Bombay High Court Orders Release of 138 Tank Containers; Holds Goods Cannot Be Retained for Dues Arising Under Separate Contracts Without Independent Lien Right
Bombay High Court Allows Section 9 Relief Against Non-Signatory Depots Holding Subject Matter of Arbitration; Orders Release of Tank Containers
Facts
The petitioner owned and operated 138 T-11 ISO tank containers. Under an Agency Agreement dated 4 March 2021, Respondent No.1 was appointed as its Indian agent and was entrusted with these containers for handling, booking and storage in India. Respondent No.1 subsequently placed the containers with Respondent Nos.2 to 4, which operated the depots where they were physically stored.
Clause 3.5.1 of the 4 March 2021 Agreement required Respondent No.1 to return the petitioner’s tanks whenever instructed. The petitioner sought unconditional release of the containers.
The relationship between the petitioner and Respondent No.1 was governed by three separate agreements, each having an arbitration clause: the Agency Agreement dated 8 December 2020; the Agency Agreement dated 4 March 2021; and the Master Tank Container Lease Agreement dated 20 November 2023.
Although the Section 9 petition originally contained reliefs relating to all three agreements, the petitioner ultimately confined the present proceeding to the 4 March 2021 Agreement and did not press the claims arising under the other two agreements.
Issues Before the Court
The Court essentially considered three questions:
- Whether goods delivered under one contract can be retained as a lien to secure money allegedly payable under other contracts when there is no express cross-contractual right of retention.
- Whether a petitioner who originally files a composite Section 9 petition involving several agreements with separate arbitration clauses can subsequently restrict the petition to one agreement and pursue the other claims separately.
- Whether Section 9 relief can be granted against non-signatory third parties who have actual possession of the subject matter of arbitration, including where some of them are situated outside the Court’s territorial jurisdiction.
Respondent No.1’s Lien Claim
Respondent No.1 did not fundamentally object to return of the tanks but claimed a lien over them until its outstanding dues were paid. Its monetary claim was approximately USD 389,576.07.
It invoked Section 221 of the Indian Contract Act and contended that an agent could retain the principal’s property until amounts due to the agent were paid.
The difficulty, however, was that the money allegedly due was not shown to represent charges relating specifically to these 138 containers under the 4 March 2021 Agreement. Rather, the claim arose from the parties’ wider contractual dealings. The Court also noted that the lien claim apparently surfaced only later in the affidavit before the Court, making the asserted general right of retention less persuasive at the interim stage.
Particular Lien vs General Lien
This became an important legal component of the judgment.
The Court distinguished between a particular lien, where goods are retained for a debt connected with those very goods, and a general lien, where goods are retained for some other or unconnected debt.
The Court held that if Respondent No.1’s claim concerned services rendered specifically in relation to the 138 containers, a particular lien question could potentially arise. But retaining these containers for amounts allegedly due under different agreements amounted to asserting a cross-contractual right of retention, and such a right could not simply be presumed.
The Court therefore accepted the broader principle that:
One set of goods cannot ordinarily be retained merely to recover money arising from another transaction unless a contractual or statutory provision authorises such retention.
Composite Section 9 Petition
Respondent No.1 relied heavily upon Duro Felguera, S.A. v. Gangavaram Port Ltd. to argue that separate contracts containing independent arbitration clauses could not be combined into one arbitral proceeding.
The Court accepted the underlying principle of Duro Felguera. Separate contracts having an independent existence and separate arbitration clauses ordinarily cannot be converted into one arbitral dispute.
However, that did not require dismissal of the present petition.
The petitioner had, before adjudication on merits, restricted its Section 9 petition exclusively to the 4 March 2021 Agreement and sought liberty to pursue claims under the remaining agreements separately. Therefore, the defect alleged by Respondent No.1 no longer justified dismissal of the entire proceeding.
The Court also considered the principle underlying Order XXIII Rule 1 CPC. While Section 9 proceedings are not civil suits and the CPC cannot mechanically be applied, its principles can provide guidance where a party elects not to press part of its claim while reserving its right to pursue it separately.
Consequently, claims under the 8 December 2020 Agreement and 20 November 2023 Agreement were treated as not pressed, with liberty to pursue them independently.
Section 9 Relief Against Non-Signatories
Another significant aspect is the Court’s treatment of Respondent Nos.2 to 4.
They were not parties to the arbitration agreement but were physically holding the containers.
The Court held that this fact did not prevent Section 9 relief. Relying upon Housing Development and Infrastructure Ltd. v. Mumbai International Airport Pvt. Ltd., the Court held that Section 9 concerns protection of the subject matter of arbitration.
Therefore, where identified property forming the subject matter of arbitration is physically possessed by a non-signatory claiming through or under a party, protective directions can be issued concerning that property.
Importantly, this does not make the non-signatory a party to the arbitration agreement or impose substantive arbitral liability upon it.
Respondent No.2’s Claim
Respondent No.2 claimed that Respondent No.1 owed it money under an MoU dated 16 July 2026.
The Court held that Respondent No.2 could not use the petitioner’s property as security for its independent monetary claim against Respondent No.1 unless it established an independent legal right to retain those goods.
Accordingly, Respondent No.2 was expressly prohibited from retaining the petitioner’s containers for recovery of its claim against Respondent No.1.
Respondent No.4’s Claim
The position of Respondent No.4 was slightly different.
Respondent No.4 stated that four containers were in its custody and claimed ₹57,297.02 towards terminal and other service charges directly relating to those containers.
Because those charges were connected with the very goods being retained, a potential particular lien issue could arise under Section 170 of the Contract Act.
The Court did not finally determine whether such lien existed. Instead, it balanced the equities by requiring the petitioner to furnish adequate security of ₹57,297.02, after which Respondent No.4 was required to release the four containers.
Missing Containers
There was a discrepancy regarding the physical location of some containers.
In particular, Respondent No.2 stated that Tank Nos. KUKU2500296 and SWIU2260102 were not at its depot.
The Court therefore did not direct Respondent No.2 immediately to deliver containers it claimed not to possess. Instead, Respondent No.2 was directed to file an affidavit identifying their present whereabouts and the person/entity having custody or control. Respondent No.1 was required to cooperate in tracing and securing their delivery.
Final Findings
The Court found that the petitioner established a prima facie entitlement to return of its tank containers under the 4 March 2021 Agency Agreement.
Respondent No.1 failed to establish a sufficient prima facie basis for retaining those containers to secure monetary claims arising under separate agreements. The mere assertion that USD 389,576.07 was outstanding did not itself create a lien over the petitioner’s property.
The Court further rejected Respondent No.1’s argument that the tanks should remain as security because the petitioner was a foreign/Russian entity allegedly facing financial difficulties. An unadjudicated monetary claim under another agreement could not justify retaining property that was contractually required to be returned.
Operative Order
The petition was partly allowed. The Court:
- permitted the petitioner to confine the Section 9 petition to the Agency Agreement dated 4 March 2021;
- treated claims under the other two agreements as not pressed, with liberty to institute appropriate proceedings;
- held that Respondent No.1 was not entitled at this stage to retain the 138 T-11 ISO tank containers as security for USD 389,576.07 allegedly arising from separate contractual dealings;
- directed Respondent Nos.2 to 4 to release the petitioner’s containers actually in their custody;
- prohibited Respondent No.2 from withholding the containers for its claim against Respondent No.1;
- directed release of Respondent No.4’s four containers upon security of ₹57,297.02;
- directed Respondent No.2, within two weeks, to disclose the whereabouts and custodian of the two missing containers;
- restrained Respondent Nos.2 to 4 from transferring, encumbering, disposing of or creating third-party rights in the containers; and
- directed the petitioner to take steps to commence arbitration under the 4 March 2021 Agreement.
The Court clarified that none of its observations finally adjudicated either side’s monetary claims or any lien that might ultimately be proved before the appropriate forum. The remaining prayers were kept open, there was no order as to costs, and the respondents’ request for a stay of the judgment was rejected.
Ratio / Key Proposition
Absent an independent contractual or statutory right, goods entrusted under one contract cannot be retained as security for an unadjudicated monetary claim arising from separate contractual dealings. Further, Section 9 protective relief may extend to non-signatories in actual possession of the arbitral subject matter without making them parties to the arbitration agreement
Case Details
Case: Limited Liability Company “LTB” v. Shri Vaibhavi Logistics & Ors.
Court: High Court of Judicature at Bombay, Ordinary Original Civil Jurisdiction, Commercial Division
Case No.: Commercial Arbitration Petition (L) No. 24421 of 2026
Neutral Citation: 2026:BHC-OS:19043
Coram: Justice Amit Borkar
Reserved: 21 August 2026
Pronounced: 27 August 2026
Provision: Section 9, Arbitration and Conciliation Act, 1996.
Petitioner: Limited Liability Company “LTB”
Respondents: Shri Vaibhavi Logistics; E F C Logistics India Private Limited; JMJ Container Solution; Kashipur Infrastructure and Freight Terminal Private Limited.
