Objections To Award’s Enforcement Not Bona Fide: Delhi High Court Enforces €5.5 Million Foreign Arbitral Award In Mercedes-Benz & Minda Corporation Dispute

The Delhi High Court has enforced a foreign arbitral award of €5.5 Million i.e., approximately Rs. 52 crores in a dispute between Mercedes-Benz Group AG and Minda Corporation Limited.

The Court was hearing a Petition filed by Mercedes under Sections 44-49 of the Arbitration and Conciliation Act, 1996 (A&C Act) and Order XXI of the Civil Procedure Code, 1908 (CPC) for enforcement of a foreign award passed by the Arbitral Tribunal.

A Single Bench of Justice Anish Dayal observed, “The JD, therefore, had consistently confirmed that they were agreeing to settlement, not only through the communication dated 28th September 2021 but also as per clause 3(i) of the Settlement Agreement and agreed to passing of the Consent Award. The objections being pressed by the JD to the enforcement are not bona fide, unjust, unreasonable and a clear attempt to obstruct the enforcement, deploying one stratagem or the other.”

Senior Advocate Rajshekhar Rao represented the Decree Holder while Senior Advocate Sandeep Sethi represented the Judgment Debtor.

Factual Background

In a contractual dispute between Mercedes-Benz Group AG (MBAG)/Decree Holder (DH) and Minda Corporation Limited/Judgment Debtor (JD), the dispute was adjudicated before a three-member Arbitral Tribunal at Stuttgart, Germany. The Arbitral Tribunal was informed that the parties had executed a Settlement Agreement (Settlement Agreement) and the Tribunal was requested to render a Consent Award on that basis. The basic crux of the Settlement Agreement was an agreement by Minda Corporation/JD, to pay DH an amount of EUR 5.5 million.

The said amount was approximately Rs. 52 Crores and was since been deposited by JD, as directed by the Order of the High Court, before the Registry of the Court. An objection was taken by the counsel for JD that the DH had in fact recovered these amounts from the subsidiary of Minda Corporation in Germany, in favour of whom Minda Corporation, India had given an open Letter of Comfort to cover the contractual obligations of Minda Corporation, Germany.

Reasoning

The High Court in the above context of the case, said, “The Court deprecates the stand taken by the JD, particularly, having fully and knowingly entered into a settlement and agreed to a Consent Award being passed, in complete know of facts and circumstances available to them, relating to the previous ‘Bilgery Settlement’.”

The Court noted that the enforcement was objected, however, under Section 48(2) of the A&C Act which permits a Court, even suo moto, to refuse the enforcement if the subject matter of the dispute is not capable of settlement by arbitration in India or if the enforcement of the Award would be contrary to public policy of India.

“It is under section 48(2)(b), which relates to public policy exception, that the objection has been asserted. … Explanation 1 to Section 48 (2)(b) of the A&C Act clarifies that the Award will be in conflict with public policy, inter alia if it is in contravention with fundamental policy of the Indian law. Explanation 2 however, further clarifies that this assessment shall not entail a review on the merits of the dispute”, it added.

The Court, therefore, deprecated the stand taken by the JD, particularly, having fully and knowingly entered into a settlement and agreed to a Consent Award being passed, in complete know of facts and circumstances available to them, relating to the previous ‘Bilgery Settlement’.

Accordingly, the High Court directed that the Foreign Award be enforced as a Decree.

Cause Title- Mercedes-Benz Group AG v. Minda Corporation Limited (Neutral Citation: 2025:DHC:1631)

Appearance:

Decree Holder: Senior Advocate Rajshekhar Rao, Advocates Pallav Shukla, Aayush Chandra, Raashika Kapoor, and Arsh Rampal.

Judgment Debtor: Senior Advocate Sandeep Sethi, Advocates Manu Krishnan, and Shruti Arora.

Click here to read/download the Judgment