Summary: LSS Ocean Transport DMCC won an appeal to enforce an arbitration decision against K.I. International Ltd. and its group company, Goyal Ispat Private Limited, even though Goyal Ispat wasn't part of the original arbitration.
On January 22, 2018, LSS Ocean Transport DMCC (LSS) signed an agreement with K.I. International Ltd. (K.I.) to transport coal from South Africa to Krishnapatnam Port, India. The ship, MV Citrus, arrived at the port on January 30, 2019, and finished unloading by March 5, 2019. Problems came up over extra charges because unloading took longer than expected.
LSS claimed extra charges for 27.0727 days, totaling USD 379,017, because unloading took longer than the agreed 6.5246 days. K.I. disagreed, saying unloading only took 12.4972 days, so they should pay less.
To sort out payment issues, LSS and K.I. made agreements where K.I. gave cheques as a promise to pay later. When these cheques bounced due to K.I.'s money problems, LSS started arbitration in London, which decided in LSS's favor on March 26, 2021.
Goyal Ispat, a related company of K.I., gave a cheque as a promise to pay for the disputed charges. Even though they weren't part of the original agreements or arbitration, they were involved in providing financial security.
On February 27, 2026, Judges C.V. Karthikeyan and K. Kumaresh Babu of the Madras High Court allowed the enforcement of the arbitration decision against both K.I. and Goyal Ispat. The court noted that Goyal Ispat willingly gave a cheque as a promise to pay and knew about the arbitration.
"The 2nd respondent had voluntarily and consciously offered the cheque as security for the enforcement of the award, if passed and for no other purpose."
This judgment shows that group companies can be responsible when they provide financial promises for issues involving related companies. The court emphasized that giving a cheque as a promise to pay created a duty for Goyal Ispat to follow the arbitration decision.
The court decided that both K.I. International Ltd. and Goyal Ispat Private Limited are responsible for paying the arbitration decision because Goyal Ispat willingly provided financial security.
