The Bombay High Court has directed Turkish company Uzer Makina VE Kalip Sanayi A.S. and Indian tyre manufacturers CEAT Ltd. and MRF Ltd. to ensure that payments relating to their commercial dealings remain secured until the Indian rupee equivalent of EUR 1.2 million is deposited before the court. The order was passed while hearing a petition filed by Malaney Trading & Services LLP, which sought interim protection for the enforcement of a foreign arbitral award arising out of a commercial agency dispute.
Background of the Case
Malaney Trading & Services LLP entered into a Commercial Agency and Distribution Agreement with Uzer Makina on February 8, 2017. Under the agreement, Malaney acted as the exclusive agent for Uzer Makina's tyre manufacturing technology in India and was entitled to commission on sales made in the Indian market.
Disputes later arose between the parties and were referred to arbitration before the Netherlands Arbitration Institute. A partial arbitral award dated February 16, 2024 held that various amounts were payable by Uzer Makina to Malaney, although some claims were rejected.
During the proceedings, Malaney alleged that despite earlier directions of the Bombay High Court, MRF continued making payments to Uzer Makina's subsidiary, Uzer Ithalat Ihracat Sanayi Ve Tic. A.S., thereby putting the eventual enforcement of the arbitral award at risk.
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Court's Observations
Justice Somasekhar Sundaresan first rejected the objection that the Bombay High Court lacked jurisdiction merely because the arbitration was seated outside India.
The Court observed that Section 9 of the Arbitration and Conciliation Act, 1996 continues to apply to foreign-seated arbitrations unless the parties have expressly agreed otherwise.
The bench observed,
"There has to be a discernible agreement that Section 9 must not apply, to oust the jurisdiction of the Section 9 Court."
The Court further held that merely choosing institutional arbitration rules that provide emergency or interim relief does not automatically exclude the jurisdiction of Indian courts under Section 9.
Rejecting the respondents' argument, the Court said an implied exclusion cannot be inferred simply because the arbitral institution has its own interim relief mechanism. According to the Court, there must be a clear contractual provision excluding Section 9 remedies before Indian courts lose jurisdiction.
The Court also noted that MRF itself had previously treated payments proposed to Uzer Ithalat as being covered by earlier court directions by issuing advance notice to Malaney. Later remittances, however, appeared to have been made despite those orders.
Justice Sundaresan observed,
"The conduct of the parties indeed indicates a threat perception to the fruits of arbitration."
The Court explained that unlike domestic arbitral awards, foreign awards require recognition and enforcement in India before they can be executed. In these circumstances, interim protection was necessary to ensure that the successful party was not deprived of the benefit of the arbitration.
Court's Decision
After considering the existing deposit of approximately EUR 800,000 and the relief sought in the petition, the High Court directed Uzer Makina to deposit the difference required to secure the Indian rupee equivalent of EUR 1.2 million, calculated at the prevailing exchange rate, within four weeks.
The Court further ordered that if CEAT, MRF or any similarly placed entity becomes liable to make payments to Uzer Makina, Uzer Ithalat or any affiliated company, those amounts must be deposited before the High Court until the total security reaches the rupee equivalent of EUR 1.2 million. Only after that threshold is achieved may further remittances be made outside India.
With these directions, the Commercial Arbitration Petition was finally disposed of, while clarifying that all deposits would remain subject to the final outcome of the arbitration proceedings.
Case Details:
Case Title: Malaney Trading and Services LLP Vs Uzer Makina VE Kalip Sanayi A.S. and 3 Others
Case Number: Commercial Arbitration Petition No. 228 of 2022
Judge: Justice Somasekhar Sundaresan
Decision Date: July 7, 2026
