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)?

 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