The Delhi High Court has ruled that Indian civil courts can step in and stop foreign-seated arbitrations if the proceedings are found to be unfair, oppressive, or against India’s public policy.

The case involved Engineering Projects (India) Limited (EPIL), a central government PSU, which approached the court seeking to stop arbitration proceedings taking place in Singapore under the International Chamber of Commerce (ICC). The arbitration had been initiated by MSA Global LLC, a defence and security company based in Oman.

Justice Purushaindra Kumar Kaurav, while hearing the matter, made it clear that civil courts in India have both the power and the duty to protect parties from misuse of the arbitration process. The court said that while arbitration is encouraged, courts must step in when the process becomes a tool for harassment.

“If arbitral proceedings are clearly unjust and oppressive, the civil court must act as a ‘sentinel on the qui vive’ — a watchful guardian — to protect the party alleging such misuse,” the court said.

The dispute began when EPIL was appointed as the main contractor for a project at the Oman-Yemen border. When disagreements arose, MSA initiated arbitration and appointed Andre Yeap as its co-arbitrator. EPIL chose former Supreme Court judge Justice AK Sikri, and the tribunal was completed with Jonathan Acton Davis as the presiding arbitrator.

Later, EPIL found out that Yeap had previously been involved in cases related to Manbhupinder Singh Atwal, who is the MD and promoter of MSA. EPIL argued that this relationship should have been disclosed under ICC Rules and raised doubts about Yeap’s impartiality.

After their objection to Yeap’s role was rejected by the ICC, EPIL approached the High Court in Singapore. Simultaneously, they filed a case in the Delhi High Court seeking to stop the arbitration.

MSA argued that EPIL was trying to delay the process and engage in "forum shopping" by taking the case to multiple jurisdictions. However, the Delhi High Court disagreed and said that it had the authority to hear the case.

The court ruled that EPIL had a strong prima facie case, the balance of convenience favoured them, and that they would suffer irreparable harm if the proceedings continued.

“It would be wholly unjust to compel a party to submit to arbitration when the process itself is being misused,” the Court noted.

As a result, the Court stayed the ongoing arbitration proceedings and barred both parties from participating further until the Delhi suit is decided.

EPIL was represented by Senior Advocate Sandeep Sethi, along with advocates Ajit Warrier, Angad Kochhar, Himanshu Setia, Vedant Kashyap, Sumer Dev Seth, Richa Khare, and Riya Kumar.

MSA Global was represented by Senior Advocate Rajiv Nayar and a team of lawyers including Kirat Singh Nagra, Kartik Yadav, Pranav Vyas, Sumedha Chadha, Sankalp Singh, Esh Gupta, and Pritesh Raj.