Facts: Ningbo Aux Imp & Exp Co. Ltd. (Ningbo), a Chinese company, entered into an agreement with Amstrad Consumer India Pvt. Ltd. (Amstrad), formerly OVOT, for the supply of AC units. The purchase order contained an arbitration clause. Vijay Sales (India) Pvt. Ltd. (Vijay Sales) issued a guarantee certificate for payments by Amstrad to Ningbo up to USD 10 million. Disputes arose, and Ningbo initiated arbitration against both Amstrad and Vijay Sales under the Shanghai International Arbitration Centre (SHIAC). The SHIAC Case Manager verbally directed Ningbo to delete Vijay Sales from the arbitration, as it wasn't a party to the proforma invoices. The arbitral tribunal awarded Ningbo USD 1,448,940.91 plus RMB 180,533.38 against Amstrad/Ovot.
Procedural Posture: Ningbo filed an enforcement petition under Sections 47 and 49 of the Arbitration and Conciliation Act, 1996, against both Amstrad and Vijay Sales. The Bombay High Court directed Vijay Sales' deletion from the enforcement proceedings. Ningbo then filed a Section 9 petition seeking interim measures against both Amstrad and Vijay Sales, including a direction for deposit of the awarded amount and disclosure of assets. This is the judgment on that Section 9 petition.
Issue: Can the Court grant interim measures under Section 9 of the Arbitration and Conciliation Act, 1996, against a third party (Vijay Sales) who is not a party to the arbitration agreement or the foreign award, and has been deleted from the enforcement proceedings? Can a separate Section 9 petition be maintained when interim reliefs have already been sought in a pending enforcement petition against the primary award debtor?
Holding: No, the Court cannot grant interim measures against Vijay Sales. Also, a separate Section 9 petition is not maintainable when interim reliefs have already been sought in the pending enforcement petition against Amstrad. The Commercial Arbitration Petition is dismissed.
Reasoning: The Court reasoned that since Vijay Sales was not a party to the arbitration agreement or the award, and was explicitly deleted from the enforcement proceedings, the foreign award cannot be enforced against it. Therefore, no interim measures under Section 9 can be directed against Vijay Sales. The Court distinguished the cases cited by the Petitioner, noting that in those cases, the third parties were inextricably linked to the primary agreement and the enforcement proceedings. The Court also emphasized that Section 9 is not a standalone remedy but is ancillary to substantive proceedings. Since the Petitioner had already sought interim reliefs against Amstrad in the enforcement petition, a separate Section 9 petition seeking similar reliefs is not maintainable. The court also observed that seeking a deposit under Section 9 cannot be a shortcut to execution.