Respondent barred from transferring 26% shares in Pioneer Aluminum to secure awarded funds.
In a significant development, the Telangana High Court, presided by Justice T. Madhavi Devi, has issued an interim order to safeguard the interests of OWH SE i.L., the petitioner, in an execution petition concerning an arbitral award. The court directed United Company Rusal, the respondent, not to transfer 26% of its shares in Pioneer Aluminum Industries Limited. This move aims to prevent any diversion of funds by the arbitral award debtor until the next hearing.
The case, registered as EXEP No. 1 of 2026, involved a complex web of corporate shareholdings, where the award debtor, identified as Respondent No.1, holds complete ownership of Respondent No.3, which in turn possesses all shares of Respondent No.2. The petitioner highlighted these intricacies to assert the necessity of the court's intervention, citing previous unsuccessful attempts in nine other countries to recover the awarded amount due to the debtor's delaying tactics.
During the proceedings, counsel for the petitioner, B Sriram Reddy, argued for an interim measure to secure the awarded funds. The court considered these arguments, particularly the fact that the appeal against the arbitral award had been dismissed, thereby reinforcing the petitioner's position.
Respondent No.2's counsel, represented by Senior Counsel Mr. K.K. Sharma, contended that there was no indication of an imminent share transfer and sought more time to prepare their case. Despite these objections, the court prioritized preventing any potential asset diversion, granting the interim order as a precautionary measure.
The court instructed the petitioner's counsel to serve all necessary documents to the respondents' counsel within a week, either through traditional or electronic means, ensuring due process is followed. The matter is slated for further hearing on April 7, 2026, where the parties will have the opportunity to present their full arguments.
Bottom Line:
Execution of arbitral award - Court directed respondent No.2 not to transfer its shares in Pioneer Aluminum Industries Limited to the extent of 26% of total shares to prevent diversion of funds by the arbitral award debtor until the next date of hearing.
Statutory provision(s): Arbitration and Conciliation Act, 1996
OWH SE i.L. v. United Company Rusal, (Telangana) : Law Finder Doc id # 2864984
