Delhi High Court
Roger Shashoua & Others vs Mukesh Sharma & Others on 2 February, 2022
Author: Prathiba M. Singh
Bench: Prathiba M. Singh
Signature Not Verified
Digitally Signed
By:DHIRENDER KUMAR
Signing Date:08.02.2022
09:06:40
$~1 & 2 (OS)
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of Decision: 2nd February, 2022
+ O.M.P. (COMM) 88/2020
ROGER SHASHOUA & OTHERS ..... Petitioners
Through: Mr. Anil Airi, Sr. Advocate with Mr.
Gaurav M. Liberhan, Mr. Mudit
Ruhella, and Mr. Neeraj Gupta,
Advocates. (M:9810955779)
versus
MUKESH SHARMA & OTHER ..... Respondents
Through: Mr. Akhil Sibbal, Sr Advocate with
Mr. Abhinav Hansaria, Mr. Nikhil
Sharma and Ms. Deboshree
Mukherjee, Advocate for R-1.
(M:9810349842)
Mr. Jayant K. Mehta, Sr. Advocate
with Ms. Neeru Sharma, Advocate for
R-2.
Mr. Deepak Kumar Vijay, Advocate
for R-3. (M:9311279321)
AND
+ O.M.P. (EFA)(COMM) 3/2018
ROGER SHASHOUA & ORS. ..... Petitioners
Through: Mr. Anil Airi, Sr. Advocate with Mr.
Gaurav M. Liberhan, Mr. Mudit
Ruhella, and Mr. Neeraj Gupta,
Advocates.
versus
MUKESH SHARMA & ORS. ..... Respondents
Through: Mr. Akhil Sibbal, Sr Advocate with
Mr. Abhinav Hansaria, Mr. Nikhil
Sharma and Ms. Deboshree
O.M.P. (COMM) 88/2020 & O.M.P. (EFA)(COMM) 3/2018 Page 1 of 15
Signature Not Verified
Digitally Signed
By:DHIRENDER KUMAR
Signing Date:08.02.2022
09:06:40
Mukherjee, Advocates for R-1.
Mr. Jayant K. Mehta, Sr. Advocate
with Ms. Neeru Sharma, Advocate for
R-2.
Mr. Deepak Kumar Vijay, Advocate
for R-3.
CORAM:
JUSTICE PRATHIBA M. SINGH
Prathiba M. Singh, J.(Oral)
1. This hearing has been done through video conferencing. I.A.13340/2021 in O.M.P. (COMM) 88/2020 EX.APPL.(OS) 1149/2021 in O.M.P. (EFA) (COMM.) 3/2018
2. These are two applications under Section 151 CPC seeking to bring on record the death certificate of Petitioner No.1 - Mr. Roger Shashoua (hereinafter "Petitioner No.1"), who is stated to have passed away on 22nd January, 2021 and seeking his deletion from the memo of parties. Mr. Akhil Sibal Sr. Adv., submits that these two applications may be taken up before re-commencement of hearings in the main matters as Petitioner No.1 has passed away last year.
3. The background of these matters is that these are two petitions under Sections 47 and 49 of the Arbitration and Conciliation Act, 1996 (hereinafter "A&C Act"), which this Court is considering for enforcement and execution of two separate foreign awards, a partial final award as to liability dated 5th January, 2010 and the final award dated 1st August, 2011 (hereinafter collectively "Arbitral Awards"). The awards were rendered out of arbitral proceedings between Petitioner No.1, Rodemadan Holdings Limited/Petitioner No.2 (hereinafter "Rodemadan"), Stancroft Trust Limited/Petitioner No.3 (hereinafter "Stancroft"), and Mr. Mukesh O.M.P. (COMM) 88/2020 & O.M.P. (EFA)(COMM) 3/2018 Page 2 of 15 Signature Not Verified Digitally Signed By:DHIRENDER KUMAR Signing Date:08.02.2022 09:06:40 Sharma/Respondent No.1 (hereinafter "Respondent No.1"), ITE India Pvt. Ltd./Respondent No.2 (hereinafter "ITE") and M/s International Trade Expocentre Ltd./Respondent No.3 (hereinafter "ITEC").
4. Disputes arose out of shareholders agreement dated 1st July, 1998 executed between Petitioner No.1, Respondent No.1 and ITEC (with only Petitioner No.1 and Respondent No.1 being referred to as parties) (hereinafter "SHA") and were referred for arbitration by a 3-member tribunal under the ICC Rules of Arbitration, Paris. Submissions in these matters had been heard in part, prior to the outbreak of the COVID-19 pandemic and subsequently, the matters could not be listed for hearing during the pandemic.
5. The matters were listed post the pandemic and hearings resumed today. The Court has been informed that Petitioner No.1 has passed away on 22nd January, 2021 during the pandemic and consequently, these applications have been moved to take the death certificate of Petitioner No.1 on record and seek his deletion from the memo of parties.
6. In both these applications, the case of the applicants, who are now Petitioner Nos.2 & 3, namely Rodemadan and Stancroft, is that prior to passing of the Arbitral Awards themselves, Petitioner No.1 had transferred his shares in ITEC and assigned the same to Rodemadan, his nominee company. The applicants submit that this fact is also mentioned in various places during the proceedings including the earlier partial awards which were passed. The relevant extract from the rejoinders filed by the applicants in these applications is as under:
"2. That Respondent No.3 is aware of the fact that though late Roger Shashoua was a signatory to the O.M.P. (COMM) 88/2020 & O.M.P. (EFA)(COMM) 3/2018 Page 3 of 15 Signature Not Verified Digitally Signed By:DHIRENDER KUMAR Signing Date:08.02.2022 09:06:40 Shareholders Agreement (SHA), and he had already assigned his rights in favour of the Petitioner herein. This fact is recorded in the Award and no objection was ever raised to this assignment. The following para in the award dated 05.01.2020 records the shares transferred by late Roger Shashoua to his nominee company:
"1.19....
1.19(2) In 2000 Mr. Shashoua transferred all his shares to Rodemadan, his nominee company. At about the same time, Mr. Sharma transferred 1 million of his shares to his nominee company, ITE India.""
7. The applicants submit that thus, the entire interest in the Arbitral Awards now vests in Rodemadan and Stancroft, being the surviving Petitioners, and the death certificate of Petitioner No.1 is, accordingly, prayed for being taken on record, with deletion of Petitioner No.1 from the memo of parties.
8. Mr. Anil K. Airi, ld. Senior Counsel appearing for the applicants, submits that the Respondents are well aware of the fact that even in the arbitral proceedings, the clear stand of the Petitioners was that all of the shareholdings were assigned by Petitioner No.1 to Rodemadan. In such a situation, the right to sue only survives in Rodemadan and Stancroft and not in the legal heirs of Petitioner No.1.
9. These applications are objected to by Mr. Sibal, ld. Senior Counsel appearing on behalf of the Respondents, on the ground that Petitioner No.1 - Mr. Roger Shashoua, was an individual and therefore, his legal heirs ought to be impleaded in these matters.
10. He further relies on the provisions of Order XXII Rules 1 to 3 CPC, stating that it is only if the right to sue does not survive in favour of the legal O.M.P. (COMM) 88/2020 & O.M.P. (EFA)(COMM) 3/2018 Page 4 of 15 Signature Not Verified Digitally Signed By:DHIRENDER KUMAR Signing Date:08.02.2022 09:06:40 heirs of a party and the right to sue survives in favour of other plaintiffs, that the legal heirs are not required to be brought on record. He submits that the very fact that Petitioner No.1 continued to be a party to these proceedings in this Court, even after the transfer of his shares, itself proves that he was a necessary and proper party in the proceedings, hence, now his legal heirs ought to be impleaded in order to proceed further in the matter.
11. The Court has heard the counsels for the parties. As can be seen from the record, the awards of which enforcement is being sought, are dated 5th January, 2010 and 1st August, 2011. These matters have been pending for several years now for enforcement of these foreign awards. Petitioner No.1 has passed away during the pendency of these petitions and it is the case of Petitioner Nos.2 and 3 that the right to sue survives in their favour. On the other hand, the case of the Respondents is that the legal representatives of Petitioner No.1 ought to be impleaded.
12. On the question of impleadment of legal heirs of Mr. Roger Shashoua, it is noticed that the disputes emanate from the SHA wherein the issue is regarding ITEC and its shareholding. The pattern of shareholding is recorded in the Arbitral Awards at different times. In the first partial award arising out of the ICC arbitration dated 12th February, 2007, it is recorded in paragraph 2 as under:
"2. The First to Third Claimants ("Mr Shashoua", "Rodemadan" and "Stancroft" respectively) and the First and Second Respondents ("Mr Sharma and "ITE India" respectively) are or were shareholders in ITEC. The basic shareholding structure, important to an understanding of the background to the issues between the parties, has been as follows:O.M.P. (COMM) 88/2020 & O.M.P. (EFA)(COMM) 3/2018 Page 5 of 15 Signature Not Verified Digitally Signed By:DHIRENDER KUMAR Signing Date:08.02.2022 09:06:40
(1) Following the initial re-organisation of ITEC's share capital, Mr. Shashoua and Mr Sharma each became the holder of 1.5 million of the 3 million issued 10 Rupee shares in ITEC.
(2) In 2000 Mr. Shashoua transferred all his shares to Rodemadan, his nominee company. At about the same time, Mr Sharma transferred 1 million of his shares to his nominee company, ITE India.
(3) A further restructuring of ITEC's share capital took place in 2003. 5 million additional 10 rupee shares were issued. 500,000 to Rodemadan, 2 million to Stancroft and 2.5 million to ITE India.
Stancroft is an investment vehicle of Mr Nicholas Berry, introduced into the affairs of ITEC by Mr Shashoua.
(4) The result was, and remains, that Rodemadan and Stancroft between them hold half ITEC's issued share capital. Mr Sharma and ITE India hold the other half."
13. A similar position has also been recorded in the award dated 5th January, 2010 as under:
"1.19 The Claimants and the First and Second Respondents are, or were, shareholders in the Third Respondent, ITEC. The basic shareholding structure was set out in the Tribunal's Partial Award on Jurisdiction, but is worth repeating. It was as follows:
(1) Following the initial re-organisation of ITEC's share capital, Mr. Shashoua and Mr Sharma O.M.P. (COMM) 88/2020 & O.M.P. (EFA)(COMM) 3/2018 Page 6 of 15 Signature Not Verified Digitally Signed By:DHIRENDER KUMAR Signing Date:08.02.2022 09:06:40 each became the holder of 1.5 million of the 3 million issued 10 Rupee shares in ITEC.
(2) In 2000 Mr Shashoua transferred all his shares to Rodemadan, his nominee company. At about the same time, Mr Sharma transferred 1 million of his shares to his nominee company, ITE India.
(3) A further restructuring of ITEC's share capital took place in 2003. 5 million additional 10 rupee shares were issued. 500,000 to Rodemadan, 2 million to Stancroft and 2.5 million to ITE India.
Stancroft is an investment vehicle of Mr Nicholas Berry, who was introduced to ITEC by Mr Shashoua.
(4) The result was, and remains, that Rodemadan and Stancroft between them hold 50% of ITEC's issued share capital, with Mr Sharma and ITE India holding the other 50%."
14. Petitioner No.1 may have been the original signatory and party in these proceedings. However, that by itself would not mean that his legal representatives need to be impleaded. The crux of the dispute is in the shareholding of ITEC, 50% of which was initially with Mr. Roger Shashoua and now is with Rodemadan and Stancroft, post the transfer, which has been recorded and mentioned in the interim awards as set out above. Since 50% shareholding in ITEC, now vests in Rodemadan and Stancroft, the right to sue survives in favour of the existing Petitioners and this Court is of the opinion that the impleadment of legal heirs of Mr. Roger Shashoua would not be required in view of the facts set out clearly in the Arbitral Awards.
15. It is also relevant to note that the Arbitral Awards are in favour of all O.M.P. (COMM) 88/2020 & O.M.P. (EFA)(COMM) 3/2018 Page 7 of 15 Signature Not Verified Digitally Signed By:DHIRENDER KUMAR Signing Date:08.02.2022 09:06:40 the Petitioners- identified as Claimants therein- which further confirms the fact that the right to sue did accrue and survives in favour of Rodemadan and Stancroft. The relevant extract of the award dated 5th January, 2010 is as under:
"12. SUMMARY OF FINDINGS- AWARD 12.1 For all of the foregoing reasons, and rejecting all submissions to the contrary, the Tribunal HEREBY FINDS DECLARES AND AWARDS as follows:
(a) In accordance with paragraphs 9.5 - 9.13 of this Award, the First Respondent shall transfer or cause to be transferred to the Claimants all shares held by him in the Third Respondent.
(b) Also in accordance with paragraphs 9.5 -
9.13 of this Award, the First Respondent shall ensure the transfer to the Claimants of all shares held by the First Respondent's nominee/s in the Third Respondent.
(c) In accordance with paragraph 9.36 (a) of this Award the transfer of the shares directed in 12.1
(a) and (b) above shall take place by way of the delivery of the original share certificates for 4 million shares in the Third Respondent, together with duly signed transfer deeds executed on behalf of the First and Second Respondents in favour of the Second and Third Claimants (2 million shares each). The First Respondent shall deposit these shares and transfer deeds with his Indian solicitor, Mr. Satinder Kapur, within four weeks of publication of this Award. Written notice of such deposit must be given by the First Respondent to the Claimants' Indian solicitors, Amarchand & Mangaldas & Suresh Shroff & Co.
(d) In accordance with paragraphs 9.15 - 9.24 of this Award, the First Respondent shall in respect of 1.5 million of the shares be entitled to receive the O.M.P. (COMM) 88/2020 & O.M.P. (EFA)(COMM) 3/2018 Page 8 of 15 Signature Not Verified Digitally Signed By:DHIRENDER KUMAR Signing Date:08.02.2022 09:06:40 sum of Rs. 144,283,500 from the Claimants.
(e) Also in accordance with paragraphs 9.15 - 9.24 of this Award, the First Respondent or his nominee/s shall in respect of the balance of the shares be entitled to recover from the Claimants a sum equal to the par value of the shares, being their paid-up value as recorded in the books of the Third Respondent, less Rs.16.29 million."
...
(u) The First Respondent shall pay the sum of £1,242,395 to any one of the Claimants within 21 days of the date of this Award. Such payment will constitute a discharge of the First Respondent as against all Claimants.
(v) In accordance with paragraphs 11.40 - 11.52 and 11.54 - 11.58 of this Award the Claimants are also entitled to recover from the First Respondent the sum of US$ 140,000 in respect of the initial advance on costs, together with interest at the rate of 8% per annum from 2 May 2007 until the date of payment, such interest to be compounded on a quarterly basis.
(w) In accordance with paragraphs 11.40 - 11.52 and 11.59 - 11.60 of this Award the Claimants are also entitled to recover from the First Respondent the sum of US$ 60,000 in respect of the second advance on costs.
(x) In accordance with paragraphs 9.26, 9.33, 9.34, 9.35, 9.39 and 9.40 of this Award, no other relief sought by the Claimants against the First and/or Third Respondents is granted."
16. Similarly, the relevant extract of the award dated 1st August, 2011 is as under:
"9.1 For all of the foregoing reasons, and rejecting all submissions to the contrary, the O.M.P. (COMM) 88/2020 & O.M.P. (EFA)(COMM) 3/2018 Page 9 of 15 Signature Not Verified Digitally Signed By:DHIRENDER KUMAR Signing Date:08.02.2022 09:06:40 Tribunal hereby finds declares and awards as follows:
(a) In accordance with paragraph 6.1 and 6.11 of this Award, the objections of the Second Respondent as to jurisdiction are dismissed.
(b) To the extent that such has not already occurred, the Second Respondent shall transfer or cause to be transferred to the Claimants all share held by it in the Third Respondent.
(c) In accordance with paragraph 7.8 of this Award the transfer of the shares directed 9.1
(b) above shall take place by way of the delivery of the original share certificates for all shares held by the Second Respondent in the Third Respondent, together with duly signed transfer deeds executed on behalf of the Second Respondent in favour of the Second and Third Claimants in equal share.
The Second Respondent shall deposit these shares and transfer deeds with the Claimants' Indian solicitors, Amarchand & Mangaldas & Suresh Shroff & Co., within four weeks of publication of this Award.
(d) In accordance with paragraph 7.7 of this Award, the Second Respondent shall, in respect of those of the initial batch of 1.5 million shares that it holds, be entitled to receive the sum of Rs.96.189 per share from the Claimants.
(e) Also in accordance with paragraph 7.7 of this Award, the Second Respondent shall in respect of the balance of the shares in Third Respondent (2.5 million shares) be entitled to recover from the Claimants a sum equal to the par value of the shares, being their paid- up value as recorded in the books of the Third Respondent, less Rs.16.29 million.
O.M.P. (COMM) 88/2020 & O.M.P. (EFA)(COMM) 3/2018 Page 10 of 15 Signature Not Verified Digitally Signed By:DHIRENDER KUMAR Signing Date:08.02.2022 09:06:40(f) In accordance with paragraph 7.8 of this Award the Claimants shall, within two weeks of receipt of confirmation of the transfer of shares as directed at paragraph 9.7 (b) above, deposit with their solicitors Amarchand & Mangaldas & Suresh Shroff & Co., or any other solicitors nominated by the Claimants, the entire sum payable towards these shares as directed by the Tribunal at paragraph 9.1(d) and (e) above. The party with whom the deposit was made shall with in 7 days of receipt of the funds advise the Second Respondent in writing that the funds have been received.
(g) Upon the giving of notice to the Second Respondent that the funds have been received in accordance with paragraph 9.1 (f) above, the Claimants' nominated solicitors will be entitled to forthwith deliver unconditionally all the shares certificate and deeds of transfer to the Claimants.
(h) Until such time as the transfer of the shares referred to in 9.1 (b) above has occurred, the Second Respondent is prohibited and injuncted from dealing with, alienating, encumbering or otherwise disposing of any interest in said shares that are registered in its name, or in which it has any interest, in accordance with paragraph 7.8 (iv) and 7.17 of this Award.
(i) In accordance with paragraph 7.18 of this Award, the Second Respondent shall do all acts, execute all necessary documents, and cooperate fully in giving effect to the from and substance of all relief granted by the Tribunal, whether by the passing, reversal or revocation of any resolution of the shareholders or the directors, or by the filing O.M.P. (COMM) 88/2020 & O.M.P. (EFA)(COMM) 3/2018 Page 11 of 15 Signature Not Verified Digitally Signed By:DHIRENDER KUMAR Signing Date:08.02.2022 09:06:40 of documents, or by the procuring of others to act or otherwise howsoever.
(j) In accordance with paragraph 8.16 and 8.48 of this Award the Second Respondent shall pay the sum of £41,077.47, in respect of the Claimants' legal costs, expert witness and other expenses incurred in connection with these arbitral proceedings as they related exclusively to the Second Respondent, to any one of the Claimants with in 21 days of the date of this Award. Such payment will constitute a discharge of the Second Respondent as against all Claimants for this sum.
(k) In accordance with paragraph 8.33 and 8.47 of this Award the Second Respondent shall the sum of £414,131.67 in respect of the Claimants' legal costs, expert witness expenses and other expenses incurred in connection with these arbitral proceedings, to any one of the Claimants within 21 days of the date of this Award. Such payment will constitute a discharge of the Second Respondent as against all Claimants for this sum.
(l) In accordance with paragraph 8.41, 8.42 and 8.46 of this Award the Second Respondent, jointly and severally with the First Respondent, shall pay the Claimants the sum of US$140,000 in respect of the initial advance on costs, together with interest on that sum at the rate of 8% per annum from 2 May 2007 until the date of payment, such interest to be compounded at 2 May 2007 and thereafter on quarterly basis. Payment to any one of the Claimants will constitute a discharge of the Second Respondent as against all Claimants for this sum.
O.M.P. (COMM) 88/2020 & O.M.P. (EFA)(COMM) 3/2018 Page 12 of 15 Signature Not Verified Digitally Signed By:DHIRENDER KUMAR Signing Date:08.02.2022 09:06:40(m) In accordance with paragraph 8.41, 8.43 and 8.46 of this Award the Second Respondent, jointly, and severally with the First Respondent, is to pay to the Claimants the sum of US$410,000, being the costs of the arbitration as set by the ICC Court less the amount awarded at 9.1(1) above. Payment to any one of the Claimants will constitute a discharge of the Second Respondent as against all Claimants for this sum."
17. As per the Petitioners, Mr. Roger Shashoua was a party to these proceedings as he had personal knowledge of a number of facts. In the opinion of this Court the fact that Petitioner No.1 was a party would not automatically lead to the inference that his legal representatives would have to be compulsorily impleaded upon his demise. The provisions of Order XXII CPC are clear to the effect that if the right to sue survives, there would be no abatement of the proceedings. In the present case the right to sue clearly survives in favour of Rodemadan and Stancroft. This is due to the fact that 50% of the shareholding of Petitioner No.1 vests in favour of Rodemadan and Stancroft, as also the fact that the Arbitral Awards are in favour of all Petitioners. Therefore, this Court is of the opinion that there is no requirement for impleadment of the legal heirs of the deceased Petitioner No.1. Moreover, directing impleadment at this stage, in these facts would lead to further delay in adjudication of foreign awards which are more than ten years old.
18. Mr. Sibal, ld. counsel, now submits that there was no assignment of rights in this case by Petitioner No.1, however, there is only a transfer of shares. He seeks to distinguish between the two terms and submits that "transfer of shares" would not be the same as "assignment of all rights".
O.M.P. (COMM) 88/2020 & O.M.P. (EFA)(COMM) 3/2018 Page 13 of 15 Signature Not Verified Digitally Signed By:DHIRENDER KUMAR Signing Date:08.02.2022 09:06:4019. In any event, since objections have also been filed by the Respondents in respect of the Arbitral Awards of which enforcement is sought, if at a later stage, the Court comes to the conclusion that there are any personal rights of Petitioner No.1, apart from the rights transferred to Rodemadan and Stancroft, and the legal heirs of Petitioner No.1 may be required to be impleaded, at that stage, after detailed examination of the arbitral awards, appropriate orders, in accordance with law, would be passed.
20. Accordingly, the death certificate of Mr. Roger Shashoua is taken on record. Petitioner No.1 is, deleted in the above terms. The amended memos of parties are taken on record.
21. Both these applications are disposed of, in these terms. I.A.16585/2010 in O.M.P. (COMM) 88/2020
22. It is submitted by Mr. Deepak Kumar Vijay, ld. Counsel for ITEC, that this application has become infructuous.
23. Accordingly, the present application is disposed of as infructuous. O.M.P. (COMM) 88/2020 & I.As.16586/2010, 903/2014, 12734/2017, 13271/2017, 13273/2017 & 13341/2021 O.M.P. (EFA)(COMM) 3/2018 & I.As. 5000/2018, 8544/2018
24. Submissions have been heard in part on behalf of the Respondents in respect of their objections under Section 48 of the A&C Act.
25. It is also submitted by the Petitioners that the costs payable by the Respondents to the Petitioners, as per the previous order dated 11th January, 2022, have not been paid.
26. Let the costs be paid now within two weeks, in the names of the counsels for the Petitioners, after ascertaining the exact details from the said counsel.
O.M.P. (COMM) 88/2020 & O.M.P. (EFA)(COMM) 3/2018 Page 14 of 15 Signature Not Verified Digitally Signed By:DHIRENDER KUMAR Signing Date:08.02.2022 09:06:4027. List for further hearing on 14th March, 2022 and thereafter on 21st March, 2022, at 2.30 p.m.
28. These are part-heard matters.
PRATHIBA M. SINGH JUDGE FEBRUARY 2, 2022 Dk/dj/mw/ms (corrected & released on 7th February, 2022) O.M.P. (COMM) 88/2020 & O.M.P. (EFA)(COMM) 3/2018 Page 15 of 15