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INDIA 73
High Court of Delhi, 29 May 2023, FAO(OS)(COMM) 59/2023 and CM Nos. 14793/2023 & 14794/2023
(Tomorrow Sales Agency Private Limited v. SBS Holdings, Inc. and Ors.)
INDIA 73
The High Court held that a third-party founder could not be ordered to give security for payment under a SIAC award. While nonsignatories could be bound by an arbitration agreement, based on consensual theories (such as agency) and non-consensual theories, such as alter ego, this was a different case in which a nonsignatory would be ordered to pay under the award, not having been compelled to arbitrate and not having been a party to the arbitration.
The court discusses issues relating to the identity of the party against whom enforcement of the arbitral award is sought, including: piercing of the corporate veil, succession, assignment, State or State entity, group of companies, agent or principal, etc. For the related defenses to enforcement, see Art. V(1)(a).
The court discusses the conditions for granting adjournment of a proceeding relating to the recognition and enforcement of an arbitral award, and the court’s discretionary power to do so, as well the determination of “suitable security” and the power to request it.