Belvedere Resources DMCC Vs. OCL Iron and Steel Ltd. & Ors. | Date of Order: 01 July 2025 | Case No.: O.M.P.(I)(COMM.) 397/2024 | Neutral Citation: 2025:DHC:5128 | Court: High Court of Delhi at New Delhi | Judge: Hon’ble Mr. Justice Jasmeet Singh
Belvedere Resources DMCC, a UAE-based coal trading company, filed a petition under Section 9 of the Arbitration and Conciliation Act, 1996 seeking interim relief against OCL Iron and Steel Ltd. (R1) and its group entities for securing a claim of USD 2,777,000 (approx. ₹23.34 crore). The petitioner alleged wrongful repudiation of a coal supply contract initially entered into with S.M. Niryat Pvt. Ltd. (SMN), which later amalgamated with R1 pursuant to an NCLT order dated 30 January 2024.
The factual matrix reveals that the agreement for supply of coal was concluded through electronic exchanges and WhatsApp communications in October 2022, incorporating terms based on the Standard Coal Trading Agreement (SCoTA), which included an arbitration clause with Singapore International Arbitration Centre (SIAC) as the seat. The petitioner nominated the vessel MV GLYFADA for delivery, but SMN purportedly cancelled the contract on 15 November 2022 without payment or performance. Arbitration proceedings were later initiated in June 2024 under SIAC.
Before the constitution of the arbitral tribunal, the petitioner approached the Delhi High Court in November 2024 seeking interim protection including attachment of assets, furnishing of security, and disclosure of bank accounts. The respondent contested the maintainability of the petition on grounds of lack of territorial jurisdiction, absence of a concluded arbitration agreement, and non-fulfilment of the legal standard for interim relief under Section 9 of the Act.
Justice Jasmeet Singh, after considering the communications and conduct of the parties, held that a valid arbitration agreement existed under Section 7(4)(b) of the Act through electronic correspondence. However, the Court ruled that it did not have territorial jurisdiction since no part of the cause of action arose in Delhi and the mere existence of a branch office of R1 in Delhi, which had no role in the transaction, was insufficient to confer jurisdiction.
On the merits, the Court declined to grant interim relief. It held that the claim was for unliquidated damages due to breach of contract and did not constitute a "debt due" warranting security under Section 9. The petitioner failed to satisfy the stringent preconditions of Order XXXVIII Rule 5 CPC, such as showing intent of the respondent to dispose of assets to defeat a potential award. The Court noted that commercial borrowing or the respondent’s previous insolvency proceedings were not grounds for presuming mala fide asset dissipation.
Accordingly, the Court dismissed the petition for interim relief, clarifying that its findings would not affect the arbitration proceedings.
