LSS Ocean Transport DMCC v. K.I. (International) Ltd. & Anr. (Neutral Citation: 2026:MHC:827; O.S.A (CAD) No. 15 of 2024) was decided by the Madras High Court on 27 February 2026 by a Division Bench comprising Justice C.V. Karthikeyan and Justice K. Kumaresh Babu. The dispute arose from a voyage charterparty agreement under which the appellant, a Dubai-based shipping company, transported coal from South Africa to Krishnapatnam Port, India. Delays in cargo discharge resulted in demurrage claims amounting to USD 379,017, which were awarded in favour of the appellant through arbitration. While the Single Judge enforced the foreign arbitral award only against the contracting party, the appellant sought enforcement against a second respondent company that had issued a cheque as security for the demurrage liability. The Division Bench held that although the second respondent was not a formal signatory to the arbitration agreement, its conduct—particularly issuing the cheque acknowledging the liability—demonstrated participation in the underlying transaction and voluntary assumption of the financial obligation. Accordingly, the Court allowed the appeal and held that the foreign arbitral award could be enforced jointly and severally against both respondents.

Legal Issue

Whether a foreign arbitral award can be enforced against a non-signatory company which was not formally a party to the arbitration agreement but had participated in the transaction and issued a cheque securing the underlying liability.

Brief Facts

The appellant, a Dubai-based shipping company, entered into a Voyage Charterparty Agreement dated 22.01.2018 with the first respondent for transportation of coal from South Africa toKrishnapatnam Port, India. Under the agreement, cargo discharge was required to occur at a specified rate, failing which demurrage charges would accrue.

Court’s Reasoning

The Division Bench examined the relationship between the two respondent companies and the surrounding circumstances of the transaction. It noted that the second respondent had issued a cheque towards the claim raised by the appellant as security for the demurrage liability arising out of the charterparty arrangement. By issuing the cheque, the second respondent had effectively assumed responsibility for the financial obligation arising from the underlying transaction.The Court held that although the second respondent was not a formal signatory to the arbitration agreement, its conduct clearly demonstrated involvement in the commercial arrangement and acknowledgment of the liability determined through arbitration. The act of issuing a cheque as security for the demurrage claim constituted a voluntary assumption of liability, thereby bringing the second respondent within the scope of enforcement of the award.

The Court further observed that permitting the second respondent to evade liability merely on the ground that it was not a signatory to the arbitration agreement would effectively sanction a corporate structure designed to avoid legitimate contractual