Direction Of Disclosure Or Attachment Of Assets Cannot Be Passed Against A Person Who Is Not A Party To The Arbitral Award: Bombay HC
The Bombay High Court has held that a foreign arbitral award cannot be enforced against a person who was not a party to the arbitration proceedings. It ruled that forcing such a person to disclose assets or face coercive enforcement would be without jurisdiction under Part II of the Arbitration and Conciliation Act, 1996.Justice Somasekhar Sundaresan passed the ruling while allowing two...
The Bombay High Court has held that a foreign arbitral award cannot be enforced against a person who was not a party to the arbitration proceedings. It ruled that forcing such a person to disclose assets or face coercive enforcement would be without jurisdiction under Part II of the Arbitration and Conciliation Act, 1996.
Justice Somasekhar Sundaresan passed the ruling while allowing two interim applications filed by Amstrad Consumer India Pvt. Ltd. (Respondent No. 1) and its shareholder (Respondent No. 2) in a commercial enforcement petition filed by Ningbo Aux Imp and Exp Co. Ltd., seeking enforcement of a foreign award passed under an agreement dated October 23, 2020.
Earlier, on March 12, 2025, the Court had passed an ex parte order directing disclosure of assets by both Respondents. However, it was later revealed that Respondent No. 2 was not a party to the arbitration agreement or proceedings and had been expressly excluded by the arbitral tribunal.
The Court said that Section 46 of the Arbitration Act treats a foreign award as binding for all purposes “on the persons as between whom it was made”. Hence, for an award to be binding on a person, such a person ought to be involved in the arbitration proceedings.
The Court noted that an attempt had been made by the Petitioner to make Respondent No. 2 a party to the arbitration proceedings, and that was rejected by the case manager of the arbitral tribunal. It said:
“… not only is it a case where Respondent No.2 cannot be said to be a party who was unable to participate in the proceedings, Respondent No.2 is a person who was sought to be made a party and the very arbitral tribunal whose arbitral award is sought to be enforced, had not permitted making Respondent No.2 a party.”
Hence, the Court observed that if Respondent No.2 is not a party against whom the arbitral award has been made, there is no possibility of enforcing the award against Respondent No.2.
The Petitioner had argued that Respondent No. 2 failed to object to the disclosure order during an earlier hearing on April 3, 2025, and was thus barred by waiver. The Court rejected this argument, holding that the direction to disclose, in itself, was void, and hence, the power to recall ought to be exercised.
“If the foundational jurisdictional fact of the arbitral award being an award made as between the Petitioner and Respondent No. 2 is absent, the order dated March 12, 2025 would be one that was passed without jurisdiction,” the court observed.
Accordingly, the Court vacated the March 12 order as against Respondent No. 2, and directed that Respondent No. 2 be deleted from the proceedings.
Case Title: Ningbo Aux Imp and Exp Co. Ltd. v. Amstrad Consumer India Pvt. Ltd. & Anr. [Commercial Arbitration Petition (L) No. 29646 of 2024]