Tit for Tat : The Anupam Mittal saga continues with anti-anti suit injunction and anti-arbitration injunction from India

Initial dispute between the parties and the ASI from Singapore courts

Anupam Mittal (Mittal) is a founder of an India company that operates a well-known online matrimonial service called “Shaadi.com”.  Westbridge Ventures II Investment Holdings (Westbridge), a Mauritian private equity fund, had invested in the company in early 2006.

Mittal and Westbridge entered into a Shareholders’ Agreement (SHA) governed by Indian law and providing for arbitration seated in Singapore under the ICC Rules.  The law governing the arbitration agreement was not specified (although the Singapore Court of Appeal found that Singapore law was the applicable law bearing the closest and most real connection).

The parties’ relationship soured and Mittal filed a petition before the NCLT in March 2021 seeking certain statutory remedies in respect of alleged corporate oppression.  Under Indian law, oppression and mismanagement actions are exclusively decided by the NCLT under the Indian Companies Act 2013 and are not arbitrable.  

Westbridge responded by requesting an ASI from the Singapore High Court (the supervisory court) to restrain Mittal from pursuing the NCLT proceedings on the ground that Mittal had breached the arbitration agreement in the SHA by commencing these proceedings.  Mittal objected the grant of the ASI on the basis that ICC arbitration agreed in the SHA is not the proper forum to adjudicate his corporate oppression allegations as (a) Indian law governed the arbitration agreement, which in turn determined the arbitrability of disputes; and (b) such actions are not arbitrable under Indian law.

The Singapore High Court, through its judgment dated 26 October 2021, rejected Mittal’s contentions and issued the ASI restraining Mittal from pursuing the NCLT proceedings and any other proceedings related to the SHA other than through the agreed ICC arbitration proceedings.  The High Court’s reasoning was that Singapore law, as the law of the seat, determined the scope of disputes that are arbitrable and corporate oppression disputes are arbitrable under Singapore law.  As a result, Mittal breached the arbitration agreement in the SHA by commencing the NCLT proceedings.

Mittal appealed the decision to the Singapore Court of Appeal.  The Court of Appeal, by its judgment dated 6 January 2023, did not interfere with the ASI issued by the High Court, and laid down a composite test for determining subject-matter arbitrability at the pre-award stage (whether a dispute is arbitrable or not will be determined by the law of the seat as well as the law governing the arbitration agreement, both of which were found to be Singapore law in this instance).

In the meantime, around May 2022, Westbridge invoked ICC arbitration against Mittal to enforce its contractual exit rights under the SHA.  On 4 April 2023, the ICC Tribunal issued a partial award confirming its jurisdiction to hear the disputes raised by Westbridge without prejudice to Mittal’s right to raise any jurisdictional objections at the final hearing (which was scheduled for the week commencing 18 September 2023).

Recent injunction orders issued by the Indian court/tribunal

Whilst the ASI proceedings were ongoing before the Singapore courts, Mittal filed a civil action (also referred to as a suit) in March 2021 before the Bombay High Court seeking a declaration that the NCLT is the only competent forum to hear and decide the disputes and accordingly seeking a permanent injunction from the court to restrain Westbridge from enforcing the ASI in India.  Mittal termed it as an “anti-enforcement” action, while the judge observed that it was in the nature of an “anti-anti suit injunction” (Anti-ASI).  As part of the suit, Mittal also filed an interim application praying for a temporary injunction restraining Westbridge from enforcing the ASI and thereby permitting Mittal to continue with the NCLT proceedings. 

The Singapore High Court found that the proceedings initiated before the Bombay High Court and the NCLT proceedings remained substantially on foot in breach of the ASI, and found Mittal guilty of contempt of court by its judgment dated 31 October 2022.  Westbridge participated in the Indian proceedings under protest.

Despite the contempt findings, the proceedings continued and the Bombay High Court decided the interim application filed by Mittal in his favour.  In its judgment dated 11 September 2023, the Bombay High Court restrained Westbridge, pending the final disposal of the suit, from relying on the ASI and opposing Mittal when he approaches the NCLT to seek injunctive relief.  The Anti-ASI issued by the Bombay High Court was granted on the basis that Mittal would be left remediless if the ICC arbitration proceedings continue in Singapore.  According to the Bombay High Court, a final award issued by the ICC Tribunal dealing with issues of corporate oppression cannot be enforced in India as such disputes are not capable of being arbitrated under Indian law, a recognised ground to resist enforcement of a foreign award under Section 48(2)(a) of the Indian Arbitration & Conciliation Act 1996.  Therefore, disallowing Mittal from pursuing the NCLT proceedings – as per the ASI – will leave him remediless and breach Indian public policy for denying access to justice to the plaintiff amounting to a grave and irreparable loss. 

Analysis

The jurisdiction to grant anti-arbitration injunctions is exceptional.  Under the New York Convention, State parties (including India) are required to recognise the validity of arbitration agreements and protect the arbitral process as part of their international obligations.  Courts of the Member States are generally hesitant to disturb the agreed dispute resolution process between the parties.

Typically, an anti-arbitration injunction may be justified on the basis that there is no valid arbitration agreement.  However, the grant of such exceptional relief is less common on the ground that a particular dispute may not be arbitrable under the law of a non-seat jurisdiction.  This is because national legislation (including the Indian Arbitration Act) already empowers the domestic courts to resist enforcement of a foreign arbitral award which deals with non-arbitrable matters without the need to issue such injunctions (see Section 48(2)(a) of the Indian Arbitration Act).  This avoids the courts of one country imposing their conceptions of arbitrability of disputes over other jurisdictions, and from affecting the integrity of the arbitral process and the arbitral tribunal’s jurisdiction.

This is certainly not the end of the Anupam Mittal saga.  Under Indian law, Westbridge may move an application under Section 45 of the Indian Arbitration Act requesting the NCLT to refer the parties to arbitration and thereby revoke the anti-arbitration injunction (NCLT’s order, paragraph 15).  Such an application may prod the NCLT to undertake a more detailed assessment of whether the oppression allegations are indeed genuine.  Alternatively, Westbridge may file appeals against the Bombay High Court judgment and the NCLT order before the appropriate forum in India or consider its options before the Singapore courts.

Judgment and order:

Bombay High Court:  Anupam Mittal v People Interactive (India) Pvt. Ltd. and others, IA No. 1010 of 2021 in Suit No. 95 of 2021, Judgment dated 11 September 2023.

NCLT, Mumbai bench: In the matter of Anupam Mittal v People Interactive (India) Pvt. Ltd. and others, CA/392/2023 in CP/92(MB)2021, Order dated 15 September 2023.