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A Delhi High Court order to attach all assets, including the bank accounts of Dredging Corporation of India Ltd (DCI), for payment of about ₹50 crore in arbitral awards to struggling private fleet owner Mercator Ltd has sent India’s biggest dredging contractor into a tizzy.
In its January 23 order, the Delhi High Court directed DCI to file affidavits of its assets along with particulars of its bank accounts and also attached all the assets, including bank accounts, to the tune of the award amount.
However, the order was kept in abeyance for 15 days to enable DCI to place on record the details of its bank accounts and schedule/proposal to deposit the award amount.
Attachment deferred
On February 6, DCI filed an application before the Delhi High Court seeking dispensation from depositing the decreed amount along with up-to-date interest and to vary the order dated January 23 to the extent that “the attachment of the accounts of DCI be released as the same would cause irreparable loss and DCI would not be able to conduct day to day operations and pay the salaries of its employees”, and sought urgent listing of its application.
On February 10, in view of the submissions made for payment of salaries to DCI employees, the Delhi High Court deferred its order of attachment by 14 days but directed DCI to file an affidavit disclosing details of its assets with specific emphasis on the status of its encumbrances and to provide a schedule for payment of the decretal sum awarded within ten days.
Foreign arbitration ruling
The case relates to a March 15, 2018 foreign arbitration ruling (three awards) wherein the arbitral tribunal directed DCI to pay about ₹50 crore to Mercator.
DCI’s appeal against the arbitral awards was dismissed by the High Court of Justice Business and Property Courts of England and Wales Commercial Court (QBD) and also by the Delhi High Court.
Subsequently, Mercator filed three petitions in the Delhi High Court seeking execution/enforcement of the awards.
On October 31, 2019, the Delhi High Court directed DCI to deposit the entire award amount along with up-to-date interest with the Registrar General of the court within six weeks.
DCI failed to comply with the court directions and filed an application seeking dispensation of the (court) directions on the grounds that it “did not have sufficient funds to satisfy the awards”.
A spokesman for DCI confirmed the court order but declined to comment further saying “the matter is sub judice”.
The court will hear the case again on February 24.
In March 2019, the Central government sold its 74.47 per cent stake in DCI to Visakhapatnam Port Trust, Paradip Port Trust, Jawaharlal Nehru Port Trust and Deendayal Port Trust for Rs 1,049 crore.
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