Delhi High Court
Bharti Tele-Ventures Ltd. & Ors vs Dss Enterprises Pvt. Ltd. & Ors on 3 July, 2018
Equivalent citations: AIRONLINE 2018 DEL 750
Author: Rajiv Sahai Endlaw
Bench: Rajiv Sahai Endlaw
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of decision: 3rd July, 2018
+ CS(OS) No.1769/2003
BHARTI TELE-VENTURES LTD. & ORS. .... Plaintiffs
Through: Mr. Gopal Jain, Sr. Adv. with
Mr. Tejveer Bhatia, Ms. Kriti
Pujari and Mr. Rohan Swarup,
Advs.
Versus
DSS ENTERPRISES PVT. LTD. & ORS. ......Defendants
Through: Mr. Vineet Jhanji and Mr.
Imran Maulaey, Advs. for D-1.
CORAM:
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
1. The plaintiff no.1 Bharti Tele-Ventures Ltd. (BTVL) instituted
this suit, for (i) declaration that the request dated 22nd August, 2003
submitted by defendant no.1 DSS Enterprises Pvt. Ltd. (DSS) to
defendant no.6 ICC International Court of Arbitration (ICC) is illegal
and invalid and that the communication dated 28th August, 2003
issued by ICC pursuant thereto is illegal and invalid; (ii) permanent
injunction prohibiting ICC from acting upon or commencing any
proceeding pursuant to the request dated 22nd August, 2003 of DSS for
arbitration; and, (iii) permanent injunction restraining DSS from
seeking to make reference and / or commencing arbitration proceeding
on the basis of Arbitration Agreement contained in the Joint Venture
Agreement (JVA) dated 12th August, 1992.
2. It was inter alia the case of BTVL in the plaint that:
CS(OS) No.1769/2003 Page 1 of 19
(a) on 3rd March, 1992, Skycell Communications Ltd.
(Skycell) was incorporated;
(b) on 12th August, 1992, a JVA was entered into between
DSS, defendant no.2 Crompton Greaves Ltd. (CGL), defendant
no.3 BellSouth International (Asia/Pacific) Inc., USA
(BellSouth) and defendant no.4 Millicom International Cellular
S.A., Luxembourg (Millicom), to subscribe to equity shares in
the capital of Skycell and in pursuance whereto CGL, BellSouth
and Millicom acquired 40.5%, 24.5% and 24.5% shares
respectively of SkyCell; the remaining 10.5% shares of Skycell
were held by DSS;
(c) CGL, BellSouth and Millicom, being parties to JVA, sold
their respective shareholding in Skycell to BTVL which thus
acquired 89.5% shareholding of Skycell;
(d) Skycell has since merged into defendant no.5 Bharti
Cellular Ltd. (BCL);
(e) DSS, at the time of filing of this suit, was having
shareholding of 0.34% only in BCL;
(f) from the request for arbitration made by DSS to ICC it is
evident that the cause of action thereof is the JVA and DSS
claims that it has been denied its rights, protection and benefits
as a shareholder under the JVA;
(g) DSS is estopped from invoking arbitration of ICC,
because:
(i) DSS filed Suit No.2089/2001 in this Court
impleading BTVL, BellSouth, Millicom and Skycell as
CS(OS) No.1769/2003 Page 2 of 19
defendants thereto, making the same averments as made
in the request for arbitration to ICC and seeking to
restrain Skycell and Millicom from effecting any changes
in the Board of Directors of Skycell and in the capital of
Skycell;
(ii) DSS, by filing such a suit clearly acknowledged
that there is no Arbitration Agreement in force and
existence;
(iii) even if there were such an agreement, DSS having
submitted to the jurisdiction of this Court, ought to be
held to have waived, repudiated or abandoned the
Arbitration Agreement;
(iv) BTVL had also filed Suit No.2202/2000
impleading DSS, CGL, BellSouth and Millicom as
defendants thereto; the said defendants filed applications
under Section 45 of the Arbitration & Conciliation Act,
1996 (Arbitration Act) and sought to have the matter
referred to arbitration on the basis of Arbitration
Agreement contained in the JVA; the said applications
were rejected vide order dated 15th May, 2001 holding
that unless the party applying for arbitration (under
Section 45 of the Arbitration Act) accepts each of the
other parties, as parties to the Arbitration Agreement,
there can be no reference to arbitration under Section 45
of the Arbitration Act; DSS was not accepting BTVL as
party to the Arbitration Agreement contending that
CS(OS) No.1769/2003 Page 3 of 19
BTVL was a stranger to the Arbitration Agreement; the
said order dated 15th May, 2001 has become final and
binding on the parties and as a result thereof, DSS cannot
enforce the Arbitration Agreement against the BTVL;
(v) DSS also filed Suit No.115/2000 before the District
Court, Delhi impugning the transfer of shares held by
CGL in Skycell without the consent of DSS; though
BellSouth and Millicom being defendants to the said suit
applied for reference of disputes to arbitration but the
applications filed in this respect were not pressed; the
Suit No.115/2000 also had since been dismissed though
an appeal filed by DSS thereagainst was pending; and,
(vi) BellSouth filed OA Nos.103-104/2000 before the
High Court of Madras under Section 9 of the Arbitration
Act on the basis of the Arbitration Agreement contained
in the JVA and pursuant to order wherein an agreement
was arrived at on 3rd May, 2000 and CGL, DSS and
BellSouth agreed to sell their shareholding to BTVL.
3. The tussle amongst the parties is for the management and
control of BCL.
4. The suit came up before this Court first on 26 th September,
2003, when the counsel for DSS appeared and while issuing summons
of the suit, the arbitration proceedings to be held pursuant to the letter
of request dated 22nd August, 2003 of DSS were stayed.
5. CGL and BCL who were defendants no.2 and 5 respectively in
the suit as originally filed, applied for transposition as plaintiffs no.2
CS(OS) No.1769/2003 Page 4 of 19
and 3 and the same was allowed on 1st October, 2003 and the interim
order continued.
6. DSS preferred FAO(OS) No.345/2003 against the order dated
13th October, 2003 of extension of interim order and which appeal was
disposed of on 20th November, 2003 observing that since Single Judge
was hearing the application for interim relief, there was no need to
interfere.
7. Only DSS and BellSouth filed written statements. While DSS
opposed the suit, BellSouth in its written statement supported BTVL.
8. DSS, in its written statement has pleaded (i) that the suit is
barred by Section 5 of the Arbitration Act; (ii) that the Arbitral
Tribunal can decide on its own jurisdiction and the Civil Courts have
no jurisdiction to decide the same; (iii) CGL, BellSouth and BCL had
themselves moved an application under Section 45 of the Arbitration
Act for reference of disputes to arbitration; (iv) that merger of Skycell
into BCL is illegal; (v) that the alleged termination of JVA is wrongful
and illegal; (vi) that the request for arbitration was made by DSS on
account of various breaches committed by BTVL, CGL, BellSouth,
Millicom and BCL in respect of JVA; (vii) that DSS, by filing suit
No.2089/2001 has not in any way waived and / or abandoned the
Arbitration Agreement and has rather in the plaint therein expressly
reserved its rights to refer disputes to arbitration; (viii) that in any
event, the question whether DSS has abandoned the Arbitration
Agreement or not is also in the exclusive domain of the Arbitral
Tribunal; (ix) that the order dated 15th August, 2001 in suit
No.2202/2000 is not final and binding and was only an interim order
CS(OS) No.1769/2003 Page 5 of 19
and suit No.2202/2000 has since been withdrawn; (x) that Suit
No.115/2000 filed by DSS does not constitute an acknowledgement
that Arbitration Agreement had come to an end and RFA No.725/2003
preferred against the dismissal of the said suit is pending
consideration; and, (xi) that DSS was not a party to Agreement dated
3rd May, 2000 pursuant to order dated 6th April, 2000 in OA Nos.103-
104/2000 of the High Court of Madras.
9. The application for interim relief was finally disposed of by a
detailed judgment dated 17th August, 2005 whereby arbitration
proceedings requested by DSS vide letter dated 22 nd August, 2003 and
the operation of the letter dated 28th August, 2003 of ICC in pursuance
thereto, was stayed during the pendency of the suit and the benefit of
the said order was also extended to CGL and BCL.
10. Vide subsequent order dated 10th January, 2011, on the
pleadings of the parties, the following issues were framed in the suit:
"1. Whether the present suit is barred by any provisions of the
Arbitration & Conciliation Act, 1996? OPD-1
2. Whether the defendant no.1 has waived, repudiated and / or
abandoned the Arbitration agreement by filing a suit being Suit
No.2089/2001 - DSS Enterprises Pvt. Ltd. vs. Bellsouth
International & Ors. Before this Court? OPP
3. Relief?"
and the counsel for BTVL and the counsel for DSS stated that no oral
evidence is required to be led and the parties were relying only on
pleadings in the admitted litigation inter se the parties and the orders
passed therein and the suit may be listed for final disposal.
CS(OS) No.1769/2003 Page 6 of 19
11. Though DSS preferred FAO(OS) No.401/2005 against the order
/ judgment dated 17th August, 2005 supra allowing the application of
BTVL for interim relief, but the said appeal was dismissed for non
prosecution on 15th January, 2010. Though subsequently, vide order
dated 9th August, 2011, the appeal was restored to its original position
but the counsel for DSS on the same day withdrew the appeal in view
of the suit itself having been posted for final hearing.
12. The suit thereafter was adjourned from time to time and came
up before the undersigned on 18th December, 2016 when the counsels
again sought adjournment. The senior counsel for BTVL and the
counsel for DSS who alone have been appearing, were heard on 4th
January, 2017 and order reserved granting liberty to the counsels to
file affidavits of costs. Affidavit in this respect has been filed by
counsel for DSS.
13. The senior counsel for BTVL argued that (i) in earlier suit filed
by BTVL, the application of DSS under Section 45 of the Arbitration
Act was dismissed vide order dated 15th May, 2001; (ii) that though
the said order was appealable under Section 50 of the Act but DSS did
not prefer any appeal; (iii) DSS admittedly made request for
arbitration on the same subject matter; (iv) that the order dated 15 th
May, 2001 having attained finality, DSS is barred by res judicata from
contending that the disputes are arbitrable; (v) that the principle of
issue estoppel also applies; DSS, after allowing the order dated 15th
May, 2001 to attain finality, is estopped from making a request for
arbitration; (vi) the judgment dated 17th August, 2005 on the
application of BTVL for interim relief also holds that since the stand
CS(OS) No.1769/2003 Page 7 of 19
of DSS in the application filed under Section 45 of the Arbitration Act
in the earlier suit unequivocally was that BTVL was not a party to the
JVA and since there is no agreement between BTVL on the one hand
and CGL, BellSouth, Millicom and DSS on the other hand, the
application of DSS under Section 45 was not maintainable and it is not
open to DSS to make a request for arbitration including against
BTVL; (vii) that even otherwise, the prayers in the request for
arbitration were infructuous because the license earlier granted to
Skycell with respect to the Chennai Telecom Circle no longer existed
and there is no arbitrable dispute; and, (viii) reliance was placed on
paras no.131.1. and 131.2. of Chloro Controls India Pvt. Ltd. Vs.
Severn Trent Water Purification Inc. (2013) 1 SCC 641 and on para
no.8 of S.N. Prasad, Hitek Industries (Bihar) Ltd. Vs. Monnet
Finance Ltd. (2011) 1 SCC 320.
14. Per contra, the counsel for DSS argued that (a) claims in the suit
filed by DSS in this Court were de hors the JVA and thus institution
of the suit does not bar DSS from invoking arbitration when arbitrable
disputes arose; (b) that the objections if any of BTVL, CGL and/or
BCL to arbitrability will be decided by ICC; (c) reliance was placed
on (i) Venture Global Engineering Vs. Satyam Computer Services
Ltd. (2008) 4 SCC 190, (ii) paras no.9,21.1, 21.2, 31 and 34 to 40 of
Chatterjee Petrochem Company Vs. Haldia Petrochemicals Ltd.
(2014) 14 SCC 574; (iii) para no.40 of World Sport Group
(Mauritius) Ltd. Vs. MSM Satellite (Singapore) Pte. Ltd. (2014) 11
SCC 639; and, (iv) para no.165 of Chloro Controls India Pvt. Ltd.
supra.
CS(OS) No.1769/2003 Page 8 of 19
15. The senior counsel for the plaintiff, in rejoinder referred to
Enercon (India) Ltd. Vs. Enercon GMBH (2014) 5 SCC 1.
16. I have perused the records.
17. Before looking at the factual matrix any further, I may state and
as the issues framed in the suit also suggest, the first question to be
adjudicated is, whether at all a suit for declaration that there is no
arbitration agreement between the parties and for injunction
restraining commencement or continuation of arbitral proceedings is
maintainable. Only if such a suit is found to be maintainable, will the
second question, whether the facts and circumstances of the present
case justify the declaration and injunction sought, would arise. On the
contrary, if it were to be held that such a suit is not maintainable,
howsoever strong the case of BTVL may be for restraining DSS from
continuing with the arbitration, BTVL would not be entitled to such an
order.
18. Having held in Roshan Lal Gupta Vs. Parasram Holdings Pvt.
Ltd. 2009 (109) DRJ 101, Spentex Industries Ltd. Vs. Dunavant SA
2009 SCC OnLine Del 1666 (MANU/DE/41662/2009) (RFA(OS)
No.69/2009 preferred whereagainst was dismissed on 29th October,
2009), Shree Krishna Vanaspati Industries (P) Ltd. Vs. Virgoz Oils
& Fats Pte Ltd. 2009 SCC OnLine Del 1665, M. Sons Enterprises
Pvt. Ltd. Vs. Suresh Jagasia 2011 (123) DRJ 266 and Ashok Kalra
Vs. Akash Paper Board Pvt. Ltd. 2013 SCC OnLine Del 3299, that a
suit of the present nature is not maintainable, I had in the order dated
8th December, 2016 itself observed that prima facie the suit did not
appear to be maintainable and was liable to be dismissed.
CS(OS) No.1769/2003 Page 9 of 19
19. None of the judgments cited by the senior counsel for the
plaintiff are on the aspect of maintainability of such a suit.
20. Upon the same being put to the senior counsel for the plaintiff,
he stated that there is no judgment holding such a suit to be not
maintainable.
21. As far as the reference by the senior counsel for BTVL to the
observations in the judgment dated 17th August, 2005 on the
application under Order XXXIX Rules 1 and 2 of the CPC is
concerned, it is well settled principle that any observation contained in
the order on the application under Order XXXIX Rules 1 and 2 of the
CPC has no bearing at the time of final disposal of the suit. In fact,
the counsel for DSS, on 9th August, 2011, before the Division Bench,
had expressed an apprehension that the said judgment may tend to
influence the final hearing in the suit and the Division Bench, in the
order of the said date observed that there was no reason for such an
apprehension as it is a settled principle that interim injunction is
passed on a prima facie view of the matter at that stage and cannot
influence the final judgment and it was in view of the same that DSS
had withdrawn the appeal. It is thus not open to BTVL to today rely
upon any observation in the judgment making the ad-interim
injunction in favour of BTVL, absolute.
22. Even otherwise, there can be no res judicata on a question of
law, even between the same parties, at successive stages of the same
proceeding and the Court is not bound to decide a lis in violation of
law, merely because an error of law may have been committed in an
earlier order / judgment which has attained finality between the
CS(OS) No.1769/2003 Page 10 of 19
parties. Supreme Court, in Erach Boman Khavar Vs. Tukaram
Shridhar Bhatt (2013) 15 SCC 655, held that to attract the doctrine
of res judicata, it must be manifest that there has been conscious
adjudication of an issue; a plea of res judicata cannot be taken aid of
unless there is an expression of an opinion on the merits; it is well
settled in law that principle of res judicata is applicable between the
two stages of the same litigation but the question or issue involved
must have been decided at earlier stage of the same litigation. An
order on an application under Order XXXIX Rules 1&2 of the CPC is
not an order delineating on merits the respective contentions; it is only
on a prima facie view of the matter. Recently, in Canara Bank Vs.
N.G. Subbaraya Setty 2018 SCC OnLine SC 427, after considering a
host of case law, it was summarised (i) the general rule is that all
issues that arise directly and substantially in a former suit or
proceeding between the same parties are res judicata in a subsequent
suit or proceeding between the same parties; these would include
issues of fact, mixed questions of fact and law and issues of law; (ii) to
this general proposition, there are certain exceptions, when it comes to
issues of law; (iii) where an issue of law decided between the same
parties in a former suit or proceeding relates to jurisdiction of the
Court, an erroneous decision in the former suit or proceeding is not res
judicata in a subsequent suit or proceeding between the same parties,
even where the issue raised in the second suit or proceeding is directly
and substantially the same as that raised in the former suit or
proceeding; an erroneous decision as to the jurisdiction of a Court
cannot clothe a Court with jurisdiction where it has none; and, (iv) an
CS(OS) No.1769/2003 Page 11 of 19
issue of law which arises between the same parties in a subsequent suit
or proceeding is not res judicata, if by an erroneous decision given on
a statutory prohibition in the former suit or proceeding, the statutory
prohibition is not given effect to; this is despite the fact that the matter
in issue between the parties may be the same as that directly and
substantially in issue in previous suit or proceeding - this is for the
reason that in such cases, the rights of the parties are not the only
matter for consideration, as the public policy contained in the statutory
prohibition cannot be set at naught.
23. Thus, notwithstanding the interim order in this suit restraining
International Commerical Arbitration initiated by DSS against BTVL,
the aspect of maintainability of a suit for the said relief has to be
adjudicated.
24. Supreme Court, in Kvaerner Cementation India Limited Vs.
Bajranglal Agarwal (2012) 5 SCC 214, held that though there cannot
be any dispute that in the absence of an arbitration agreement, no
dispute could be referred for arbitration to arbitral tribunal, but bearing
in mind the very object with which Arbitration Act has been enacted
and the provisions contained in Section 16, conferring the power on
the arbitral tribunal to rule on its own jurisdiction including ruling on
any objection with respect to existence or validity of the arbitration
agreement, Civil Court cannot have jurisdiction to go into that
question; moreover, a decision of an arbitral tribunal on an objection
to its jurisdiction is amenable to be assailed within the ambit of
Section 34 of the Arbitration Act; in this view of the matter, the Civil
Court cannot go into the said question.
CS(OS) No.1769/2003 Page 12 of 19
25. Supreme Court recently in A. Ayyasamy Vs. A. Paramsivam
(2016) 10 SCC 386, though not directly concerned with the issue,
cited Kvaerner Cementation India Ltd. supra with approval.
26. The reason which prevailed with the Supreme Court in
Kvaerner Cementation India Limited supra for holding a suit for
declaration that there does not exist any arbitration agreement and the
arbitration proceedings are without jurisdiction and for injunction
restraining the arbitration proceedings to be not maintainable, would
in my opinion apply to the present suit as well. It is not the case of
BTVL that it is not open to BTVL to, before ICC, take up the plea of
DSS having abandoned the arbitration agreement or DSS being
estopped from seeking arbitration. It is also not the plea of BTVL that
ICC does not have the power to rule on its own jurisdiction. Thus
even though Section 16, referred to in Kvaerner Cementation India
Limited, located in Part I of the Arbitration Act applicable to domestic
arbitration, may not be applicable to International Commercial
Arbitration, as the arbitration in the present case is, but as long as the
powers of ICC are the same as under Section 16, the dicta of the
Supreme Court would apply to the present situation also.
27. I may in this context mention that though Kvaerner
Cementation India Limited, Roshan Lal Gupta, M. Sons Enterprises
Pvt. Ltd. and Ashok Kalra supra were with respect to domestic
arbitration but Spentex Industries Ltd. and Shree Krishna Vanaspati
Industries (P) Ltd. supra pertained to International Commercial
Arbitration. In Spentex Industries Ltd., it was considered whether
what had been held in the context of domestic arbitration will also
CS(OS) No.1769/2003 Page 13 of 19
apply to International Commercial Arbitration. The contention of the
plaintiff therein that since Sections 5 and 16 of the Arbitration Act
were located in Part I thereof relating to domestic arbitration, what had
been held in the context of domestic arbitration will not apply to
International Commercial Arbitration, was not accepted. It was held
that Supreme Court in Bhatia International Vs. Bulk Trading S.A.
(2002) 4 SCC 105 having held that provisions of Part I of the
Arbitration Act apply to all arbitrations and to all proceedings relating
thereto, Sections 5 and 16 were attracted to International Commercial
Arbitration as well. It was yet further reasoned that the reliefs of
declaration and injunction fall within the domain of Specific Relief
Act and are discretionary reliefs and circumscribed by the provisions
of the Specific Relief Act, to be available only when there is no
alternative efficacious remedy available; the remedy of taking the plea
as by way of suit, by way of objection to the arbitral award or at the
time of enforcement thereof is an alternative efficacious remedy. In
Shree Krishna Vanaspati Industries (P) Ltd. supra, it was in addition
held that it was not the case of the plaintiff therein that the pleas
sought to be taken by way of a suit could not be taken before the
Arbitral Tribunal.
28. I find another Co-ordinate Bench of this Court in Devinder
Kumar Gupta Vs. Realogy Corporation 182 (2011) DLT 32 having
dealt with a similar suit. It was the case of the plaintiff therein also
that he was not a party to any document containing a clause for
arbitration of the American Arbitration Association. It was the
contention of the defendant in the suit that the declaration sought by
CS(OS) No.1769/2003 Page 14 of 19
the plaintiff with respect to arbitration agreement could not be granted
by a Civil Court and the Civil Court could not restrain the defendant
from pursuing arbitration proceedings before American Arbitration
Association. The question framed for consideration was, whether
existence of an arbitration agreement between the plaintiff and the
defendant could be challenged by filing a civil suit and whether a civil
Court, in such a suit, could stay arbitration proceedings. It was held
that this Court as a Civil Court could not go into existence or validity
of the arbitration clause invoked by the defendant and could not grant
an injunction restraining the defendant from continuing with the
arbitration proceedings initiated by it before the American Arbitration
Association. The appeal preferred thereagainst was dismissed by the
Division Bench of this Court vide judgment reported as Devinder
Kumar Gupta Vs. Realogy Corporation 2011 (125) DRJ (DB).
29. Thus, as far as this Court is concerned, the consistent view has
been that such a suit is not maintainable.
30. Supreme Court, in Chatterjee Petrochem Company supra also,
was concerned with a suit, filed pursuant to the defendant making a
request for arbitration, for declaration that the arbitration clause
contained in the agreement between the parties was null and void. It
was the contention of the defendant before the Supreme Court and as
noted in para no.9 of the judgment, that Article 6 of the ICC Rules
1998 is pari materia to Section 16 of the Arbitration Act and the Civil
Court has no jurisdiction to decide on such issues. Reliance by the
counsel for the defendant was placed on Yograj Infrastructure Ltd.
Vs. Ssong Yong Engg. and Construction Co. Ltd. (2011) 9 SCC 735.
CS(OS) No.1769/2003 Page 15 of 19
Supreme Court inter alia framed the question for adjudication "Is the
suit, filed by the respondents, seeking injunction against arbitration of
disputes between parties sought for by the appellants as per Clause 15
of the principal agreement referred to supra maintainable in law?" and
held that the contention of the respondents/plaintiffs that Section 5 of
the Arbitration Act which bars intervention of judicial authority will
not be applicable to international agreements cannot be accepted.
Reliance was placed on Venture Global Engineering Vs. Satyam
Computer Services Ltd. supra holding that because the Scheme of the
Act is such that the general provisions of Part-I including Section 5
will apply to all Chapters or Parts of the Act.
31. World Sport Group (Mauritius) Ltd. supra is not found to be
concerned with the said aspect. All that it holds is that the judicial
authority under Section 45 of the Arbitration Act is not entitled to
decline a reference to arbitration on the ground that another suit on the
same issue is pending in the Indian Court.
32. Though the senior counsel for the plaintiff contended that
Enercon (India) Ltd. supra holds a suit to be maintainable but the
same is also not found to be dealing with the said question.
33. Mention may lastly be made of Bharat Aluminium Company
Vs. Kaiser Aluminium Technical Services Inc. (2012) 9 SCC 552,
overruling Bhatia International and Venture Global Engineering,
though prospectively. It was held that (i) Part I of the Arbitration Act
has no application to International Commercial Arbitrations held
outside India; such awards would only be subject to the jurisdiction of
the Indian Courts when the same are sought to be enforced in India in
CS(OS) No.1769/2003 Page 16 of 19
accordance with the provisions contained in Part II of the Act; (iii)
there can be no overlapping or intermingling of the provisions
contained in Part I with the provisions contained in Part II of the
Arbitration Act; (iv) in a foreign seated International Commercial
Arbitration, no application for interim relief would be maintainable
under Section 9 of the Act or any other provision of Indian Law, as
applicability of Part I of the Act is limited only to arbitrations which
take place in India; (v) similarly, no suit for interim injunction
simpliciter would be maintainable in India in respect of an
International Commercial Arbitration with a seat outside India; (vi)
pendency of an arbitration proceeding outside India would not provide
the cause of action for a suit where the main prayer is for injunction;
in such a case, the entire suit would be based on pendency of
arbitration proceedings in a foreign country; if such a suit was to be
filed, it would in all probability be stayed in view of Sections 8 and 45
of the Arbitration Act; therefore it would not be open to a party to file
a suit touching on the merits of the said foreign arbitration and the
plaint would be liable to be rejected under Order VII Rule 11(a) of the
CPC; (viii) in matters pertaining to arbitration, the suit would also be
barred under Section 14(2) of the Specific Relief Act, 1963; although
the provision exists in Section 37 of the Specific Relief Act for grant
of temporary / perpetual injunction but the existence of cause of action
would be essential under this provision also; similar would be the
position under Section 38 of the Specific Relief Act.
34. The aforesaid judgment leaves no manner of doubt that the suit
as the present one is without cause of action and is not maintainable.
CS(OS) No.1769/2003 Page 17 of 19
35. Accordingly, issue no.1 is decided, by holding the suit to be
barred and without cause of action and not maintainable, against
BTVL and other plaintiffs and in favour of DSS.
36. As far as issue no.2 framed in the suit is concerned, once this
Court has held the suit to be not maintainable, it is not deemed
appropriate to render any finding thereon inasmuch as the result of the
dismissal of the suit would be continuation of the arbitral proceedings,
if the parties so choose, and in which it will be open to BTVL to
challenge the jurisdiction of the Arbitral Tribunal. It is felt that any
finding on issue no.2 given in this suit, which has been held to be not
maintainable, may prejudice either of the parties. Moreover, once the
suit has been held to be not maintainable, this Court is not obliged
under Order XIV Rule 2 of CPC to answer the remaining issues and
which in any case as per law laid down in Harbans Singh Vs. Juggat
Pharma 2013 SCC OnLine Del 5166, Phonographic Performance
Ltd. Vs. Union of India (2015) 220 DLT 90 and Savitri Devi Vs.
Fashion Linkers (2002) 95 DLT 893 would not be res judicata.
37. I therefore refrain from answering issue no.2, save for observing
that no merit is found in the contention of the BTVL of the order dated
15th May, 2001 supra in earlier legal proceedings between the parties
binding the parties. It has been held in Shin-Etsu Chemical Co. Ltd.
Vs. Aksh Optifibre Ltd. (2005) 7 SCC 234 that pendency of an
application under Section 45 of the Arbitration Act does not come in
the way of the party so applying, invoking, commencing and
proceeding with the arbitral proceedings. Once it is so, from the action
of DSS of not choosing to appeal against the order dated 15th May,
CS(OS) No.1769/2003 Page 18 of 19
2001 of dismissal of its application under Section 45 of the Arbitration
Act, it cannot be held to have conferred any finality on the said order
when in law, it was open to DSS to commence arbitration.
38. Accordingly, the suit is dismissed as not maintainable.
39. The defendant no.1 DSS, in affidavit of costs, has pleaded costs
of Rs.15 lacs.
40. BTVL having enjoyed the interim order for the last 15 years and
this being a commercial suit, to also pay costs of this suit of Rs.15 lacs
to DSS and which if not paid by BTVL are made recoverable by
execution, from BTVL.
Decree sheet be drawn up.
RAJIV SAHAI ENDLAW, J.
JULY 03, 2018 „gsr/pp‟..
CS(OS) No.1769/2003 Page 19 of 19