Arbitration – Enforcement of Foreign Award – Jurisdiction of the Court – Asset of Debtor
Foreign award dated 24.1.2018 of SIAC arising out of Securities Purchase Agreement dated 19.9.2012 was sought to be enforced in the High Court of Delhi.
The preliminary objections as also four applications filed on the issue were based on two grounds – Debtor is neither a resident nor possess assets in the jurisdiction of DHC.
It is seen that in the additional affidavit the award holders mentioned that the debtor has assets in the jurisdiction of DHC. Debtor owed outstanding amount of Rs.1,95,70,100/- plus interest from an entity of HGEPL – partial subsidiary of Debtor and which has registered address of Delhi.
The Debtor contended that the debtor had written off the debt since the defunct HGEPL since it was not able to activate its business in Sikkim due to adverse regulatory provisions and was not able to pay its debts.
It was contended that such an approach would lead to “forum shopping”.
In that context, the question arose for consideration – whether the amount owed by HGEPL to the Debtor is its “asset” even if it was written off as claimed by the debtor.
HELD that HGEPL is still in existence, the debt is recoverable even after it is written off in the accounts, the debt is not obliterated or extinguished, the creditor can pursue recovery of written off debt, the debt of HGEPL is an “asset” of the Debtor in the jurisdiction of the DHC even if there is no likelihood of its recovery.
Relying on the extract from “Law and Practice of International Commercial Arbitration” in para 13 of the judgment, it was held that a party seeking to enforce an award in an international commercial arbitration may have a choice of country and a party may be able to go for forum shopping depending on location of assets.
Judgment dated 9.11.2023 of the High Court of Delhi in the case of Taqa India Power Ventures Private Limited and Anr Vs. NCC Infrastruture
