In OWH SE i.L. v. United Company RUSAL International PJSC & Ors., the Hon’ble Telangana High Court restrained the transfer of shares while hearing execution proceedings seeking enforcement of arbitral awards amounting to approximately ₹2,840 crore rendered under the London Court of International Arbitration.
The dispute arose from an international arbitration between a German financial institution and entities linked to the Russian aluminium group Rusal. The arbitral awards were passed by a tribunal constituted under the London Court of International Arbitration, following which the petitioner initiated enforcement proceedings across multiple jurisdictions to recover the amounts awarded.
In the proceedings before the Hon’ble Telangana High Court, the petitioner sought protection of assets located in India to secure enforcement of the arbitral awards. It was submitted that a subsidiary entity connected to the judgment debtor held a 26% shareholding in Pioneer Aluminum Industries, a Hyderabad-based company.
The petitioner contended that unless protective orders were granted, transfer or dissipation of such shares could defeat the enforcement of the arbitral awards. Upon considering the submissions of the parties, the Hon’ble Telangana High Court deemed it appropriate to preserve the subject assets during the pendency of the enforcement proceedings.
The Hon’ble Court accordingly restrained AL Plus Holding LLC from transferring its 26% shareholding in Pioneer Aluminum Industries until further orders. The Hon’ble Court observed that interim protection of assets may be necessary in enforcement proceedings to ensure that arbitral awards are not rendered ineffective due to transfer or diversion of assets.
The judgment reiterates that courts may grant interim protective measures during enforcement proceedings to safeguard assets and ensure that foreign arbitral awards are not frustrated.
