KLA Const Technologies Private Limited in 2008 had undertaken some work at Afghanistan Embassy in New Delhi but due to certain disputes, the company later invoked the arbitration clause in the contract.
THE DELHI High Court has directed the embassies of Afghanistan and Ethiopia to file affidavits disclosing the assets owned and held by them in India and also directed their authorized representatives to remain present before it on July 30. The order has been passed in petitions filed by two private companies for enforcement of arbitral awards in their favour.
“Both these petitions for enforcement of the arbitral awards are maintainable and the respondents are directed to deposit the respective award amounts with the Registrar General of this Court within four weeks. If the amounts are not deposited by the respondents within four weeks, the petitioners shall be at liberty to seek attachment of the assets of the respondents,” said Justice J.R Midha in an order.
KLA Const Technologies Private Limited in 2008 had undertaken some work at Afghanistan Embassy in New Delhi but due to certain disputes, the company later invoked the arbitration clause in the contract. In 2015, the Supreme Court appointed a sole Arbitrator to adjudicate the disputes between the partes. With Afghanistan avoiding the arbitration proceedings, the Arbitrator passed an ex-parte award in November 2018 in favour of KLA Const Technologies. Approximately Rs.1,72,65,000 has become due to it under the arbitral award dated November 26, 2018 as on May 6, 2021, the court was told.
Similarly, Matrix Global Private Limited in June 2012 had entered into a contract with Ethiopia’s Ministry of Education for supply and distribution of books to the country. While the books were shipped to Ethiopia in 2013, the company was allegedly not paid the full amount and the contract was also cancelled in April 2014 leading to arbitration proceedings. Ethiopia also skipped the arbitration proceeding leading to an ex-parte award in favour of the company in October 2015. Approximately Rs.7,60,75,997 as on May 6, 2021, is to be paid by Ethiopia to the company, the court was told.
The companies argued before the court that prior consent of the central government is not necessary under Section 86(3) of the Code of Civil Procedure to enforce an arbitral award against a foreign State. It was also contended that a foreign State cannot claim a sovereign immunity against enforcement of an arbitral award arising out of a commercial transaction.
Justice Midha agreed with the contentions and directed both the embassies to file an affidavit disclosing their assets on the date of the cause of action, date of the award as well as on June 18, within 30 days of the receipt of the notice.
Besides the assets owned and held by them in India, the embassies have also been directed by the court to disclose information regarding all the bank accounts, and their statements, held by them with any bank in India. They have also been directed to disclose information about all their commercial ventures and transactions in India.
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