Pueblo Holdings Limited v. Emirates Trading Agency LLC, Eta Mauritius Ltd. and others

At a glance

Parties

Pueblo Holdings Limited (Marshall Islands) v. Emirates Trading Agency LLC (UAE), award debtor, and 16 garnishees (ETA Mauritius Ltd. and other Mauritian and Indian companies)

Case no.

E.P. No. 55 of 2019 (High Court of Madras)

Forum and rules

Execution petition under Order XXI, Rule 46 of the Code of Civil Procedure, to execute foreign awards declared enforceable under Part II, Chapter 1 of the Arbitration and Conciliation Act, 1996 (New York Convention)

Treaty

Clause 17 (arbitration clause) of the charterparty dated 9 April 2008

Court

High Court of Judicature at Madras, Justice Pushpa Sathyanarayana (single judge)

Underlying award(s)

Partial Final Award of 9 April 2017 and Second Partial Final Award of 6 August 2017, made by sole arbitrator David Farrington in London

Sector

Shipping; charterparty

Outcome

Execution petition allowed: the debts and shares in the schedule were attached and prohibitory orders under Order XXI, Rule 46 CPC were to issue. No costs.

The dispute

Pueblo Holdings Limited is a wholly owned subsidiary of Navios Maritime Holdings Inc and owned the vessel "Navios Lumen". It brought claims for debt and/or damages against the charterer, Emirates Trading Agency LLC (ETA), under a charterparty dated 9 April 2008 and a Suspension Agreement dated 30 October 2012. ETA did not appear, and a sole arbitrator in London issued two partial final awards against it. On 2 November 2018, in O.P. No. 416 of 2018, the High Court of Madras declared the awards enforceable as decrees of that court. Pueblo then sought to attach and sell shares and debts in Chennai-registered companies, which it said ETA held directly or beneficially through four Mauritian companies (respondents 2 to 5). The garnishees argued four points: the court lacked jurisdiction over shares held from Dubai or Mauritius; a mareva injunction Pueblo had obtained from the Supreme Court of Mauritius barred a second, overlapping attachment; respondent 5 held no assets of ETA; and ETA's beneficial interest had not been decided by a competent court.

Key holdings

1. Under Order XXI, Rule 46 CPC, shares are attached where they are located. The court treated a company's shares as located at its registered office, where its register of members is kept. It relied on Vishwanathan v. Rukn-Ul-Mulk Syed Abdul Wajid, Motorola v. Modi Wellvest and Vodafone v. Union of India. ¶¶ 11–11.4
2. A holder of a foreign award may enforce it wherever the award debtor has assets, and may 'forum shop' on that basis. Where the assets lie in several jurisdictions, execution may be brought in all of those courts at the same time. Forum non conveniens does not apply to execution of foreign awards. ¶¶ 20, 24
3. The court found that a Mauritian mareva injunction and an attachment have similar effect. It said that, since respondents 2 to 5 are third parties based in Mauritius, jurisdiction over them lay with the Mauritian courts, and Pueblo could not obtain an overlapping order for the same relief under a different name. ¶¶ 16, 23
4. The grounds for refusing enforcement under Section 48 of the Act are narrow, and the award was never challenged. The garnishees' objections therefore failed, because the award had been recognised by the court. The executing court cannot re-examine the award; only the award debtor can challenge it, and only in the country where the award was made. ¶¶ 20, 22, 29
5. The court noted that respondents 2 to 5 had taken no steps to have their claimed rights decided, and that neither side had produced documents on the current shareholding. It listed the admitted facts: the foreign award was converted into a decree on 2 November 2018 and was not challenged; a three-year limitation period runs from recognition; and those opposing execution are only garnishees. ¶¶ 26–29
6. Relief: the debts and shares of respondents 1 to 5 held in respondents 2 to 17 were attached, and prohibitory orders under Order XXI, Rule 46 CPC were to issue to the extent of the schedule. The petition was allowed to that extent, with no costs. The judgment does not explain how this order fits with its earlier statement (¶ 23) that jurisdiction over the Mauritian respondents lay with the Mauritian courts. ¶¶ 30–31

Procedural history

1. 9 April 2008Charterparty for the vessel "Navios Lumen" concluded; Clause 17 is the arbitration clause.
2. 21 December 2016Pueblo filed its claim before the sole arbitrator.
3. 9 April 2017 and 6 August 2017Partial Final Award and Second Partial Final Award issued against ETA, which did not appear.
4. 2 May 2018Supreme Court of Mauritius granted Pueblo a worldwide mareva injunction (applied for on 19 April 2018).
5. 2 November 2018High Court of Madras, in O.P. No. 416 of 2018, declared the awards enforceable as decrees of the court.
6. 6 December 2018Injunction granted in O.A. No. 772 of 2018 against respondents 3 to 7 vacated after contest.
7. 7 March 2019Division Bench, in O.S.A. No. 62 of 2019, disposed of the appeal and left Pueblo free to apply to the executing court, with all defences, including jurisdiction, left open.
8. 3 June 2020Execution petition allowed: attachment and prohibitory orders granted.

Tribunal, counsel and experts

Decided by

• Pushpa Sathyanarayana Judge, High Court of Judicature at Madras

For the claimant

Ratnanko Banerji · K. Mukund Rao

For other participants

J. Sivanandaraj · K. Mahendran · P. Giridharan · Srinath Sridevan

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Keywords

• enforcement
• execution of foreign award
• New York Convention
• Arbitration and Conciliation Act 1996
• Section 48
• Order XXI Rule 46 CPC
• attachment of shares
• situs of shares
• garnishee
• mareva injunction
• forum shopping
• forum non conveniens
• charterparty
• Navios Lumen
• ETA Group
• Mauritius
• shipping
• India

Summary generated with AI from the published documents — refer to the award for the authoritative text.