Herbert Smith Freehills has issued the latest edition of its India arbitration e-bulletin.

In this issue we consider various court decisions, which cover issues such as the constitutional validity of s87 of the Arbitration Act, setting aside an award on the grounds of bias, and the time limits surrounding enforcement of awards. In other news, we consider the latest developments regarding COVID-19, the UAE becoming a reciprocating territory for the enforcement of judgments, as well as India-related bilateral investment treaty news and other developments. Continue reading


In Seniority Shipping v City Seed Crushing Industries, “Joker”, [2019] EWHC 3541 (Comm), the English Commercial Court granted an anti-suit injunction restraining proceedings brought by City Seed before a Bangladeshi court in breach of an arbitration agreement incorporated by reference in the bills of lading under which the dispute arose (the “Bills of Lading”). The Court first found that the arbitration agreement had been effectively incorporated from the relevant voyage charter and considered the law applicable to this issue of incorporation. The Court then concluded that, despite some steps taken by Seniority Shipping in the foreign proceedings, there was no good reason not to grant the anti-suit injunction.


Seniority Shipping Corporation (“Seniority Shipping”) were owners of the m.v. Joker, a ship which collided with a tanker within Bangladesh waters, causing damage to cargo. City Seed Crushing Industries (“City Seed”) – as holder of the Bills of Lading and the intended recipient of the cargo – then filed a suit in Bangladesh (the “Cargo Claim”). The Bangladeshi court ordered the arrest of the ship.

Seniority Shipping subsequently issued proceedings in the English Commercial Court and filed an application for an anti-suit injunction in respect of the Cargo Claim on the basis that any claims arising under or relating to the Bills of Lading should have been referred to arbitration. Seniority Shipping argued that:

  • the Joker was operating under a time charter between Seniority Shipping and DHL Project & Chartering Ltd (“DHL”) and a voyage charger between DHL and COFCO (the “Voyage Charter”).
  • Clause 6 of the Voyage Charter, entitled “Law & Arbitration Clause” provided that: (a) the Voyage Charter was governed by English law; and (b) disputes which have not been settled shall be referred to arbitration in London in accordance with the small claims procedure of the LMAA.
  • The Bills of Lading incorporated this arbitration agreement by reference. Based on the Congenbill 1994 form (a standard form designed to be used with charter-parties), the Bills of Lading provided that “all terms and conditions… of the Charter Party [i.e. the Voyage Charter], dated as overleaf, including the Law and Arbitration Clause, are herewith incorporated” (emphasis added).

The Commercial Court granted an interim injunction restraining City Seed from continuing or further prosecuting the Cargo Claim. While Seniority Shipping participated in the Cargo Claim before the Bangladeshi court (discussed below), City Seed did not participate in the action before the Commercial Court.

The Court’s decision

In its decision on the question of a final anti-suit injunction, the Court considered two issues: (a) was the incorporation of the arbitration agreement in the Bills of Lading effective; and (b) if so, should the Court grant an anti-suit injunction restraining the Cargo Claim in breach of the arbitration agreement?

Was the incorporation of the arbitration agreement effective?

The Court began its analysis by determining the law applicable to the issue of incorporation. Applying English conflict of laws rules, the Court noted that the question of whether the Bills of Lading incorporated the express choice of English law from the Voyage Charter would typically be governed by English law by virtue of Article 10(1) of the Rome I Regulation. This Article 10(1) provides that “the existence and validity of a contract, or of any term of a contract, shall be determined by the law which would govern it under this Regulation if the contract or the term were valid” (emphasis added). However, Article 10(1) is subject to Article 10(2) of the Rome Regulation (addressed below).

If the choice of English law was incorporated from the Voyage Charter, the question whether the arbitration clause from the Voyage Charter was incorporated in the Bills of Lading would also be governed by English law (based on conflict of law rules under English common law as the Rome I Regulation does not apply to arbitration agreements.)

The Court found that if the issue of incorporation was governed by English law, it could “straightforwardly” conclude that the arbitration clause from the Voyage Charter had been incorporated in the Bills of Lading: the Bills of Lading expressly incorporated the “Law and Arbitration Clause” from the Voyage Charter and that was sufficient as a matter of English law.

Therefore, the only question was whether Article 10(2) of the Rome I Regulation precluded the application of English law to the issue of incorporation. In essence, pursuant to Article 10(2), the effectiveness of the incorporation of the choice of English law from the Voyage Charter would be determined by reference to the law of Bangladesh (i.e. the law of the country in which City Seed has habitual residence) if it was unreasonable to apply English law to that question.

The Court found that it was “eminently reasonable and in accordance with the ordinary expectations of international trade” to determine the effectiveness of the incorporation by reference to English law. The Court explained that City Seed, as a buyer who wished to leave to its seller responsibility for arranging carriage, had full freedom to contract and specify the terms on which the seller should cause it to become party to the Bills of Lading with Seniority Shipping.  In the absence of evidence to the contrary, the Court considered that the Bills of Lading, which were in a very well-known, widely used form, may be taken to have conformed with City Seed’s contractual requirements. If City Seed did not wish to refer disputes to London-seated arbitration or agree to any other terms of the Bills of Lading or the Voyage Charter whose terms were incorporated in the Bills of Lading, it was free to choose to contract on that basis.

In conclusion, the Court held that the incorporation of the arbitration agreement in the Bills of Lading was effective and City Seed was therefore bound to refer any disputes relating to the Bills of Lading (in this case, concerning the damage to the cargo) to London-seated arbitration.  It also followed that the Cargo Claim – the proceedings before the Bangladeshi court – was in breach of this arbitration agreement.

Should the Court issue an anti-suit injunction restraining the Cargo Claim?

It is well settled that, where foreign proceedings are brought in breach of a London arbitration agreement, the Court would enforce the negative aspect of that arbitration agreement (i.e. the obligation on the parties not to bring such foreign proceedings) by granting an anti-suit injunction unless there are good reasons not to restrain the foreign proceedings (including if they are covered by the intra-EU Brussels Regulation). Referring to The Angelic Grace, [1995] 1 Lloyd’s Rep 87, the Court considered that it would be right to restrain the Cargo Claim unless (a) Seniority Shipping had allowed the Cargo Claim to proceed so far and/or had participated in it to such an extent that it would now be inappropriate to interfere, or (b) there was some other good reason why City Seed should not be restrained.

As to (b), the Court held that the burden of establishing good reason lay upon City Seed.  By choosing not to participate in the injunction proceedings, City Seed had chosen not to seek to discharge the burden.  Nevertheless, the Court did briefly consider whether the possibility that City Seed would not comply with the anti-suit injunction was a good reason not to grant it (on the basis that equity would be acting in vain). The Court concluded that this should not affect its analysis because: (i) the fact that City Seed would not comply with the anti-suit injunction could not be inferred simply from its refusal to participate in the proceedings and/or other facts; and (ii) the Court should not lightly hold that it would be acting in vain if it granted the anti-suit injunction – the prospect of contempt proceedings against City Seed, its directors and/or insurers should not be assumed to be without value.

As to (a), the Court considered why, and the extent to which, Seniority Shipping had participated in the Cargo Claim before the Bangladesh Court. The Court found that while there was not complete inactivity on Seniority Shipping’s part before the Bangladeshi Court, Seniority Shipping’s participation did not advance the Cargo Claim to such an extent as to make it now inappropriate to interfere.  In particular, the Court noted:

  • Seniority Shipping issued proceedings in the English court and applied for an anti-suit injunction “perfectly promptly” (as the Cargo Claim was filed on 14 May 2019 and the English court proceedings were issued on 3 June 2019).
  • Seniority Shipping had neither done nor allowed anything to be done to advance the proceedings before the Bangladesh Court. Its participation was restricted to steps which were reasonably required to free the Joker from arrest, which arrest was a result of a breach of contract by City Seed.
  • The steps taken by Seniority Shipping could not be regarded as voluntary submission to the jurisdiction of the Bangladeshi Court.
  • Those steps were taken by Seniority Shipping alongside “clear and repeated protest” that City Seed was obliged to refer the matter to arbitration.
  • Seniority Shipping’s three appearances before the Bangladesh Court to obtain extensions of time to file a Written Statement of Defence should not have been necessary and “were capable in principle, and if judged in isolation, of amounting to a voluntary submission … to the jurisdiction of the Bangladesh court”. However, in the context of the other steps Seniority Shipping had taken (the bullet points above), the Court did not view Seniority Shipping’s appearances as amounting to voluntary submission.

In conclusion, the Court found that there was no good reason not to restrain the foreign proceedings and granted a final anti-suit injunction.


The decision in Joker is a helpful reminder that where foreign proceedings are brought in breach of a London arbitration agreement, the English courts may be prepared to grant an anti-suit injunction. More significantly, the decision provides useful guidance for applicants faced with foreign proceedings and seeking anti-suit injunctions:

  • An application for an anti-suit injunction should be made promptly. We have previously covered cases (see, for example, here and here) where English courts have denied delayed applications for anti-suit injunctions.
  • Careful consideration should be given to whether any steps taken in the foreign proceedings may amount to voluntary submission to the jurisdiction of the foreign court.

As we have previously noted, if the claimant in the foreign proceedings does not voluntarily comply with the English court’s anti-suit injunction, and the applicant is unsuccessful in challenging jurisdiction in the foreign court, the applicant may wish to consider commencing arbitration proceedings (including, potentially for breach of the arbitration agreement) in order to obtain an award. This may be appropriate where the claimant in the foreign proceedings has assets in the UK or in another New York Convention country other than that in which the vexatious claims are brought.

For further information, please contact Nicholas Peacock, Partner, Divyanshu Agrawal, Associate, or your usual Herbert Smith Freehills contact.

Nicholas Peacock

Nicholas Peacock
+44 20 7466 2803

Divyanshu Agrawal

Divyanshu Agrawal
+44 20 7466 2593


In this issue we consider India-related investment treaty developments (“BITs“), starting with the signing of India’s new BITs with Belarus and Taiwan.

We then consider new investment treaty claims commenced by Indian investors against Saudi Arabia and Macedonia, as well as new claims commenced against India, including the potential claim brought by a Portuguese investor and the new claim under the India-Korea BIT brought by KOWEPO.

We also cover the developments in existing BIT claims, such as India’s first win in a BIT claim and the settlement negotiations in the Nissan BIT claim against India.

New Treaties

  • India signs new BITs with Belarus and Taiwan and agrees joint interpretative statement with Colombia and Bangladesh.

As we previously reported in April 2015 and January 2016, the Government of India published a new model BIT (the “Model BIT“) to serve as a template for future BIT negotiations. Later in 2017, India decided to terminate 58 of its existing BITs.  The Model BIT limits the protections afforded to investors perhaps as a reaction to the number of investor claims against India in recent years.

India has since entered into a BIT with Belarus in September 2018 (available here) and with an investment promotion organisation in Taiwan in December 2018 (available here). Both BITs largely follow the text of the Model BIT including in the definitions of ‘investor’ and ‘investment’, exclusion of the fair and equitable treatment standard and detailed requirements on exhaustion of local remedies.

The “India-Taiwan” BIT is between the India Taipei Association and the Taipei Economic and Cultural Centre rather than between two nation states.  India’s Department of Economic Affairs currently notes that draft BITs based on the Model BIT are “under discussion” with a number of countries including Switzerland, UAE, Hong Kong, Israel, Mauritius and Iran.

Separately, in 2016, India circulated a proposed joint interpretative statement to be agreed with the counterparties to its existing BITs that were not then capable of being terminated (25 countries), seeking to align those BITs with the Model BIT.  In October 2018, India and Columbia concluded a joint interpretative statement regarding the India-Columbia BIT of 2009.  India had previously concluded a similar interpretative statement with Bangladesh in 2017.

New BIT Claims

  • Indian investor Khadamat Integrated Solutions Private Limited pursues BIT claim against Saudi Arabia

As reported here, Indian investor Khadamat Integrated Solutions Private Limited has brought a claim against Saudi Arabia under the India-Saudi Arabia BIT. It has been reported that the dispute concerns a large-scale development project in Saudi Arabia but no further details are available. The Permanent Court of Arbitration (“PCA“) is administering the claim with a tribunal already formed under the UNCITRAL rules. Eric A. Schwartz has been appointed as chair by the co-arbitrators to sit alongside Franco Ferrari (nominated by Khadamat) and Rolf Knieper (nominated by Saudi Arabia).

  • Tribunal constituted in a BIT claim by Indian investors against Macedonia

According to this report, the tribunal in a BIT claim by Indian investors against Macedonia has been constituted, with the President of the International Court of Justice appointing Nigerian arbitrator Funke Adekoya SAN as chair to sit alongside Robert Volterra (Indian investors’ nominee) and Brigitte Stern (Macedonia’s nominee).  The claim was allegedly commenced in 2017 by Gokul Das Binani and Madhu Binani under the India-Macedonia BIT of 2008. The claim reportedly alleges that Macedonia illegally expropriated mining concessions awarded to a London-based company (in which the investors were the only shareholders) and subsequently auctioned it to a Bulgarian company.  The arbitration is seated in Switzerland and governed by the UNCITRAL Rules.

  • India may face new claim from Portuguese investor

As reported here, the Indian government revealed that it may be facing a claim from a Portuguese investor currently identified only as Mascarenhas. While it is known that Mascarenhas is bringing the claim under the India-Portugal BIT, the details of the dispute remain undisclosed.

Although the India-Portugal BIT was terminated by India as of March 2017 alongside 58 other BITs (as we previously reported here), the India-Portugal BIT contained a 15-year sunset clause which protects investments made in India prior to the BIT’s termination date. Thus, while there are only very limited details of the claim, it is a useful reminder that claims may yet arise under the cancelled BITs provided they fall within the sunset provisions of the relevant treaty.

  • KOWEPO sends a notice of dispute under the India-Korea BIT and / or the Comprehensive Economic Partnership Agreement (CEPA) between India and Korea

According to this report, Korea Western Power Company (KOWEPO) has sent a notice of dispute to the Government of India in relation to a gas-based power plant in the state of Maharashtra.  KOWEPO, which owns 40% in Pioneer Gas Power Limited, the operator of the plant, has alleged that India has failed to honour its fuel supply commitments to the plant and has reportedly claimed US$ 400 million in damages.

Two treaties govern India’s obligations towards Korean investors – the India-Korea BIT of 1996 (for investments made prior to the termination of the India-Korea BIT on 22 March 2017) and the 2009 Comprehensive Economic Partnership Agreement (CEPA) between India and Korea.  It is unclear whether KOWEPO has initiated arbitration under one or both treaties.  While the substantive investment protection standards in these treaties are different, both treaties provide for a cooling off period of at least six months from the date of the notice of dispute.  If the dispute is not resolved in this period, KOWEPO is entitled to commence arbitration proceedings against India.

Developments in Existing BIT Claims

  • Tribunal awards India its first public win in a BIT claim, dismissing claims of French investor

An UNCITRAL arbitral tribunal reportedly dismissed a US$ 36 million claim by a French investor, Louis Dreyfus Armateurs SAS (“LDA“), against India under the 1997 France-India BIT. LDA claimed that India had breached its treaty commitment to provide full protection and security, in particular as regards LDA’s Indian joint venture employees and their families, and was also in breach for its failure to follow Indian court orders.  The tribunal reportedly found that it lacked jurisdiction over LDA’s claims since the BIT requires that an investor in an indirect investment hold at least 51% ownership in order to fall within the BIT’s protection.  LDA’s shareholding did not satisfy this threshold.  The award is not public at this time, but press reports state that LDA has also been ordered to pay approximately US$ 7 million in respect of India’s legal expenses.

A more detailed discussion of the decision is available on our blog here.

  • Tribunal in Nissan BIT case dismisses India’s objections and upholds jurisdiction

According to this report, the claim brought by Nissan under the Japan-India Comprehensive Economic Partnership Agreement (CEPA) is now progressing to the merits phase, with the tribunal upholding jurisdiction in a now public decision which can be found here.

As we had previously reported, the claim relates to withdrawal of incentive payments allegedly promised by the state government of Tamil Nadu pursuant to a 2008 agreement under which Nissan established a manufacturing facility in Chennai.

Despite settlement talks between the parties (which we previously reported on here), and the efforts by the state of Tamil Nadu to prevent the arbitration proceedings from happening (see here), the PCA tribunal applying the UNCITRAL rules has dismissed most of India’s objections to the tribunal’s jurisdiction.

India had objected to the tribunal’s jurisdiction on five grounds. First, it objected to the default appointment by the PCA of India’s nominee and the tribunal chair. Second, India claimed that Nissan had triggered a fork-in-the-road clause which barred it from bringing its claim to international arbitration. Third, India asserted that the claim was essentially contractual in nature, which meant the seat of the arbitration should have been Chennai, as stipulated in the 2008 agreement signed between the parties. Fourth, India alluded to CEPA’s three-year time bar, and contended that Nissan had first acquired knowledge of the alleged breach and loss three years prior to filing its claim. Finally, India argued that Nissan’s claim was barred entirely due CEPA’s exception for taxation measures.

The tribunal dismissed India’s first four objections (see detailed discussion here), and deferred its final objection to the merits phase, with the merits hearing set for February 2020. That jurisdictional award is now being challenged in the Singapore International Commercial Court.

  • Delhi High Court refuses to grant an anti-arbitration injunction restraining a BIT claim against India

In 2013, Khaitan Holdings brought a claim against India under the India-Mauritius BIT.  The claim arose from the Indian Supreme Court’s 2012 decision (and subsequent decisions of regulatory bodies in India) to cancel 2G spectrum licenses granted by the Government of India (the “GOI“), including one granted to Loop Telecom of which Khaitan Holdings was a shareholder.  The tribunal was not fully constituted until 2018 when Khaitan Holdings applied to the Permanent Court of Arbitration for the appointment of the presiding arbitrator to sit alongside Francis Xavier SC (Khaitan Holdings’ nominee) and Brigitte Stern (the GOI’s nominee).

The GOI then applied for an anti-arbitration injunction on the ground that (among other things) Khaitan Holdings is not a genuine and bona fide investor under the BIT as it is effectively controlled by Indian citizens.  In a decision of 29 January 2019, the Delhi High Court dismissed the application on the basis that the GOI’s arguments were jurisdictional in nature and ought to be raised before, and decided by, the tribunal.  The court expressly upheld the principle of kompetenz-kompetenz. In doing so, it relied on the earlier Delhi High Court decision in Union of India v Vodafone (which we covered on our blog here).

  • Indonesia defeats BIT claim by Indian Metals & Ferro Alloys Ltd

As reported here, Indian investor Indian Metals & Ferro Alloys Ltd (“Indian Metals“) has lost its claim against Indonesia brought under the India-Indonesia BIT. The dispute concerned alleged interferences with Indian Metals’ coal mining rights in the Indonesian region of Kalimatan. In a currently unpublished award, the England-seated tribunal, applying UNCITRAL rules, dismissed the investor’s claim and ordered it to bear certain costs. The tribunal was chaired by Neil Kaplan, sitting alongside Muthucumaraswamy Sornarajah (nominated by Indonesia) and James Spigelman (nominated by Indian Metals).

  • Hague court rejects set-aside of merits award in Devas case

According to this report, the Hague District Court has refused to set aside the merits award in the CC/Devas case against India brought under the India-Mauritius BIT.

In the merits award, the tribunal had found that India’s cancellation of a satellite lease contract was an unlawful expropriation and a breach of FET, but, in a split decision, also held that India was largely shielded from liability because of the BIT’s “essential security” clause.

India attempted to annul the award, and challenged the tribunal’s decision on jurisdiction and merits before the Hague District Court on three grounds. First, India alleged that the investor lacked a protected investment. Second, India argued that the tribunal had inappropriately dealt with its arguments on the “essential security” clause. Finally, India asserted that a domestic criminal complaint meant that the underlying satellite lease contract was void.

The Hague District Court rejected all of India’s objections. A detailed explanation of the Hague District Court’s reasoning can be found here.

  • Two treaty claims against India withdrawn ahead of hearing

As reported here, claims by Astro All Asia Networks and South Asia Entertainment Holdings, two affiliates of Malaysian satellite-TV group Astro, have been withdrawn.

As with the Khaitan Holdings case, these claims arose out of the Indian Supreme Court’s decision in the 2G spectrum licenses case.

The UNCITRAL tribunal based in Hong Kong (comprised of Michael J Moser (chair), Peter Leaver QC, and Lucy Reed) issued consent awards recording the withdrawal of both claims.

If you have any questions or would like discuss any aspect of this post, please contact Nicholas Peacock, Partner, Kritika Venugopol, Senior Associate, Nihal Joseph, Associate (India), Divyanshu Agrawal, Associate (India) or your usual Herbert Smith Freehills contact.

Nicholas Peacock

Nicholas Peacock
+44 20 7466 2803

Kritika Venugopal

Kritika Venugopal
Senior Associate
+65 68688017

Nihal Joseph

Nihal Joseph
Associate (India)
+44 20 7466 2212

Divyanshu Agrawal

Divyanshu Agrawal
Associate (India)
+44 20 7466 2593


In Sabbagh v Khoury and others, [2019] EWCA Civ 1219 (available here), the English Court of Appeal partly upheld the injunction granted by the Commercial Court restraining the pursuit of arbitration proceedings seated in Lebanon.  In doing so, the Court of Appeal confirmed the power of English courts to restrain a foreign arbitration on grounds that the foreign arbitration is oppressive and vexatious and provided helpful guidance on the exceptional circumstances in which English courts may exercise this power.

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Indian Supreme Court rules that Indian courts have jurisdiction to hear an application to set aside an award issued in Malaysia

In its recent decision in Union of India v Hardy Exploration and Production (available here), the Supreme Court of India found that a contractual clause stipulating Kuala Lumpur as the ‘venue’ of arbitration did not amount to a choice of juridical seat. While the Indian courts’ jurisdiction to hear set-aside applications will be excluded if the seat of the arbitration is outside India, the Supreme Court found that in this case there was no chosen seat (and the tribunal had not determined a seat), notwithstanding the choice of Kuala Lumpur as the venue for the arbitral proceedings, and the fact that the award was signed in Kuala Lumpur. Since this was a case where the arbitration agreement pre-dated 6 September 2012 (the date of the key Supreme Court ruling in BALCO), it appears that the Court did not find it necessary to positively determine that the seat was in India; the fact that an overseas seat had not been established appears to have been sufficient for the Indian courts to have jurisdiction to hear the application.

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