Delhi District Court
Solitaire Capital India & Anr vs . Ask Securities Advisory on 29 September, 2013
IN THE COURT OF SH. JITENDRA MISHRA,SCJ/RC
(SOUTH-EAST) SAKET COURTS NEW DELHI
CS NO:139/13
Solitaire Capital India & Anr Vs. ASK Securities Advisory
Services Pvt Ltd & Ors
ORDER
1) Vide this order, application U/s 5 & 8 of the Arbitration and Conciliation Act filed by the defendant no.1 will be disposed off.
2) Briefly, the relevant facts of the case are that the plaintiff has filed the present suit for injunction etc on the basis of "Class A Contribution Agreement dt. 12.09.2006" and defendant no.1 has claimed that as per Clause A Contribution Agreement, clause 19.8 provides clear cut arbitration clause and therefore valid and written agreement persists between the parties. It was further submitted that present dispute is with regard to plaintiff being aggrieved by transfer of units by defendants being in violation of clause 14 of the Contribution Agreement and accordingly the same is covered by said Arbitration Clause, accordingly, it was submitted by the defendant no. 1/applicant that matter be referred to Arbitration and same is accordingly hit by Section 8 of Arbitration and Conciliation Act.
3) On the other hand, plaintiff opposed the said application and claimed that dispute in the present suit is regarding the purported CS NO:139/13 1 attempt to create rights in favour of any third party in respect of the Units issued in Scheme Solitaire II by the plaintiff Trust and as such the present matter cannot be referred to Arbitration as defendant no. 2 & 3 are not a party in the said Arbitration Agreement since there is no arbitration agreement covering all the three defendants in the suit and the present matter cannot be split for referring to Arbitration. It was further submitted that defendant no.2 & 3 are proper and necessary parties to the present suit with reference to the relief claimed in the suit. Accordingly, it was prayed that matter cannot be referred to Arbitration U/s 5 & 8 of Arbitration & Conciliation Act and prayed that application be dismissed.
4) Written submissions were also filed by the parties in support of their respective submissions and various judgments as follows were also filed by the parties in support of their care :
(a) Judgments filed by the plaintiff :
(1). (2003) 5 Supreme Court Cases 531, Sukanya Holdings (P) Ltd. Versus Jayesh H. Pandya and another.
(2). Civil Appeal no. 3777, 4168, 4169 and 4170-4173/2003 and civil Appeal Nos. 6562, 6563-6564, 6565-6566 of 2005 (Arising out of S. L. P (Civil) Nos. 3205 and 14033 -14034/ 2004 and 21272 - 21273/2002), S. B. P and Co. vs Patel Engineering Ltd. and Anr.
(3) Civil Appeal No. 5440 of 2002, titled as Booz Allen and Hamiliton Inc. Vs. SBI Home Finance Ltd. and Ors.
(4) I. A. No.16171/2011 in CS (OS) No.2278/2011, titled as GTL Limited & Ors. Vs. IFCI Ltd. & Ors.CS NO:139/13 2
(5) I. A. No.6546 / 2005 in CS (OS) No.432/ 2005, titled as Alankar Global Pvt. Ltd. and Ors. Vs. Mr. Dinesh Kumar Mathur and Ors.
(6) Original Side Appeal No. 307 of 2012, R. K. Productions Pvt. Ltd. Vs. M/s N. K. Theaters Pvt. Ltd.
(7) IAs Nos. 217 and 8752/02 in Suit No. 2380/2000, titled as Raj and Associates and Anr. Vs. Videsh Sanchar Nigam Limited and Ors.
(8) C. R. P. No. 1274 of 2005, Mrs. Najma Hussain and Ors. Vs. Smt. Manjari Jain and Anr., wherein it has been held that;
(9) C. R. P. No. 134/2005, The Punjab State Electricity Board Vs. Vee Kay General Industries.
(10) AIR 1959SC 1362, 1961The Union of India Vs. Kishorilal Gupta and Bros.
(11) CS (OS) 2436/2008, titled as Pradyuman Overseas Ltd.
Vs. Virgoz Oils and Fas Pte Ltd. and Anr.
(b) Judgment filed by the Defendant :
(1) (2000) 4 Supreme Court Cases 539, P. Anand Gajapathi Raju and others)Versus P. V. G. Raju (Dead) and others, Civil Appeal no. 5251 of 1993, decided on March 28, 2000.
(2) Mumbai International Airport Private Limited vs. Regency Convention Centre and Hotels Private Limited and Ors., (2010) 7 Supreme Court Cases 417 Civil Appeal No.4900 of 2010.
(3) P. R. Shah, Shares and Stock Brokers Pvt. Ltd. Vs. B. H. H. Securities Pvt. Ltd. & Ors. : (2012) 1 SCC 594.
(4) Sukanya Holdings Pvt Ltd v Jayesh H Pandya & Ors :
(2003) 5 SCC 531.
(5) Everest Holding Limited v Shyam Kumar Shrivasava & Ors : (2008) 16 SCC 774.CS NO:139/13 3
(6) M/s Maruti Clean Coal & Power Ltd v Kolahai Infotech Pvt Ltd & Ors : IA No.1659/2010 in CS(OS) No.2241/2009 decided on 10.03.2010 by the Hon'ble High Court of Delhi.
(7) WPIL v. NTPC Ltd & Ors : 2009 (1) Arb LR 378 (Delhi) (8) Ultra Home Constructions (P) Ltd v. Choice Hotels International Inc & Ors : 2012 (1) Arb LR 318 (Delhi).
(9) Tandav Film Entertainment Pvt Ltd v Four Frame Pictures and Anr : decided on 03.12.2009 by the Hon'ble High Court of Delhi in CS(OS) Nos.551 and 552/2009.
(10) RPG Communication Holdings Pvt Ltd v. J Bala Murgan & Ors : (2010) 4 Comp L J 337 (Del).
(11) Damco India Pvt Ltd v Samtel Glass Limited & Ors : 199 (2013) DLT 275.
(12) Rashtriya Ispat Nigam Ltd & Anr v. Verma Transport Co :
(2006) 7 SCC 275.
(5) I have gone through the submission of the parties and records.
U/s 5 & 8 of the Arbitration and Conciliation Act are as under:-
"Section. 5 Extent of judicial intervention:-
Notwithstanding anything contained in any other law for the time being in force, in matters governed by this part, no judicial authority shall intervene except where so provided in this part.
Section 8. Power to refer parties to arbitration where there is an arbitration agreement:-(1) A judicial authority before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party so applies not later than when submitting his first statement on the substance of the dispute, refer the parties to arbitration. (2) The application referred to in sub-section (1) shall not be entertained unless it is accompanied by the original arbitration agreement or a duly certified copy thereof.
(3) Notwithstanding that an application has been made under sub-section (1) and that the issue is CS NO:139/13 4 pending before the judicial authority, an arbitration may be commended or continued and an arbitral award made."
(6) When we consider the agreement dt. 12.09.2006, the same is between Solitaire Capital Trustees Pvt. Ltd as first part, Solitaire Capital Advisors Pvt Ltd is second part and finally ASK Raymond James Securities India Pvt Ltd as third part. When we consider the matter at hand, the defendant no.2 and 3 are not signatory of the said agreement dt. 12.09.2006 wherein the said arbitration clause is contained, accordingly, basic ingredients for referring the parties to Arbitration that the parties must have a binding arbitration agreement is not made out. Though, defendant have tried to submit that defendant no. 3 is not a necessary party etc and also that even if it was not a signatory of the arbitration agreement the same can be referred. However, the fact of whether or not, the defendant no.3 is necessary party cannot be decided at this stage when there is no detailed reply etc filed on behalf of the defendant and accordingly, since the basic ingredients i.e binding arbitration agreement between parties is missing, hence Judgment cited by applicant do not apply to facts of the case. Accordingly, the present application is dismissed. Be put up for further proceeding on 07.11.2013.
Announced in open court (Jitendra Mishra)
on SCJ/RC/SE/Saket Courts
New Delhi
CS NO:139/13 5
CS NO:139/13 6