Section 42 has no application in enforcement of Foreign Award, Delhi HC

The Delhi High Court on June 8, 2020 {GLENCORE INTERNATIONAL AG  vs  HINDUSTAN ZINC LIMITED} held that the arbitration can be at a neutral Forum between the two parties and the assets may or may not be at either of the two places. It was held that this is the Forum where parties to an Arbitration Agreement agree to the arbitration proceedings being held and is the subject matter of arbitration. However, it was held that if an enforcement of the Award is filed, it is maintainable only where the properties/ assets of the JD are located, which may or may not be the chosen place of the parties for subject matter of arbitration.

The Single Judge of HC, Justice JYOTI SINGH, further observed that the right or interest to occupy any flat is a species of property and hence has a stamp of transferability and can be attached by a Warrant of Attachment.

In the present case, the JD had raised a preliminary objection on the territorial jurisdiction of the Delhi High Court, in the petition filed for execution of foreign award.

The HC observed that the various provisions of Order XXI CPC clearly held that the only relevant factor in execution of the Award is the location of the assets or the property of the JD and not the JD itself.

The HC held that reading of the earlier judgments along with the provisions of CPC and the Arbitration & Conciliation Act, 1996, leads to a prima facie conclusion that this Court would have territorial jurisdiction to entertain the petition. It was held that the subject matter of the Award is money and the JD has its assets within the territorial jurisdiction of this Court. It was held that the Award holders have made a categorical averment in the petitions that the JD has an Administrative Office in Delhi, as also some moveable properties lying in those premises. It was held that it is also averred that the JD has Bank Accounts in Delhi. Significantly, it was held that the JD in its application, objecting to the maintainability, has admitted that there is an Administrative/ liaison office, though on a Lease from the Government. It was held that there is no document on record at present to corroborate the stand that the premises are on Lease. Insofar as the averment of Bank
Accounts or other movables are concerned, it was held that there is not even a denial. In any case, it was held that in present times, there is a Centralized Banking Systems and Accounts can be operated from any part of the country.

The Delhi HC held that insofar as the argument of the JD that it has challenged the Awards under Section 34 read with Section 48 of the Act and the appeal is pending before the Rajasthan High Court, suffice would it be to state that pendency of those proceedings cannot come in the way of the Petitioners enforcing the Award before this Court. It was held that Section 42 is in Part I of the Act and since Part I itself had no application to a Foreign Award, Section 42 would have no application. Accordingly, the preliminarily objection was rejected by Delhi HC about maintainability.