The court ruled that jurisdiction lies where the assets of the award debtor are located, which in this case, is Qatar, not Telangana.
In a significant ruling, the Telangana High Court has dismissed an Execution Petition filed for the enforcement of Foreign Arbitral Awards dated September 25, 2024, and August 29, 2025. The awards were issued by the London Court of International Arbitration in favor of the petitioner, OWH SE I.L., against United Company Rusal, International P.J.S.C (Rusal) and its subsidiaries. The court held that the jurisdiction for enforcing foreign awards lies where the assets of the award debtor are located, not where the company's shareholders register is maintained. In this case, the situs of the shares in question is in Qatar.
The petitioner had filed the Execution Petition against Rusal and its subsidiaries, contending that Rusal, along with its wholly-owned subsidiaries, Respondent No.2 (R2) and Respondent No.3 (R3), operated as a single economic entity. The petitioner argued that Rusal had deliberately diverted assets to its subsidiaries to frustrate the enforcement of the awards. The court examined the application of the "alter ego" doctrine and piercing the corporate veil, which allows third parties to be impleaded in enforcement proceedings if assets were diverted to evade enforcement.
Despite the petitioner’s argument that Rusal, R2, and R3 are alter egos and operate as a single economic entity, the court found that jurisdiction does not lie with the Telangana High Court. The court noted that the shares of R2 in Pioneer Aluminium Industries Limited, which are located in Qatar, cannot confer jurisdiction to Telangana High Court for enforcement proceedings.
Furthermore, the court emphasized that the registered office of Pioneer Aluminium Industries Limited is in Andhra Pradesh, and under Company Law, jurisdiction is determined by the location of the registered office. Therefore, the jurisdiction should lie with the High Court of Andhra Pradesh, not Telangana.
The court's decision is based on the Arbitration and Conciliation Act, 1996, specifically sections 47 and 48, which govern the enforcement of foreign awards. The ruling underscores the importance of territorial jurisdiction in enforcement proceedings and the necessity of proving the misuse of corporate structure to avoid liability.
The interim order granted on March 3, 2026, which restrained R2 from transferring its shares, stands vacated. The court has suspended the operation of its order for four weeks to allow the petitioner to prefer an appeal.
Bottom line:-
Execution of Foreign Arbitral Awards - Court held that jurisdiction for enforcement of foreign awards lies where the assets of the Award Debtor are located, but in this case, the situs of the shares in question lies in Qatar, and therefore, the Telangana High Court does not have jurisdiction under Sections 47 and 48 of the Arbitration and Conciliation Act, 1996.
Statutory provision(s): Arbitration and Conciliation Act, 1996, Sections 46, 47, 48, 49; Civil Procedure Code (CPC), Section 60, Order 21, Rule 47
