Delhi High Court Directs Bank To Keep Rs 1.8 Cr Balance in Afghan Embassy's Account To Secure Execution Of An Arbitral Award

The Delhi High Court on Monday issued notice on a plea by a decree holder (KLA Const. Technologies) seeking attachment of moveable and immovable assets of the judgment debtor in light of the collapse of Islamic Republic of Afghanistan and the rapid take-over of the country by the Taliban.

The Court was adjudicating upon a plea seeking enforcement of an arbitral award against a foreign State i.e. the Embassy of Islamic Republic of Afghanistan.

The counsel for the decree holder submitted before the Court that considering the ongoing political turmoil in Afghanistan, the execution of the award in question has become doubtful due to which it is essential that the properties of the judgment debtor (Embassy of Afghanistan) are attached in order to secure the execution of the arbitral award. The decree holder also apprised the Court that an amount to the tune of Rs 1 crore and 80 lakhs (including interest) is currently pending payment by the judgment debtor pursuant to the arbitral award.

Taking into consideration the grievance raised, Justice Suresh Kumar Kait observed,

"To safeguard the interest of decree holder, this Court directs Kotak Mahindra Bank, Branch D Block, Vasant Vihar New Delhi to ensure that the total minimum balance amount in three account Nos. 3111478010, 3111478027 and 3111478041 of judgment debtors, shall not be less than Rupees One crore and Eighty Lacs"

The High Court vide its earlier judgment dated June 18, 2021 had held that the instant plea seeking enforcement of the award was maintainable and had further directed the foreign State to deposit the concerned award amount with the Registrar General of the High Court within 4 weeks. The judgment debtor had also been ordered to file affidavit of assets on the date of the cause of action, date of the award as well as on the date of passing of the judgment.

On Monday, Justice Kait noted that 'none of the directions have been complied with'. Accordingly, he opined further,

"Keeping in mind that the arbitral award pertains to the year 2018 and despite directions of this Court vide judgment dated 18.06.2021, learned counsel is unable to disclose assets of judgment debtor and pleads no instructions, coupled with the fact that the prevalent political situation in Islamic Republic of Afghanistan is not clear, this Court is left with no option but to take on record the details of assets of judgment debtors so furnished on behalf of decree holder in the present application"

Furthermore, counsel for the judgment debtor informed the High Court that a Special Leave Petition had been moved in the Supreme Court against the June 18 judgment of the High Court. However, the hearing for the same had been deferred for 6 weeks since the judgment debtor was yet to seek further instructions in this matter. Accordingly, the counsel sought the Court's leave for further extension of time for a period of 2 weeks.

Granting such a request, the Court observed,

"In the meanwhile, judgment debtor shall obtain instructions to assist this Court on the next date of hearing". Liberty was also granted to the judgment debtor to approach the High Court in case of any exigency before the next date of hearing.

The matter is slated to be heard next on September 13.

Advocates Amit George and K.K. Shukla appeared for the decree holder. 

Case Title: LA CONST TECHNOLOGIES PVT. LTD v. THE EMBASSY OF ISLAMIC REPUBLIC OF AFGHANISTAN

Click Here To Read/Download Order