The Chhattisgarh High Court Restores ABB Arbitration Appeals Hitachi ruling clarifies that a company cannot leave pending litigation simply by claiming its liabilities transferred under an NCLT-approved scheme. The Chhattisgarh High Court restored ABB Ltd. as a respondent in two arbitration appeals after setting aside an earlier order that replaced it with Hitachi Energy India Ltd. Justice Naresh Kumar Chandravanshi held that courts must first determine whether the liabilities actually transferred before removing the original party from the proceedings.
Background of the Dispute
The dispute arose during two pending arbitration appeals. ABB Ltd. sought to substitute Hitachi Energy India Ltd. as the respondent.
ABB argued that the NCLT-approved demerger transferred its power grids business and related liabilities to Hitachi. Based on this claim, the lower forum substituted Hitachi for ABB and removed ABB from the proceedings.
Hitachi challenged that order. It argued that the transfer of liabilities remained a disputed legal and factual issue. Therefore, the court could not decide the matter without hearing both companies.
High Court’s Findings
Justice Naresh Kumar Chandravanshi accepted Hitachi’s challenge. The Court held that the transfer of liabilities under an NCLT-approved scheme is a disputed issue that requires proper adjudication.
The Court ruled that ABB cannot exit the litigation merely by asserting that its liabilities shifted to Hitachi. Both companies must remain before the court until it determines the issue.
The Bench observed that if ABB believes its liabilities have passed to Hitachi, the proper course is to implead Hitachi as an additional respondent rather than remove ABB altogether.
Protecting the Rights of All Parties
The Court noted that removing ABB at this stage could prejudice the opposing party. If the court later finds that the liabilities never transferred, the claimant could lose an effective remedy.
Keeping both companies in the proceedings ensures that the court can decide successor liability after examining the evidence.
Final Direction
Accordingly, the Chhattisgarh High Court Restores ABB Arbitration Appeals Hitachi by modifying the earlier substitution order. It restored ABB Ltd. as a respondent while retaining Hitachi Energy India Ltd. as an additional respondent.
The Court directed that both companies remain parties to the arbitration appeals until it finally decides whether the liabilities transferred under the NCLT-approved Scheme of Arrangement.
