the High Court of Karnataka ruled that an international commercial arbitration award made between parties who have no connection with India can be enforced by a court in India if the property against which the award is sought is within the territorial jurisdiction of the Court.
The Bench, made up of Chief Justice Ritu Raj Awasthi and Justice Suraj Govindarajheld that India, as a signatory to the New York Convention, was required to permit the enforcement of a foreign arbitral award made in a reciprocating jurisdiction, if the property against which the arbitral award was to be enforced was located within the jurisdiction of India.
Petitioner CTI Future Corporation filed a petition in the Karnataka High Court for enforcement of a foreign arbitral award made in Singapore. The arbitral award was registered with the Singapore International Arbitration Center.
Counsel for claimant CTI Future Corporation argued in the High Court that the Central Government by its notification of 06.07.1999 declared that an arbitral award made in the Republic of Singapore can be enforced in India. Counsel asserted that in view of the said notification, an arbitral award made in Singapore could be enforced in India by a court having territorial jurisdiction to issue enforcement orders. Since the property belonging to the defendant against which the interim injunctions were sought was likely to be within the jurisdiction of the Bangalore High Court, he argued that the Court had jurisdiction to make the injunction.
The Court observed that both the Applicant and the Respondent, against whom the award was to be enforced, were legal persons incorporated outside India which had no connection with India.
The Court held that Part II of the Arbitration and Conciliation Act 1996, which deals with the enforcement of certain foreign arbitral awards, provides under section 44 that, for an award to be recognized as a foreign award, it must relate to a business relationship under the laws of India. In addition, the Court held that the award must be made in a jurisdiction where the New York Convention has been made applicable by a notice issued by the central government.
The Court noted that the Central Government’s notification dated 06.07.1999 declared the Republic of Singapore to be a territory to which the New York Convention would apply for the purposes of the enforcement of foreign arbitral awards made in the territory of Singapore.
The Court observed that it was not disputed that the arbitral award rendered was an international commercial arbitral award and that, taking into account the notification of the central government dated 06.07.1999, the arbitral award rendered in Singapore could be enforced in India.
The Court ruled that a foreign arbitral award under the New York Convention was given special status. The Court added that India being a signatory to the New York Convention, India is bound to allow the enforcement of a foreign arbitral award made in a reciprocal country in the case of property located in the jurisdiction of India against which the arbitral award was sought. to apply.
The Court held that in view of the claim filed by the Claimant CTI Future Corporation under Part II of the Arbitration and Conciliation Act and India’s obligation under Section 51 ( (c) of the Constitution of India, the High Court could exercise its jurisdiction to enforce a foreign law arbitral award made between parties having no connection with India, if the property against which enforcement is sought is located within the territorial limits of the Court.
The Court therefore registered the petition filed by the petitioner and notified the respondent.
Case Title: CTI Future Corporation v Ducgiang Chemical and Detergent Powder Joint Stock Company
Dated: 18.02.2022 (High Court of Karnataka)
Counsel for the Applicant: Shreyas Jayasimha
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