Anti-suit restraint in arbitration can bar foreign enforcement proceedings and be conditioned on payment of admitted dues.

An Indian court may grant an equitable anti-suit restraint against foreign enforcement proceedings where the arbitration agreement is governed by Indian law and an Indian arbitral challenge is already pending, because concurrent foreign enforcement can create inconsistent decisions, irreversible prejudice and oppressive expense. The restraint may also be made conditional on payment of the undisputed contractual amount, with such payment treated as pro tanto satisfaction without affecting the parties' substantive rights in the arbitration dispute. The stated principle is that equitable relief can protect the integrity of Indian arbitral proceedings while preventing unfair prejudice to the respondent.

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Issues: (i) Whether a court in India could restrain a party from prosecuting enforcement proceedings in a foreign court when the arbitration agreement provided for Indian law and Indian arbitration procedure. (ii) Whether the restraint ought to be made conditional upon payment of the undisputed amount due under the contract.

Issue (i): Whether a court in India could restrain a party from prosecuting enforcement proceedings in a foreign court when the arbitration agreement provided for Indian law and Indian arbitration procedure.

Analysis: The arbitration clause required the proceedings to be governed by the Indian Arbitration Act, 1940, and the validity and interpretation of the contract were governed by Indian law. The award had already been challenged in India under Sections 30 and 33 of the Indian Arbitration Act, 1940, while the other party pursued confirmation in a foreign court. The simultaneous foreign enforcement action created a real risk of inconsistent decisions, irreversible prejudice, and unnecessary expense if the award were enforced abroad before the Indian challenge was decided. In these circumstances, the foreign proceedings were held to be oppressive, and the Indian court had jurisdiction in equity to grant restraint.

Conclusion: The restraint order was justified and the appellant was entitled to protection against the foreign proceedings.

Issue (ii): Whether the restraint ought to be made conditional upon payment of the undisputed amount due under the contract.

Analysis: Although the appellant was entitled to restraint, fairness required that the undisputed contractual liability not remain unpaid during the pendency of the challenge to the award. The court held that the admitted amount could be directed to be paid without prejudice to the parties' rights, with the sum to operate as pro tanto satisfaction subject to the final outcome of the arbitration dispute. This balanced equitable relief with the spirit of international arbitration and avoided unfair prejudice to the respondent.

Conclusion: The restraint was made conditional upon payment of the undisputed amount.

Final Conclusion: The appeal succeeded, the vacating order was set aside, and the earlier restraint against the foreign enforcement action was restored subject to compliance with the payment condition.

Ratio Decidendi: Where foreign enforcement proceedings would undermine an Indian arbitral challenge governed by Indian law and expose a party to oppressive and potentially irreversible prejudice, an Indian court may grant an anti-suit restraint in equity, and may condition that relief on payment of undisputed contractual dues.

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