Foreign Award – Enforcement against a person not party to proceedings

Award was passed in the proceedings arising out of arbitration agreement dated 23.10.2020.  

The enforcement of a foreign award may be refused under Section 48(1)(b) of the ACA at the request of a party against whom it is invoked only if that party furnishes to the Court, the proof that the party against whom the award is invoked was not given proper notice of the appointment of the arbitrator or of the arbitral proceedings or was otherwise unable to present his case.    In the instant case, the respondent no.2 was not even a party to the arbitral proceedings, much less, a party to the proceedings who was entitled to notice of the appointment of the arbitrator or was unable to present his case.

The Respondent No.2 is sought to be roped in as guarantor for the transactions between the petitioner and the respondent No.1.   The Respondent No.2 is the shareholder of the Respondent No.2 guarantees for all the payments to be made by the Respondent No.1 to the Petitioner in respect of future orders upto the level of US $ 10 million.   However, the guarantee certificate does not have an arbitration clause.

Case Manager – An attempt was made by the petitioner to add respondent no.2 to the arbitration proceedings but it was rejected by the Case Manager of the Arbitral Tribunal.  The contention that such rejection cannot be treated as rejection by the Arbitral Tribunal is not correct.   The Case Manager is an officer of the Arbitral Tribunal.   If the Case Manager has wrongly disallowed the respondent no.2 to be made part to the arbitral proceedings, the petitioner ought to have steps to overrule the case Manager.

Judgment dated 4.7.2025 of the Bombay High Court in Commercial Arbitration Petition (L) No.29646 of 2024 of Ningbo Aux Imp and Exp Co Ltd   Vs.  Amstrad Consumer India Pvt Ltd and another with connected matters.