Delhi High Court - Orders
Syrma Sgs Technology Limited vs Aptos Technology Inc on 19 February, 2024
Author: Dinesh Kumar Sharma
Bench: Dinesh Kumar Sharma
$~32
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ O.M.P.(I) (COMM.) 59/2024, I.A. 3948/2024, I.A. 3949/2024
SYRMA SGS TECHNOLOGY LIMITED ..... Petitioner
Through: Mr. Amit Sibal, Sr. Adv. with Mr.
Sanjeev Kapoor, Mr. Aakash Bajaj,
Avirat Kumar, Ms. P. Banerjee, Advs.
versus
APTOS TECHNOLOGY INC ..... Respondent
Through: None.
CORAM:
HON'BLE MR. JUSTICE DINESH KUMAR SHARMA
ORDER
% 19.02.2024
1. The present petition has been filed under Section 9 of the Arbitration and Conciliation Act with the following prayer:
"(a) Pending the final disposal of the arbitration proceedings, restrain the Respondent and/or its directors and/or officers and/or employees and/or servants and/or assigns from dealing with and/or creating third party rights or interests regarding the investment / operations which are subject matter of the Agreement;
(b) Pending the final disposal of the arbitration proceedings, restrain the Respondent and/or its directors and/or officers and/or employees and/or servants and/or assigns from giving effect / further effect and/or further acting under the Collaboration Agreement dated 06.02.2024 executed by the Respondent;
(c) Pass an ex parte ad interim order in terms of prayers (a) and (b) above;
(d) Award costs of the present proceedings; and This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 20/02/2024 at 00:33:36
(e) Pass such other or further order (s) as this Hon'ble Court may deem fit and proper in the facts and circumstances of the present case."
2. Learned senior counsel for the petitioner submits that the petitioner and respondent entered into a "Non-binding Indicative Term Sheet" signed by the petitioner on 19.01.2024 and signed by the respondent on 16.01.2024 for the purpose of setting up chip packaging business in India "Non-binding Indicative Term Sheet" reveals that that petitioner company was looking for partner to setup Chip Packaging business in India. It further states that the business cooperation will include technology and manufacturing know-how transfer, packaging machineries and equipment transfer, sustaining business demand from outside India. The business proposal also included that JV company shall initially acquire from Aptos or from any party as advised by Aptos.
i. Plant & Machinery, equipment - as per detailed of Equipment along with value estimates provided in Exhibit 1. ii. Technology Transfer and know-how, Training, including Technical Support for all future product & technology development - as an extended R& D facility.
3. The term sheet also contains the JV Structure and business proposals, the role and responsibility of both parties and the steps to be taken.
4. Learned senior counsel has particularly invited the attention of the court to the exclusivity clause which provides as under:
"For a period of 90 days from the signing of this Term Sheet, Syrma SGS and as well APTOS will not initiate, solicit, encourage, discuss, negotiate, or accept offers This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 20/02/2024 at 00:33:36 regarding investment in relation to this Term Sheet with another party."
5. Learned senior counsel submits that this exclusivity clause binds both the parties to maintain confidentiality and exclusivity for the period of 90 days from the signing of this term sheet.
6. Learned senior counsel submits that however this exclusivity was breached when the petitioner came across a letter submitted by Kaynes Technology India Limited dated 06.02.2024 to the Secretary, Bombay Stock Exchange wherein it was revealed that Kaynes Semicon and APTOS Technology Inc. a subsidiary of Taiwan Mask Corporation, Taiwan has entered into a collaboration agreement on 06.02.2024 to conduct cooperation training with Kaynes Semicon on semiconductor packaging and testing technology, as well as know-how authorization.
7. Learned senior counsel submits that this information was clearly in violation of the exclusivity clause of the "Non-Binding Term Sheet". Learned senior counsel further submitted that vide email dated 06.02.2024 the petitioner company confronted senior officer Mr. Mike Liang of the respondent company and asked the respondent company about their agreement with an Indian EMS Company, in reference to the "Exclusivity Clause" in the term sheet.
8. Mr. Mike Liang responded on the same day through email and stated as under:
"Hi Michael, attached please refer to the announcement of Kaynes and Aptos cooperation. This announcement is not conflicting to the Term Sheet we have made for Syrma and Aptos as our intent without involving NAND flash stacking with Kaynes, and the deal with Kaynes is not involving manufacturing tools transferring. We are continuing This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 20/02/2024 at 00:33:36 looking for the engagement of Technology Transfer with Aptos's existing machinery for NAND manufacturing. Let's keep on conversation to reach to agreement."
9. It has further been submitted that actually the stand taken by the respondent that the agreement with the Kaynes Technology is not in contravention of the clauses of the Term Sheet entered with the petitioner company is misleading.
10. Learned senior counsel submits that the advance notice has duly been served to the respondent on the email ID provided on the website of the respondent company.
11. Learned senior counsel submits that the petitioner company has been in conversation with the respondent company since September 2022 which fructified with the signing of the Term Sheet on 16/19.01.2024. Learned senior counsel submits that under this Term Sheet, the petitioner company had to invest around 31 million USD and therefore, if the respondents are not restrained immediately from entering into any conversation with the competitor of the petitioner company, it will prejudice the interest of the petitioner company.
12. Issue notice to the respondent through all permissible modes.
13. During the course of submissions, learned senior counsel has invited the attention of the court and read out the clauses in the "Non-binding Term Sheet" as well the communication with Kaynes Technology to the Bombay Stock Exchange. The clauses in the term sheet and the communication of Keynes Technology to the Bombay Stock Exchange do indicate prima facie some conflict. The respondent in the very email though has given an impression that it is not in contradiction. However, This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 20/02/2024 at 00:33:36 learned senior counsel stated at the bar that respondent did not respond after 06.02.2024 which has raised serious apprehensions in the petitioner's mind.
14. It is also a matter of record that the respondents have duly been served with an advance notice through email given on the website of the respondent company.
15. Learned senior counsel submits that this is a peculiar case where a reputed Indian Company has proposed to enter into an agreement with a foreign company in order to encourage local manufacturing. However, the foreign company in violation of the term sheet is trying to enter into collaboration agreement with the competitor of the petitioner company regarding the same subject matter.
16. Though at this stage, it is difficult to say that whether the collaboration agreement between the respondent company and Kaynes Technology is in contrast to the term sheet. However, on the face of it there seems to be some overlapping. In these circumstances, it is necessary to protect the interest of the petitioner company. Therefore, till the next date of the hearing, the parties are directed to maintain the status quo in relation to the subject matter of the "Non-Binding Indicative Term Sheet signed on 16/19.01.2024.
17. Copy of the order be immediately sent to respondent through email given on the website of the respondent company as well as to Mr. Mike Liang at [email protected] today itself.
18. List on 01.03.2024.
DINESH KUMAR SHARMA, J FEBRUARY 19, 2024/AR..
This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 20/02/2024 at 00:33:36