The Bombay High Court, in the case of IMAX Corporation v. E-City Entertainment (India) Pvt. Ltd. and Others, ruled that deletion of respondents' names through a chamber summons does not impact the maintainability of an appeal filed under Section 50(1)(b) of the Arbitration and Conciliation Act, 1996.
The case was heard by Justices A.S. Chandurkar and M.M. Sathaye. IMAX Corporation had approached the court challenging the Single Judge’s judgment dated October 24, 2024, which dismissed its Commercial Arbitration Petition No. 414 of 2018. The petition had sought recognition, enforcement, and execution of three foreign awards under Sections 47, 48, and 49 of the Act.
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The Single Judge found the petition time-barred and declined enforcement of the awards. It was also held that the 2nd to 4th respondents were wrongly impleaded, as they were not parties to the arbitration agreement. Consequently, their names were deleted by allowing their chamber summons.
The appellant argued that the entire assets of the 1st respondent were wrongfully diverted to the 2nd to 4th respondents to defeat enforcement. Thus, even if they were not original parties to the arbitration, their presence was crucial for the execution of the awards.
"It is well established that a common petition seeking both recognition and execution of a foreign award is maintainable," submitted Senior Counsel Mr. Aspi Chinoy, appearing for IMAX Corporation.
In contrast, the 2nd to 4th respondents contended that since their names had been deleted through the allowed chamber summons, the appeal was not maintainable against them. They argued that an independent challenge against the deletion order should have been filed.
The High Court, however, clarified that they were not examining the merits but only deciding the maintainability issue.
Relying on the Supreme Court’s judgments in M/s Fuerst Day Lawson Ltd. v. Jindal Exports Ltd. and Government of India v. Vedanta Ltd., the Court emphasized:
"For enforcement of a foreign award, there is no need to undertake separate proceedings for recognition and then execution. A combined petition is permitted, and once enforcement is declined, the execution fails simultaneously."
Thus, the Court held that when enforcement and execution are refused against all respondents, the appeal under Section 50(1)(b) is maintainable against all, including those whose names were deleted by chamber summons.
Importantly, the Court highlighted that even if the chamber summons were allowed, it would not change the outcome, as the entire petition was dismissed on merits. Therefore, insisting on a separate appeal against the chamber summons would cause unnecessary litigation and delay.
Case Title – IMAX Corporation v. E-City Entertainment (I) Pvt. Ltd. and Others
Case No. – Commercial Arbitration Appeal (L) No. 38267 of 2024
Appearance-
For Appellant - Mr. Aspi Chinoy, Senior Advocate with Mr. Shanay Shah, Mr. Rahul Mahajan, Mr. Amit Surve & Ms. Simran Gulabani i/b Fortitude Law Associates, Advocates
For Respondent No. 1 - Mr. Prateek Seksaria, Senior Advocate with Ms. Pooja Tikde, Ms. Krushi Barfiwala, Ms. Rima Desai, Mr. Nishant Chothani, Mr, Rohit Agarwal, Mr. Shlok Bodas & Ms. Jahnavi Bhatia i/b Parinam Law Associates, Advocates
For Respondent No. 2 & 3 - Mr. Navroz Seervai, Senior Advocate with Ms. Gulnar Mistry, Mr. Saket Mone & Mr. Devansh Shah i/b Vidhii Partners, Advocates
For Respondent No. 4 - Mr. Sharan Jagtiani, Senior Advocate with Mr. Saket Mone, Ms. Apoorva Manwani, Mr. Siddharth Joshi & Mr. Devansh Shah i/b Vidhii partners, Advocates
