Summary: When a company is struck off from the Register of Companies (ROC), it is deemed dissolved under the Companies Act, 2013, but this does not nullify its legal rights, including those arising from arbitral awards. The Arbitration and Conciliation Act, 1996, does not recognise striking off as a ground to set aside or resist enforcement of an award. Section 250 of the Companies Act explicitly allows dissolved companies to continue operating for the purpose of realising dues and settling liabilities. Indian courts, including in Exotic Buildcon, Value Advisory, and AB Creations, have affirmed that arbitral awards remain enforceable even if the company is struck off, provided it is restored to the register. Restoration retroactively validates the company’s existence, enabling it to pursue claims and enforce awards, making dissolution a procedural pause rather than a termination of justice.

The Companies Act, 2013, outlines circumstances under which companies may be removed from the Register of Companies (“ROC”)[1], such as not commencing business or operations within a year of the company’s incorporation, or subscribers to the memorandum failing to pay the subscription, etc. Once a company is struck off from the ROC, the Registrar may, unless cause is shown to the contrary, remove its name from the ROC. The Registrar is required to publish a notice in the Official Gazette in this regard, upon which, the company stands dissolved.

But what happens when a company secures an arbitral award in its favour and is struck off from the ROC after the arbitral award is passed? Can the arbitral award be set aside on this ground? Can the arbitral award be rendered unenforceable? This blog aims to analyse some of these questions.

At the outset, neither Section 34, Section 36 or Section 48 of the Arbitration and Conciliation Act, 1996 (“Act”), provide for removal of a company as one of the grounds for setting aside or resisting enforcement of an arbitral award. The Act provides for patent illegality and violation of public policy as the two major grounds for setting aside an arbitral award. An arbitral award can be said to be patently illegal if it is perverse. It can be said to be against the public policy of India if it is in contravention to the law of the land. This raises the question — whether enforceability of an arbitral award in favour of a struck off company is antithetical to any statutory laws of India, thus being contrary to public policy? The answer is a no!

The Companies Act, 2013, particularly Section 250 provides that where a company stands dissolved on account of striking off, it shall cease to operate as a company, except for the purpose of realising the amount due to the company and for payment or discharge of the liabilities or obligations of the company. Therefore, the proceedings for realising the amounts due to the company (which will include amounts under an arbitral award) would not be affected by its striking off.

The Hon’ble Delhi High Court has had the opportunity to examine this issue in Exotic Buildcon Pvt. Ltd. v. Medors Biotech Pvt. Ltd.[2] (“Exotic Buildcon”), M/s. Value Advisory Services v. M/s. ZTE Corporation[3](“Value Advisory”) and A.B. Creations and Another v. Bhan Textiles Private Limited[4](“AB Creations”). In Exotic Buildcon, the Division Bench of the Hon’ble Delhi High Court held that while a company is required to take effective steps for its restoration to pursue its claims, the arbitral award cannot be set aside on the ground of striking off.

While Exotic Buildcon was in the context of a domestic award, Value Advisory dealt with the enforcement of a foreign award under Section 47 and Section 49 of the Act. The company had also filed for voluntary striking off from the ROC. In Value Advisory, during the arbitration proceedings, Value Advisory Services was struck off from the register of companies under Section 560(5) of the Companies Act, 1956 (corresponding to Section 248 of Companies Act 2013), for not carrying out any business or operations. The company was later restored by the company court, following petitions filed by both the company and its creditors. The restoration was imperative because it allowed the company to continue pursuing its claims and enforce the arbitral award granted in its favour. The Hon’ble Delhi High Court emphasised that once a company is restored to the register, it is deemed to have continued in existence as if its name had never been struck off. This principle enabled Value Advisory Services to proceed with its execution petition and enforce the arbitral award.

In AB Creations, the Hon’ble Delhi High Court held that Section 250 of the Companies Act, 2013, in plain and simple grammatical manner provides an exception that even after such an event has occurred, i.e. the company having dissolved or ceasing to operate, it shall remain alive for the purpose of realising the amount due to the company and also for payment or discharge of liabilities or obligations. Mere striking-off of the name of the company from the ROC does not automatically invalidate or renders flawed the litigation initiated by the company to realise its dues. 

The striking off of a company from the ROC may formally dissolve its existence, but it does not extinguish its legal rights or obligations — including those arising from arbitral awards. Indian courts have consistently opined that dissolution is neither a shield against enforcement nor a sword to invalidate legitimate claims. Whether the award is domestic or foreign, its enforceability remains unaffected, provided the company is restored for that purpose. A struck-off company continues to exist for the purpose of realising its dues and settling liabilities. In the realm of arbitration, being struck off is not the final chapter — it is merely a procedural pause in pursuit of justice.

[1] Section 248 of the Indian Companies Act, 2013

[2] 2024 SCC OnLine Del 569

[3] 2017 SCC OnLine Del 8933

[4] 2024 SCC OnLine Del 6981