The main legal point established in the judgment is that Section 9 of the Arbitration and Conciliation Act applies to international commercial arbitrations, even if seated outside India, unless specifically excluded by the parties.

JUDGMENT :

Shekhar B. Saraf, J.

1. The petitioner in the instant application [being A.P. No. 707 of 2022] under Section 9 of the Arbitration and Conciliation Act, 1996 [hereinafter referred to as ‘the Act’] is a company incorporated as per the provisions of the Companies Act, 1956, engaged in the business of manufacturing, supplying and marketing refined glycerine.

2. The respondent No.1 is a company incorporated under the laws of the Republic of Singapore and is engaged in the business of selling crude glycerine. The Respondent No.2 is a company incorporated under the provisions of the Companies Act, 1956.

3. The petitioner has filed this application praying for interim relief in the form of either an (i) interim injunction restraining Respondent No.2 from honouring a Letter of Credit in favour of respondent No.1 till the completion of the arbitral proceedings, or (ii) an order directing respondent No.2 to furnish and deposit with this Hon’ble Court an irrevocable bank guarantee in favour of the Petitioner for a sum of US$190,000 till the completion of the arbitral proceedings, or (iii) an order directing the Respondent No. 1 to maintain a balance of US$190,000 in its bank accounts till the completion of the arbitral proceedings between the petitioner and respondent no.1.

4. The petitioner entered into a sales contract dated 31 May, 2022 being No. SC-2122-553 [hereinafter referred to as ‘the contract’] with the respondent no.1 for purchase of two hundred metric tons of crude glycerine at the rate of US$950 per metric ton, for a total price of US$190,000. The specifications agreed upon were as follows:

5. The payment was to be made by way of an irrevocable letter of credit [hereinafter referred to as ‘L.C.’] opened by the petitioner in favour of the respondent no.1 under which payment would be made within ninety days from the date of issuance of a bill of lading for the shipment of the contracted quantity of glycerine. The petitioner had to send the petitioner a draft L.C. to the respondent no.1 for confirmation, prior to the opening of such an L.C. The port of loading was to be any port in the United States of America and the port of discharge was to be Mundra, India.

6. An L.C. for a sum of US$190,000 being No.0006MLC00025123 was opened on June 28, 2022 by the petitioner in favour of the respondent no.1 with the respondent no.2 bank, Rasoi Court branch, 20, Sir Rajendra Nath Mukherjee Road, Kolkata 700 001, as the issuing bank and one DBS Bank Private Limited as the advising and negotiating bank. The L.C. was to be honoured within 90 days from the date of issuance of the bill of lading.

7. The L.C. was opened after a draft L.C. was sent to the respondent no.1 by an electronic mail dated June 17, 2022, which in turn was sent back by the respondent no.1 with alterations by an electronic mail sent on June 20, 2022. Clause 7 of the draft L.C., which required submission of a certificate of analysis of the shipped glycerine in triplicate, was accepted by the respondent no.1 and remained unedited in the mail sent on June 20, 2022.

8. Consequently, Clause 6 of the L.C. dated June 28, 2022 sent to respondent no.1 as an attachment to an electronic mail required submission of a certificate of analysis of the shipped glycerine in triplicate by the respondent no.1.

9. Pursuant to the contract, the respondent no.1 shipped the said quantity of crude glycerine via Scan Global Logistics as carrier from Houston, Texas, United States on July 31, 2022. A bill of lading of the same date, being no.SIN31101259, was also issued.

10. On September 5, 2022 the petitioner was informed vide an email by an officer of the respondent no.1, who relied upon a repor