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The Delhi High Court has issued a notice on a plea by a construction company seeking attachment of movable and immovable assets of the Embassy of Afghanistan for payment owed to it. The company’s plea follows the the collapse of the Islamic Republic of Afghanistan government and its takeover by the Taliban.
The plea concerns the enforcement of an arbitral award against a foreign State, a matter on which the High Court had earlier ruled that a foreign State cannot seek sovereign immunity in a contract arising out of a commercial transaction.
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The counsel for the decree holder, KLA Construction Technologies Pvt Ltd which had carried out work in the Afghanistan Embassy for a consideration of ₹3.02 crore, submitted before the Court that considering the ongoing political turmoil in Afghanistan, the execution of the award in question had become doubtful due to which it is essential that the properties of the judgment debtor (the embassy) are attached in order to secure the execution of the arbitral award. KLA Technologies informed the Court that the exact amount pending payment pursuant to the arbitral award is ₹1.80 crore. The counsel for the embassy pleaded that they had no instructions and were unable to disclose the assets of the judgment debtor.
‘Unclear situation’
“...Coupled with the fact that the prevalent political situation in Afghanistan is not clear, this Court is left with no option but to take on record the details of the assets of the judgment debtors so furnished on behalf of the decree holder in the present application. Being conscious of the fact that the Special Leave Petition against the judgment dated June 18, 2021 (which held that foreign States cannot claim Sovereign immunity in commercial transactions) is pending consideration before the Supreme Court, to safeguard the interest of the decree holder, the Court directs Kotak Mahindra Bank, Branch D Block, Vasant Vihar, New Delhi to ensure that the total minimum balance in three accounts of judgment debtors shall not be less than ₹1.80 crore,” said Justice Suresh Kumar Kait.
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