Introduction
When can a domestic court intervene in an arbitration proceeding that is seated abroad? Can a party be compelled to arbitrate against a counterparty with whom it has no contractual privity? The recent judgment of the Delhi High Court, delivered by Justice Mini Pushkarna on March 13, 2026, in SARR Freights Corporation and Anr. v. Argo Coral Maritime Ltd1. illuminates these questions, providing nuanced insights into the interplay between civil courts’ inherent powers and the autonomy of foreign-seated arbitration tribunals.
The plaintiffs, SARR Freights Corporation and SARR Freights Limited, approached the Delhi High Court seeking an injunction to prevent the defendant, Argo Coral Maritime Ltd., from pursuing two concurrent arbitration proceedings before the London Maritime Arbitrators Association (“LMAA”), arising from a Booking Note executed earlier in 2023. The plaintiffs contended that the defendant was not a party to the Booking Note, and that the initiation of parallel arbitrations and subsequent rectification of the contract by the Tribunal created an arbitration agreement where none existed, thereby constituting procedural oppression and vexatious litigation. The High Court was called upon to assess whether, even in the context of a foreign-seated arbitration, the domestic courts could exercise jurisdiction to prevent abuse of the arbitral process.
The factual matrix highlights the commercial complexity. SARR Freights, as charterers, had contracted with Ocean7 Projects ApS, acting as agents for the vessel owner, MV Pelagica, under a Fixture Recap and Booking Note for transporting military cargo for UNISFA from Mumbai to Port Sudan. Subsequent force majeure events, including the war in Sudan and termination of the purchase order by the United Nations, led the plaintiffs to cancel the Booking Note. In response, the defendant invoked arbitration before the LMAA, claiming damages for “dead freight.” Notably, a second arbitration was initiated against a different plaintiff entity while the first reference was still pending. The Tribunal ultimately issued a Partial Award, dismissing objections to its jurisdiction, including a controversial rectification of the contract to create an arbitration clause that the plaintiffs argued never existed.
The plaintiffs’ submissions focused on three central points: first, that the Delhi High Court possessed territorial jurisdiction as substantial parts of the cause of action arose in New Delhi, including contract negotiations, partial performance, and payments; second, that no arbitration agreement existed between the plaintiffs and the defendant, and reliance on the Fixture Recap to create one was impermissible; and third, that continuation of parallel arbitrations and the rectification of the Booking Note constituted procedural abuse, oppression, and vexatious litigation warranting judicial intervention under Sections 9 and 151 of the CPC. The plaintiffs relied on principles limiting arbitration only when exceptional circumstances show that arbitral proceedings would be unconscionable or against public policy.
Conversely, the defendant argued that the dispute was governed by a foreign-seated arbitration agreement, with London as the seat and English law as the governing law. The defendant emphasized the doctrine of Kompetenz-Kompetenz, asserting that the LMAA alone had jurisdiction to decide on the validity of the arbitration clause. It further contended that the plaintiffs had participated in the arbitration process, effectively waiving objections, and that no exceptional circumstances existed to justify anti-arbitration relief from Indian courts.
The Court’s analysis reflected a careful balance between respecting foreign-seated arbitration and protecting domestic parties from procedural oppression. The judgment clarified that it was not an appeal against the Partial Award but an assessment of whether exceptional circumstances justified injunctions against arbitration proceedings. The Court acknowledged that domestic courts could exercise inherent powers under Section 151 CPC to prevent injustice, especially where arbitration might compel a party to arbitrate with a non-contracting entity or face vexatious, parallel proceedings. The plaintiffs’ arguments regarding lack of privity, abuse of process through parallel arbitrations, and unilateral rectification of the Booking Note were central to establishing a prima facie case for relief.
The rationale, therefore, focused on safeguarding fundamental principles of fairness and preventing structural compromise of arbitration. The Court noted that procedural oppression can arise even in foreign-seated arbitrations when parties are compelled to defend against multiple proceedings on the same cause of action or where the tribunal attempts to rewrite contractual terms without the parties’ consent. Reliance on doctrines such as contra-proferentem and Section 28(3) of the Arbitration and Conciliation Act, 1996 reinforced that contractual intent cannot be disregarded under the guise of typographical errors. While foreign arbitral tribunals generally enjoy autonomy, this judgment underscores that Indian courts retain residual jurisdiction to intervene when arbitration becomes abusive or unconscionable.
Conclusion
The Delhi High Court’s decision in SARR Freights Corporation v. Argo Coral Maritime Ltd. reaffirms the delicate boundary between respecting foreign-seated arbitration and exercising judicial oversight to prevent abuse. It emphasizes that procedural fairness, privity of contract, and public policy remain paramount, and that the mere designation of a foreign seat does not automatically oust domestic courts’ powers when exceptional circumstances arise. For parties engaged in international commerce, the ruling is a critical reminder that arbitration clauses must be clearly defined, and that misuse of arbitral processes through parallel proceedings or unilateral rectifications can attract judicial scrutiny, even beyond the seat of arbitration.
Expositor(s): Adv. Jahnobi Paul
