot be prematurely extinguished by the mere filing of enforcement proceedings.

Date of Decision: 10.03.2026