CAN FOREIGN ARBITRAL AWARDS ARE ENFORCEABLE IN INDIA AND CAN BE TREATED AS DECREES OF THE INDIAN COURTS UNDER SECTIONS 47–49 OF THE ARBITRATION AND CONCILIATION ACT, 1996(2015)?
IMAX CORPORATION VS SUBHASH CHANDRA’S E-CITY ENTERTAINMENT
FACTS OF
THE CASE
On 30 December 2025, a Division
Bench of the Bombay High Court upheld IMAX Corporation’s appeal and allowed
enforcement of foreign arbitral awards against E-City Entertainment (I) Pvt.
Ltd., owned by Subhash Chandra.
This set aside an earlier
single-judge refusal from 24 October 2024 that had declined enforcement.
Mumbai HC held that these ICC London awards are enforceable and to be treated as decrees of the Court under Sections 47–49 of the Arbitration and Conciliation Act, 1996.
NATURE OF DISPUTE
The dispute dates back to September
28, 2000, when IMAX entered into a master agreement with E-City Entertainment
for the lease of six IMAX systems for 20 years, extendable by 10 years
more. Disputes arose during 2003-2004, following which IMAX initiated
arbitration before the ICC in London, claiming $18.3 million plus interest.
ICC AWARD
The ICC tribunal ruled in favour of
IMAX and directed E-City Entertainment to $11.3 million along with interest of
$2,512.60 per se from October 1, 2007. As of March 31, 2018, the total amount
payable had risen to $20.86 million.
FIRM ALIGNMENT WITH THE NEW YORK
CONVENTION AND PRO-ENFORCEMENT JURISPRUDENCE:
· The bench
reinforced that Indian law should interpret “public policy of India” narrowly
under Section 48, consistent with international arbitration norms.
· Objections
like alleged violations of FEMA were rejected as not constituting public policy
grounds to refuse enforcement.
FINALITY
AND RES JUDICATA:
The court applied res judicata to
preclude re-agitation of objections (such as limitation), once finally decided
at an earlier stage of the same enforcement petition. This protects the
finality of interlocutory determinations and discourages procedural tactics
CORPORATE
STRUCTURING SCRUTINY
By addressing asset diversion and
permitting execution against assets held by related companies, the Court
underscores that corporate form cannot be misused to evade arbitral obligations.
RESTRICTION ON E-CITY ENTERTAINMENT
E-City Entertainment has been
restrained from dealing with its properties and assets, including bank
accounts. Similar restrictions apply to the assets transferred to the second
and third respondents which are subsidiaries of E-CITY Entertainment.
OBSERVATION BY MUMBAI HIGH COURT
The court noted that E-City
Entertainment delayed enforcement of the awards for nearly two decades and for diverting assets
worth ₹210 crore during the pendency of arbitration proceedings.
VIJAY KARIA
CASE
Quoting the Supreme Court’s observations in the Vijay Karia case, the bench said the company was indulging in speculative litigation to frustrate enforcement.
LESSONS
LEARNED
The Bombay High Court’s Division bench
decision in IMAX Corporation vs. E-City Entertainment
marks a notable pro-enforcement ruling in Indian arbitration law.
It reinforces international
arbitration principles, narrows judicial review under public policy, and
clarifies procedural doctrines like res judicata in enforcement contexts.
OPTIONS
AVAILABLE TO E–CITY
The bench declined to stay the
operation of its order, noting that the respondent s have
sufficient time to challenge the judgment.
Hence, E-CITY ENTERTAINMENT may
apply to Supreme Court of India to redressal of their grievances.
R V SECKAR , FCS, LLB 79047 19295
