Naresh H. Patil, J.

1. This appeal is directed against an order passed by the learned Single Judge of this Court on 28th April, 2017 in Comm Arbitration Petition (l) No. 208/2017. The respondent herein Aircon Beibars FZE (original petitioner) holds a foreign award passed on 25th January, 2017 for an amount of approximately US$7 million equivalent to Rs.46 Crores against the appellant herein Heligo Charters Pvt. Ltd. The award was made pursuant to reference of disputes under the Arbitration Clause contained in Clause 7 of the Settlement Deed dated 9th September, 2014. The Award was passed in Singapore.

2. The original respondent-appellant herein did not challenge the Award in the Singapore Court. It has thus become final. It is the contention of the respondent herein that the appellant has failed to pay awarded amount of US$ 7 million/Rs.46 Crores.

3. The Respondent herein had filed Arbitration Petition No.269/2017 wherein it was pointed out that only significant asset that the appellant/Heligo has in India, is a helicopter which it uses for ONGC operations. The respondent expressed apprehension that appellant might move the helicopter from the jurisdiction of the Court or might encumber or alienate the same to prevent the same from being proceeded against in enforcement of the said Award. Therefore, the petitioner had sought relief under Section 9 of the Arbitration Act, 1996 (as amended by Amendment Act of 2015) to restrain the respondent from alienating, encumbering, or parting with possession of the Helicopter and from removing it from the jurisdiction of the Court, pending enforcement of the Foreign Award under Part II of the Arbitration Act.

4. The learned Single Judge by an order dated 28th April, 2017 confirmed the adinterim injunction.

5. The learned Senior Counsel Mr. Vikram Nankani appearing for the appellant submitted that the question of law arising herein is what the law in force in India was on the date on which the Arbitration Agreement was entered into by the parties. Clause 7 of the Settlement Deed dated 9th September, 2014 reads as under:

7. GOVERNING LAW AND ARBITRATION

This DEED shall be governed by and construed in accordance with Singapore Law and any and all disputes, matters, differences of whatsoever nature and howsoever arising out of this DEED shall be referred to arbitration in Singapore in accordance with the rules of the Singapore International Arbitration Centre (SIAC) for the time being in force. The Arbitration shall be conducted in English and the parties shall endure to have the Arbitration concluded within three (3) months of it being called for. Each of the Buyer and the Seller shall be entitled to nominate an Arbitrator. The two appointed arbitrators shall within a period of no more than (10) days appoint a third arbitrator such that the tribunal shall consist of three arbitrators. If upon the receipt by the Buyer or the Seller (as the case may be) of the nomination, in writing, of the appointment of an arbitrator, Buyer or the Seller (as the case may be) shall appoint their arbitrator within 14 days, failing which the arbitrator already appointed shall act as a sole arbitrator.

6. In the written submissions it is submitted that the Scheme of the Arbitration Act visavis foreign seated arbitration does not permit the respondent to approach courts in India under Section 9 of the. This submission is based on the fact that the parties had executed the Settlement Deed, and consequently the Arbitration Agreement, prior to the Arbitration and Conciliation (Amendment) Act, 2015 and had agreed to seat their arbitration in Singapore. The parties have excluded availability of PartI of the, including Section 9 of the. The law in India was settled by the Supreme Court in Bharat Aluminum Co. vs. Kaiser Technical Service (2012) 9 SCC 552 [LQ/SC/2012/749] (BALCO for short). It was held that Section 9 of thewas not applicable to foreignseated International Commercial Arbitration. The BALCO judgment was pronounced on 6th September, 2012. The Arbitration Agreement in the present case was executed on 9th September, 2014. Section 9 of the Act, therefore, is not applicable to the facts of the case. The dispute between the parties was referred to arbitration on 12th April, 2015. The amended act came into effect from 23rd October, 2015. The Counsel, therefore, submitted that the negative right of the parties under the Settlement Deed to not have the ability to approach courts in India under Part I of the had accrued before the amendment to the took effect. It is submitted that Section 26 of the Amendment Act must be given purposive interpretation based on the findings of Apex Court in the case of Thyssen judgment. The Counsel referred to the 246th report of the Law Commission of India. It is the submission of the Counsel that proviso to Section 2(2) of the Arbitration Act cannot be made applicable retrospectively. One of the written submission of the appellant reads as under:

14. Without prejudice to the submissions made above, and in the alternative, the Appellant further submits that there is yet another reason by the petition in the present case is not maintainable. This because the second condition in the proviso to Section 2(2) is not fulfilled. The proviso, inter alia, provides that if the seat of arbitration is outside India, the foreign award has to be enforceable and recognised under Part II of the. These words indicate that unless and until the foreign award is first enforced and recognised (accepted) by this Honble Court, under Section 48 read Section 49 of the Act, no petition under Section 9 is maintainable.

15. Enforceability and recognition of foreign award is a condition precedent for filing petition under Section 9. This submission is fortified by the language used in Section 9 itself, which while covering the situation after award refers only Section 36 of the Act, which applies to domestic award. Hence, on a plain reading, Section 9, does not cover a case of foreign award after arbitration is concluded and therefore, the petition under Section 9 in relation to foreign award can only be maintained, if the second condition under the proviso to Section 2(2) was also satisfied, namely, Section 9 of the foreign award should be enforceable and recognised under Part II of the by the competent court in India.

16. Indeed, since the Respondent has failed to procure enforcement under Part II of the, for more than twelve (12) months after the Foreign Award was made, the Foreign Award has not become enforceable in terms of section 49 of theand remains to be tested for enforceability in terms of Section 48 of the.

7. In the facts, the Counsel submitted that primafacie case is made out. Balance of convenience is not in favour of the respondent and irreparable injury would be caused in case the relief is denied to the appellant herein. The Counsel submitted that Single Judge failed to appreciate the facts, the import of the judgment and the amended provisions of the Arbitration Act.

8. The learned Counsel for the appellant placed reliance on following judgments:

I) Harmony Innovation Shipping Ltd. Vs. Gupta Coal India Ltd. & anr. (2015) 9 SCC 172 [LQ/SC/2015/323] )

ii) Thyssen Stahlunion Gmbh Vs. Steel Authority of India Ltd. (1999) 9 SCC 334 [LQ/SC/1999/970 ;] ">(1999) 9 SCC 334 [LQ/SC/1999/970 ;] [LQ/SC/1999/970 ;] )

iii) Bharat Aluminum Company Vs. Kaiser Aluminum Technical Services. (2012) 9 Supreme Court Cases 552) [LQ/SC/2012/749]

iv) Law Commission of India (Report No.246)

v) Order dtd. 17/4/17 in ARBPL/208/2017 passed by Justice G.S. Patel.

9. In the case of Thyseen Stahlunion GMBH (cited supra), the Apex Court observed in Paragraph 32 as under:

32. Principles enunciated in the judgments show as to when a right accrues to a party under the repealed Act. It is not necessary that for the right to accrue legal proceedings must be pending when the new Act comes into force. To have the award enforced when arbitral proceedings commenced under the old Act under that very Act is certainly an accrued right. Consequences for the party against whom award is given after arbitral proceedings have been held under the old Act though given after the coming into force of the new Act, would be quite grave if it is debared from challenging the award under the provisions of the old Act. Structure of both thes is different. When arbitral proceedings commenced under the old Act it would be in the mind of everybody, i.e., the arbitrators and the parties that the award given should not fall foul of Sections 30 and 32 of the old Act. Nobody at that time could have thought that Section 30 of the old Act could be substituted by Section 34 of the new Act.

10. The learned Senior Counsel Mr.Chinoy appearing for respondents submitted that appellant therein has raised technical/legal pleas to exercise of jurisdiction as follows:

e(i) that section 9 was not applicable as Part I including section 9 was excluded by virtue of the Arbitration being seated in Singapore and subject to Singapore Law; and

(ii) that orders under section 9 could not be sought till the Foreign Award had been recognised and held to enforceable under Section 48. The Respondent had also pointed out that the Helicopter had already been provided as security to the Union Bank of India for obtaining various banking facilities.

11. It is submitted that by an order dated 28th April, 2017 the learned Single Judge rejected the respondents objection to the exercise of jurisdiction under Section 9 and allowed the petition.

12. In the submission of the Counsel that mere fact that under the arbitration agreement the arbitration took place in foreign country could not resolve any exclusion in non-applicability of Section 9 of the. The learned Single Judge pointed out that since Section 2(2) proviso is in relation to foreign awards, to accept the appellants submission would be to render the amendment to section 2(2) utterly otiose. The proviso to Section 2(2), which was added by the Arbitration and Conciliation Act, 2015 reads as under:

2(2) Provided that subject to an agreement to the contrary, the provisions of sections 9, 27 and clause (a) of subsection (1) and subsection (3) of section 37 shall also apply to international commercial arbitration, even if the place of arbitration is outside India, and an arbitral award made or to be made in such place is enforceable and recognised under the provisions of Part II of this Act.

13. The said proviso was added pursuant to Supreme Court judgment in the case of BALCO cited supra. The Counsel referred to Report No.246 of Law Commission of India. In the submission of learned Senior Counsel Mr. Chinoy notwithstanding that Part I is not applicable to a Foreign Seated Arbitration, the proviso to Section 2(2) was introduced to make only Section 9 (and other sections) of Part I applicable even to Foreign seated Arbitrations, in order to provide a remedy to a party who obtains a Foreign Award in such a Foreign seated Arbitration, so that such a Party was not faced with the situation that the entity against which it had to enforce the award has been stripped off its assets and has been converted into a shell company. It is submitted that the Amendment Act which introduced section 2(2) proviso has treated section 9 as being distinct from the rest of Part I of the Arbitration Act, 1996 and has made Section 9 applicable to the foreign seated arbitration, unless the parties specifically agrees to the contrary. The Counsel further submitted that remedy under Section 9 is a transitory provision pending the process contemplated under Section 48 of the. This is obviously intended to ensure that a Court can step in to protect an asset from being diverted or dissipated and to ensure that the holder of a foreign Award, if he is able to get his foreign award pronounced enforceable against an asset which he can proceed. In the written submissions the respondent has specifically stated in paragraphs (d) (e) and (g) as under:

(d) More once a Foreign Award is recognised and held to be enforceable under section 48, there would be no need to resort to section 9, as the award would be deemed to be a decree of the Court (Ref: Section 49) and orders by way of injunctions, attachment etc. can be sought in Execution proceedings. It is only in the interregnum, i.e. till the Foreign Award is held to be enforceable as a decree if the Court (under sections 48 and 49), that recourse would be required under section 9 for interim protective orders to prevent dissipation and diversion of assets.

(e) The patent fallacy in the Appellants submission is apparent from the fact that the proviso to sec 2(2) makes section 9 applicable to an international commercial arbitration taking place outside India and an arbitral award made, or to be made in such place... Under the plain language of the Proviso to Section 2(2), an Application under Section 9 could be made even during the pendency of an Arbitration held outside India; i.e. even prior to an Award having been made in such a Foreign Arbitration. It would be ex facie incongruous/absurd to construe the Proviso to section 2(2) to mean that an Application under section 9 would be maintainable before the foreign Award was made BUT would not be maintainable once the foreign Award was made until the Award had been recognised and held enforceable under Section 48.

(g) The reliance sought to be placed by the Appellants between the language proposed by the Law Commission for the proviso to sec 2(2) i.e. if an award made, or to be made, in such place would be enforceable and recognised under Part II of this Act, and the section as enacted if an award made, or to be made, in such place is enforceable and recognised under Part II of this Act, is misplaced. The change in language is inconsequential and merely a matter of phrasing. In both cases the said last sentence, is merely descriptive of the arbitral award made, or to be made as being a Foreign Award required to be recognised and enforced under Part II of the. The last sentence does not stipulate a second/additional precondition for making an Application under section 9.

14. We have perused the judgments cited supra and written submissions of the parties.

15. Heard learned Counsel appearing for the respective parties. We agree with the submissions advanced by the Counsel appearing for the respondents. The amended provisions of Section 2(2) clearly stipulates that subject to an agreement to the contrary, the provisions of Section 9 shall apply to international commercial arbitration even if the place of arbitration is outside India. The contention that unless the award is put to execution in accordance with provisions of Section 48, a party is not entitled to seek interim-relief is not sustainable. There is no such embargo or restriction placed for seeking recourse to interim measures even if the award is foreign-seated one. The amendment was brought into effect after the Law Commission submitted its report consequent to judgment in the case of BALCO (cited supra). Paragraph 194 of the judgment reads as under:

194. In view of the above discussion, we are of the considered opinion that the Arbitration Act, 1996 has accepted the territoriality principle which has been adopted in the UNCITRAL Model Law, Section 2(2) makes a declaration that Part I of the Arbitration Act, 1996 shall apply to all arbitrations which take place within India. We are of the considered opinion that Part I of the Arbitration Act, 1996 would have no application to international commercial arbitration held outside India. Therefore, such awards would only be subject to the jurisdiction of the Indian courts when the same are sought to be enforced in India in accordance with the provisions contained in Part II of the Arbitration Act, 1996. In our opinion, the provisions contained in the Arbitration Act, 1996 make it crystal clear that there can be no overlapping or intermingling of the provisions contained in Part I with the provisions contained in Part II of the Arbitration Act, 1996.

We are, therefore, not inclined to accept the contentions of the appellant on that ground. In view of the amended provisions and facts, we are of the view that operation of provisions of Section 9 cannot be excluded in absence of a specific agreement to the contrary. The judgment in BALCO was pronounced on 6th September, 2012. The dispute between the parties was referred on 8th April, 2015. The Arbitration agreement was executed between the parties on 9th September, 2014. Whereas the was amended on 23rd October, 2015.

16. In respect of interpretation placed by the Counsel appearing for the appellant under the provisions of Section 2(2), 9 and 48, we are of the view that the interim protection in the facts cannot be denied to the respondent irrespective of as to whether the award was put to execution or not Such a measure is made available in law under Section 9 of theso as to prevent dissipation and diversion of assets. This being the object and purpose behind the amended provisions which is based on the recommendations of the Law Commission. We do not find any error in the view adopted by the learned Single Judge on this count. The judgments cited supra by the Counsel appearing for the appellant do not support and sustain the interpretation placed by the Counsel.

17. It is to be noted that although the arbitration agreement was entered into in September 2015, the objection under Section 9 was filed in April 2017 i.e. 19 months after the amendment.

18. In Paragraph11 of the impugned order dated 28th April, 2017, the learned Single Judge quoted the extract of Report No.246 of the Law Commission of India which reads as under:

While the decision in BALCO is a step in the right direction and would drastically reduce judicial intervention in foreign arbitrations, the Commission feels that there are still a few areas that are likely to be problematic.

(i) Where the assets of a party are located in India, and there is a likelihood that that party will dissipate its assets in the near future, the other party will lack an efficacious remedy if the seat of the arbitration is abroad. The latter party will have two possible remedies, but neither will be efficacious. First, the latter party can obtain an interim order from a foreign Court or the arbitral tribunal itself and file a civil suit to enforce the right created by the interim order. The interim order would not be enforceable directly by filing an execution petition as it would not qualify as a judgment or decree for the purposes of sections 13 and 44A of the Code of Civil Procedure (which provide a mechanism for enforcing foreign judgments). Secondly, in the event that the former party does not adhere to the terms of the foreign Order, the latter party can initiate proceedings for contempt in the foreign Court and enforce the judgment of the foreign Court under sections 13 and 44A of the Code of Civil Procedure. Neither of these remedies is likely to provide a practical remedy to the party seeking to enforce the interim relief obtained by it.

That being the case, it is a distinct possibility that a foreign party would obtain an arbitral award in its favour only to realize that the entity against which it has to enforce the award has been stripped of its assets and has been converted into a shell company.

(ii) While the decision in BALCO was made prospective to ensure that hotly negotiated bargains are not overturned overnight, it results in a situation where Courts, despite knowing that the decision in Bhatia is no longer good law, are forced to apply it whenever they are faced with a case arising from an arbitration agreement executed pre-BALCO.

In Paragraph18 the learned Single Judge observed as under:

18. On the question of whether such an order ought to be made on merits, Mr.Nankani says that Heligo is good for the money. Given that this is about a helicopter, he succumbs to temptation in describing his client as being not a fly-by-night operator. If that is so, Mr. Nankanis clients option is simple: his client must make available by a deposit in Court sufficient money or security to secure a potential enforcement of the foreign award that has been rendered against it. If not, I see no reason why a limited injunction of the nature that I have described, i.e. subject to a prior claim by a secured creditor ought not to be made. Certainly, I am not able to see any prejudice being caused to the Respondent. On the other hand, as I have noted, if an injunction is refused, there is every possibility of irreparable prejudice to Aircon. In my view, there is not only prima-facie case, bu the balance of convenience also favours the Petitioner.

19. The Award was passed on 25th January, 2017. The learned Single Judge has rightly dealt with the issue and has reached reasonable and proper conclusion. We do not find any error or perversity in the view adopted by the learned Single Judge. In the facts, we do not notice any prejudice being caused to the appellant. If the injunction is refused, there is every possibility of irreparable loss being caused to the respondent. The respondent has made out a strong prima-facie case and balance of convenience is also in favour of respondent-original petitioner. We, therefore, find no merit in the Appeal. It stands dismissed. No order as to costs.