The Bombay High Court recently clarified that the purpose and intent of Section 9 (interim measures) of the Arbitration and Conciliation Act, 1996, is to support arbitration rather than to undermine it. Justice Arif Doctor emphasized that Section 9 aims not only to provide relief but also to strengthen the arbitration process itself.
“There is no dispute that the relief granted under Section 9 of the Arbitration Act is discretionary and should be exercised in accordance with established principles for granting interim relief. However, the primary object of Section 9 is to bolster arbitration, preventing parties from undermining the arbitration process,” the Court noted.
This observation was made during a hearing regarding a long-standing dispute between Vyoman Tradelink (now Vyoman India)—the original promoters of ITZ Cash, now rebranded as Ebix Payment Services—and EbixCash Ltd., a forex, gift cards, and payments service company.
In its October 8 order, the Court directed EbixCash and its associated companies to comply with an Emergency Arbitrator’s ruling, which mandated that Ebix provide an irrevocable bank guarantee of ₹145 crores to Vyoman Tradelink Ltd. within 14 days, in accordance with a shareholders agreement between the parties.
The dispute originated in 2019 when Vyoman Tradelink initiated arbitration against EbixCash for failing to make specific earn-out payments as stipulated in their Shareholders Agreement (SHA). Vyoman held a substantial stake in Ebix Payment Services, and in 2017, the two parties entered into an SHA under which Ebix was obligated to purchase Vyoman’s stake. Disagreements over the agreement’s execution led to the arbitration process.
The Singapore International Arbitration Centre (SIAC) ruled that Ebix must acquire Vyoman’s remaining stake. On March 14, 2024, the Emergency Arbitrator instructed Ebix to provide a bank guarantee of ₹145 crores within 14 days, a deadline that passed without compliance, prompting Vyoman to seek enforcement from the Bombay High Court.
During the hearing, Senior Advocate Sharan Jagtiani, representing Vyoman, argued that while Section 9 of the Arbitration Act is not typically used for enforcing Emergency Arbitrator (EA) decisions, the Court could evaluate the facts and grant interim relief if warranted. Jagtiani asserted that there was a compelling case for interim relief due to Ebix’s failure to fulfill its obligations.
Conversely, Advocate Mayur Khandeparkar, representing EbixCash, contended that the petition was not maintainable, as it effectively sought to enforce the EA’s decision without a formal application under Section 49 (enforcement of foreign arbitral awards) of the Arbitration Act (Part II). He argued that the petition did not meet the exceptional circumstances required for interim relief under SIAC rules.
The Court found Ebix’s objections unpersuasive. “The objection from Ebix, claiming that the EA decision was an award requiring enforcement under Section 49 of Part II of the Arbitration Act, lacks merit,” the Court stated.
It clarified that the determination of whether a decision is final depends on its substance, not its title. The Court noted that Ebix had not claimed the EA decision conclusively resolved any part of the ongoing dispute, nor did the respondents raise concerns regarding the merits of the EA decision.
Furthermore, the Court determined that even without considering the EA decision, Vyoman presented a strong case for interim relief due to Ebix’s obstructive behavior. “Even without relying on the EA decision, the Petitioners (Vyoman) have made a compelling case for interim relief,” the Court concluded.
The Court also issued an injunction prohibiting EbixCash and its associated companies from dealing with, encumbering, or disposing of any assets listed in a specified schedule. The matter is scheduled for compliance review on October 22.
Senior Advocate Sharan Jagtiani, along with Advocates Nitesh Jain, Juhi Mathur, Sonia Dasgupta, Ananyaa Jagirdar, Surbhi Agarwal, and Atul Jain of Trilegal, represented Vyoman and its Director Ashok Kumar Goel. Advocate Mayur Khandeparkar, accompanied by Advocates Chetan Yadav, Allen Mathew, and Pratibha Tiwari of VJ Juris Advocates, represented Ebix Cash Ltd. and its associated companies.
