Summary:This article analyses the Bombay High Court’s decision in Ningbo Aux Imp and Exp Co Ltd v. Amstrad Consumer India Pvt Ltd & Anr., which held that enforcement of a foreign arbitral award under Part II of the Arbitration and Conciliation Act, 1996, is confined to persons between whom the award was made, and directed deletion of a non-party guarantor from enforcement proceedings. The article also examines the subsequent Section 9 petition, dismissed on the ground that interim measures cannot be directed against a party against whom the award is not enforceable.
Can a foreign award be enforced against an entity that was not a party to arbitral proceedings? The Bombay High Court in Ningbo Aux Imp and Exp Co Ltd v. Amstrad Consumer India Pvt Ltd & Anr., 2025 SCC OnLine Bom 2625, pondered over this question and responded in the negative. It held that the binding scope of foreign awards under Sections 46 and 48 of the Arbitration and Conciliation Act, 1996 (“Act”), is confined to the persons between whom it was made, and enforcement proceedings cannot be deployed to extend that scope. Consequently, the High Court directed the deletion of a non-party guarantor from the enforcement proceedings and vacated an ex-parte disclosure order passed against it.
A subsequent decision in relation to Section 9 proceedings reinforced that interim measures cannot be used indirectly to fasten liability on an entity against whom the award itself is not enforceable.
Factual Background
The dispute arose from a transaction for the supply of air-conditioning units. Ningbo Aux Imp and Exp Co Ltd (“Petitioner”), a Chinese trading company, entered into an agreement with Amstrad Consumer India Pvt. Ltd. (“Respondent No.1”). Accordingly, the Petitioner raised a purchase order on Respondent No. 1, which contained an arbitration clause stipulating that disputes would be resolved via arbitration before the Shanghai International Arbitration Centre (“SHIAC”). Separately, Vijay Sales (India) Pvt Ltd (“Respondent No.2”), a shareholder of Respondent No.1, had executed a ‘guarantee certificate’ for payments up to USD 10 million. Crucially, neither did the guarantee certificate contain an arbitration clause, nor did it incorporate by reference the arbitration agreement contained in the purchase order.
When disputes in relation to non-payment of proforma invoices arose, the Petitioner initiated arbitral proceedings before SHIAC against both Respondents. However, the case manager of the arbitral tribunal verbally directed the Petitioner to refile the Arbitration Application after deleting Respondent No.2 on the ground that it was not a party to the proforma invoices. The Petitioner complied, without any objections. The arbitral tribunal issued an award in November 2023, solely against Respondent No. 1, i.e., directing Respondent No.1 to pay outstanding dues amounting to USD 1,448,940.91/- to the Petitioner and RMB 180,533.38/- towards refund of arbitration fees.
Due to non-payment of the awarded amounts, the Petitioner filed an enforcement petition before the Bombay High Court under Sections 47 and 49 of the Act. In the enforcement proceedings, the Petitioner nonetheless arrayed Respondent No. 2 and secured an ex parte order dated March 12, 2025, directing both Respondents to disclose their assets (“Disclosure Order”). In response, Respondent No.2 filed interim applications seeking its deletion from the array of parties in the enforcement proceedings, and vacation of the Disclosure Order.
View of the High Court
At the heart of the Court’s analysis lay Sections 46 and 48 of the Act. Section 46 provides that a foreign award shall be treated as binding “on the persons as between whom it was made”. Section 48(1)(b) permits refusal of enforcement of a foreign award, where the “party against whom the award is invoked was not given proper notice of the appointment of the arbitrator or of the arbitral proceedings or was otherwise unable to present his case”.
The Court noted that Respondent No. 2 was in an even stronger position to resist the enforcement of the foreign award in comparison to the threshold provided under Section 48(1)(b), as (a) it was not just unable to participate in the proceedings; (b) it was affirmatively excluded from the arbitral proceedings by SHIAC; and (c) the Petitioner chose not to contest that exclusion.
Accordingly, the Court held that given that Respondent No. 2 was not a party against whom the award was made, there was no possibility of enforcing the award against it. Additionally, it led to the conclusion that the ex-parte Disclosure Order was passed without jurisdiction.
The Court further observed that the prayer to disclose assets is in aid of the prayer which seeks appointment of a court receiver in respect of properties of both Respondents, to the extent of USD 1.45 million. Accordingly, compelling Respondent No. 2 to disclose its assets without such disclosure being in aid of a maintainable prayer, would not be appropriate.
However, the Petitioner argued that Respondent No. 2 had waived its right to seek vacation of the Disclosure Order by not raising the issue at the earliest opportunity. The Court rejected this, clarifying that orders passed without jurisdiction or in ignorance of a necessary fact can be recalled. Additionally, given that Sections 46 and 48 of the Act delineate the jurisdictional reach of the enforcement court in respect of a foreign award, any direction to disclose assets or direction to attach such assets, against a person who is not a party against whom the award is made, would be void. This jurisdictional defect cannot be cured by waiver.
Hence, the High Court allowed the interim applications filed by Respondent No. 2, i.e., it directed the deletion of Respondent No.2 from the enforcement proceedings and vacated the Disclosure Order insofar as it pertained to Respondent No.2.
The matter, however, did not end there.
Section 9 Proceedings
After Respondent No. 2 was deleted from enforcement proceedings, the Petitioner filed a fresh petition under Section 9, read with Section 2(2) of the Act.[1] It sought interim measures against both Respondents, inter alia invoking the doctrines of “group of companies” and “lifting of corporate veil”. The Bombay High Court, earlier this year, dismissed the petition. The High Court held in the peculiar facts and circumstances of this case, the Petitioner could not invoke the ‘group of companies’ doctrine, nor could the Court conduct an inquiry into Respondent No. 2’s liability arising out of the guarantee certificate. In essence, the Court held that:
- A court considering interim measures cannot record a finding on a party’s liability, contrary to the one already rendered in substantive proceedings filed for enforcement of award.
- Once the enforcement court holds that a third party has no underlying liability under the award, interim measures cannot be invoked to “fasten” that very liability in a different guise.
- Interim relief under Section 9 of the Act can be directed against a “third party” (i.e., not a party against whom an award is made) only when the third party is claiming through or under the award debtor.
Conclusion
Read together, these decisions reaffirm the jurisdictional limits of enforcement courts under Part II of the Act. The binding force of a foreign award is strictly confined to the persons between whom it is made. Enforcement proceedings cannot be instrumentalised to extend its reach to non-parties, irrespective of their commercial nexus with the award-debtor. The dismissal of the Section 9 petition closes the loop. Interim measures must operate in aid of enforceable substantive relief. They cannot serve as a back-door mechanism to circumvent findings of the enforcement court.
For litigants and practitioners, the message is clear. Guarantors and affiliated entities that are not parties to the arbitral proceedings cannot be subjected to enforcement measures under Part II of the Act. This holds true even in sectors such as technology, where layered corporate structures, multi-entity supply chains, and inter-company guarantees are particularly prevalent. The enforceability of a foreign award remains tethered to the parties between whom it was made. Parties that wish to pursue claims against such entities must do so through independent proceedings under the underlying instruments, rather than through the enforcement framework of the Act.
[1] Ningbo Aux Imp and Exp Co Ltd v. Amstrad Consumer India Pvt Ltd & Anr., 2026 SCC OnLine Bom 441