Limited Liability Company Eurochem Nw 2 vs Tecnimont Spa

CNR No : HCBM020203332026

2026:BHC-OS:23757
Digitally signed
by ASHISH
SAHEBRAO
MHASKE
Date:
2026.11.03
15:47:26
+0530
ASHISH
SAHEBRAO
MHASKE
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
COMMERCIAL APPEAL (L) NO.20333 OF 2026
IN
INTERIM APPLICATION NO. 569 OF 2026
WITH
INTERIM APPLICATION (L) NO.21931 OF 2026
Limited Liability Company Eurochem .. Appellant
North-West-2
Versus
Tecnimont S.P.A. (Foreign Company) .. Respondent
WITH
INTERIM APPLICATION (L) NO. 23525 OF 2026
Tecnimont S.P.A. Foreign Company .. Applicant
Registration No. F02979
Versus
Limited Liability Company Eurochem .. Respondent
North West 2 Tin Inn 4707040090
Mr. Zal Andhyarujina, Sr Adv a/w Mr. Prateek Bagaria, Ms. Maithili
Parikh, Ms. Jimisha Dalal, Ms. Nitansha Nema, Mr. Mihir Govande
and Ms.Shrilakshmi Sankaranarayanan i/b Singularity Legal, for
Appellant.
Mr. Vikram Nankani, Sr Adv a/w Mr. Alok Jain, Mr. Samarth Saxena,
Ms. Ria Gard, Mr. Aditya Athreya, Mr. Mihir Beradia i/b Quillon
Partners, for Respondent.
CORAM: BHARATI DANGRE &
MANJUSHA DESHPANDE, JJ.
th
RESERVED ON : 30 JULY, 2026
th
PRONOUNCED ON : 29 OCTOBER, 2026
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JUDGMENT (PER BHARATI DANGRE, J)
1. The Commercial Appeal filed under Section 13 (1A) of the
Commercial Courts Act, 2015 raises a challenge to the order dated
08/06/2026 passed on an IA No. 569 of 2026 in Commercial Suit No.
6 of 2026 filed by the Plaintiff (Appellant) for recovery of debt on
the basis of the operative part of the decision of Arbitrazh Court
Moscow, Russia (Moscow Commercial Court) announced on
27/11/2025 along with full decision announced on 05/12/2025. The
Plaintiff sought a fresh decree of the Indian Court in terms of the
reliefs set out in the plaint by asserting the Russian judgment as the
cause of action for instituting the Suit, by stating that it stood as a
conclusive evidence for the material findings of fact and law relevant
to the underlying transaction and liability, in terms of Section 13 of
CPC.
By the said judgment, the Respondent and its Russian
subsidiary are held jointly and severally liable to pay to the Appellant
RUB 171,115,220,555 comprising of interest and damages. This
judgment has attained finality in the concerned jurisdiction, being
upheld by Ninth Arbitrazh (state commercial) Appeal Court, Moscow
(for short ‘Arbitrazh Appeal Court, Moscow’) on 04/03/2026.
2. Pending the hearing of the Suit an interim application was
taken out seeking several directions and the learned Single Judge
(Justice Gauri Godse) by judgment dated 08/06/2026 refused to grant
any relief and dismissed the interim application by recording her
reasoning in detail, indicative of the conclusion that no case for grant
of interim injunction was made out.
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It is this judgment which is subjected to challenge on the basic
premise that the order proceeds on an erroneous legal standard and
has ignored the provision contained in Section 13 and 14 of the Code
of Civil Procedure, 1908 (hereinafter referred to as ‘CPC/Code’), by
which once a certified copy of the Russian Judgment was produced, it
ought to have been accepted as a statutory basis for treating the
judgment as conclusive as the competence of the Arbitrazh Court,
Moscow stood established.
The challenge to the impugned order is also based upon an
assertion that the said order applies an unduly high threshold to the
Appellant’s case on dissipation of assets and despite the fact that a
prima facie risk of removal or disposal of assets to defeat its claim
was demonstrated, the Single Judge dismissed the application, by
recording that the Russian judgment could not be relied upon as
conclusive evidence under Section 13 of CPC for grant of relief and
the presumption under Section 14 could be applied at the stage of
grant of interim relief and particularly, in the wake of the arbitration
agreement between the parties and pending international arbitration,
the competence of the Arbitrazh Court was doubtful even at the pre-
trial stage.
3. We have heard learned Senior Counsel Mr. Zal Andhyarujina
for the Appellant and learned Senior Counsel Mr. Vikram Nankani for
the Respondent.
With their able assistance, we have perused the impugned order
along with the supporting material placed before us.
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4. Before we appreciate the rival contentions, it would be
necessary to refer to the background facts in which rival contentions
are to be appreciated.
The Appellant, LLC, EuroChem North-West-2 (hereinafter
referred to as ‘EuroChem’) is incorporated and existing under the
laws of Russia, having its registered office at Leningrad Region.
Tecnimont S.P.A. Italy is a Foreign Company having a registered
office in Malad (West), Mumbai, in India.
The EuroChem Group planned construction of a Fertiliser
Complex at Leningrad Region at Russia, with an annual production
capacity of 1.1 million tones of ammonia and 1.4 million tones of
urea (“K2 Project”). As a step towards the implementation of this
project, it entered into contract with Tecnimont (‘Respondent’) and
its 99% owned Russian subsidiary LLC ‘MT Russia’ (‘MTR’). Three
agreements were signed between the parties to the following effect:-
a) An onshore engineering, local procurement, and
construction contract with MTR (‘Onshore Contract’/
‘Contract-I’);
b) An offshore engineering and procurement contract with
Tecnimont (‘Offshore Contract’/ ‘Contract-2’);
c) A coordination and interface agreement among the parties
(‘Coordination Agreement’ / ‘Contract-3’).
All the above contracts were concluded in Russia.
5. The aforesaid K-2 Contracts, all executed on 01/06/2020,
provided that the disputes arising therefrom shall be referred to a
London seated arbitration under ICC Rules. Contract-2 and Contract-
3 were to be governed by the laws of England and Wales, whereas
Contract-1 was to be governed by the laws of Russian Federation.
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In February 2022, due to Russian (Special Military Operation)
in Ukraine, European Union (EU) and United Kingdom (UK)
imposed sanctions on various individuals. Since the Appellant, an
indirect subsidiary of EuroChem AG (Switzerland) was founded and
owned by Russian businessman Mr. Andrey Melnichenko, he along
with his wife were subjected to sanctions in March and June 2022,
respectively, they being the ultimate beneficiaries of the assets of
EuroChem. Due to the inability to perform the works under K-2
Contract on account of the sanctions, the Respondent and MTR
suspended performance temporarily under Contract-1 and Contract-2
on account of the imposition of the sanctions by invoking Clause 17.3
of the agreement.
This was followed by EuroChem terminating K-2 Contract on
the basis that the Respondent unilaterally suspended performance
under Contract-1 and Contract-2 by issuing notices of termination on
04/08/2022.
6. Being aggrieved by the said termination, Tecnimont and MTR
initiated ICC Arbitration against the Appellant by filing request for
arbitration seeking, inter alia , damages arising out of the alleged
breach of K-2 Contracts. The arbitral proceedings commenced in the
wake of the arbitration agreement in the K-2 Contracts in August
2022 and Tecnimont appointed its arbitrator and even the Appellant
participated and nominated its arbitrator, Professor Douglas Samuel
Jones, an Australian National and did not raise any objection to the
jurisdiction of ICC Tribunal to resolve the dispute through arbitration
and it also filed its counter claim. The ICC arbitration continued for a
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period of 3 years and we are informed that it even continue today.
In the interregnum, after the arbitral proceedings commenced
at the instance of the Respondent and MTR, on 19/08/2022, appellant
issued demand notices of approximately INR 2,240 Crores in respect
of the performance bonds under the K-2 contracts. The Banks,
SocGen and ING, however, refused to pay the demanded sums in
light of the sanctions and this resulted in EuroChem filing a claim
before the English Commercial Court against the Banks with
impleadment of Tecnimont and MTR as third parties, for enforcement
of performance bonds under the K-2 Contract.
On 31/07/2025, the English Commercial Court declared that
the banks were justified in withholding the payment to the Appellant
under the bonds due to sanctions, as the ultimate beneficiaries were
the sanctioned individuals. This is referred to by the parties before us
as the ‘Bright Judgment’. The dismissal was therefore based upon a
finding that the Melnichenkos were subject to sanctions and the
banks were justified in not honoring the demands.
7. At this stage, we must note the contention of Mr. Andhyarujina
the counsel for the Appellant, that because of the ‘Bright Judgment’,
despite the Appellant itself not being a sanctioned entity, it was
treated to be so, thereby rendering the arbitration agreements
unenforceable and thus allowing the Russian Courts to have
exclusive jurisdiction over the dispute pursuant to Article 248.1 of the
Arbitrazh (state commercial) Procedural Code of the Russian
Federation (“APC RF”). According to him, the Appellant encountered
severe restrictions on banking operations that hindered inter alia its
ability to pay for legal representation and transfer funds towards
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arbitration costs.
It is in the wake of the aforesaid, the Appellant filed an
application before the ICC Tribunal on 25/11/2025, challenging the
Tribunals jurisdiction on two grounds; (i) That following the Bright
Judgment, it was treated as a sanctioned entity, (ii) That this situation
rendered the arbitration agreements unenforceable.
8. It is on 01/09/2025, the Appellant filed a Statement of Claim
before the Arbitrazh Court, of the city of Moscow, which was
premised in the background that the arbitration agreements were
rendered unenforceable, and it sought the following reliefs:-
(a) Recovery of unutilised advance payments;
(b) Interest for the use of another’s funds, accrued on the
amount of the unearned advance payment;
(c) Damages incurred in entering into substitute agreements;
(d) Thus claiming damages approximately in the sum of INR
22,764 Crores.
9. The proceedings were filed in a Moscow Court on the basis
that it had exclusive jurisdiction over the disputes by virtue of Article
248.1 of ‘APC RF’. It is in this proceeding, at the instance of the
Appellant, the Respondent was impleaded as co-defendant on
28/10/2025, but this joinder was appealed by the Respondent, who
seriously objected to its joinder, but its appeal was returned and the
Respondent was ordered to appeal the joinder with merits, whenever
the stage arises.
However, on 11/11/2025, MTR challenged the jurisdiction of
Moscow Court which received support from Tecnimont by filing its
submissions in writing. In the meantime, the Appellant filed a
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Statement of Claim before St. Petersburg Court seeking to prohibit
the Respondent from continuing the arbitration proceedings and
initiating any other proceeding outside Russia, this proceedings being
filed in form of Application for Anti-arbitration and Anti-suit
injunction.
On 19/12/2025, St. Petersburg Court issued Anti-suit and Anti-
arbitration injunction against the Respondent and MTR. However, it
is worth to note that even the Respondent approached ICC Tribunal
and English Courts seeking Anti-suit injunction against the Appellant
restraining it from proceeding before the Russian Court, and
according to the Respondent, Anti-suit injunction was issued by
English Court (‘Butcher Judgment’) prior to 19/12/2025, but the St.
Petersburg Court completely ignored the same.
10. Another development which warrant its mention, are the steps
taken by the MTR when on 08/10/2025, it irrevocably assigned the
Respondent a bundle of claims including proceeds from K-2
Contracts under the Assignment Deed, and the Appellant perceived it
as an attempt to transfer assets out of Russia to Italy to avoid
recovery in Moscow, the intention being to defraud the creditors.
The Arbitrazh Court, on 13/10/2025, granted interim measures
securing part of the Appellant’s case including attaching funds and
property of MTR and the Respondent.
This constrained the Appellant to file a case before the
Arbitrazh Court on 24/11/2025, so as to declare the assignment deed
null and void and the Arbitrazh Court, Moscow on 03/12/2025, issued
an injunction restraining the Respondent from acting under the
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Assignment Agreement.
11. As far as the ICC arbitration proceedings are concerned, on
13/10/2025, the Arbitral Tribunal issued procedural order no. 18
(subsequently corrected as ‘23/10/2025’) inter alia, directing the
Appellant to withdraw its proceedings in Arbitrazh Court, Moscow
and the claim before the St. Petersburg Court. Pursuant to this, the
Respondent instituted Anti-suit proceedings in the English High
Court seeking to enforce the ICC Tribunal’s Procedural Order No. 18.
On 11/11/2025, the ICC Tribunal issued Procedural Order no.
22, when it directed the Appellant to withdraw the Russian Interim
Measures Application, which was filed before the Moscow Court.
Once again, on 14/11/2025, Procedural Order No. 23 was
issued by ICC Tribunal reiterating its earlier orders.
12. On 05/12/2025, the Arbitrazh Court, Moscow declared its full
judgment in furtherance of the operative part declared on 27/11/2025
and it is this judgment which is placed before the Commercial
Division of this Court for seeking a decree by relying upon its
conclusiveness upon the underlying transactions and liability by
instituting Commercial Suit No. 6 of 2026.
Pursuant to this, the ICC Tribunal on 09/12/2025 issued
Procedural Order No. 25, issuing anti-enforcement order, restraining
the Appellant from enforcing the Russian Judgment. It is on
10/12/2025, the St. Petersburg Commercial Court issued operative
part of the Judgment, thereby prohibiting the Respondent and MTR
from proceeding with arbitration and related Court proceeding
pending before Courts outside Russian jurisdiction though the full
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judgment was issued by the Court on 19/12/2025.
13. It is in this background facts, the Commercial Suit is instituted
by EuroChem , the Appellant by pleading that the Russian Judgment
in its favour is final and conclusive, since the Arbitrazh Court,
Moscow is a Court of competent jurisdiction and the Commercial
Court in India be pleased to issue a decree for the amount sought for
in the plaint. The plaint specifically pleaded that the Arbitrazh Court
had granted the plaintiff’s claim for RUB 8,058,168,619.35/- towards
an unjust enrichment, RUB 3,834,694,789.96 as interest for the use
of another’s fund till 13/11/2025 and RUB 159,222,357,146.00 as
damages. Moreover, the Arbitrazh Court awarded interest for the use
of another’s funds, calculated on the debt amount of RUB 8,058,168,
619.35 using the key rate of the Central Bank of Russia effective
during the relevant periods, for the period from 14/11/2025 to the
date of actual payment of the debt.
It is also pleaded that the Arbitrazh Court rejected the
Respondent’s jurisdictional objection and noted that there was
sufficient ground to doubt the independence and impartiality of the
arbitrators before the ICC Tribunal. Pleading that the Russian
Judgment is conclusive on merits, as it has even pronounced upon the
objection on jurisdiction, by applying the principle of Comity of
Nations, a decree is sought in terms of the final decision (Russian
Judgment) dated 05/12/2025, in case No. A40 - 231304/25-141-1793.
Pending the Suit, an interim application was taken out seeking
interim relief restraining Tecnimont S.P.A from removing from India,
or in any way disposing of, dealing with or diminishing the value of
any of its assets, which are in India upto the value of RUB
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171,115,220,555 (or INR equivalent). It was specifically prayed that
the injunction shall apply to all of the Tecnimont S.P.A assets
whether or not they are in its name, and whether they are solely or
jointly owned.
The interim application contained a list of assets, to which the
injunction was sought to be made applicable and it also prayed for a
direction to Tecnimont S.P.A to file and serve an affidavit, setting out
all its assets in India, whether in its own name or not, or whether
solely or jointly owned, giving the value, location and details thereof.
14. It is this application, which came to be rejected by the learned
Single Judge on consideration of the rival contentions.
The Single Judge pronounced upon the facts before her in the
backdrop of the legal principle propagated, as to when a Foreign
Judgment is conclusive, and whether it can be accepted as a
conclusive evidence at the pre-trial stage while considering grant of
discretionary relief of injunction.
The order passed by the Single Judge, which is impugned
recorded a finding as below:-
“35. In the present case, in view of the arbitration agreements between
the parties and the plaintiff’s participation in the international arbitration
proceedings pertaining to the same claim arising out of the same dispute,
the competence of the Russian court in entertaining the plaintiff’s claim is
doubtful. Therefore, the presumption under Section 14 of the CPC cannot
be applied at the pre-trial stage. As discussed in detail in the paragraphs
above, the defendant has raised serious objections in view of the
exceptions under Section 13 of the CPC to contend that the Russian
court’s judgment cannot be accepted as conclusive evidence at this stage.
From the record, it is seen that the defendant has raised serious
objections on the grounds that the proceedings are founded on an
incorrect view of international law, and the proceedings also suffer from a
breach of principles of natural justice. Therefore, the conclusiveness of
the Russian judgment needs to be tested in the trial. At this stage, the
Russian judgment cannot be accepted as an absolute and conclusive
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proof or evidence to support the plaintiff’s money claim.”
Apart from this, it is also recorded that merely stating that the
defendant is likely to transfer its funds out of India, would not be
sufficient to grant an injunction, when there is no prima facie
evidence to support the plaintiff’s claim. In the present case, the
apprehension was expressed by referring to an assignment agreement
executed between the Defendant and MTR. Noting that the Russian
Court had already granted an injunction in respect of the assignment
agreement, it is recorded that the plaintiff had already participated in
international arbitration proceedings in UK and there is no dispute
that the Russian Judgment pertains to substantially the same claim as
in the arbitral proceedings, in which the EuroChem had also filed a
counterclaim.
Therefore, on appreciating the conduct of the plaintiff, the
discretionary relief of injunction was refused. In addition, it was also
recorded that the plaintiff was not able to make out a prima facie case
in its favour, nor did it demonstrate any irreparable loss caused to it,
or that the balance of convenience was in its favour. On the contrary,
relying upon the material produced by the defendant showing that the
dispute within the parties was subject matter of international
arbitration proceedings and the English Courts had issued various
orders imposing Anti-suit injunction, the balance of convenience was
found to be in favour of the defendant.
It is this impugned order, which is the subject matter of
challenge in the Appeal.
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15. The challenge to the impugned judgment deserve consideration
in the backdrop of Section 13 and 14 of the Code of Civil Procedure,
1908.
The provision in Section 13 couched in negative terms, provide
for the exception, when a foreign judgment shall not be conclusive to
any matter thereby directly adjudicated upon between the same
parties, or between the parties under whom they or any of them
claim litigating under the same title.
Section 13 reads thus:-
“13. When foreign judgment not conclusive – A foreign judgment shall
be conclusive as to any matter thereby directly adjudicated upon between the
same parties or between parties under whom they or any of them claim
litigating under the same title except-
( a) where it has not been pronounced by a Court of competent jurisdiction;
(b) where it has not been given on the merits of the case;
(c) where it appears on the face of the proceedings to be founded on an
incorrect view of international law or a refusal to recognise the law of
[India] in cases in which such law is applicable;
(d) where the proceedings in which the judgment was obtained are
opposed to natural justice;
(e) where it has been obtained by fraud;
( f) where it sustains a claim founded on a breach of any law in force in
India.”
The said provision deserves a reading along with Section 14
which create presumption as to foreign judgments and we reproduce
the same:-
“14. Presumption as to foreign judgments – The Court shall presume,
upon the production of any document purporting to be a certified copy of a
foreign judgment, that such judgment was pronounced by a Court of
competent jurisdiction, unless the contrary appears on record; but such
presumption may be displaced by proving want of jurisdiction.”
16. A ‘Foreign Judgment’ is defined under Section 2(6) as
judgment of a Foreign Court. ‘Judgment’ in terms of Section 2(9) of
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CPC means the statement given by the Judge on the grounds of a
decree or order.
Conclusivity is attached to a foreign judgment, as regards the
matter, which is directly adjudicated therein, between the same
parties or between the parties under whom they or any of them claim
if the same is pronounced by a court of competent jurisdiction.
However, it shall not be accepted to be conclusive, unless it is
pronounced by a Court of competent jurisdiction, or it has not been
given on merits of the case or it suffers from any of the infirmity as
set out in clause (a) to (f) of Section 13.
It is a well settled principle that if the judgment is delivered
after following due judicial process and after adhering to the
principles of natural justice, and it is the judgment of a competent
court, the Executing Court shall not inquire into its validity, legality
and by applying the principle of Comity of Nations, the judgment
shall be executed in India as if it is a judgment passed by an Indian
Court.
1
17. In Alcon Electronics Pvt Ltd v. Celem S.A ., in a Suit filed
before the English Court for infringement of patent, the challenge
raised to the jurisdiction of the English Court was dismissed and the
liability was fastened upon Alcon Electronics to pay cost of
£
application set at 12,229.75, which was agreed to by the Appellant.
The petition filed by the Respondents for execution of the said order
in India faced opposition on the ground that the order of the English
Court is not executable in India as it is not conclusive, being an
interlocutory order in an application challenging the jurisdiction of
1 (2017) 2 SCC 253
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the said Court and the order do not amount to a judgment on merits or
a ‘decree’.
It is in this background facts, the Apex Court observed thus:-
“9. Moreover all the Orders of the Court are required to be obeyed
and implemented, unless the Court itself sets a date for its non-execution.
Otherwise orders will only remain a piece of paper and merely decorate
the file of litigant, which would lead to an impression being created in
the minds of the litigants that they could with impunity avoid to obey the
court order. It is neither the legislative intent nor the desire of the
judiciary.”
Two questions were formulated for consideration namely; (i)
whether the order passed by Foreign Court falls within exception to
Section 13 of the CPC? (ii) whether the order passed by Foreign
Court amounts to a decree and the same is executable?
A third issue was formulated as to whether if answer to the
issue No. 2 is in affirmative, whether the decree for costs would fall
within the ambit of Explanation (2) of Section 44-A(3) of CPC, and
make it inexecutable. Answering the aforesaid issue, the Apex Court
noted thus:-
“15. A glance on the enforcement of the foreign judgment, the
position at common law is very clear that a foreign judgment which
has become final and conclusive between the parties is not
impeachable either on facts or law except on limited grounds
enunciated under Section 13 CPC. In construing Section 13 CPC we
have to look at the plain meaning of the words and expressions used
therein and need not look at any other factors. Further, under Section
14 CPC there is a presumption that the foreign court which passed
the order is a court of competent jurisdiction which of course is a
rebuttable presumption. In the present case, the appellant does not
dispute the jurisdiction of the English Court but its grievance is, it is
not executable on other grounds which are canvassed before us.
17. Applying the same analogy to the facts of the case on hand,
we have no hesitation to hold that the order passed by the English
Court is an order on merits. The appellant who has submitted itself to
the jurisdiction of the Court and on its own requested the Court to
assess the costs summarily. While passing a reasoned order by
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dismissing the application filed by the appellant, English Court
granted the costs against the appellant. Had it been the case where
appellant’s application was allowed and costs were awarded to it, it
would have as well filed a petition for the execution of the order. Be
that as it is, the appellant did not prefer any appeal and indeed
sought time to pay the costs. The appellant, therefore, cannot be
permitted to object the execution. It cannot be permitted to blow hot
and cold at the same time. In our opinion, it is a pure abuse of
process of law and the courts should be very cautious in entertaining
such petitions.”
18. In the wake of Section 13, a foreign judgment shall be
conclusive as to any matter directly adjudicated upon between the
same parties, or between the parties under whom they or any of them
claim, litigating under the same title, except in the contingencies set
out in clauses (a) to (f).
The very first clause, being clause (a), provides an exception
where the foreign judgment is not conclusive, when it is not
pronounced by a Court of competent jurisdiction.
The said provision, when read with Section 44-A, allows
execution of decrees passed by Courts in reciprocating territories
upon production of a certified copy of the decree and the Section
providing for, as to what would amount to a ‘reciprocating territory’
and what would amount to a ‘decree’. The said provision, therefore,
permits a foreign decree to be directly executed in India, as if it is a
decree passed by an Indian District Court, provided that the decree is
passed by the Court in a reciprocating territory, namely, the United
Kingdom, Singapore, the United Arab Emirates, as notified by the
Central Government. This benefit, however, is not applicable to non-
reciprocating territories, as in such case, it would be necessary to file
a fresh Suit based upon a foreign judgment, which would be accepted
as evidence, but would not be a conclusive proof of any liability.
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Section 14 of the Code creates a presumption and the Court
upon production of any document, purporting to be a certified copy
of a foreign judgment, shall presume that such judgment was
pronounced by a Court of Competent Jurisdiction, unless the contrary
is proved, but such presumption may be displaced by proving want of
jurisdiction. Thus, upon production of a certified copy of a foreign
judgment, it shall result into a presumption that the foreign court was
competent, but it is a rebuttable presumption, as it is open to the
opposite party to prove that the Court was not of competent
jurisdiction.
Thus, Sections 13 and 14 of the Code of 1908, read together,
embody the principles of private international law as it deals with
foreign judgments, and by prescribing as to where it shall be
conclusive, and upon production of a certified copy of such foreign
judgment, the court shall presume that it is ruled on by a court of
competent jurisdiction, unless the contrary appears on record, and it
is also permissible to displace the said presumption.
The two provisions together, ensure Comity of Nations, but
when this provision is put to use for the purposes of execution under
Section 44-A of CPC, for execution of the decree passed by a Court
in a reciprocating territory and a decree passed by a Court in a non-
reciprocating territory, in both situations, the filter of Section 13 shall
apply.
19. There is no difference of opinion between the respective
counsel, as regards the understanding revolving around Section 13
and 14, but the moot question for debate is, at what stage the
statutory presumption under Section 14 of the Code can be dislodged.
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The learned Senior counsel, Mr. Andhyarujina, has vehemently
contended before us that once a copy of certified judgment is
produced, a mandatory presumption gets triggered, and the Court
shall presume that the judgment is passed by a Court of competent
jurisdiction.
According to him, even Section 21(1) of the Bharatiya Sakshya
Adhiniyam, 2023 (‘BSA’), has prescribed that the Court shall regard
such fact as proved unless and until it is disproved, and therefore,
according to him, there is no discretion left in the Court once the
presumption is drawn, which is imperative.
According to the learned Senior counsel, upon production of
any document purported to be a certified copy of the foreign
judgment, the presumption kicks in, unless something is brought on
record to dispel this presumption. However, insofar as the second
limb is concerned, such a presumption of the judgment being
delivered by a Court of competent jurisdiction, can be displaced only
by adducing proof, i.e. by leading evidence at the stage of trial.
20. The aforesaid submission, is contested by learned Senior
Counsel, Mr. Nankani, who would submit that Section 14 contains
the limited initial presumption to the effect that the foreign judgment
has been pronounced by a Court of competent jurisdiction, and this
presumption is limited to the provision mentioned in clause (a) of
Section 13, which is also rebuttable ‘when the contrary appears on
record’ or when ‘it is displaced by proving want of jurisdiction’.
According to him, decrees passed by Courts in both
reciprocating and non-reciprocating territories must satisfy the test of
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Section 13, and when a foreign judgment is not on merits, or violates
any of the sub-clauses (a) to (f) of Section 13, it is not conclusive as
to any matter thereby adjudicated upon and it is open to collateral
attack on the grounds mentioned, resultantly, a decree that follows a
judgment that is not on merits, cannot be enforced in India.
The onus to prove existence of exceptions specified in clauses
(a) to (f) of Section 13 of the Code in a Suit filed for decree of
foreign judgment, according to Mr. Nanakani, is on the plaintiff filing
such Suit, whereas, in execution proceedings filed under
Section 44-A, for execution of a decree passed by a foreign court in a
reciprocating territory, the onus is on the judgment debtor.
Apart from this distinction, according to Mr. Nankani, whether
the Foreign Court was a Court of competent jurisdiction is a question
which has to be decided at the threshold, before any further orders are
passed in the Suit (in case of a foreign judgment from a non-
reciprocating territory), or in execution (in the case of a foreign
judgment from a reciprocating territory), as the competence of the
Court goes to the root of the matter, and, therefore, at least the
preliminary examination thereof cannot be deferred to the stage of
trial.
It is also his submission that, even jurisprudentially, the
questions relating to jurisdiction have to be decided as preliminary
questions, and cannot be left for determination at final trial and to
defer the question until trial, would circumvent the discretion of the
Court under Order XXXIX, Rule 1(b) of the CPC, on whether the
plaintiff has been able to make out a prima facie case for the grant of
an injunction.
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Reliance is placed upon the decision in case of Meso Private
2
Limited v. Liberty Shoes Limited , to submit that the statutory
presumption can be rebutted at the interim stage and shall not await a
full trial.
He would also invoke the principle laid down by the Full
3
Bench of this Court in Lupin Limited v. Johnson & Johnson , where
it is held that there is no express or implied bar under the Trade
Marks Act, 1999, to completely take away the jurisdiction and power
of the Civil Court to consider the challenge to the validity of the
registration of a trademark at the interlocutory stage by way of a
prima facie finding on such issue.
According to Mr. Nankani, the learned Single Judge has rightly
examined, at interim stage, whether the Arbitrazh Court is a Court of
competent jurisdiction and on finding that there was a doubt in
regards to its competency, and the plaintiff not being able to
demonstrate a prima facie case, or that it would suffer irreparable
loss, has refused to grant the injunction as prayed for.
21. It is in the wake of the rival contentions, the following
questions emerge for our consideration in the Appeal:
(a) Whether the Moscow Court, whose decision is sought to be
executed by EuroChem, is a court of competent jurisdiction, as
claimed, or whether the presumption available under Section 14
of CPC is rebutted in the wake of the contrary material brought
on record or it stands displaced by proving want of jurisdiction.
(b) Whether the presumption available under Section 14 of the CPC,
which can be displaced by proving want of jurisdiction, is
permitted to be rebutted at the interim stage, or must await the
2 2020 (1) Mh. LJ 253
3 2014 SCC OnLine Bom 4596.
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trial.
(c) Whether the presumption available under Section 14 regarding
the foreign court being a court of competent jurisdiction absolves
the party seeking an injunction from satisfying with the triple test
of prima facie case, balance of convenience and irreparable loss
under Order XXXIX, Rule 1(b) of the CPC.
(d) Whether the view of the learned Single Judge that the Moscow
judgment is not conclusive with reference to clauses (a) and (d)
of Section 13 of the CPC warrants interference.
(e) Whether the appellant has made out a case for interference
against the discretionary order rejecting injunction under Order
XXXIX, Rule 1(b) of the CPC.
22. In the background of the sequence of events placed before us,
we must note that three contracts were entered into between the
parties for the construction of a Fertiliser Plant in Russia on
01/06/2020 and admittedly, all three contracts contain an arbitration
clause, to the effect that the dispute between the parties shall be
referred to arbitration. The Offshore Engineering and Procurement
Contract dated 01/06/2020, contain an Arbitration Agreement in
Clause 21.3.1 and a choice of law clause in Clause 26.3, which read
as follows:-
“21.3.1. Any Dispute… may be submitted by either Party for
binding resolution by arbitration under the Rules of Arbitration of
the International Chamber of Commerce…
21.3.2 The place of the arbitration shall be London…. The seat
of arbitration shall be London…. Each Party hereby excludes and
waives irrevocably any rights or application or appeal to the
courts of any country otherwise having jurisdiction….
26.3 Choice of Law
This Contract, and any non-contractual obligations arising out
of or in connection with it, shall in all respects be governed by and
interpreted in accordance with the laws of England and Wales
without application of the conflict of laws principles thereof. ...”
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Similarly, the Onshore Engineering and Procurement Contract,
also of the same date, prescribe that, in case of disputes, the same
shall be determined by arbitration under the ICC Rules, with the seat
of Arbitration at London.
The third agreement, namely, the Coordination and Interface
Agreement, also incorporate the Arbitration Agreement in Clause 7.5
and choice of law in Clause 7.2.
23. Reading of the aforesaid would make it evidently clear that the
parties have chosen the law of England to govern the contracts and
the disputes arising thereunder were agreed to be resolved by
arbitration with the seat at London, and very specifically, stipulating
that each party excluded and waived any right or application to the
courts of any other country. Thus, the Courts of other
countries/jurisdiction are excluded and consequently not competent
to adjudicate the resultant discord.
24. At this juncture, it is also necessary to make a reference to the
the Arbitrazh (state commercial) Procedural Code of the Russian
Federation i.e. the APC RF and what is pressed into service is Article
248.1, which confer exclusive jurisdiction of commercial courts in
the Russian Federation in dispute involving persons subject to
restrictive measures. It is, therefore, necessary for us to reproduce the
relevant portion of the said provision and it reads thus:-
“1. Unless otherwise established by an international treaty of the Russian
Federation or an agreement between the parties, pursuant to which the
consideration of disputes involving them is referred to the jurisdiction of
foreign courts or international commercial arbitration tribunals located
outside the territory of the Russian Federation, the exclusive jurisdiction of
arbitration courts in the Russian Federation shall include cases:
1) in disputes involving persons subject to restrictive measures
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imposed by a foreign state, state association and (or) union and (or)
state (interstate) institution of a foreign state or state association and
(or) union;
2) in disputes between one Russian or foreign person and another
Russian or foreign person, if the basis for such disputes is restrictive
measures imposed by a foreign state, state association and (or) union
and (or) state (interstate) institution of a foreign state or state
association and (or) union in relation to citizens of the Russian
Federation and Russian legal entities.”
“4. The provisions of this article shall also apply if an agreement
between the parties, according to which the consideration of disputes
involving them is referred to the jurisdiction of a foreign court and
international commercial arbitration outside the territory of the
Russian Federation, is incapable of being performed due to the
application of a restrictive measure by a foreign state, state association
and (or) union and (or) state (interstate) institution of a foreign state
or state association and (or) union against one of the parties to the
dispute. restrictive measures by a foreign state, state association and
(or) union and (or) state (interstate) institution of a foreign state or
state association and (or) union, creating obstacles for such a person
in accessing justice.”
25. In the wake of the aforesaid provision contained in APC RF,
and in form of Article 248.1, the same operate unless otherwise
provided by an agreement of the parties and the exclusive
competence of Commercial Courts in the Russian Federation shall
include the dispute involving persons in respect of whom restrictive
measures are imposed by a foreign State, a State association and/or
Union and/or State, institution of a foreign State or State association
or Union.
The said clause shall operate unless otherwise provided by an
international treaty or an agreement of the parties and in this case
since, by a specific agreement between the parties, they have agreed
to submit their disputes to arbitration under the Rules of Arbitration
of the ICC, and the place and seat of arbitration having been chosen
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as London, by excluding and waiving the jurisdiction of the courts of
any other country, in our view, the exclusive jurisdiction of
Commercial Courts in Arbitrazh Court is not an automatic fallout
because of the sanctions imposed.
Reliance is placed before us upon a judgment in case of Google
4
LLC v. Nao Tsargrad Media , and w e will refer to the ratio laid down
therein a little later.
However, at this stage, we must also refer to Para 4 of Article
248.1, which necessarily require to satisfy a specific condition, to the
effect that, when the dispute is referred to the competence of a
foreign court or international commercial arbitration outside the
territory of the Russian Federation, and it has become unenforceable
due to the application of restrictive measures against one of the
parties to the dispute, thereby creating an obstacle for such a person
in accessing justice, the provision may be invoked. Therefore, for
invoking the exclusive jurisdiction, the Arbitrazh Court must satisfy
itself that the sanctions have resulted in obstacles for accessing
justice for the Appellant before the Courts of the foreign jurisdiction,
including the ICC Arbitration and the Courts of the United Kingdom,
and Para 4 do not contemplate the automatic creation of obstacles or
an artificial situation amounting to an obstacle.
26. We are therefore called upon to appreciate the rival claims
staked before the learned Single Judge and the observations thereon,
in light of the specific understanding between the parties, which was
reflected through the contracts and agreements executed between
them and the invocation of the ‘APC RF’ by the Arbitrazh Court so as
4 [2025] EWHC 94 (Comm)
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to ascertain its competence, contrary to the understanding of the
parties.
The sequence of events placed before us reveal that the
Appellant projected a claim, that the contracts entered between the
parties containing arbitration and exclusion clause, were impacted on
account of the sanctions imposed by the EU and the UK, and in
particular in February 2022, sanctions being imposed against the
owner of EuroChem, Mr. Melnichenko. The Respondents, therefore,
suspended the performance due to sanctions which prompted
EuroChem to terminate all the three Contracts.
Being aggrieved by this, strictly in terms of the Arbitration
Clause, proceedings were commenced in London by Tecnimont and
MTR, and it is worth to note that EuroChem did not raise any
objection on it’s jurisdiction and rather willingly participated and
even appointed an Arbitrator, and it also presented a counter claim.
For three years, the ICC Arbitration continued.
However, the turning point occurred when EuroChem invoked
the bonds furnished by the Respondents and the Italian Banks refused
to pay, citing sanctions and EuroChem sued the Banks in London
Courts by filing proceedings. However, Justice Bright of the English
Court (Bright Judgment) by his judgment dated 31/07/2025 did not
find any fault with the Bank refusing to pay under the bonds, as it
found Mr. Melnichenko to be the beneficial owner of EuroChem,
who was under sanctions.
This triggered, EuroChem approaching the Arbitrazh Court, in
Moscow against MTR, the subsidiary company seeking exactly the
same relief which it sought through its counter claim launched in ICC
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Arbitration. At this juncture, EuroChem invoked Para 1 and Para 4 of
Article 248.1 of the ‘APC RF’ to submit that since it is subjected to
sanctions, the Arbitrazh Court shall exercise its jurisdiction as in
prosecuting its claim in the arbitral proceedings, it faced obstacles in
securing justice for iteself.
EuroChem sought anti-arbitration injunction from St
Petersburg Court against Tecnimont and MTR.
27. Worth it to note that the proceedings before the ICC Tribunal
commenced in August, 2020, and are still in progress and ICC
Tribunal had issued anti-suit injunction on three dates i.e.
13/10/2025, 11/11/2025 and 14/11/2025. However, EuroChem
ignored the anti-suit injunctions and continued to prosecute its Suit in
the Arbitrazh Court. Since, in the proceedings before the Arbitrazh
Court were initially only against MTR, it sought joinder of Tecnimont
and also sought freezing of assets and both the reliefs were granted in
its favour by the Arbitrazh Court on 27/10/2025, while the anti-suit
injunction remained in force against it. Even the English Court issued
anti-suit injunction against EuroChem on 21/11/2025, but the
proceedings in Arbitrazh Court still continued.
It is for the first time, on 25/11/2025, after a period of three
years of its participation in the arbitration proceedings before ICC
Tribunal, EuroChem challenged the jurisdiction of the ICC Tribunal.
28. The list of dates before us reveal that Arbitrazh Court
proceeded to determine the claim of EuroChem and though the
Respondent sought adjournment as on the ground that on 13/11/2025
an on 17/11/2025, EuroChem was permitted to amend its claim, 10
days prior to the final hearing and added 20,000 pages of documents,
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and time was sought by the Respondents to file a response, but the
Court refused to grant adjournment sought by the Respondents and
went ahead and disallowed the statement of defence, stating that it
was filed beyond time and even disallowed the request of
appointment of an independent expert to examine EuroChem’s claim.
In specific, it is urged before us that the Arbitrazh Court
granted the Respondents a few minutes of arguments in the huge
claim, which it had to face and ultimately on 5/12/2025, it declared
its decision although the operative part of the decision was already
pronounced on 27/11/2025, by which it allowed the claim and
concluded that EuroChem had suffered significant losses in
connection with its unlawful conduct. The Court accordingly
concluded thus:-
“The case materials show that LLC ‘ ECNW-2” suffered significant
losses in connection with the unlawful unilateral refusal to perform
obligations on the part of LLC “MT Russia” and Tecnimont SpA, which
were established by the court in the amount of 159,222,357,146 roubles, of
which:
the amount of actual damage in the form of additional expenses incurred
as a result of concluding substitute transactions – 51,754,868.124
roubles;
the amount actual damage in the additional expenses for hiring personnel
to complete the work – 2,442,899,981 roubles;
the amount of actual damage in the form of an estimated penalty for delay
in the performance of the Contracts-6,257,820,606 roubles;
the amount of actual damage from the non-delivery of paid spare parts –
792,886,268 roubles;
the amount of lost profits from the inability to produce and sell mineral
fertilisers – 76,584,416,685 roubles;
the amount of lost profits from the inability to make capital investments –
21,389,465, 482 roubles;
These amounts of losses are confirmed by the primary documents
submitted in the case file, the terms of substitute transactions concluded
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by ECNW-2 LLC for the purpose of completing the construction of the
plants, calculations, as well as the expert opinion dated 13 November
2025 No. 02-03/25/023, prepared by specialists of LLC “Veta Appraisal
Company”, the conclusions of which have not been refuted by the
Respondents with any admissible and relevant evidence. This conclusion
is detailed, well-reasoned and based on numerous documents studied by
experts. In this regard, the court has no reason not to trust the conclusion.
The calculation of losses from substitute transactions is determined on the
basis of a comparison of the cost of unfinished work with the contracts
actually concluded by LLC “ECNW-2””
29. The Arbitrazh Appeal Court, Moscow by its Resolution dated
04/03/2026 dismissed the Appeal, by upholding the finding of the
First Court by recording that it had lawfully recognized the
calculation of the specified amounts as methodologically correct,
justified and accurate, and the Respondent had not contested the
specified amounts, no counter calculations were presented, and no
evidence refuting them was provided to the Court of first instance. It
also rendered a finding that from the circumstances of the present
case, it could be inferred that by referring to the European Union
sanctions, the Respondents, consciously and voluntarily suspended
the performance of their obligations under the contracts, thereby
directly complying with the specified sanctions regime and in this
regard, within the meaning of Article 401 (4) of the Civil Code of
Russian Federation, the Respondents cannot refer to the existence of
conditions limiting liability for intentional non-performance of
contractual obligations.
30. It is vehemently urged before us by Mr. Andhyarujina that the
Arbitrazh Court was well within its competence to decide the claim
for recovery of 202,659,375,289 Roubles as well as interest under
Article 395 of Civil Code of Russian Federation, calculated on the
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amount of unearned advance payment as on the date of repayment of
debt.
He would submit before us that the Respondents objected to
the satisfaction of the claim raised by ECN W-2 LLC by pressing
force majeure , being the sanctions imposed by EU. It also filed a
Motion for a forensic examination of the case and the relief was
denied by referring to Article 148 of APC RF, permitting the Court to
leave the claim without consideration, if it was established that there
was another case involving the same person, the same subject matter
and the same grounds before the Arbitrazh Commercial Court.
However, the Court concluded that there are no grounds for leaving
the application without consideration, as the agreements concluded
contain an arbitration clause, according to which all disputes related
to performance of contract are subjected to consideration of the Rules
of ICC (London) and it was noted that the proceedings were so
initiated. However, what was invoked by the Arbitrazh Court to
assume jurisdiction was Para 1 of Article 248.1 and in this regard,
citing a ruling on the Judicial Panel on Economic Disputes of the
Supreme Court of Russian Federation dated 09/12/2021, it was
inferred that taking into account the objective of the legislative
regulation that mere fact of imposing restrictive measures on a
Russian person involved in a dispute in International Commercial
Arbitration outside the territory of Russian Federation is sufficient to
conclude that such person’s access to justice is restricted.
The Arbitrazh Court, therefore, concluded thus:-
“ Taking into account that, according to the claimant’s
explanations, the arbitration at the International Chamber of
Commerce (ICC), case No. 27195/ELU, is being conducted in
London, the capital of the United Kingdom (included in the List of
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foreign states and territories committing unfriendly acts against the
Russian Federation, Russian legal entities and individuals, approved
by Decree of the Government of the Russian Federation No.430-r of
05.03.2022), the arbitrators are also British subjects, and the basis of
the dispute is the legality of the imposition and implementation of
foreign sanctions, the court concludes that there are sufficient
grounds to doubt the independence and impartiality of the arbitrators
in considering the case.”
31. As regards the Motion of MTR to conduct Forensic
examination, it was held that the Motion was filed untimely without
depositing the funds into the deposit account of Arbitrazh Court and
it is aimed at disrupting the Court hearing. As regards to the Motion
of appointing an expert for examining the claim, the conclusion is
reached that the issue of scope of work performed under the Contract,
the amount of financing, as well as price of replacement work and
other circumstances can be established by examining evidence
presented in the case material, and did not warrant any special
evidence.
We are not deciding upon the merits of the finding rendered by
the Arbitrazh Court, as what is only permitted for us to examine is
whether the decision is delivered by the Court of competent
jurisdiction. However, since we have noted that as per Article 248.1
of ‘APC RF’, and in particular clause 1, when there was an
agreement between the parties, the jurisdiction of Russian Court is
excluded and even Para 1 of Article 248.1 clearly contemplated the
applicability of sub-clauses (1) and (2) unless there was an agreement
between the parties.
This aspect however, is not at all considered by the Arbitrazh
Court and since the agreement/ the contract entered between the
parties which comprise of an exclusion clause giving primacy to
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ICC, we are not persuaded to hold that the Arbitrazh Court was
justified in exercising its jurisdiction.
Para 4 of Article 248.1 of ‘APC RF’ also contemplate a
peculiar situation, if restrictive measures are imposed which may
include economic sanctions also and a Russian party is left with no
access to justice and in such a scenario, the doors of the Russian
Courts are open for a Russian party, provided it demonstrate that
imposition of restrictive measures by a foreign State, is creating
obstacles for such an entity in accessing justice. Mere imposition of
sanctions, however, does not per se create obstacles in accessing
justice, and in our view, Arbitrazh Court has wrongly presumed that
because sanctions are imposed, the plaintiff which had approached it,
had no means of accessing justice. The Court failed to carry out any
examination about what type of obstacles were faced by the
Appellant in accessing justice, and in fact, it record that the
Arbitrators are British and therefore, there was every likelihood of
bias because UK had imposed restrictions on Russians, but it is
pointed out to us that only one of the Arbitrators before the ICC is
British and the other two are Canadian and Australian.
32. One aspect which appear to us very glaring is, all the while
EuroChem, the Appellant participated in ICC proceedings for a
considerable length of time i.e. three years and even filed its counter
claim. It was never stopped from prosecuting and infact, we have
noticed that when the Banks refused to honor the commitment citing
sanctions, the Appellant sued the Banks in London Court. The said
Court determined the most pertinent issue, whether EuroChem NW-2
or EuroChem AG is owned or controlled by Mr. and Mrs.
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Melnichenko for the purposes of Regulation 269, which prescribed
‘all funds and economic resources belonging to, owned, held or
controlled by anyone listed in Annexure 1 shall be frozen’ and ‘no
funds or economic resources shall be made available directly or
indirectly to or further the benefit of anyone listed in Annexure 1’.
It is only when the Appellant did not succeed in the Bond
litigation, it turned its attention to the Arbitrazh Court, Moscow,
without setting out as to which factors created obstacles in its way of
accessing justice and without demonstrating as to how the arbitration
agreement had become unenforceable, as the counter claim filed by
it, is already pending before ICC Tribunal.
The ICC Tribunal, in light of the proceedings pending before it
instituted by the Respondent, on more than one occasion prevented
EuroChem from commencing any proceedings including, but not
limited to injunctive relief or similar proceedings in Russia against
the contractors in connection to K-2 project and in breach of the
arbitration agreements, except with the leave of the Tribunal or in the
event such proceedings are already initiated, stay such proceedings
until the Tribunal issue the final award in arbitration and any post-
award proceeding ensuing thereafter are fully and finally settled.
With regard to the St. Petersburg action initiated by EuroChem,
it was ordered to withdraw the action, but this was all the while
ignored and even the Arbitrazh Court failed to consider the aspect of
the parties agreeing mutually for resolving their disputes through ICC
with a London seated Arbitration. For establishing the competence of
the Arbitrazh Court, the requirements contemplated in Article 248.1
of ‘APC RF’ is mandatory requirement, but even this was not adhered
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to.
33. Perusal of the Offshore Engineering and Procurement Contract
entered into on 01/06/2020 to be followed by the Onshore Contract
and the Coordination and Interface Agreement, all executed on the
same date, included a mutual understanding for referring the dispute
to arbitration under the Rules of Arbitration of the ICC, with the
place and seat of the arbitration also being agreed to as London. In
addition, in the relevant clause in all the three Contracts, each party
agreed to exclude and waive irrevocably any rights or application of
appeal to the courts of any country otherwise having jurisdiction. Not
only this, as regards choice of law all the three Contracts contained a
specific stipulation that the said contract and any non-contractual
obligations arising out of or in connection with it, shall be governed
in accordance with the laws of England and Wales without
application of the conflict of law principle.
Pursuant thereto, upon termination of the Contracts by the
appellant, the Respondent invoked arbitration, the parties nominated
their respective arbitrators and the ICC Tribunal was constituted, with
no objection ever raised to its jurisdiction till the appellant decided to
follow the route of the Arbitrazh Court, Moscow.
Evidently, it can be seen that during the pendency of ICC
arbitration, the appellant also fought a litigation when the banks
refused to pay when EuroChem invoked the bonds furnished by the
Respondents and the bank refused to honor and the English Courts on
being approached found sufficient justification in the banks not
paying the money under the bonds. It is at this moment, the appellant
deemed it appropriate to approach the Moscow Court, Moscow by
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taking recourse to Article 248.1 of the ‘APC RF’ by completely
ignoring that there was a binding arbitration agreement which was
invoked, acted upon by the parties and rather the proceedings before
the arbitral tribunal were ongoing when the Arbitrazh Court was
approached.
Invocation of the jurisdiction of the Arbitrazh Court only in the
light of sanctions, is of no consequence as from the sequence of
events, it is evident that the sanctions were imposed in February
2022, but the arbitration being invoked on 15/08/2022, continued till
2025 and EuroChem never faced any obstacle, as it continued to
participate in the proceedings and even prosecute its counter claim
before the ICC Tribunal. However, the turning point being the
rejection in the Bonds case, on 01/09/2025, the jurisdiction of
Russian Court is invoked but we must express that for satisfying the
invocation of Article 248.1 of ‘APC RF’, it was imperative for the
appellant to establish the obstacles being faced in accessing justice in
England and because of which the arbitration agreement could not be
enforced, as a party.
The quintessential of invoking Para 4 of Article 248.1 namely;
“is incapable of being performed due to application of a restrictive
measures by a foreign state…., creating obstacles for such a person in
accessing justice” is what is the test to be satisfied before the
Arbitrazh Court can assume jurisdiction to the exclusion of the
agreement between the parties, that any dispute arising out of the
contract/s shall be referred to ICC Arbitration.
In absence of any such material being placed, in our view, the
Moscow Court presumed obstacles in accessing justice, simply on the
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basis that sanctions are imposed.
34. It is vehemently asserted before us by Mr. Andhyarujina that
objection has been considered by the Moscow Court and the Court
had ruled upon the same, and we have carefully perused the decision
of the Arbitrazh Court, Moscow to ascertain whether court had
considered this aspect. The decision declared on 05/12/2025, clearly
noted the dispute as below:-
“The claims of ECNW-2 LLC are motivated by the fact that the
respondents citing the effect of anti-Russian sanctions,
suspended the execution of the agreements dated 1 June 2020
for the construction of fertiliser plants and Kingisepp, Leningrad
Region, in connection with which LLC “ECNW-2” unilaterally
terminated the aforementioned Contracts out of court by sending
a notice to the Respondents dated 04.08.2025. Due to the breach
of contractual obligations on the part of the Respondents, a joint
and several debt arose for compensation for losses, return of
unjust enrichment, and interest for the use of other people’s
funds in the total amount of 202, 659,375, 289 roubles 07
kopecks in roubel equivalent.”
35. The decision record that the representative of Respondent
Nos.1 and 2 objected to the satisfaction of the claim, pointing to the
existence of the force majeure, which they considered to be sanctions
imposed by EU and it filed an application for forensic examination.
It is in light of this contest, the Court pronounced upon the
issues before it and though the application was filed by the
Respondent to leave the application, the court expressed that there are
no grounds for leaving the application without consideration on the
ground that the agreement concluded on 01/06/2020 contained
arbitration clauses, which directed the parties to the ICC London.
The court took note of the proceedings pending before ICC,
London, however, it then relied upon Para 1 of Article 248.1 of ‘APC
RF’ and taking into account the basis of the suspension of
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performance of obligations under the disputed contracts, it held that
the actions of MTR and Tecnimont S.p.A are caused by the adoption
of sanctions by EU, which subsequently led to unilateral refusal of
ECNW-2 LLC to perform the said contracts and therefore, a
conclusion is drawn that the basis for the dispute is the restrictive
measures imposed by Foreign States on citizens of Russian
Federation and Russian legal entities and therefore the case clearly
fall within the exclusive jurisdiction of the Arbitrazh Court, Moscow.
The Court also interpret that clause (2) Para 1, Article 248.1 of
‘APC RF’ is independent and its application do not require to
establish whether the restrictive measures of foreign States have
actually been imposed on the claimant or whether the measures are
actually being applied to him.
In considering Para 4 of Article 248.1, as to whether it is
established that the contract executed is incapable of performance
and thus create obstacle in access to justice, the Arbitrazh Court only
observed that the restrictive measures are binding and based on the
power and authority of public state power whether they are personal
in nature or public in nature.
Dealing with the objection of the Respondents, as regards the
contingency contemplated in Para 4 of Article 248.1 of ‘APC RF’ of
not having come into existence, the Moscow Court observed thus:-
“Moreover, according to the position set out in the ruling of the
Judicial Panel on Economic Disputes of the Supreme Court of
the Russian Federation of 28 November 2024 No. 305-ES 24-
13398 in case No.A40-214726/ 2023, if the dispute arose due to
the introduction of restricted measures by the state in which it
was to be considered, the impartiality of the arbitrators (judges)
in the legal assessment of the basis of the disputed legal
relationship cannot but raise reasonable doubts. A deliberate
finding of the legality (lawfulness) of the introduction of
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restrictive measures may affect the resolution of the dispute on
its merits, which does not meet the criteria of independence and
impartiality of the court, as well as the principles of equality of
the parties and adversarial proceedings.
Taking into account that, according to the claimant’s
explanations, the arbitration at the International Chamber of
Commerce (ICC), case No. 27195/ELU, is being conducted in
London, the capital of the United Kingdom (included in the List
of foreign states and territories committing unfriendly acts
against the Russian Federation, Russian legal entities and
individuals, approved by Decree of the Government of the
Russian Federation No. 430-r of 05.03.2022), the arbitrators are
also British subjects, and the basis of the dispute is the legality
of the imposition and implementation of foreign sanctions, the
court concludes that there are sufficient grounds to doubt the
independence and impartiality of the arbitrators in considering
the case.”
36. The reading of the aforesaid would reflect, that those obstacles
which the appellants have faced in accessing justice in the English
Courts or in the ICC Arbitration, has not at all been adverted to, and
the court did not even deem it necessary to ascertain as to where the
ICC proceedings had travelled, as it was not in dispute that
EuroChem which now knocked the doors of Moscow Court was
infact, before ICC Tribunal for past three years and even filed a
counter claim. Worth it to note that even after the Bright judgment
going against it, the appellant continued to participate unhindered in
the ICC arbitration and conveniently ignored the anti-suit proceeding
injunction granted by the ICC Tribunal, pursuant to it approaching
the Moscow Court seeking the same as it sought as a counter claim in
ICC arbitration.
37. On this aspect of the matter namely, that the Moscow Court
usurping the jurisdiction of the ICC Tribunal, as the agreement
which was still valid between the parties, un-equivocally expressing a
consensus and so recorded that the dispute between the parties shall
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be resolved through ICC and therefore, the jurisdiction of Arbitrazh
Court is excluded and unless and until the case falls within Para 1 of
Article 248.1 of ‘APC RF’ and also Para 4 thereof in our view, the
decision of the Moscow Court has been rightly objected to by the
Respondent and even the learned Single Judge, rightly observed that
if the foreign court’s jurisdiction is doubtful, then the Indian Court
can refuse to accept the absolute conclusiveness of the Foreign
Judgment at a pre-trial stage.
Recording that the defendant has seriously objected the
conclusiveness of the Russian judgment on the ground that the
Arbitrazh Court, Moscow lacked jurisdiction because the agreements
between the parties contemplated arbitration and due to the pendency
of the arbitration proceedings before the ICC in which the appellant
had participated at will, and that is how a cloud was raised over the
competence of the Arbitrazh Court and therefore, the learned Single
Judge arrived at a conclusion that the conclusiveness of the Russian
judgment is in doubt and it deserve consideration at the stage of trial
by leading evidence.
38. One more aspect that caught our attention is the breach of
principles of natural justice when the judgment is delivered by
Arbitrazh Court, Moscow as it is the submission of the Respondent
that a huge bulk of documents, about 20,000 pages were produced
before a Court by amending the claims 10 days prior to the final
hearing and when an adjournment was sought on the ground that the
documents placed on record by way of an amendment deserve a
response, the same were simply ignored and the adjournment sought
to deal with the bulk of document was declined. The statement of
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defence is also not allowed to be filed on the ground that it was not
filed in time. The request made for appointment of an independent
expert is also denied but what was relied upon was only the expert
report produced by the claimant i.e. EuroChem before the court and
this is sought to be canvassed before us as one of the ground to doubt
the conclusiveness of the judgment as contemplated under Section 13
of CPC being in violation of principles of natural justice.
Perusal of the decision of 05/12/2025 is prima facie indicative
of a lopsided approach as while considering the motion of MT Russia
LLC to conduct a forensic examination, the court observed that it was
filed untimely and without depositing funds into the deposit account
of the court, and filing of this application is described as, ‘aimed at
disrupting the court hearing.’
By taking recourse to Article 82 of the ‘APC RF’, it is
concluded that a judicial examination is appointed by a Court when
considering a case to resolve issues requiring special knowledge but
the issue of scope of work performed under the contract in question,
the amount of financing as well as price of replacement work and
other circumstances can well be established by examining the
evidence presented in the case material and it did not require special
knowledge.
The aforesaid approach is strongly objected to by Mr. Nankani
and he would submit that the Court had never directed the
Respondents to deposit any sum/funds and had it been a direction
coming from the Court, it is quite possible that to raise a contest, such
sum would have been deposited.
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Though we are not getting into the merits of the matter, we are
restricting the aforesaid observation to the aspect of breach of
principle of natural justice, so as to rebut the presumption of
conclusiveness of the foreign contract and we find a case to be made
out to that effect by the Respondent.
39. We are guided by two instructive Foreign Judgments, Bank A
5
v. Bank B and Google LLC & Anr. v. NAO Tsargrad Media & Ors.
(supra) and we must refer to the proposition of law, flowing
therefrom.
40. Mr. Nankani had placed reliance upon the decision of the
Hong Kong Special Administrative Region Court of First Instance
between Bank A and Bank B in form of Construction and Arbitration
Proceedings No. 73 of 2023, the judgment being delivered on
24/09/2024.
A perusal of the said judgment would disclose somehow
similar facts with which we are confronted, when the Plaintiff
licensed bank headquartered in Germany and under voluntary and
solvent liquidation was subjected to supervision of the German
Federal Financial Supervisory Authority and the Defendant is a bank
established in Russia, with the Government of Russian Federation
being its majority shareholder.
The Defendant held 99.39% of the shares of the Plaintiff and
another Russian company was the minority shareholder.
On an ISDA Master Agreement being entered between the
predecessor of the Plaintiff and the Defendant in respect of various
foreign exchange and derivatives transactions, on 17/03/2014, the EU
implemented Council Regulation No. 269/2014 concerning restrictive
5 [2024] HKCFI 2529
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measures in respect of actions undermining or threatening the
territorial integrity, sovereignty and independence of Ukraine and
what was invoked was Article 2 of EU Sanction, which are also
invoked in our case.
As a result of the war between Russia and Ukraine in February
2022, the Supervisory Authority of the Plaintiff issued an order on
24/02/2022 which prohibited it from making payments or other
transfers of assets to companies belonging to a particular group
including the Defendant, and from granting loans to Russian
borrowers including the Russian State. By an order, the Supervisory
Authority of the Plaintiff’s bank also prohibited it from accepting
new deposits, granting new loans, or making payments to Russian
banks, with a view to winding down the Plaintiff’s banking business,
and eventually implementing a solvent winding up of the Plaintiff.
On 08/04/2022, the Defendant was named as a sanctioned
entity and added to Annexure - I of the EU Sanction.
41. The parties entered into a Termination and Settlement
Agreement (“TSA”) on the very same day for termination of their
respective rights and obligations under all the outstanding
transactions covered by ISDA Agreement and it was agreed that the
relevant transactions would be terminated and their respective rights,
obligations and liabilities would also stand terminated and discharged
by the Plaintiff by paying to the Defendant a sum of Euros
112,634,610 on or before 08/04/2022.
The TSA which was governed by the English Law, contained a
dispute resolution clause for arbitration in Hong Kong and where the
seat of arbitration was agreed to be Hong Kong, the arbitral
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proceedings to be carried out by three arbitrators, indicating that the
parties mutually agreed that any dispute, difference or claim arising
out of the TSA shall be resolved by arbitration administrated by the
Hong Kong International Arbitration Center.
When the supervisory body of the plaintiff prohibited the
defendant from exercising its voting rights as a shareholder of
Plaintiff and appointed a special representative of the Plaintiff with
executive powers to take over the function of the supervisory board,
and a trustee was appointed to exercise the voting right of the
Defendant. The trustee so appointed by the German Court passed a
resolution for the Plaintiff to enter into voluntary and solvent
liquidation and the liquidators of the Plaintiff were appointed and this
was projected as a step to ring-fence the Plaintiff from influence of its
Russian shareholders, including Defendant.
42. By placing reliance on TSA, the Defendant demanded
payment of the settlement amount and in response the Plaintiff
claimed that EU Sanction prohibited it from making any funds or
economic resources available, directly or indirectly, to the Defendant.
The Plaintiff also adopted a stand that any dispute or difference
arising out of or relating to the TSA should be referred to and finally
resolved by HKIAC arbitration, and no claims aimed at the recovery
of any funds from the Plaintiff may be submitted to the Russian
Courts.
43. It is worth to note that, the Defendant commenced the Russian
proceedings for recovery of settlement amount in relation to the
Plaintiff’s breach of obligations under the TSA. It obtained interim
measures from Russian Court, thereby freezing securities held in the
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Plaintiff’s account with the Defendant and prohibiting the Defendant
from transferring the title of such securities to any party other than
the Defendant.
The Plaintiff then issued the first originating summons in
Hong Kong and obtained an interim anti-suit injunction when the
Defendant was ordered to take necessary steps to stay or not take any
further steps in the Russian proceedings except in accordance with
the arbitration agreement. Despite this, the defendant commenced the
nd
2 Russian Proceedings, and obtained further order to prohibit the
plaintiff form imitating or continuing any proceedings in Hong Kong
in relation to the TSA. Russian Court passed an order in its favour
prohibiting the Plaintiff from initiating any proceedings in the High
Court of Hong Kong, and from maintaining petitions and claims in
the High Court of Hong Kong prohibiting the commencement of
legal proceedings.
With these different proceedings, Russian Court gave a
judgment in favour of the Defendant for recovery of settlement
amount in full and dismissed the Plaintiff’s jurisdiction challenge, on
holding that the Russian Court had exclusive jurisdiction in respect of
the Defendant’s claim for the settlement amount and in relation to EU
Sanction under Article 248 of the ‘APC RF’.
It is in this background, the Plaintiff approached the Hong
Kong Court for final injunction to restrain the Defendant from
commencing or pursuing any proceedings in relation to the disputes
covered by the arbitration clause in the TSA and it also sought a
declaration that the Defendants claim to recover the settlement
amount from the Plaintiff in Russian Proceedings constitute breach of
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arbitration agreement.
44. As regards the jurisdictional challenge is concerned, it was
urged that the defendant was seeking relief against the effects of
international sanctions including the EU Sanction, which by their
nature are matters of State and it was seeking relief against the acts of
the German State in implementing and enforcing EU Sanction against
it, which acts had culminated in the expropriation of the plaintiff. It
was urged that the tribunal Hong Kong Arbitration does not have
jurisdiction to determine disputes on the implementation and
enforcement of sanctions vis-a-vis the German State and the
Defendant. It was also urged that the Tribunal in the Hong Kong
Arbitration was likely to determine, as a matter of English Law that
payment of settlement amount by the Plaintiff is unenforceable due to
imposition of EU Sanction.
45. It is in the aforesaid background and the objections raised, the
Court observed thus:-
“59. In my judgment, what is pertinent is that the question for
determination by the Court in this case is simply whether there
is a valid and binding arbitration agreement between the
Plaintiff and the Defendant, which covers the scope of the
dispute between the two parties and the claims made by them in
these proceedings and in the two sets of Russian Proceedings,
and whether to grant the injunctions on the Plaintiff's
application. It is trite, that the arbitration agreement contained
in the Arbitration Clause is severable from and separate to the
underlying TSA between the parties. Any illegality of the TSA,
and any alleged impossibility to perform the TSA, cannot affect
the validity and operation of the arbitration agreement. Nor
does the impossibility of performance of any award obtained in
the HK Arbitration affect the validity and enforceability of
either the arbitration agreement, the HK Arbitration itself, or
the award obtained. 10
60. It is also clear, that the Court's decision on the questions
identified in the preceding paragraph does not require its
adjudication of the validity, lawfulness or fairness of the EU
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Sanction, nor its operation within the territory of the EU. There
is no attempt by the Plaintiff to seek enforcement of the EU
Sanction in Hong Kong, as it has no recognition or application
here. It is simply not necessary for the Court to decide whether
the issue and application of the EU Sanction in the EU, or in
Hong Kong, is right, or wrong, or valid. Whether the EU
Sanction confers a good answer to the Defendant's claim for
payment under the TSA, whether the Plaintiff can be excused
from payment, and the effect of the EU Sanction on the TSA are
all matters which go to the merits of the claims in the HK
Arbitration, and it should not be forgotten that the Court does
not consider the merits of the underlying dispute when it
decides the Plaintiff's claim for the injunctions which are made
solely on the basis of a valid arbitration agreement. This is also
a reason to reject the Defendant's assertion that by granting the
injunctions to the Plaintiff, the Court is implementing or
facilitating the EU Sanction. Any injunction which the Court
grants in this case is to facilitate the arbitration agreement
between the parties, and nothing else.”
46. It was thus concluded that there is a dispute between the parties
that falls within the scope of arbitration clause as covering any
controversy, difference or claim arising out of or relating to the TSA,
including the validity, interpretation, performance, breach or
termination of the TSA and this could be submitted to arbitration in
accordance with the arbitration clause.
Answering the question as to whether Hong Kong Arbitration
would be futile in the wake of EU Sanctions in light of its prohibitive
effect in blocking payment of settlement amount, it is held that the
parties by their own choice had agreed to and provided for English
Law to govern the TSA and if under the English law, the EU
Sanctions has an effect on TSA or on the Hong Kong Arbitration in
any way, that is a consequence of the party’s choice. It was
pertinently noted that at the time of the TSA, sanctions were already
being implemented by EU and the parties to ISDA Agreement must
have envisaged the risk of sanctions and their effect on the
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transaction under the agreement and the defendant being added to the
list of sanctioned entities on the same day as the TSA, it was
observed that it is inconceivable that this could not have been
envisaged as a risk at the time when TSA was negotiated and
concluded.
It is also held that in the event the Tribunal makes an award in
Hong Kong Arbitration for the plaintiff to make payment to the
defendant, such an award is valid and binding on the parties, even if
performance of the award is impossible by virtue of EU sanctions or
for any other reason and this was found to be sufficient ground to
dismiss the claim that Hong Kong arbitration will be futile by reason
of the fact that an award for payment to the defendant cannot be
performed.
After a threadbare discussion, the Judge of the Court of First
Instance, High Court was satisfied that the plaintiff’s claim in the
arbitration and the defendant’s claim in the Russian proceedings all
relate to the validity, alleged breach of termination and TSA and it
fall within the arbitration clause in TSA and therefore, there is no
‘strong cause’ or reason not to grant injunction and relief sought to
restrain the Defendant from acting in breach of arbitration clause.
Merely, because the Russian Court has already assumed jurisdiction
and issued an anti-suit injunction, was found not sufficient to refuse
the relief, particularly when the Defendant had by the arbitration
clause agreed not to invoke the jurisdiction of the Russian Court and
injunctions were directed at the Defendant and not against the
Russian Court.It was further recorded that the Defendant having
ignored HK ASI Order warranted grant of mandatory injunction as
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well as declaratory relief in favour of the Plaintiff.
The Defendant’s jurisdiction summons were therefore
dismissed with the aforesaid reasoning.
47. Another judgment which is relied upon by Mr. Nankani is in
case of Google LLC & Anr vs. Nao Tsargrad Media and Ors (supra)
delivered by the High Court of Justice Business and Property Courts
of England and Wales King’s Bench Division on 22/01/2025 also has
the involvement of a Russian entity where the Defendant
commenced the proceedings before Arbitrazh Court, Moscow and
obtained Russian judgment in contrast to the understanding between
the parties that their relationship under the agreement would be
governed by English law and to resolve the dispute the party shall
apply to the Court of England and Wales. In addition, clause 14.11 of
the Content Agreement entered between the parties specifically
contain the following clause:-
“This Agreement shall be governed by and construed in
accordance with English law. Without prejudice to the right of
either party to apply to any court of competent jurisdiction for
emergency, interim or injunctive relief, any dispute or claim
arising out of or in connection with this Agreement, including
any question regarding its existence, validity or termination,
shall be referred to and finally resolved by arbitration under the
Rules of the LCIA, which Rules are deemed to be incorporated
by reference into this clause… The seat, or legal place, of
arbitration shall be London, England...”
48. A detailed judgment delivered by Mr. Justice Henshaw,
referred to the mandatory law proviso and it interprets the Article
248.1 which entitled the Russian sanction party to bring proceeding
in Russia if, upon application of that party, the Russian Court
concludes that the foreign forum selection agreement is inoperative
as a result of foreign sanctions.
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The true interpretation of the said provision from Professor
Kryvoi is relevant to note, which reads as below:-
v) Article 248.1 expressly provides that it applies only
"[u]nless otherwise provided by... agreement of the parties,
according to which the consideration of disputes with their
participation is within the jurisdiction of foreign courts or
international commercial arbitration located outside the
territory of the Russian Federation".
vi) Article 248.1 entitles a Russian sanctioned party to bring
proceedings in Russia if, upon the application of that party, the
Russian court concludes that the Foreign Forum Selection
Agreement is inoperable as a result of the foreign sanctions.
However, this provision does not limit a Russian sanctioned
party's right to enter into a Foreign Forum Selection Agreement.
vii) Moreover, the law does not prohibit or otherwise prevent
Russian Sanctioned Parties from seeking, in Russia or outside
Russia, the recognition and enforcement of court judgments or
arbitral awards issued as a result of litigation or arbitration
proceedings initiated by Russian Sanctioned Parties outside
Russia in accordance with Foreign Forum Selection Agreements.
To the contrary, Article 248.1(5) of the APC specifically states
that:
"The provisions of this [Article 248.1] shall not impede the
recognition and enforcement of a decision of a foreign court or
international commercial arbitration adopted pursuant to the
claim of [a Russian sanctioned party], or if that person has not
objected to the consideration of the dispute to which that person
was a party by a foreign court or international commercial
arbitration located outside the territory of the Russian
Federation, including if that party did not apply for an [anti-
suit] injunction prohibiting the initiation or continuation of the
proceeding in a foreign court or international commercial
arbitration located outside the territory of the Russian
Federation."
vii) Further, Article 244 of the APC sets out the grounds for
refusal to recognise and enforce foreign judgments and arbitral
awards in Russia. Article 244(1)(3) of the APC states:
“The arbitrazh court refuses to recognise and enforce the
judgment of the foreign court in full or in part if:
…
3) in accordance with an international treaty of the Russian
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Federation or in accordance with a federal law, the case falls
within exclusive jurisdiction of the court of the Russian
Federation, except as indicated in Article 248.1(5) of [the
APC].”
49. The contention of the Defendant was to the effect that Article
248.1 of ‘APC RF’ is an example of exclusive jurisdiction of the
Arbitrazh Court, which cannot be changed by the parties agreeing,
and it was introduced to provide protection to the rights and
legitimate interests of certain categories of Russian citizens and legal
entities against whom ‘unfriendly countries’ introduced restrictive
measures and as a result of sanctions, such citizens and legal entities
were deprived of their right to judicial protection in the territory of
these foreign countries, not only in State Courts, but also in
arbitration institutions.
The judgment succinctly take note of the Defendant’s
contention and reject the same by observing thus:-
“97. The Defendants submit that the "mandatory law"
paragraph of the YouTube Jurisdiction clause does not require
Article 248.1 to exclude the sanctioned entity's contractual right
to sue in a foreign forum or for that right to be lost or
overridden. Rather, if, as in the present case, the applicability of
the particular local law - Article 248.1-falls within the exclusive
competence of the Russian court, the Russian court becomes the
only place where that issue and any dispute related to it can be
resolved. They submit that that view is supported by §§ 12-14 of
Professor Nikitin's report quoted above.
98. I disagree. The language of the paragraph in the
jurisdiction clause is clear. It applies only where the dispute
"cannot", by reason of a mandatory law, be resolved in an
English court applying English law. Article 248.1 does not have
that effect. Nothing in Article 248.1 would prevent the
Defendants from starting proceedings in England in accordance
with the first paragraph of the jurisdiction clause. Moreover, any
resulting judgment would be enforceable in Russia, provided
that the Defendants had not objected to English jurisdiction. The
situation is entirely different from that which would exist if the
dispute had instead concerned one of the categories of case for
which Russian law applies exclusivity properly so called, such
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as real property and intellectual property rights. Accordingly,
the conditions set out in the second paragraph of the jurisdiction
clause do not apply.
99. There was at one stage a suggestion by the Defendants
that Google was issue estopped as to the meaning of the clause
by the decision of the Russian court. Any such argument was not
pressed in the skeleton argument or at the hearing, and would
have no substance. There is no evidence that the Russian court
considered or ruled on the meaning of the YouTube jurisdiction
clause. To the contrary, it ignored it pursuant to Article 248.1.
100. For these reasons, I conclude that, in the context of these
disputes, the YouTube jurisdiction clause had and has effect as
an exclusive jurisdiction clause in favour of the English court.”
50. The question that arises for consideration, must be pondered
upon in light of Section 13 and 14 of the CPC, 1908 where there is a
presumption of conclusiveness of a foreign judgment unless one of
the stipulations mentioned in clause (a) to (f) is attracted and this
include the two facets namely; (a) the foreign judgment is
pronounced by Court that is not of competent jurisdiction and (d)
when the foreign judgment obtained is opposed to natural justice. In
absence of these factors, a foreign judgment would be conclusive.
Section 13 of CPC do not provide for any presumption but
Section 14 prescribe a presumption as regards sub-clause (a) of
Section 13, namely that the foreign judgment has been pronounced
by a Court of competent jurisdiction but this presumption is a
rebuttable one, permitted to be rebutted, when ‘the contrary appears
on record’ or ‘it is displaced by proving want of jurisdiction’.
By relying upon the two provisions, which are to be read as a
part of a scheme, it is urged by Mr. Andhyarujina that since Section
13 accept conclusiveness of a foreign judgment, the judgment passed
by the Arbitrazh Court, by taking recourse to Article 248.1 and in
particular Para 4 thereof must receive its due weightage, as it is
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pronounced by a court of competent jurisdiction. It is urged by him
that at the stage of consideration of an application for injunction,
there is no scope of rebuttal of presumption and this scrutiny must be
shifted to the stage of trial and according to him, the Single Judge
has erroneously exercised the discretion at pre-trial stage, by
declining to apply the mandatory statutory presumption under Section
13 and 14 of the CPC.
51. The question that arise for consideration before us is whether
the Single Judge was justified in considering the objection about the
conclusiveness of the foreign judgment or the presumption of
competent jurisdiction of the foreign court, at the pretrial stage, as
based on the foreign judgment, one party seek interim relief, by
treating it as conclusive evidence to support its claim.
The decision of the learned Single Judge is subjected to severe
criticism by Mr.Andhyarujina on this count as it is his submission
that the Judge has erred, in not giving Section 13 of the CPC its due
weightage, as the said provision must be accepted as the mandate of
law which has assigned conclusiveness to the Judgment of the
foreign court, if it is between the same parties and the competency
contemplated by Section 13 in an international sense and not merely
by law of foreign state in which the Court delivering judgment
functions and according to him the provision reflect the principle of
Comity of Nations and is recognized as the most relevant aspect of
civilised jurisdictions.
This contention is specifically contested by Mr.Nankani by
submitting that the learned Judge has rightly applied the filter while
considering application of grant of injunction and there is no
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prohibition in forming prima facie view about the conclusiveness of
the Judgment at this stage, instead of deferring it for trial.
52. The rule of conclusiveness of a foreign judgment as indicated
in Section 13 is founded upon the principle of sanctity of Judgments
delivered by a foreign court competent to render the same. A foreign
judgment is made conclusive as to any matter thereby directly
adjudicated upon between the same parties, but it is also the essence
of the judgment of a court, that it is obtained after due observance of
the juridical process i.e. by observing the basic tenets in law, which
may include adherence to the minimum requirements of natural
justice, the decision being delivered by acting in utmost fairness,
unaffected by bias and in good faith. Adherence to the principles of
natural justice is a significant facet in decision making, and
applicable across different jurisdictions and it is basic requirement to
be followed while adjudicating a dispute/lis between the parties, and
hence a judgment which ensure its compliance is entitled to be
accepted as conclusive, though the correctness of the judgment may
be appreciated on factual grounds and it is different thing to say that
the judgment is incorrect, because it had failed to appreciate the law
in the background of the facts, in which the court has pronounced the
same.
Therefore, under Section 13 a foreign judgment is considered
to be conclusive unless it is pronounced by a court of competent
jurisdiction; delivered on merits of the case; is based on an incorrect
view of the International law; or it has refused to recognize the law;
it is opposed to natural justice; has been obtained by fraud or it
sustains a claim founded on breach of any law in force in India.
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In absence of a foreign judgment suffering from either of these
flaws, which would rob it of its sanctity of conclusiveness, the same
is allowed to be enforced in the manner prescribed in the Code by
accepting its conclusiveness.
53. Section 14 creates a presumption and it prescribe that upon the
production of any document purported to be a certified copy of a
foreign judgment, the Court shall presume that such a judgment was
pronounced by a competent jurisdiction and this presumption is
available unless the contrary appears from record.
Section 14 permit such presumption to exist upon production
of certified copy of the judgment though it is permissible to rebut the
presumption by proving want of jurisdiction.
In Alcon Electronics (supra), the Hon’ble Apex Court held that
a foreign judgment ,which has become final and conclusive between
the parties, is not impeachable either on facts or law except on
limited ground as set out in Section 13 of the Code and when the
order is passed by a foreign court after following the principles of
natural justice and it had recorded reasons, it shall be presumed that
the court had conclusively tested the issue as to its jurisdiction and
passed the same coupled with cost and, therefore, it had achieved the
finale of ‘conclusivity’.
By applying the principle of Comity of Nation, which demand
respect to the order of another court (‘English Court’) , it is
categorically held that even in regard to an interlocutory order,
Indian Courts shall give due weightage to such order unless it falls
under any of the exception under Section 13.
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54. Mr. Andhyarujina has rightly placed reliance in case of Dan
6
Bunkering Ltd. vs. PFS Shipping India Ltd. , when the court
pronounced upon the scheme underlying Section 13 and 14 and the
ratio reads to the following effect :
“13. These two provisions together indicate that a foreign
judgment which has become final and conclusive between the
parties is not impeachable either on facts or law except on
limited grounds enunciated under Section 13 of CPC. The Court
shall also presume upon the production of any document
purporting to be a certified copy of a foreign judgment that such
judgment was pronounced by a Court of competent jurisdiction,
unless the contrary appears on the record; but such presumption
may be displaced by proving want of jurisdiction. Of course, an
order or decree to be conclusive, an order or decree must have
been obtained after following due judicial process by giving
reasonable notice and opportunity to all the proper and
necessary parties to put forth their case. Once these requirements
are fulfilled, the executing Court cannot enquire into the validity,
legality or otherwise of the judgment in Alcon Electronics (P)
Ltd.”
Reliance was placed by the learned Single Judge upon Alcon
Electronics (supra) and following the principle of law laid down it is
held that, by default the foreign judgment will have to be considered
as conclusive and an onus will be on the defendant to prove that
foreign judgment would fall under any of the six exceptions and in
the case in hand when the defendant except for filing of written
statement in which bald averments were made, did not lead any
evidence as to why the said judgment would not fall within the
exception provided under Section 13, the court accepted the
conclusiveness of the judgment and held it to be enforceable by
applying the principles laid down in Section 13 of CPC.
55. In yet another decision in case of Oren Bydorcarbons Pvt. Ltd.
7
vs. MS Mediterranean Shipping Company , dealing with a Suit
6 (2018) SCC Online Bom. 1313
7 2019 SCC Online Mad 34481
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filed under Section 13 of the CPC and Order IV Rule 1 seeking a
declaration that the summary judgment passed by the High Court of
Justice, Queens Bench Division (Commercial Court), is not
conclusive and the same cannot be enforced against the Plaintiff
under Indian Law or in any other manner and it also sought a relief
of permanent injunction restraining the Defendant from enforcing
judgment of Queens Bench Division.
It is in this background, the Court has noted thus :-
“14. When the foreign Court passed judgment on merits and
there is no dispute on the correctness or otherwise of
International Law ог refusal to Tecognize Indian Law and the
principles of natural justice was duly followed in the
proceedings which culminated in the judgment. Ex. D.10 reveals
that summons were properly served upon the plaintiff and the
same is accepted and acknowledged by the plaintiff. Ex. D.12 is
the Certificate of judgment under Section 10 of the Foreign
Judgments issued by the High Court of Justice, Queen's Bench
Division, London. Ex. D.12 clearly indicate that the judgment
has been served by the foreign Court in accordance with the
provisions of Part 6 of the Civil Procedure Rules 1998. As the
plaintiff failed to pay the sum decreed under the judgment and
Order passed by the High Court of Justice, Queens Bench,
Division Commercial Court, London, the defendant through his
counsel has called upon the plaintiff to make money. Though the
plaintiff has raised some allegation of fraud absolutely, there is
no material on record to prove the alleged fraud. There is no
allegations on fraud in obtaining the judgment and there is no
claim that the judgment is founded on any breach of law in force
in India. Section 14 of CPC provides presumption on the
judgment and the said presumption on the jurisdiction was not
rebutted by the plaintiff.
15. From the above facts, it is very clear that the plaintiff had
participated in the proceedings before the London Court and the
London Court has also passed the Judgment on merits. Such
being the position, it is not open to the plaintiff to relitigate and
reagitate the same factual issues already considered, decided
and given findings by the foreign Court. As there are appeal
provisions at England against the judgment of Commercial
Division which is under challenge in the instant suit, the plaintiff
ought to have filed only an appeal or review before the London
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Court and no fresh suit can be filed against the well considered
foreign judgment. In view of the same, all the issues are
answered against the plaintiff and in favour of the defendant.”
56. Much submissions have been advanced before us as regards the
effect of presumption and by this time it is a well known proposition
in law, that a presumption is not in itself evidence, but it only makes a
prima facie case for the party in whose favour it exist. It indicates
the person on whom the burden of proof lies and when a
presumption is conclusive, it is obvious on production of any other
evidence to disallow the conclusion to be drawn on the basis of a
proof of certain facts. However, when the presumption is rebuttable,
it point out to the party on whom lies the burden of bringing forward
the evidence on the facts presumed. The evidence so brought shall
determine the true nature of the facts to be established.
In the words of the Hon’ble Apex Court in S odhi Transport
8
Co. & Ors. vs. State of U.P. & Ors , ‘The Rules of presumptions are
deduced from enlightened human knowledge and experience and are
drawn from the connection, relation and coincidence of facts and
circumstances.’.
9
57. In Neeraj Dutta vs. State (Government of NCT of Delhi) ,
with reference to the presumption under the public accountability,
vigilance and Prevention of Corruption Act, 1988 (for short ‘PC Act,
1988’), the Apex Court was determining the issue, whether in
absence of evidence of the complainant/direct or primary evidence of
demand of illegal gratification, is it permissible to draw an
inferential presumption of deduction of culpability/ guilt of a public
servant under Section 7 and 13(1)(d) read with Section 13(2) based
8 (1986) 2 SCC 486
9 (2023) 4 SCC 731
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on the other evidence, with the presumption existing under Section
20 of the Act.
Recording that the presumption under Section 20 differs from
the presumption available under Section 114 of the Indian Evidence
Act, which is discretionary in nature inasmuch as it is open to the
Court to draw or not to draw a presumption as to the existence of one
fact from proof of another fact. However, in case of the presumption
under Section 20 of the PC Act, 1988, it was found that the court
must mandatorily draw such presumption, if the requisite facts are
proved for raising the same and these requisite facts being; where
any illegal gratification has been received by accused and in such a
case the presumption mandatorily has to be drawn that the person
received the thing as a motive or reward.
It is held that a presumption under Section 20 is a rebuttable
one, where accused is entitled to show that though that money was
not due to him as legal remuneration, it was legally due to him in
some other manner or that he has received it under transaction or an
agreement, which is lawful.
Thus, the burden being cast on an accused to rebut the
presumption duly raised under Section 20 of the Act, it was held that
it should not be as light as it is when presumption is raised under
Section 114 of the Indian Evidence Act, and the burden to rebut the
presumption under Section 20 of the PC Act, 1988 cannot be held to
be discharged merely by reason of a fact that the explanation offered
by the accused is reasonable and probable, but it must be shown that
the explanation offered is true.
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In this regard, the pertinent observation of the Division Bench
which would provide guidance with reference to Section 4 of the
Indian Evidence Act deserve a reproduction:
“64. Courts are authorised to draw a particular inference from a
particular fact, unless and until the truth of such inference is
disproved by other facts. The court can, under Section 4 of the
Evidence Act, raise a presumption for purposes of proof of a
fact. It is well settled that a presumption is not in itself evidence
but only makes a prima facie case for a party for whose benefit
it exists. As per English law, there are three categories of
presumptions, namely, (i) presumptions of fact or natural
presumption; (ii) presumption of law (rebuttable and
irrebuttable); and (iii) mixed presumptions i.e. "presumptions of
mixed law and fact" or "presumptions of fact recognised by
law". The expressions "may presume" and "shall presume" in
Section 4 of the Evidence Act are also categories of
presumptions. Factual presumptions or discretionary
presumptions come under the division of "may presume" while
legal presumptions or compulsory presumptions come under the
division of "shall presume". "May presume" leaves it to the
discretion of the court to make the presumption according to the
circumstances of the case but "shall presume" leaves no option
with the court, and it is bound to presume the fact as proved
until evidence is given to disprove it, for instance, the
genuineness of a document purporting to be the Gazette of India.
The expression "shall presume" is found in Sections 79, 80, 81,
83, 85, 89 and 105 of the Evidence Act.”
“70. As opposed to the expressions "may presume" and "shall
presume", the expression "conclusive proof" is also used in
Section 4 of the Evidence Act. When the law says that a
particular kind of evidence would be conclusive, that fact can be
proved either by that evidence or by some other evidence that
the b court permits or requires. When evidence which is made
conclusive is adduced, the court has no option but to hold that
the fact exists. For instance, the statement in an order of the
court is conclusive of what happened before the presiding officer
of the court. Thus, conclusive proof gives an artificial probative
effect by the law to certain facts. No evidence is allowed to be
produced with a view to combat that effect. When a statute
makes certain facts final and conclusive, evidence to disprove
such facts is not to be allowed.”
58. From reading of the aforesaid passage of the law report, it can
be inferred that when the statute gives conclusiveness to a particular
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kind of evidence and it is accepted as conclusive, the evidence to
disprove such fact is not allowed.
It is in this context, when we look at Section 13 of the CPC, a
foreign judgment is conclusive in regards to any matter directly
adjudicated upon between the same parties or between the parties
under whom they or any of them claim litigating under the same
title except in six situations enumerated in clause (a) to (f).
However, when it comes to a presumption, it is only available in
regards to the judgment being pronounced by a court of competent
jurisdiction and the presumption is not applicable to clause (b) to (f)
of Section 13. Even this presumption about the judgment being
pronounced by a court of competent jurisdiction also operate unless
the contrary appears on record and it is also permissible to displace
this presumption by proving that the court lacked the jurisdiction to
decide a particular issue/matter before it.
There is no presumption under Section 13 of CPC, as to what
is available under Section 14 and this presumption is also permitted
to be drawn with respect to clause (a) of Section 13 and, therefore, it
is pertinent to note that presumption is not available as regards the
conclusiveness of the judgment, but it is only available to presume
that the judgment is pronounced by a court of competent jurisdiction.
59. When the question is about enforcement of a foreign judgment,
under the Code of Civil Procedure, there are two methodologies
stipulated, one in case of reciprocating territories when it is
permissible to have direct execution of foreign judgments of courts
which are recognized as reciprocating territories in terms of Section
44 A of CPC. The other mode is enforcement of foreign judgments
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of courts situated in territories that are not recognized as
reciprocating territories through filing of the Suit seeking decree in
terms of foreign judgment.
Thus, the judgments of reciprocating territories are directly
executable, but in case of non-reciprocating territories, a suit shall be
filed before the Indian Court seeking a decree, which can be in terms
of foreign judgment and this distinction becomes crucial as it goes to
determine on whom the burden lies and at what stage it is permitted
to be rebutted.
In case of direct execution of foreign judgment of
reciprocating territories, the burden of proof to prove that the foreign
judgment is not conclusive, lies upon the judgment debtor in terms of
Section 44-A(3), as the provision reads thus :
“The provisions of Section 47 shall apply…… the district court shall
refuse execution of any such decree, if it is shown to the satisfaction of the court
that the decree falls within any of the exception specified in clause (a) to (f) to
Section 13.”
In case of a Suit filed under Section 13 of CPC seeking
domestic decree in terms of foreign judgment from a court falling in
non reciprocating territory, the foreign judgment is conclusive and the
burden to establish that it is not conclusive lies on the judgment
holder/decree holder.
60. The attempt of the appellant to read the presumption
contemplated under Section 14 for the purpose of Section 13 in its
entirety would be an incorrect application of law, as this
presumption under Section 14 is only permitted to be drawn in
respect of clause (a) of Section 13.
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Since we are talking about clause (a) of Section 13 and the
issue before us is whether the Moscow Court had delivered the
Judgment as it was the court of competent jurisdiction, and for this
stipulation since the Section 14 presumption is available in favour of
the foreign judgment, then it will be necessary to appreciate the
contention of the Respondent when it submit that it is not the
decision of a court which had the competence to decide.
The question is at what stage this can be gone into and in our
view, it is permissible to appreciate the same or rather it is
imperative to appreciate the same at the prima facie stage, as when
the application for interim relief is pressed into service upon
producing a certified copy of the foreign judgment, the onus shifts to
the respondent to demonstrate how the judgment is not conclusive
and because it falls in one of the exceptions carved out including the
objection that the foreign court is not the court of competent
jurisdiction.
Section 14 itself has permitted a presumption which is
available to be refuted by use of words, ‘unless the contrary appears
on record’, but such presumption may also be displaced by proving
want of jurisdiction. Definitely, the term ‘on the record’ cannot be
read in a restrictive sense, but it shall extend to the documents
produced at the time when the interim application is being decided
including the pleadings in it as well as the opposition to the said
pleadings. Similarly, the term ‘contrary appears on the record’ , is
also required to be construed in a wider sense, by having the prima
facie view of the matter and ‘unless the contrary appears on record’
permit the Court to take into consideration the pleadings at the
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interim stage as well as all such material which is pressed into service
by the respondent in establishing that the foreign judgment is not
conclusive, because it is not passed by the court of competent
jurisdiction.
It is also open for the judgment debtor to rebut/displace the
presumption by ‘proving want of jurisdiction’ and we find it difficult
to accept that it is permissible to be done only at the final stage i.e.
during the trial and not at interim stage as we do not find any
embargo in taking a prima facie view of the matter and, therefore, if
on perusal of the record or if the presumption that is created by virtue
of Section 14 is displaced by the defendant by proving want of
jurisdiction, the court shall completely ignore the same and hold on
to the ‘conclusiveness’ of the judgment.
61. In Marine Geotechnics LLC Vs. Coastal Marine Construction
10
and Engineering Limited , the learned Judge of this Court
appreciated the scheme of Section 13 and described the same in the
following words :-
“Section 13 enunciates the well established principle of private
international law that a court will not enforce a foreign judgment that
is not of a competent court. What that section provides is, therefore,
substantive law, not mere procedure. Section 13 makes no distinction
between judgments of a court in reciprocating territory and those of
courts in non-reciprocating territories. That distinction comes only in
Section 44A, an independent provision that says that a decree of a
court in a reciprocating state may be put into execution in India. A
decree from non-reciprocating state cannot be so executed.”
10 (2014) SCC OnLine Bom 309
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Decrees of both reciprocating and non-reciprocating territories
must, however, satisfy the test of Section 13 with the only difference
being at what stage and on whom the burden lies.
When a foreign judgment is not on merits and violates any of
the provisions of sub-clauses (a) to (f) of Section 13 it is not
conclusive, even though it may be in accordance with the domestic
procedure of the country in which it was passed and is valid and
enforceable in that country.
In short, if it falls under any clauses (a) to (f) of Section, is it
not conclusive as to any matter thereby adjudicated upon and the
judgment is open to collateral attack on the grounds mentioned in the
clauses of Section 13.
When a party is armed with a decree of a court in a non-
reciprocating foreign territory, it has an option to file a Suit based on
the foreign decree in a domestic Indian court of competent
jurisdiction, but it is not open for it to simply execute such a foreign
decree, but it can execute the resultant domestic decree. To obtain
that decree, it has to demonstrate that the foreign decree satisfy the
test of Section 13, so that it is considered as conclusive. However, if
the decree is from the Court in a reciprocating territory, then it can
straightaway put it into execution, following the procedure prescribed
under Section 44A and Order XXI Rule 22 of CPC and the judgment
debtor can resist the decree by raising the grounds under Section 13.
If he is unable to do so, or fail in his attempt, the decree will be
executed as if the decree was passed by a competent court in India.
11
62. In Elis Jane Quinlan Vs. Naveen Kumar Seth , another
learned Single Judge, (Justice Sandeep Marne) was confronted with
11 2026 SCC OnLine Bom 1011
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the scope of the power to be exercised by the Executing Court while
executing the decree passed by a Foreign Court in reciprocating
territory under Section 44A of the Code and the question arose
whether he can frame issue and direct parties to lead evidence while
conducting an inquiry into existence of exceptions specified in
clauses (a) to (f) in Section 13 of the Code.
The petitioners urged that neither the issues could be framed
nor the evidence be allowed to be led when decree is to be executed
under Section 44A of the CPC, as a distinction was drawn between a
decree passed by a Court in a reciprocating territory and non-
reciprocating territory, and it was urged that the conduct of full-
fledged trial in execution proceeding by framing of issues and leading
of evidence would completely convert the execution proceedings into
a suit filed on judgment of foreign court in non-reciprocating
territory.
Reliance was placed upon Section 14 of the Code which
created a presumption as to foreign judgment and unless contrary
appears on record, it was contended that presumption existed that the
foreign judgment was pronounced by a court of competent
jurisdiction, although the presumption could be displaced by proving
want of jurisdiction.
In this regard, the following observations of the learned Judge
are relevant to note :-
“24) Thus, there is a vital distinction between the decree passed
by the foreign court in non-reciprocating territory and a decree
passed by the foreign court in reciprocating territory. In the
former case, the decree is not directly executable, and it is
necessary to institute a suit on foreign judgment to secure a
domestic decree on the foreign judgment. However,in the latter
case, the decree passed by the foreign court in reciprocating
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territory can be directly executed by the District Court. However,
even while executing the decree of a foreign court in
reciprocating territory, the exceptions specified in clauses (a) to
(f) of Section 13 of the Code continue to apply and the District
Court can refuse execution if the decree demonstrably falls in
any of the exceptions specified in clauses (a) to (f) of Section 13
of the Code.
25) Thus the onus to prove existence of exceptions specified in
clauses (a) to (f) of Section 13 of the Code in a suit filed for
decree on foreign judgment passed in non-reciprocating territory
is on the Plaintiff filing such suit whereas in execution
proceedings filed under Section 44A for execution of decree
passed by foreign court in reciprocating territory such onus is on
the judgment-debtor.
63. When the test for granting an injunction in exercise of Order
XXXIX Rule 1(b) of CPC, is based on the satisfaction of triple test
of prima facie case, balance of convenience and irreparable loss, and
if in a Suit filed seeking a decree based upon the foreign judgment,
such an application is filed, in our view, it would be unjust for the
parties to postpone the examination of the question as to whether the
foreign court is a court of competent jurisdiction. In our view, in
order to find out a prima facie case for grant of injunction, a prima
facie opinion must be formed, which would involve the exercise of
discretion by the court when it comes to grant of relief under Order
XXXIX Rule 1(b) of the CPC.
A suit filed under Section 13 of CPC read with Section 14 is
no exception to the general principle of law governing injunctive
reliefs under Order XXXIX Rule 1 of CPC, which include a prima
facie test, and hence a presumption shall be permitted to be rebutted
even at interim stage. Postponing the determination of question
whether the foreign court is a court of competent jurisdiction to the
stage of trial would cause huge prejudice to the judgment debtor
/respondent who would have to accept an order of injunction/ restrain
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only on the presumption that the judgment of the foreign court has
weightage of conclusivity. However, if on culmination of trial the
Plaintiff do not succeed in proving conclusiveness, and the defence
was raised that the court delivering the judgment was not of
competent jurisdiction, but if the injunction continued to operate
against the defendant till this final conclusion is arrived, it would
cause irreparable loss, which at times may be irreversible.
Therefore, whenever an opportunity comes for consideration of
grant of injunction or any interim order pending the suit, the
parameters which are applicable under Order XXXIX Rule 1(b)
must apply with equal force and the court shall appreciate the prima
facie case, even at the stage of grant of injunction, whether the
judgment/ decision of the foreign court is conclusive or not on the
ground that it is not delivered by the court of competent jurisdiction.
It is for this reason, we are not satisfied with the submissions
advanced on behalf of the appellant and we find that the learned
Judge has rightly treaded the path, when she has expressed that in the
wake of the doubt that has been created whether the decision of the
Moscow court was conclusive or not as in light of the existence of
arbitration agreement between the parties, the parties had already
resorted to ICC proceedings which were continued for last 3 years
and on the date when the Moscow Court was approached the
proceedings were still in progress.
64. Reliance placed by Mr.Andhyarujina on the precedents
involving the judicial interpretation of ‘shall presume’ in respect of
several other statutes including the Trade Marks Act, 1999,
Negotiable Instruments Act, 1881 and Section 20 of the Prevention of
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Corruption Act, 1988, by placing reliance upon the authoritative
pronouncement interpreting the said wording, according to us, is not
applicable while interpreting Sections 13 and 14 of the CPC, as the
meaning of a term/phrase used in provision in a statute shall
definitely receive interpretation strictly in accordance with the object
underlying the said statute as well as the provision by itself and the
purpose which the provision serve in a statute.
As far as Negotiable Instruments Act, 1881 is concerned, the
presumption is applied at a stage when the process is issued and
therefore, it is capable of being rebutted at a trial stage, as the
Magistrate is only to be satisfied on the basis of complaint and
examination of the complainant. Similarly, comparison with the use
of the words ‘shall presume’ under the Trade Marks Act, reliance
upon the Full Bench decision of this Court in Lupin (supra), to the
effect that if the words of the statute are precise and clear, then the
statute must speak for itself and the use of the word ‘ prima facie ’ in
Section 31, shall mean registration which will be prima facie
evidenced is most apt.
65. The Full Bench in Lupin (supra) while dealing with the
presumption under Section 31 of the Trade Marks Act, 1958
regarding prima facie evidence of the validity of the Trade Mark,
noted that it operated both, during pendency of the Suit and during
pendency of the rectification proceedings. However, with the change
brought about by 1999 Act, it provided that while the Suit for
infringement of trade mark may be pending before the District Court
or High Court, where the defendant questions the validity of
registration of plaintiff’s trademark, such question shall be finally
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determined only on application for the rectification of the register to
be made by the Appellate Board and this question could be only
answered by the Intellectual Property Appellate Board and not by
Civil Court or High Court trying the suit for infringement. In light of
the scheme of the statute including Section 28 which confer
substantial rights, but which was made subject to other provisions of
the Act, it was noted that the registration of the trade mark shall, if
valid, give to the registered proprietor of the trade mark, the
exclusive right to the use of the trade mark in relation to the goods or
services in respect of which the trade mark is registered and to obtain
relief in respect of infringement of trade mark in the manner provided
by the Act.
Since Section 134 provided the forum for obtaining the relief
of registered trade mark, and such forum being the Court not inferior
to a District Court having jurisdiction to try the suit, it is in this
peculiar background the words ‘if valid’ were interpreted by applying
the basic rule of interpretation of the statute, that if the words of the
statute are precise and clear, then nothing more is required to be
looked into to give effect to their natural meaning and definitely, the
external and internal aids cannot be invoked and in such case, statute
speaks for itself.
It is in this context, the use of the word ‘ prima facie ’ in Section
31 was construed to mean registration which will have prima facie
evidence and the Full Bench observed that the expression ‘ prima
facie ’ is too well settled to be expounded and to substitute the words
with conclusive evidence would be re-writing the Section. The Bench
held that if the registration was to be conclusive, it was not necessary
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to introduce the phrases ‘if valid’ and ‘ prima facie ’ and various
Courts had given plain meaning to the phrases that the registration
will be prima facie evidence of its validity and not a conclusive
evidence.
In light of this position, the Full Bench made the following
observation in paragraph no.35.
“35. The words "if valid" in Section 28 and "prima facie
evidence of title" in Section 31 support the Defendant's case that
the defence of invalidity of registration of the Plaintiff's trade
mark can be considered at the interlocutory stage. As per the
settled legal position, a Court hearing and deciding an
interlocutory application for injunction during the pendency of
the suit is required to consider: (i) prima facie case; (ii) balance
of convenience; and (iii) where an irreparable injury and
injustice would be caused to the Plaintiff if an interim injunction
is not granted.”

66. A careful reading of the aforesaid decision, would reveal that,
the Full Bench held that the presumption is in fact, rebuttable even at
interim stage as in paragraph no.34, the Bench observed thus :-
“34. While we agree with Dr.Tulzapurkar for the Plaintiff that
the object of providing for registration of a trade mark and
recognising the exclusive right of the registered proprietor to use
the registered trade mark in order to prevent others from using
an identical or deceptively similar trade mark is to obviate the
necessity of proving in each and every case the Plaintiff's title to
the mark, its distinctiveness and its reputation, we are of the
view that the object has been achieved by raising a presumption,
and a strong presumption in law, as to the validity of registration
of the mark.
The burden is therefore cast, and a heavy burden at that, on the
Defendant to question the validity of registration. While such a
challenge can finally succeed only in a rectification proceedings
which now lie before the Intellectual Property Appellate
Tribunal (IPAT), we do not find any express or implied bar in the
Trade Marks Act to completely take away the jurisdiction and
power of the Civil Court to consider the challenge to the validity
of registration of the trade mark at the interlocutory stage by
way of a prima facie finding on such issue.”
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67. In such circumstances, Mr. Nankani would submit that the use
of the words ‘prima facie evidence of validity’ is distinct than the
words ‘shall presume’ as used in Section 14 and the absence of the
words ‘ prima facie ’ appearing in Section 14 do not make out the law
laid down in Lupin (supra) inapplicable, because in any case, the
prima facie test is automatically applicable once a temporary
injunction under Order XXXI of Rule 1 of CPC is sought in a suit
filed on foreign judgment. Whether or not, a parlance is to be drawn
between the provisions of the Trade Marks Act and Section 14 of the
CPC, one thing is appearing before us with clarity that, the said
provision shall be interpreted by its own language, by keeping in
mind the object of the legislature and the provision itself has
contemplated the circumstances when the presumption can be
rebutted and even the rebuttal is also permitted from the record.
68. We find fallacy in the argument of the appellant as accepting
the submission of Mr. Andhyarujina would mean that in every case of
foreign judgment placed before an Indian Court, where from a court
of reciprocating or non-reciprocating territory, the grant of interim
relief would automatically flow, as the presumption is permitted to be
rebutted only at the trial stage.
By applying such an interpretation in every case, interim
injunction shall automatically follow and this would definitely disrupt
the exercise of civil court under Order XXXIX Rule 1(b) to assess
whether a prima facie case is made out.
Apart from this, laying down of such a proposition would be
antithetical to vital distinction between foreign judgments from
reciprocating and non-reciprocating territories, where the former are
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directly executable while the latter require the entire trial to be found
conclusive and thereafter executable.
69. Therefore, in the facts of the case, applying the principle laid
12
down in Wander Ltd and Anr Vs. Antox India P Ltd , we do not
find any scope for interference in the decision of the learned Single
Judge, who has rightly opined that the judgment of the Arbitrazh
Court, Moscow giving rise to doubt and in absence of prima facie
case, balance of convenience and irreparable loss being established
by EuroChem, an injunction shall not automatically flow.
We must also hold that there is no presumption under Section
13 of the Code of Civil Procedure and therefore, the appellant must
make out a prima faci e case for grant of relief under Order XXXIX
Rule 1(b) of CPC, and since the burden of proving that the Moscow
judgment is conclusive lies on the appellant, as Moscow Court is
situated in a non-reciprocating territory with the limited presumption
under section 14 being available only qua clause (a) of Section 13,
which is also rebuttable, and in our view, even at the interim stage,
and since the respondent has produced sufficient material to call in
question its conclusivity, we find that the learned Single Judge as
rightly exercised the discretion available, and refused the injunction
as the plaintiff/appellant failed to make out a case under Order
XXXIX Rule 1(b) of CPC.
As a result, finding no merit and substance in the Appeal, the
same is dismissed. No order as to costs.
(MANJUSHA DESHPANDE, J.) (BHARATI DANGRE, J.)
12 1990 (Supp) SCC 727
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70. After the judgment is pronounced, the learned Senior Counsel
Mr. Andhyarujina seek its stay. The said request is strongly opposed
by learned Senior Counsel Mr. Nankani.
In our view, the said request must receive rejection as the
judgment has exhaustively dealt with the issues raised in the Appeal
and since we find no reason to interfere with the order passed by the
learned Single Judge, who has refused to grant interim injunction by
taking a prima facie view of the matter at the interim stage and
deemed it appropriate even to consider the conclusiveness of the
judgment of Arbitrazh Court. We have expressed our agreement with
the view adopted and have refused to entertain the Appeal.
71. As we have dismissed the Appeal by upholding the order
passed by the learned Single Judge, the relief sought in Interim
Application (L) No. 21931 of 2026 taken out by the Appellant/
Applicant, praying for extension of the interim order granted is also
dismissed as the Appeal is now decided on merits and there is no
cause for us to grant the said prayer, apart from the fact that upon a
request being made to stay the judgment pronounced by us, we have
declined the request to stay the effect of the judgment pronounced by
us today. IA (L) No. 21931 of 2026 is therefore disposed of.
72. Interim Application (L) No. 23525 of 2026 is taken out by the
Respondents seeking deposit of an amount as security for costs, but
learned Senior Counsel Mr. Nankani under instructions state that he
shall press the relief in the application before the learned Single
Judge, as and when the situation demands. Hence, IA (L) No. 23525
of 2026 is also disposed of.
(MANJUSHA DESHPANDE, J.) (BHARATI DANGRE, J.)
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