Injunction Can't Be Granted In Absence Of Any Risk Of Assets Dissipating Or Pleadings Indicating Frustration Of Award: Calcutta High Court

The Calcutta High Court has clarified the conditions under which a court can grant an injunction to secure the amount in dispute before passing an arbitral award. The court ruled that such an injunction, which is a drastic measure, cannot be granted unless the party seeking the injunction can demonstrate that there is a real risk of the other party dissipating its assets to frustrate the future enforcement of the award. The court held that there must be specific pleadings and credible evidence to show this risk. A mere apprehension that the other party might not pay is not sufficient. This judgment ensures that the power to grant pre-award injunctions is not used to harass defendants and is reserved for genuine cases where there is a clear danger that the final award will be rendered unenforceable.