After 3 Years Of ICC Arbitration, Bombay HC Refuses EuroChem’s Asset Freeze On Moscow Judgment, Says Court Jurisdiction Can Be Tested At Interim Stage

In brief

The question

Whether the Moscow Arbitrazh Court was a court of competent jurisdiction, or whether the presumption under Section 14 of the CPC was rebutted by the material on record.

The court held

The Court answered the central questions against EuroChem and held that the Section 14 presumption could be rebutted at the interim stage and did not displace the ordinary requirements for an injunction.

It also directed

Finding no basis to interfere with the Single Judge’s discretionary refusal of interim relief, it dismissed the appeal without costs.

The application to extend interim relief was also dismissed; the application concerning security for costs was disposed of after Tecnimont stated that it would pursue that relief before the Single Judge if necessary.

01Facts

EuroChem sued in India for a decree based on a Moscow Arbitrazh Court judgment awarding it damages, interest and other sums against Tecnimont and its Russian subsidiary.

¶ 4–14

The judgment arose from disputes under three contracts containing ICC arbitration clauses, with London as the seat and English law governing two of the contracts.

¶ 4–14

The parties had participated in ICC arbitration for about three years, and EuroChem had filed a counterclaim there.

¶ 4–14

In its Indian suit, EuroChem sought interim protection over Tecnimont’s Indian assets. The Single Judge refused the injunction, finding the Moscow judgment’s conclusiveness and the Russian Court’s competence doubtful at the interim stage. EuroChem appealed.

¶ 4–14

02Issues

i.Whether the Moscow Arbitrazh Court was a court of competent jurisdiction, or whether the presumption under Section 14 of the CPC was rebutted by the material on record.

¶ 21(a)

ii.Whether the Section 14 presumption could be rebutted at the interim stage or had to await trial.

¶ 21(b)

iii.Whether that presumption relieved EuroChem of the obligation to satisfy the requirements for interim relief under Order XXXIX, Rule 1(b), CPC.

¶ 21(c)

iv.Whether the Single Judge’s view that the Moscow judgment was not conclusive, having regard to Sections 13(a) and 13(d), warranted interference.

¶ 21(d)

v.Whether EuroChem had established grounds for appellate interference with the refusal of an injunction.

¶ 21(e)

03Law Applied

Sections 13 and 14 of the Code of Civil Procedure, 1908 govern the conclusiveness of foreign judgments and the presumption of jurisdiction: Section 13 makes a foreign judgment conclusive as to matters directly adjudicated, subject to its specified exceptions, while Section 14 creates a rebuttable presumption only that the foreign judgment was pronounced by a court of competent jurisdiction.

¶ 16–18, 53–63, 69

That presumption may be displaced where the contrary appears on the record or want of jurisdiction is proved, including at the interim stage when the court considers an injunction.

¶ 16–18, 53–63, 69

A party seeking interim relief under Order XXXIX, Rule 1(b), CPC must independently establish a prima facie case, balance of convenience and irreparable injury.

¶ 16–18, 53–63, 69

For a judgment from a non-reciprocating territory, the party suing on the judgment bears the burden of establishing its conclusiveness.

¶ 16–18, 53–63, 69

Provisions in the judgment · 12 · Linked ones open on LawLens

Commercial Courts Act, 2015 Section 13

Code of Civil Procedure, 1908 Section 2 Section 13 Section 14 Section 47

Bharatiya Sakshya Adhiniyam, 2023 Section 21

Prevention of Corruption Act, 1988 Section 7 Section 13 Section 20

Trade Marks Act, 1999 Section 28 Section 31 Section 134

04Reasoning

The Court held that Section 14 did not establish the Moscow Court’s jurisdiction conclusively and could be rebutted on the material available at the interim hearing.

¶ 23–38, 60–69

The contracts expressly provided for ICC arbitration seated in London and excluded recourse to other courts; EuroChem had participated in the arbitration and pursued a counterclaim there for years.

¶ 23–38, 60–69

The Moscow Court’s reliance on Article 248.1 was, in the High Court’s view, insufficiently supported: the Moscow judgment did not adequately examine whether sanctions actually prevented access to justice, and it did not properly address the parties’ arbitration agreement.

¶ 23–38, 60–69

The High Court also considered the refusal to allow a defence and the treatment of the request for expert examination as material raising a prima facie concern about natural justice.

¶ 23–38, 60–69

Given these matters, the Moscow judgment’s conclusiveness was sufficiently challenged at the interim stage. EuroChem also failed independently to establish the requirements for an injunction; the foreign judgment did not make interim relief automatic.

¶ 23–38, 60–69