A now-defunct Manhattan-based energy trading company has asked a federal court in New York to dismiss Indian Oil Corporation’s attempt to confirm and enforce a $9.2 million arbitration award, arguing that the state-owned Indian refiner never properly served the company and that the firm ceased operations years ago.
DTI Financial Inc., which formerly operated under the name DGA Energy, filed a motion Wednesday asserting that Indian Oil delivered the petition to a building doorperson rather than to an authorized officer, failing to satisfy the requirements of service under Rule 12(b)(5) of the Federal Rules of Civil Procedure. The company stressed that by the time Indian Oil initiated arbitration proceedings in May 2021, DTI had already dissolved its New York corporate registration and had no staff, offices, or bank accounts.
“DTI has no office, no income, and no assets,” the filing states. “The company has debts exceeding $66 million and all operations ceased in September 2020. Service of the petition was attempted on a person with no authority to accept legal documents, which makes this petition defective on its face.”
Indian Oil, in its petition filed Jan. 2, sought to enforce the $9.2 million award resulting from an arbitration conducted under the Singapore International Arbitration Centre (SIAC). The award stemmed from a dispute over a master LNG sale and purchase agreement, which included a binding arbitration clause, after DTI allegedly failed to deliver liquefied natural gas cargo. Indian Oil also noted that both Singapore and the United States are signatories to the New York Convention, making the award enforceable in U.S. courts.
DTI argued that service of process is a fundamental requirement and that the failure to properly deliver the petition alone warrants dismissal. “Veeia S., the person at 1148 5th Ave. who received the documents, is not an officer, director, managing or general agent, or otherwise authorized to accept service on behalf of DTI Financial,” the filing states. “Once sufficiency of service is challenged, the burden is on the plaintiff to demonstrate proper service. Indian Oil has not met this burden.”
The energy company also noted that the office at which documents were served was empty, all employees had been terminated, and DTI no longer maintains any accounts or assets, highlighting the difficulty in enforcing an award against a dissolved corporation. The motion points out that Indian Oil’s effort to pursue enforcement “appears to be an attempt to collect on a judgment against an entity that effectively no longer exists and cannot fulfill any financial obligations.”
Indian Oil countered that the arbitral award, issued in January 2023, is binding and enforceable. The award, totaling $9.2 million, includes simple interest at 4.75% per year from June 2018 until full payment, reflecting the financial losses Indian Oil alleges it incurred from DTI’s failure to deliver LNG cargo as required under the supply agreement. Indian Oil stated that all communications and notices were sent to DTI’s known addresses, but the company did not respond to the arbitration proceedings.
Legal experts note that the case could hinge on the court’s interpretation of proper service under U.S. federal law, as well as the practical challenges of enforcing arbitration awards against defunct companies with no assets. If the court grants DTI’s motion, Indian Oil may need to pursue alternative avenues or may be left unable to recover the awarded sum.
The Southern District of New York case is being overseen by U.S. District Judge Paul A. Engelmayer. DTI Financial is represented by David K. Bowles of Bowles & Johnson PLLC, while Indian Oil Corp. is represented by Matthew J. Weldon, Tom A. Warns, and Leah J. Kates of K&L Gates LLP.
