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Delhi HC: ‘Forum Shopping’ Inapplicable to Arbitration Award Enforcement Proceedings

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Published on: December 03, 2023 at 12:55 IST

The High Court of Delhi has ruled that the principle of “forum shopping” does not extend to proceedings for enforcing arbitration awards.

Justice Prateek Jalan clarified that concerns about forum shopping in substantive civil cases do not apply when enforcing awards. Award holders retain the right to pursue assets of the debtor in any jurisdiction where these assets exist, without it being deemed as forum shopping.

In the case concerning enforcement proceedings for a foreign award from a Securities Purchase Agreement dated 19.09.2012, conducted under the Singapore International Arbitration Centre, the award debtor contested the court’s jurisdiction.

They claimed non-residency and absence of assets within the court’s jurisdiction. The debtor argued that certain debts were written off, disputing their classification as assets.

Representatives for the award holders countered, stating that despite being marked as “doubtful,” the debts weren’t legally written off, and the debtor still possesses recoverable assets.

The court, drawing from precedent and citing the Supreme Court’s stance, highlighted that writing off a debt doesn’t erase the right to pursue its recovery.

The judgment affirmed that the debts, despite being challenged by the debtor, are still considered assets in the hands of the award debtor, establishing the court’s jurisdiction in enforcement proceedings. Additionally, it clarified that the concept of forum shopping doesn’t apply here, allowing the award holder to pursue enforcement in any jurisdiction with the debtor’s assets, regardless of their value.

The ruling dismissed the objections raised by the award debtor, affirming the court’s jurisdiction in the case titled Taqa India Power Ventures v. NCC Infrastructure Holdings, OMP(EFA)(COMM) 1 of 2018.