Matter: Jaldhi Overseas Pte. Ltd v. Steer overseas Private Ltd.
Order dated: 17 November 2021
Summary:
Jaldhi Overseas Pte. Ltd. (Jaldhi Overseas), a company incorporated in Singapore sought to initiate CIRP against Steer Overseas Pvt. Ltd. (Steer Overseas), an Indian company. Dispute arose between the parties and the matter was referred to arbitration in Singapore. The arbitral tribunal passed a partial foreign award in favour of Jaldhi Overseas, who was also granted leave by the High Court of the Republic of Singapore to enforce the arbitral award. Since Steer Overseas refused to make payments, Jaldhi Overseas filed a petition before NCLT seeking initiation of CIRP against Steer Overseas.
The issue before the NCLT was whether a foreign award is sufficient to initiate insolvency proceedings under the Code. The NCLT held that a foreign award is not a decree and mere production of a foreign award does not give an effect to it. The NCLT further clarified the position and explained that under the Arbitration and Conciliation Act, 1996, HC’s alone have exclusive jurisdiction to deal and enforce with foreign awards.
Accordingly, the petition filed by Jaldhi Overseas was rejected and it was held that a foreign award is not sufficient to initiate a CIRP. Further, it was clarified that the NCLT does not have powers of a civil court and cannot execute of a foreign award.
For further information, please contact:
Souvik Ganguly, Partner, Acuity Law
al@acuitylaw.co.in
