Enforcement Of A Foreign Arbitral Award Can Be Filed In More Than One High Court: Madras High Court

The High Court of Madras has held that more than one High Court can exercise jurisdiction for the recognition and enforcement of a part of arbitral award if the claims are decided for and against the parties thereto. The Single Bench of Justice Senthilkumar Ramamoorthy held that the Court for the purpose of the enforcement of a foreign award would be the one within whose jurisdiction either the award debtor carries his business or its assets are located within its jurisdiction. The Court held that as a corollary at least two High Courts can have jurisdiction if the arbitrator has allowed the claims of both the parties and each party would file an application for the enforcement of the award in the High Court where the assets of the other party are located. Effect Of Dismissal Of Insolvency Petition Of The Award Holder Against The Award Debtor. The Court further held that merely because the NCLT has declined to admit an insolvency petition preferred by the award holder against the award debtor, it would not preclude the award holder from filing an application for the enforcement of the award. Facts The parties entered into a Securities Purchase Agreement (Agreement) whereby the petitioners agreed to sale their shares in the Himachal Sorang Power Ltd (Company) to the respondent in the paid-up share capital of the Company. Clause 14 of the agreement provided for the resolution of the dispute through arbitration under the Rules of the SIAC. A dispute arose between the parties related to their respective obligations under the agreement, accordingly, the parties were referred to arbitration before the SIAC. The respondent and the company were the joint claimants before the arbitral tribunal, they made several claims. The petitioners also preferred several counter claims against the respondent especially. The Award The arbitrator directed the petitioner no. 1 to pay a total sum of Rs. 119 Crores along with 12% Interest. The respondent was directed to pay a sum of Rs. 9 crores towards the balance sale consideration along with 12% interest thereupon to petitioner no. 1. Petitioner no.1 was directed to pay a sum of Rs. 18.5 Crores towards the cost to the claimants and the claimants in return were directed to pay a sum of Rs. 8.5 Crores to the petitioner no. 2. The Contention Of The Parties The petitioners sought the enforcement of the foreign award on the following grounds: The part of the award that recognizes the right of the petitioner to claim payment from the respondent has attained finality, therefore, the same is liable to be recognized as a decree of the Court. The Company was not a necessary party to the present petition as the award only recognizes the right of the petitioners to recover the amount only from the respondent. The order of NCLT does not preclude the petitioners from seeking the enforcement of a foreign award that has attained finality. The proceedings before the High Court of Delhi are not a bar to the present application as more than one High Court could exercise jurisdiction for the enforcement of a foreign award. None of the ground mentioned under Section 48 of the Act is made out. The respondent objected to the maintainability of the application on the following grounds: The respondent has already filed an application for the enforcement of the award before the High Court of Delhi and only one High Court would have the jurisdiction to entertain an application for the enforcement of a foreign award. The petitioner had preferred an insolvency petition against the respondent which has been rejected by NCLT with an observation that the petitioner does not qualify as the operation creditor of the respondent.The Company who was the joint claimant before the arbitral tribunal has intentionally not been made a party to the petition as the tribunal had directed the petitioners to pay a much larger sum to the Company over which the respondent has an interest. For the same purpose, the Company has filed an affidavit confirming the interest of the respondent over the amount due from the petitioners. The proceedings before the Delhi High Court are for a much larger sum arising out of the same award, therefore, the present petitions are not maintainable. Analysis By The Court The Court held that the Court for the purpose of the enforcement of a foreign award would be the one within whose jurisdiction either the award debtor carries his business or its assets are located within its jurisdiction. It would be the Court that can enforce an award by issuing a process for the attachment or sale of the assets of the award debtor. The Court held that as a corollary at least two High Courts can have jurisdiction if the arbitrator has allowed the claims of both the parties and each party would file an application for the enforcement of the award in the...

Enforcement Of A Foreign Arbitral Award Can Be Filed In More Than One High Court: Madras High Court

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