NINGBO AUX IMP AND EXP COMPANY LIMITED Vs. AMSTRAD CONSUMER INDIA PRIVATE LIMITED

JUDGEMENT

(1.) This is a post-foreign award Petition filed under Sec. 9 read with Sec. 2(2) of the Arbitration and Conciliation Act, 1996 (Arbitration Act) seeking interim measures for securing the awarded sum from Respondents during pendency of enforcement proceedings filed by the Petitioner under Ss. 47 and 49 of the Arbitration Act. The Petition involves the issue of permissibility to make interim measures under Sec. 9 of the Act against a third party, who is deleted from enforcement proceedings filed by the award creditor under Ss. 48 and 49 of the Act and against whom the award is no longer enforceable.

(2.) Petitioner- Ningbo Aux Imp and Exp Co. Ltd. (Ningbo) is a company incorporated under the laws of People's Republic of China and is engaged in the business of providing international trading services, particularly export of air-conditioners and related spare parts and products. The first Respondent Amstrad Consumer India Private Limited (Amstrad) was formerly known as OVOT Private Limited (Ovot), which is engaged in manufacture of electric motors, generators, transformers and sale of home appliances. Petitioner entered into an agreement with Amstrad/Ovot, under which Respondent No.1 agreed to purchase AC units from the Petitioner. The Purchase Order dtd. 23/10/2020 placed by Amstrad upon Petitioner contained an arbitration clause. Petitioner supplied AC units to Amstrad. Respondent No.2- Vijay Sales (India) Private Limited (Vijay Sales) apparently had links with Amstrad since promoters and directors of Vijay Sales held key managerial positions in Amstrad. According to Petitioner, Vijay Sales had executed guarantee certificate on 28/2/2020 guaranteeing that it would be responsible for all payments to be made by Amstrad/Ovot to Ningbo for orders upto USD 10 million and that if Amstrad/Ovot made any payment default, Vijay Sales would be responsible to pay to Ningbo. The guarantee certificate was valid from 1/3/2020 to 31/8/2021. It is Petitioner's contention that the sale transaction for AC units was entered into by Ningbo with Amstrad/Ovot on the strength of guarantee issued by Vijay Sales.

(3.) Disputes arose between Ningbo and Amstrad/Ovot in respect of payment of proforma invoices issued between 8/2/2021 to 12/2/2021. Ningbo therefore wrote to Vijay Sales on 24/4/2021 to fulfil its guarantee and make payment on behalf of Amstrad/Ovot. Vijay Sales responded stating that all dues payable to Amstrad/Ovot were fully paid.