Delhi High Court
International Trade Expo. Centre Ltd. vs Mukesh Sharma And Ors on 7 June, 2016
Author: V.Kameswar Rao
Bench: V.Kameswar Rao
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Judgment reserved on March 30, 2016
Judgment delivered on June 07, 2016
+ O.M.P. 4/2008, IAs 49/2008, 3828/2008 & 1137/2009
MR. MUKESH SHARMA
..... Petitioner
Through: Mr.Abhinav Hansaria, Adv.
versus
MR. ROGER SHASHOUA & ORS. EF+
..... Respondent
Through: Mr. Dayan Krishnan, Sr. Adv.
with Mr. Gaurav Liberhan and
Mr. Neeraj Kumar Gupta, Advs.
O.M.P. 255/2010, IAs 16585-16586/2010 & 903/2014
ROGER SHASHOUA & OTHERS
.... Petitioner
Through: Mr. Dayan Krishnan, Sr. Adv.
with Mr. Gaurav Liberhan and
Mr. Neeraj Kumar Gupta, Advs.
versus
MUKESH SHARMA & OTHERS
..... Respondent
Through: Mr.Abhinav Hansaria, Adv. for R-
1
Mr. Sandeep Sethi, Sr. Adv. with
Ms. Neeru Sharma, Adv. for R-2
Mr. Abhinav Vasisht, Sr. Adv.
with Mr. D.K. Vijay, Mr. K.
Datta, Ms. Sanjana, Advs. for
ITECL/R-3
O.M.P. 914/2011
ITE INDIA PVT LTD
..... Petitioner
Through: Mr. Sandeep Sethi, Sr. Adv. with
Ms. Neeru Sharma, Adv.
OMP 04/2008 and connected matters Page 1 of 62
versus
MUKESH SHARMA AND ORS
..... Respondent
Through: Mr.Abhinav Hansaria, Adv. for R-
1
Mr. Abhinav Vasisht, Sr. Adv.
with Mr. D.K. Vijay, Mr. K.
Datta, Ms. Sanjana, Advs. for
ITECL/R-2
Mr. Dayan Krishnan, Sr. Adv.
with Mr. Gaurav Liberhan and
Mr. Neeraj Kumar Gupta, Advs.
for R-3, R-4 & R-5.
W.P.(C) 10954/2015
INTERNATIONAL TRADE EXPO. CENTRE LTD.
..... Petitioner
Through: Mr. Abhinav Vasisht, Sr. Adv.
with Mr. D.K. Vijay, Mr. K.
Datta, Ms. Sanjana, Advs.
versus
MUKESH SHARMA AND ORS ..... Respondent
Through:
Mr.Abhinav Hansaria, Adv. for R-
1
Mr. Sandeep Sethi, Sr. Adv. with
Ms. Neeru Sharma, Adv. for R-2
Mr. Dayan Krishnan, Sr. Adv.
with Mr. Gaurav Liberhan and
Mr. Neeraj Kumar Gupta, Advs.
for R-3, R-4 & R-5.
CORAM:
HON'BLE MR. JUSTICE V.KAMESWAR RAO
V.KAMESWAR RAO, J.
1. This batch of petitions are primarily under Section 34 of the OMP 04/2008 and connected matters Page 2 of 62 Arbitration & Conciliation Act, 1996 („Act of 1996‟ in short) being OMP 914/2011 by ITE India Pvt. Ltd („ITE‟ in short) [challenging four Awards being Final Award dated August 5, 2011, Award on Jurisdiction dated February 27, 2007, Cost Award dated November 17, 2007 and Partial Final Award dated January 19, 2010 (it is dated January 5, 2010)] and OMP 04/2008 filed by Mukesh Sharma [challenging Award dated November 17, 2007]. The Writ Petition (Civil) No. 10954/2015 is filed by International Trade Expo. Centre Ltd. („ITECL‟ in short) impugning order dated July 06, 2011 passed by the Ld. District Judge, Gautam Budh Nagar, U.P in Misc. Case No. 33 of 2010, under Section 34 of the Act of 1996, initially filed before the High Court of Judicature, Allahabad but later on transferred by the Supreme Court vide its order dated September 15, 2015 in SLP Civil No. 22318/2010). The OMP 255/2010 is an Enforcement Petition under Section 47 and 49 of the Act of 1996 filed by Roger Shashoua and two others seeking enforcement of final Award dated January 5, 2010. The parties in this petition shall be referred to, not by their status in different petitions but by their names. Facts:-
2. Facts which are relevant for the purpose of the issues need to be decided by this order are that, on October 20, 1997, ITECL was allotted a property located at A-II, Sector-62, Noida for a sum of Rs.1.5 Crores OMP 04/2008 and connected matters Page 3 of 62 paid as allotment money. Mukesh Sharma, Roger Shashoua and the International Trade Expo. Centre Ltd signed a Shareholders Agreement on July 1, 1998 whereby ITCEL was restructured as a Joint Venture Company. The paid up share capital of ITCEL was Rs.3 Crores, divided into 30 lakh shares. Mukesh Sharma and Roger Shashoua equally held 15 lakh shares each in the ITECL. It is the case of ITECL that in a Board meeting held on September 30, 1999, Roger Shashoua showed interest in transferring his share holding in ITECL to a company Shashoua holdings and subsequently shares were transferred to his company. As per agreement between Roger Shashoua and Mukesh Sharma, building plans were submitted and approved and pursuance of which construction agreement was signed between ITECL and H.S. Oberoi and company for construction of exhibition convention centre. The parties, Roger Shashoua and Mukesh Sharma agreed upon an arbitration clause to provide for a resolution of disputes i.e Clause 14. The clause reads as under:-
"14.1 In the event, a dispute arise in connection with the validity, interpretation, implementation or breach of any provision of this agreement, the parties shall attempt in the first instance, to resolve such dispute through negotiations within thirty (3) days from a party making a request therefore. In the event, the dispute is not OMP 04/2008 and connected matters Page 4 of 62 resolved through negotiations or such negotiations do not commence within thirty (30) days of a written request on his behalf, either party may refer the dispute to arbitration. Each party shall nominate one arbitrator and in the event of any difference between the two arbitrators, a third arbitrator/umpire shall be appointed. The arbitration proceedings shall be, in accordance with the rules of the conciliation and arbitration of International Chamber of Commerce, Paris.
14.2 Proceedings in such arbitration shall be conducted in the English language.
14.4 The venue of arbitration shall be London, United Kingdom."
I may note here that clause 17.6 of the Agreement, which has relevance to decide the issues which falls for consideration stipulates as under:-
"17.6 Governing Law This Agreement shall be governed by and construed in accordance with the laws of India."
3. It is the case of ITCEL that Roger Shashoua incorporated a company in the name of India Exhibition Management Pvt. Ltd (IEM) for undertaking activities of organising, designing, planning and setting up exhibition, trade fair etc. In April 2005, ITECL filed a suit against Roger Shashoua and India Exhibition Management Pvt. Ltd for carrying on a competitive business being Suit No. 257/2005 before the Civil OMP 04/2008 and connected matters Page 5 of 62 Judge, Senior Division, Gautam Budh Nagar for injunction against competing business of ITECL inderogation of Indian law, more particularly Press Note No.18 and Pres Note No.1 whereby it was decided that Foreign Financial Corporation/Technical Collaborators with tie up in India cannot operate themselves or through subsidiary in India in the same field without the consent of the Joint Venture partner. In the said suit, Roger Shashoua filed an application under Section 8 of the Arbitration & Conciliation Act, inter-alia on the ground that there was an arbitration clause in the Shareholder Agreement executed between Mukesh Sharma and Roger Shashoua that all matters concerning the scope of the said suit had to be referred to the Arbitration. The Civil Judge, vide its order dated April 25, 2005 allowed the application under Section 8 and referred the parties to Arbitration. The ITECL challenged the order of the Civil Judge dated April 25, 2005, by filing first appeal before the High Court at Allahabad which was dismissed on May 9, 2008 by holding inter-alia that the Court is not concerned whether the order of injunction could be granted by the Civil Court on merits. The Court is only concerned whether Civil Court rightly returned the proceedings for arbitration or not. The Court held when the petitioners have principally agreed in terms of agreement subject to formal documentation and the clause of agreement is wide enough to cover the OMP 04/2008 and connected matters Page 6 of 62 question of validity, interpretation and implementation and when the petitioners have already submitted to the jurisdiction of the Arbitrator and when preliminary Award is being passed against them, the appeal arising out of the Suit has become infructuous in nature. If the petitioners are aggrieved by the Award, it is open to them to challenge the same before appropriate Court of Law in appropriate circumstances. Roger Shashoua, M/s Rodamadan Holding Ltd., Stancroft Trust („Roger Shashoua and two others‟ for short) on May 26, 2005 made a request for arbitration in accordance with Article 4 of the ICC Rules. According to them, the disputes pertained to breaches of the SHA by Mukesh Sharma resulting in a situation where the petitioner could not work. On June 23, 2005 Mukesh Sharma, ITECL and ITE applied to ICC Court of Arbitration for dismissal of the arbitration proceedings on the ground of non existence of arbitration agreement and other grounds as to its validity and scope. The ITE preferred CS(OS) 926/2005 before this Court seeking a declaration that their did not exist a valid arbitration agreement with it. An application under Section 45 of the Arbitration & Conciliation Act was filed by Roger Shashoua and two others in the suit for reference of disputes to arbitration. On July 12, 2005, an ex-parte order was passed in CS(OS) 926/2005 whereby it was directed that the petitioners Roger Shashoua and two others shall not commence any OMP 04/2008 and connected matters Page 7 of 62 arbitration proceedings against ITE. It appears that Mukesh Sharma served an answer to the request for Arbitration in accordance with Article 5 of the ICC Rules without prejudice to his objection that an arbitration clause did not exist. On September 2, 2005, the ICC Court of Arbitration decided that the arbitration should proceed pursuant to Article 6(2) of the ICC Rules. Therefore, the Tribunal would decide on its own jurisdiction. On October 5, 2005, it was clarified in CS(OS) 926/2005 that the order dated July 12, 2005 was meant to operate only in favour of ITE. This Court on December 20, 2005 allowed application under Section 45 of the Act filed by Roger Shashoua and two others and dismissed the Suit CS(OS) No.926/2005.
4. The ICC Arbitral Tribunal at London continued between Mukesh Sharma and Roger Shashoua and two others. Accordingly, the Arbitral Tribunal communicated the terms of reference on February 27, 2006. On February 12, 2007, the Arbitral Tribunal passed Jurisdiction Award and further passed Cost Award on November 17, 2007. Thereafter, the matter was reserved for final order/Award in May, 2008.
5. The ITE filed RFA(OS) No.9/2006 against the judgment dated December 20, 2005 of the learned Single Judge in CS(OS) 926/2005. On February 21, 2006, an interim order was granted by the Division Bench in RFA(OS) 9/2006 thereby restraining the arbitration OMP 04/2008 and connected matters Page 8 of 62 proceedings against ITE. It appears that on February 27, 2006 when the terms of reference were signed by Roger Shashoua and two others and Mukesh Sharma in accordance with ICC Rules, the ITE did not sign the same. As stated above, on February 12, 2007 the Arbitral Tribunal rendered the partial Award on jurisdiction. It appears that with regard to ITE, it was held by the Tribunal that in the light of the injunction of this Court in favour of ITE, a separate Award would be passed at a later stage, upon giving an opportunity to make submissions.
6. Insofar as ITECL is concerned, the Tribunal held that the said company is bound by the outcome of the jurisdictional hearing. On September 18, 2009, RFA(OS) 9/2006 was dismissed by this Court as not maintainable. A Review Petition was also dismissed on November 13, 2009. On January 5, 2010, a Partial Final Award (Liability Award) (according to the ITE, it is January 19, 2010) was passed by the Arbitral Tribunal. It appears that this Award was final award between the parties, except as to the claims of Roger Shashoua and two others against ITE. The Arbitral Tribunal wrote to the parties noting that the injunction operating in favour of ITE has been lifted and whether Roger Shashoua and two others intend to pursue their claims against ITE. In the meantime, on February 13, 2010, SLP (C) Nos. 22318-22321/2010 was filed before the Supreme Court against the judgment of the learned OMP 04/2008 and connected matters Page 9 of 62 Single Judge dated December 20, 2005 and of the Division Bench dated September 18, 2009. It is noted that the case of Roger Shashoua and two others is that in the event Mukesh Sharma complied with the directions in the Partial Final Award, the claims need not be pressed against ITE. An application under Section 29(2) of the ICC Rules was made by Mukesh Sharma. The Tribunal dismissed the application for correction and interpretation of the Award. On April 30, 2010 Roger Shashoua and two others preferred OMP 255/2010 before this Court for the enforcement of Partial Final Award dated January 5, 2010 under Section 47 and 49 of the Arbitration & Conciliation Act. Notice on the petition was issued by this Court on May 12, 2010 and status quo on the shareholding was ordered to be maintained.
7. On June 14, 2010, an application for setting aside the Partial Final Award under Section 34 of the Act was filed by ITECL being Miscellaneous Case No. 33/2010 before the Ld. District Judge, Gautam Budh Nagar. Notice was issued and a reply was called for by the District Court of Gautam Budh Nagar, U.P on the objections filed by ITECL. In the meantime, on October 13, 2010, the Arbitral Tribunal considered the issue of ITE participation in the Arbitration proceedings post the Partial Final Award and held that it is entitled to proceed against ITE on the basis of the claims of the Roger Shashoua and two others. It appears that OMP 04/2008 and connected matters Page 10 of 62 on December 2, 2010, Roger Shashoua and two others filed a preliminary response to Misc. Case No. 33/2010 before the Ld. District Judge, Gautam Budh Nagar raising specific objections on the ground of jurisdiction, as well as delay in filing the petition under Section 34 of the Act. On July 6, 2011, the Ld. District Judge at Noida returned the objections filed by ITECL under Section 34 of the Act for want of jurisdiction. An appeal was filed under Section 37 of the Arbitration & Conciliation Act being FAO No.1304(D)/2011 by the ITECL against the order dated July 6, 2011 before the Allahabd High Court on August 1, 2011. In the meantime, Final Award dated August 5, 2011 was passed by the Tribunal incorporating directions qua the ITE. The ITE filed OMP 914/2011 seeking setting aside under Section 34 of the Act of the Awards of the Arbitral Tribunal dated February 27, 2007, November 17, 2007, January 19, 2010 (should be January 5, 2010) and Award dated August 5, 2011.
8. On March 13, 2013, an appeal filed by ITECL was dismissed by the Allahabad High Court for non prosecution, which was subsequently restored on August 28, 2013. On April 2, 2014, the Allahabad High Court dismissed FAO No. 1304(D)/2011 as being non-maintainable under Section 37 of the Arbitration & Conciliation Act on the ground that the District Court‟s order dated July 6, 2011 returning the objections OMP 04/2008 and connected matters Page 11 of 62 of the ITECL was not an appealable order under Section 37(I) (b) of the Act. Accordingly, the ITECL has filed the writ petition No. 10954/2015 challenging the order dated July 6, 2011 passed by the Ld. District Judge of Gautam Budh Nagar under Article 226 of the Constitution of India. It is noted that in the SLP filed before the Supreme Court by the ITE against order dated December 20, 2005 in CS(OS) No.926/2005 and dated September 18, 2009 in RFA 09/2006, the Supreme Court noting that the objections filed by the petitioner therein ITE under Section 34 of the Act and the same being heard by this Court, has passed the following order:-
"Heard in Part.
In course of hearing, we have been apprised that on behalf of ITE India Private Limited, an application under Section 34 of the Arbitration and Conciliation Act, 1996 (for short, „the Act‟) is pending before the learned Single Judge of the High Court of Delhi.
At this juncture, learned counsel for respondent no.2 submitted that he has filed an application under Section 34 of the Act before the learned District Judge, Gautam Budh Nagar, U.P. who had rejected the application to be filed before the proper court. Against the order passed by the District Judge, an FAO, i.e. FAFO (D) No.1304/2011 was filed before the High Court of Allahabad, Bench at Allahabad and same has been dismissed on the ground of maintainability. Be it stated, thereafter the 2nd respondent has challenged the order passed by the District Judge, Gautam Budh Nagar, UP in Writ Petition (C) No. 20945 of 2014 titled as International Trade Expo Centre Ltd. vs. Mukesh Sharma & Ors.OMP 04/2008 and connected matters Page 12 of 62
In our considered opinion, the writ petition and the petition filed under Section 34 of the Act in Delhi High Court should be heard together by one court and accordingly, we transfer the writ petition from Allahabad and accordingly it is ordered that the writ petition be transferred to the High Court of Delhi and be heard by the same learned Judge who is hearing the petition under Section 34 of the Act.
The Registrar (Judicial) is directed to send a copy of this order to the Registrar (Judicial) of the High Court of Allahabad for transmitting the record to the High Court of Delhi. A copy of the order be sent to the Registrar General of the High Court of Delhi. The learned Chief Justice of the High Court of Delhi is requested to nominate a Judge who will hear the writ petition as well as the application preferred under Section 34 of the Act. The nominated judge, we request, should to dispose both the matters by the end of November 2015.
Let the matter be listed for further hearing on 08.12.2015."
9. Noting the facts, Mr. Vashist appearing for ITECL in Writ Petition(C) No.10954/2015 would attack the order passed by the learned District Judge, Gautam Budh Nagar dated July 6, 2011 in Misc. Case No.33/2010, which is a petition filed under Section 34 of the Arbitration & Conciliation Act by stating that the Ld. District Judge, Gautam Budh Nagar, U.P erroneously held that an application for enforcement of the arbitral award confers exclusive jurisdiction on this Court by virtue of Section 42 of the Act of 1996. According to him, it is a settled law that execution/enforcement applications are not applications within the OMP 04/2008 and connected matters Page 13 of 62 meaning of Section 42 of the Act of 1996 and therefore do not confer jurisdiction. In this regard he would rely upon the judgment of S.K. Brothers vs. Delhi Development Authority ILR (2009) 1 Delhi 305. He would state, that in view of the above settled position of law, the order of the learned District Judge is palpably illegal and is liable to be set aside and the objections filed under Section 34 ought to be remanded back for consideration. He would also rely upon the judgment in the case of Hari Vishnu Kamath vs. Syed Ahmad Ishaque and ors AIR 1955 SC 233.
10. Further he would submit, the Noida Court has the territorial jurisdiction to entertain the petition, hence it is a Court within the meaning of Section 2(1)(e) of the Act of 1996. He would further submit that any reference to/reliance on the alleged SHA is strictly without prejudice to the stand of the ITECL that the ITECL is not a signatory to the alleged SHA. Neither is SHA incorporated in the MOA of the ITECL. Therefore the ITECL is not bound by any of the terms or conditions stipulated therein. In support of his above submission, it is his endeavour to state:-
(i) The land belonging to the ITECL is situate at property bearing No.A-11, Sector-62, Noida, within the territorial jurisdiction of the Noida Court.
(ii) As per clause 1(b) of the alleged SHA dated July 1, 1998, the sole OMP 04/2008 and connected matters Page 14 of 62 activity to be undertaken by the said joint venture is constructing and running an exhibition/convention/seminar centre in Noida.
(iii) The one and only asset of the ITECL is the said asset at Noida, Gautam Budh Nagar, Uttar Pradesh from where it is carrying on its business activities.
(iv) Hence, the ITECL has a corporate office at Noida and is also carrying on its business at Noida.
(v) Contrary to the understanding between the parties, Roger Shashoua incorporated a Company by name of India Exhibition Management Pvt. Ltd., later name changed to Expomedia Events India Pvt. Ltd., with the same objectors as those of the ITECL. This company had a corporate office at Noida.
(vi) Since the said India Exhibition Management Pvt. Ltd. was carrying on competing business activities, had a corporate office at Noida, and its activities invaded the ITECL right at Noida, cause of action and/or part thereof had arisen within the jurisdiction of the Noida Court.
(vii) Hence, the ITECL filed a suit for injunction against the Roger Shashoua and India Exhibition Management Pvt. Ltd. before the Civil Judge, Gautam Budh Nagar, Noida in the year 2005 being Suit No.257/2005.OMP 04/2008 and connected matters Page 15 of 62
(viii) Noida Court was thus the court of competent jurisdiction within the meaning of Section 2(1)(e) of the Act of 1996. It is not disputed that Delhi Courts also had jurisdiction. However, the ITECL being dominus litis was entitled to choose which court to approach.
(ix) The Roger Shashoua in the said suit filed an application under Section 8 of the Act for referring the disputes to arbitration as per the arbitration clause contained in the alleged arbitration agreement.
(x) Significantly, Roger Shashoua took no objection to the territorial jurisdiction of the Noida Court in the Section 8 application.
(xi) That the Civil Judge, Gautam Budh Nagar, allowed the said application under section 8 of the Act vide order dated April 25, 2005 and referred the disputes to arbitration.
(xii) Thus, arbitration proceedings between the parties were initiated pursuant to the order of the Civil Judge, Gautam Budh Nagar on the application filed by the Roger Shashoua in the Civil Suit which culminated in passing of various arbitral awards, impugned in the Section 34 petitions, which has also been admitted by the Roger Shashoua in the arbitration proceedings at various instances including request for arbitration and the reply to application dated 20th July, 2005.
(xiii) Accordingly, as the First Application under Part I of the Act with respect to the alleged arbitration agreement was filed in the Principal OMP 04/2008 and connected matters Page 16 of 62 Civil Court of the Civil Judge, Gautam Budh Nagar, hence all subsequent applications arising out of the said agreement and the said arbitral proceedings have to mandatorily be filed in the same Civil Court of Gautam Budh Nagar only and in no other Court.
(xiv) Pursuant to the reference made to Arbitration, Arbitration Proceedings were initiated between the parties before the ICC Court of Arbitration. The Arbitral Tribunal passed four awards dated 12.02.2007, 15.11.2007, 5.1.2010 and 5.8.2011. The Arbitral Tribunal in its Award dated 5.1.2010 categorically stated as follows:
"Para 1.18: Nature of Dispute: This dispute has arisen out of a Joint Venture Devlop an exhibition centre on land leased by the New Okhla Industrial Development Authority (Noida) in the state of Uttar Pradesh, India."
(xv) As the application under Section 8 with respect to the alleged arbitration agreement was filed in the Court of the Civil Judge, Gautam Budh Nagar, Noida, the ITECL filed its Section 34 petition in May-June 2010 being Misc. Case No. 33/2010 before the District Judge, Gautam Budh Nagar, Noida. The Ld. District Judge vide order dated 7.7.2010 issued notice to the respondents in the said petition.
11. He would also state, that the judgment of the Apex Court in the case of State of West Bengal &Ors vs. Associated Contractors (2015) 1 SCC 32 and P. Anand Gajapathi Raju vs. P.V.G. Raju (2000) 4 SCC OMP 04/2008 and connected matters Page 17 of 62 539, do not apply to the facts and circumstances of the present case. He would further state, the learned District Judge, Gautam Budh Nagar has not rejected the objections to the award filed by the petitioner under Section 34 of the Act but has merely returned the same to be filed before the appropriate Court. Moreover, vide order dated 2.4.2014, the High Court of Allahabad in First Appeal No.1304(D)/2011 had clearly stated as follows:-
"For the aforesaid reasons, it is held that by the impugned order the District Judge has not refused to set aside the arbitral award not the impugned order amounts to a refusal to set aside the arbitral award."
12. He would state, even assuming without admitting, the writ petition is decided against the petitioner, the petitioner has the right to file its objection under Section 34 before this Court and seek a decision on merits. However, if the present writ petition is allowed, all the subsequent objections and applications filed by the parties are to be transferred to the Gautam Budh Nagar Court, being the Principal Civil Court exercising exclusive jurisdiction in terms of Section 42 of the Act of 1996.
13. On the other hand, Mr. Dayan Krishnan, learned Senior Counsel appearing for Roger Shashoua and two others would take preliminary objection to the maintainability of petitions under Section 34 of the Act OMP 04/2008 and connected matters Page 18 of 62 of 1996 being OMP No.914/2011, OMP 4/2008 and Misc. Case No. 33/2010, whose order is in challenge in W.P. No.10954/2015 to contend that the contract providing that the arbitral proceedings shall be governed by ICC Rules with venue of arbitration at London, which means that the procedural aspects thereof are governed by the English Law, it necessarily implies that Part 1 of Arbitration &Conciliation Act, 1996 stands impliedly excluded and therefore, the petitions under Section 34 of the Act of 1996 be dismissed. He would rely upon the following judgment in support of his contention:-
(i) UOI vs. Reliance Industries Ltd-C.A No.11396/2015;
(ii) Videocon Industries Ltd vs. Union of India (2011) 6 SCC 161;
(iii) DOZCO India Pvt. Ltd Vs. DOOSAN Infracore Company Ltd (2011) 6 SCC 179;
(iv) Shashoua vs. Sharma (2009) EWHC 957 (Comm).
14. With regard to territorial jurisdiction, without prejudice to the aforesaid submission, he would state, the issue is no longer res-integra as the Supreme Court in the judgment reported as 2015(1) SCC 32 State of West Bengal vs. Associated Contractors, held that - i. That Section 2(1)(e) contains an exhaustive definition marking out only the Principal Civil Court of Original Jurisdiction in a district or a High Court having original civil jurisdiction in the State, and no other OMP 04/2008 and connected matters Page 19 of 62 Court as "court" for the purpose of Part I of the Arbitration Act, 1996. The expression "with respect to an arbitration agreement" makes it clear that Section 42 will apply to all applications made whether before or during arbitral proceedings or after an award is pronounced under Part I of the 1996 Act. However, Section 42 only applies to applications made under Part I if they are made to a court as defined. Since applications made under Section 8 are made to judicial authorities and since applications under Section 11 are made to the Chief Justice or his designate, the judicial authority and the Chief Justice or his designate not being court as defined, such applications would be outside Section 42. ii. If a first application is made to a Court which is neither a Principal Court of Original Jurisdiction in a district or a High Court exercising original jurisdiction in a State, such application not being to a Court as defined would be outside Section 42. Also, an application made to a Court without subject-matter jurisdiction would be outside Section 42.
15. He would state, in view of the above, although Section 42 of the Act has no application in the present case, it has been clearly held that, an application to a Court without subject matter jurisdiction, would be outside Section 42, and the CS 257/2005, which was filed before the Civil Judge, Gautam Budh Nagar, it is outside the Court as defined in Section 2(1)(e) of the Act. Anyhow, it was a suit for injunction against OMP 04/2008 and connected matters Page 20 of 62 IEM, a separate Company and the Arbitration proceedings culminating into the award were a result of an independent reference and not the order of the Civil Judge. He would further state, it has been held in (2000) 4 SCC 539 P. Anand Gajapathi Raju & Ors. Vs. P.V.G. Raju (Died) & Ors., that an application before a court under Section 8 merely brings to the court‟s notice that the subject-matter of the action before it is the subject-matter of an arbitration agreement. This would not be such an application as contemplated under Section 42 of the Act as the court trying the action may or may not have had jurisdiction to try the suit to start with or be the competent court within the meaning of Section 2(e) of the new Act. Furthermore, in view of the aforesaid pronouncements, the judgment of this Court in Hertz (supra) is per-incuriam.
16. On the other hand, on maintainability of objections under Section 34 of the Act, it is the submission of Mr. Abhinav Vashist, learned Senior Counsel for ITECL, which is without prejudice to the stand of the ITECL, that the Court of District Judge, Gautam Budh Nagar is the Principal Civil Court, which has the jurisdiction and also of Mr. Sandeep Sethi, learned Senior Counsel appearing for ITE that the Award passed in the present case is under an alleged agreement executed on July 1, 1998 and the Awards have been passed in January 2010 and in August, 2011. Admittedly, the awards are governed as per the law laid down in OMP 04/2008 and connected matters Page 21 of 62 Bhatia International (2002) 4 SCC 105 as the same is prior to the judgment delivered by the Supreme Court in Balco vs. Kaiser Aluminium Technical Services Inc. (2012) 9 SCC 552. The law laid down by BALCO is prospective as is expressly stated by the Supreme Court in para 197 of the said judgment. They would state that the judgment of Carzonrent India Pvt. Ltd (supra) is squarely applicable to the facts of the present case. In the present case, the proper law of the arbitration agreement is Indian Law. In the absence of contractual stipulation of law of arbitration, normally the proper law of contract (Indian) is taken to be the law of arbitration. In this regard, they would place reliance on the judgment of NTPC vs. Singer Company and ors (1992) 3 SCC 551. They would state, the arbitration agreement has the closest and the most real connection with India in the present case since:
(i) The petitioner is a company incorporated under the Companies Act, 1956 (Indian Laws) and has its registered office at I-83, Lajpat Nagar-2, New Delhi-110024.
(ii) The Joint Venture company is also a company incorporated under the Companies Act, 1956 and has its registered office at I-83, Lajpat Nagar-
2, New Delhi-110024.
(iii) The alleged SHA has been entered into by the parties for forming a Joint Venture Company in India for constructing, running and managing OMP 04/2008 and connected matters Page 22 of 62 the Expocentre at Noida, India and that is the sole business and only asset of the company for which the Joint Venture was done.
(iv) That the entire alleged SHA was in relation to the shares of an India Company, the entire job had to be executed in India using India workforce/manpower etc.
(v) The agreement between the parties is to be governed by the Laws of India and all the terms and conditions of the agreement have been expressly stated to be subject to the laws prevailing in India.
(vi) That clause 17.9 clearly state that the agreement is deemed to be executed at New Delhi, India.
(vii) The relevant law governing conduct of the company is Companies Act, 1956.
(viii) That various clauses of the alleged SHA including Clause No.1(a), 1(b), 1(g),1(h), 2.6, 3.4, 6.1, 6.2, 8, 9.2,17.3, 17.6 and 17.9 all mentioned the laws of India and/or the applicability of laws of India.
(ix) Without prejudice, the relief prayed by the Roger Shashoua requesting for direction for transfer/sale of shares of the petitioner company can only be executed in India under the laws of India and nowhere else in the world.
(x) It may also be noted that there is no connection of either the award or the parties with London except it being a neutral venue for holding OMP 04/2008 and connected matters Page 23 of 62 arbitration sittings.
(xi) The respondent No.3 is a French citizen and the respondent Nos.4 and 5 companies are companies incorporated in Cyprus and have nothing to do with London whatsoever.
17. They would state, that London was simply a neutral venue for conduct of arbitration proceedings. The parties under the agreement have not expressly mentioned the seat of arbitration. Keeping in mind the close nexus to the disputes with India and the settled law, the seat of Arbitration is India and not London. For determining the seat of arbitration the Court would have to determine the territory that will have the closes and most intimate connection with the arbitration. In the present case, the substantive law of the Contract is Indian Law, the proper law of the Arbitration Agreement is Indian Law, the enforcement of the award is to be done under the Indian Law, the Joint Venture Agreement between the parties is to be acted upon in India and the relevant assets are in India. They would state, that reliance on the judgment of Supreme Court in Union of India vs. Reliance (2015) 10 SCC 213 is absolutely misplaced, inasmuch as in the said judgment the Supreme Court, in clear terms, concluded that the Bhatia rule will apply either to; (i) where the seat of arbitration is not outside India, which in the present matter is India and (ii) Law governing arbitration agreement OMP 04/2008 and connected matters Page 24 of 62 is India law, which, also in the present matter is India, as per the settled law for determining the law of the Arbitration agreement in the absence of express choice. They would state, that Roger Shashoua and two others have not rebutted the contention of the petitioner herein that the Arbitration Agreement has the closest and most real connection to India and thus the proper law of the Arbitration Agreement is Indian Law and the seat of arbitration ought to be India.
18. They would state, that the order passed in Roger Shashoua and ors vs. Mukesh Sharma (2009 EWHC 957 (Comm) the ITECL/ITE were not parties to the case filed by Roger Shashoua and two others before the English Court and thus the aforestated judgment is not binding on the petitioner. It was an anti-suit injunction action filed by respondent No.1. The reasoning of the English Court for holding that the seat of arbitration is London, England is against the established principles of Indian Law. It was held in that judgment that "................if the arbitration agreement provided for a venue, that would constitute a seat". This is contrary to Indian Law. It was also held that "............a provision that the venue of the arbitration shall be London, UK does amount to the designation of a juridical seat". This is also contrary to Indian Law. In any event, a reading of paras 42, 46 and 48 of the order reveals that the English Court was only taking prima-facie view to grant OMP 04/2008 and connected matters Page 25 of 62 an "anti-suit injunction". It was also held that a mini trial is required and that the Court‟s discretion would be influenced by a finding that Roger Shashoua and two others had submitted to the jurisdiction of the Indian Courts. The said judgment being contrary to the laws of India is not binding on this Court. Section 13 of the Code of Civil Procedure, 1908 provides that a foreign judgment shall not be conclusive as to any matter directly adjudicated even between the same parties where it appears on the face of the proceedings to be contrary to the law applicable in such cases in India.
19. They would further submit that in BSES Ltd. vs. Fenner India Ltd (2006) 2 SCC 728 it was held that whatever may be the law (of bank guarantees in that case) in other jurisdictions, when the law in India is clear, settled and without any deviation whatsoever, there is no occasion to rely upon foreign case law. They would further submit that Roger Shashoua filed an application under Section 8 of the Act for referring the disputes to arbitration in the suit for injunction filed by the ITECL before the Civil Judge, Gautam Budh Nagar, Noida in the year 2005 being Suit No. 257/2005. Even in the High Court of Allahabad, the Roger Shashoua has relied upon Section 8 and Section 16 of the Act, which are in Part 1 of the Act. Evidently, it was always the intention of the parties to apply Part 1 of the Arbitration & Conciliation Act to the Arbitration OMP 04/2008 and connected matters Page 26 of 62 Agreement. Further, the High Court of Allahabad in the aforestated judgment in para 12 has held that it is open for the parties to challenge the award and further have a right to appeal in case the setting aside proceedings goes against them. The High Court was thus satisfied as to applicability of Part 1 of the Act, as a right to appeal under Section 37 of the Act is provided only against an unsuccessful challenge made under Section 34 of the Act and not against an order dismissing the objections filed under Section 48 of the Act. They would state, that after commencement of Arbitration proceedings before the ICC Court of Arbitration, Roger Shashoua and two others filed a petition under Section 9 of the Act before this Court being OMP 186/2005 to seek interim measures. He would state, by filing the petition under Section 9 of the Act, Roger Shashoua and two others have agreed to the applicability of Part 1 of the Act to the present proceedings. Roger Shashoua and two others had categorically stated in the petition under Section 9 of the Act as follows:-
"27..........as the seat in accordance with the law laid down by the Supreme Court in Bhatia International vs. Bulk Trading SA (2002) 4 SCC 102, the present petition under Section 9 is maintainable in view of the fact that the respondent No.2 Company is an Indian Company and the registered office of the Company is in the jurisdiction of this Court OMP 04/2008 and connected matters Page 27 of 62 an records of the Company are required to be maintained within the jurisdiction of this Court".
20. The reliance placed on Videocon Industries (supra) and Dozco India Private Limited (supra) is misplaced as the said judgments do not apply to the case in hand, inasmuch as in Videocon Industries (supra), the Supreme Court has concluded in para 33 of the said judgment that since the parties expressly agreed that the arbitration is to be governed by the laws of England, it necessary implied that parties agreed to exclude the provisions of part I of the Act. In the present case, the proper law of contract is Indian law, parties have not expressed any such intention to exclude Part I of the Act and therefore, the above case has no applicability to the facts and circumstances of the present case. Insofar as the case of Dozco India Private Limited (supra) is concerned, in the said case the governing laws of the Contract were the laws of South Korea (Article 22.1). The conclusion reached by the Court in inferring the seat to be Korea in para 15 and concluding that there was a clear agreement to exclude Part I of the Act was only after considering Article 22.1 of the Contract which provided for the proper law of the contract to be Korean law. In the present case, the proper law of contract is Indian Laws and therefore, there can be no presumption of exclusion of Indian laws (Part 1 of the Act) by the parties.
OMP 04/2008 and connected matters Page 28 of 62
21. Mr. Abhinav Hansaria, learned counsel appearing for Mukesh Sharma adopts the arguments advanced by Mr. Abhinav Vashist and Mr. Sandeep Sethi. Additionally, he relies upon the judgment reported as (1998) 1 SCC 305 Sumitomo Heavy Industries Ltd. vs. ONGC Ltd to contend that the Supreme Court has time and again applied the test of closest and most real connection for determining the proper Law of Arbitration of a contract. He would state that in Venture Global Engineering vs. Satyam Computer Services Ltd and Anr (2008) 4 SCC 190, the Apex Court has held that the award has an intimate and close connection to India, in view of the following facts:-
(a) The company was situated in India
(b) The transfer of "ownership interest" were to be made in India under the laws of India.
(c) All the steps necessary have to be taken in India before the ownership stood transferred.
The said facts squarely apply to the facts of the present case.
22. Having heard the learned counsel for the parties, the first and the foremost question, needs to be decided, is the plea of Mr. Dayan Krishnan on the non-maintainability of the petitions filed under Section 34 of the Act of 1996, which would also have a bearing on the writ petition filed by ITECL as the order impugned of the learned District OMP 04/2008 and connected matters Page 29 of 62 Judge, Gautam Budh Nagar dated July 6, 2011 is in proceedings under Section 34 of the Act of 1996. It was the submission of Mr. Dayan Krishnan, learned Senior Counsel for Roger Shashoua and two others that the arbitral proceedings were governed by the ICC Rules and seat of arbitration was London. The Agreement being governed by implied exclusion of Bhatia principle (as the Agreement is pre-Balco), which states, the Act of 1996 will not apply if it is found that on facts of a case juridical seat of arbitration is outside India or the law governing the Arbitration Agreement is law other than the Indian Law. According to him, even though the law governing Arbitration Agreement is not specified, yet it was held having regard to the various circumstances, the seat being at London, Part I of the Act of 1996 shall be impliedly excluded.
23. The aforesaid submission of Mr. Dayan Krishnan is primarily based on the judgment of the Supreme Court in the case of Union of India vs. Reliance Industries Limited and others(supra), whrein in para 18, the Supreme Court has held as under:-
"18. It is important to note that in paragraph 32 of Bhatia International itself this Court has held that Part-I of the Arbitration Act, 1996 will not apply if it has been excluded either expressly or by necessary implication. Several judgments of this Court have held that Part-I is OMP 04/2008 and connected matters Page 30 of 62 excluded by necessary implication if it is found that on the facts of a case either the juridical seat of the arbitration is outside India or the law governing the arbitration agreement is a law other than Indian law. This is now well settled by a series of decisions of this Court [see: Videocon Industries Ltd. v. Union of India & Anr., (2011) 6 SCC 161, Dozco India Private Limited v. Doosan Infracore Company Limited, (2011) 6 SCC 179, Yograj Infrastructure Limited v. Ssang Yong Engineering and Construction Company Limited, (2011) 9 SCC 735), the very judgment in this case reported in Reliance Industries Limited v. Union of India, (2014) 7 SCC 603, and a recent judgment in Harmony Innovation Shipping Ltd. v. Gupta Coal India Ltd. & Anr."
24. A perusal of the aforesaid paragraph would show, the Supreme Court has held that the Court in several judgments has held that Part I is excluded by necessary implication, if it is found that on the facts of a case, either the juridical seat of the arbitration is outside India or the law governing the arbitration agreement, is a law other than Indian law. While holding so, the Supreme Court referred to its judgments in Videocon Industries Ltd. (supra), Dozco India (P) Ltd (supra), Yograj Infrastructure Ltd vs. Ssang Yong Engg. and Construction Co. Ltd (2011) 9 SCC 735, Reliance Industries Ltd. (supra) and Harmony Innovation Shipping Ltd. vs. Gupta Coal India Ltd (2015) 9 SCC 172. OMP 04/2008 and connected matters Page 31 of 62 In fact, some of the judgments, as referred to above, have been relied by Mr. Krishnan as well.
25. Insofar as the judgments relied upon by Mr. Dayan Krishnan in support of his submissions are concerned, in Videocon Industries Ltd (supra), the Supreme Court was concerned with Article 34.12, referred to the same in para 3, and is reproduced as under:-
".....34.12. Venue and law of arbitration agreement.-- The venue of sole expert, conciliation or arbitration proceedings pursuant to this article, unless the parties otherwise agree, shall be Kuala Lumpur, Malaysia, and shall be conducted in the English language. Insofar as practicable, the parties shall continue to implement the terms of this contract notwithstanding the initiation of arbitral proceedings and any pending claim or dispute. Notwithstanding the provisions of Article 33.1, the arbitration agreement contained in this Article 34 shall be governed by the laws of England."
26. The Supreme Court analysed the said provision and held as under:-
"33. In the present case also, the parties had agreed that notwithstanding Article 33.1, the arbitration agreement contained in Article 34 shall be governed by laws of England. This necessarily implies that the parties had agreed to exclude the provisions of Part I of the Act. As a corollary to the above conclusion, we hold OMP 04/2008 and connected matters Page 32 of 62 that the Delhi High Court did not have the jurisdiction to entertain the petition filed by the Respondents Under Section 9 of the Act and the mere fact that the Appellant had earlier filed similar petitions was not sufficient to clothe that High Court with the jurisdiction to entertain the petition filed by the Respondents."
27. Similarly in DOZCO India Pvt. Ltd (supra), the Supreme Court was considering a case wherein Article 22 and 23 of the Agreement dealt with governing laws and arbitration. Article 22.1 provided that the agreement shall be governed by and construed in accordance with the laws of The Republic of Korea. Article 23.1, which dealt with arbitration, stipulated that all disputes arising in connection with the agreement, shall be finally settled by arbitration in Seoul, Korea or such other place as the parties may agree in writing, pursuant to the Rules of the Agreement then in force of the ICC. The Supreme Court in para 20, has held as under:-
"20. In that view, my inferences are that:-
(i) The clear language of Articles 22 and 23 of the Distributorship Agreement between the parties in this case spell out a clear agreement between the parties excluding Part I of the Act.
(ii) The law laid down in Bhatia International v. Bulk Trading S.A. & Anr. (cited supra) and Indtel Technical Services Private Ltd. v. W.S. Atkins Rail Ltd. (cited OMP 04/2008 and connected matters Page 33 of 62 supra), as also in Citation Infowares Ltd. v. Equinox Corporation (cited supra) is not applicable to the present case.
(iii) Since the interpretation of Article 23.1 suggests that the law governing the arbitration will be Korean law and the seat of arbitration will be Seoul in Korea, there will be no question of applicability of Section 11(6) of the Act and the appointment of Arbitrator in terms of that provision."
28. The reliance placed by Mr. Dayan Krishnan, on Union of India vs. Reliance Industries Ltd.(supra), is concerned, the Supreme Court has extensively referred to its earlier judgment dated May 28, 2014 (Reliance Industries Ltd vs. Union of India (2014) 6 SCC 603). In para 2, it referred to the following clauses of the Agreement between the parties:-
ARTICLE 32: APPLICABLE LAW AND LANGUAGE OF THE CONTRACT 32.1 Subject to the provisions of Article 33.12, this Contract shall be governed and interpreted in accordance with the laws of India.
32.2 Nothing in this Contract shall entitle the Government or the Contractor to exercise the rights, privileges and powers conferred upon it by this Contract in a manner which will contravene the laws of India.
ARTICLE 33: SOLE EXPERT, CONCILIATION AND OMP 04/2008 and connected matters Page 34 of 62 ARBITRATION
33.9 Arbitration proceedings shall be conducted in accordance with the arbitration rules of the United Nations Commission on International Trade Law (UNCITRAL) of 1985 except that in the event of any conflict between these rules and the provisions of this Article 33, the provisions of this Article 33 shall govern.
33.12 The venue of conciliation or arbitration proceedings pursuant to this Article, unless the Parties otherwise agree, shall be London, England and shall be conducted in the English Language. The arbitration agreement contained in this Article 33 shall be governed by the laws of England.
Insofar as practicable, the Parties shall continue to implement the terms of this Contract notwithstanding the initiation of arbitral proceedings and any pending claim or dispute.
34.2 This Contract shall not be amended, modified, varied or supplemented in any respect except by an instrument in writing signed by all the Parties, which shall state the date upon which the amendment or modification shall become effective."
29. It also, in para 4, referred to paragraphs 36 to 42 of its earlier judgment dated May 28, 2014, which I reproduce as under:-
"36. Before we analyse the submissions made by the learned Senior Counsel for both the parties, it would be appropriate to notice the various factual and legal points on which the parties are agreed. The controversy herein would have to be decided OMP 04/2008 and connected matters Page 35 of 62 on the basis of the law declared by this Court in Bhatia International [(2002) 4 SCC 105] . The parties are agreed and it is also evident from the final partial consent award dated 14-9-2011 that the juridical seat (or legal place) of arbitration for the purposes of the arbitration initiated under the claimants' notice of arbitration dated 16- 12-2010 shall be London, England. The parties are also agreed that hearings of the notice of arbitration may take place at Paris, France, Singapore or any other location the Tribunal considers may be convenient. It is also agreed by the parties that the terms and conditions of the arbitration agreement in Article 33 of the PSCs shall remain in full force and effect and be applicable to the arbitration proceedings.
37. The essential dispute between the parties is as to whether Part I of the Arbitration Act, 1996 would be applicable to the arbitration agreement irrespective of the fact that the seat of arbitration is outside India. To find a conclusive answer to the issue as to whether applicability of Part I of the Arbitration Act, 1996 has been excluded, it would be necessary to discover the intention of the parties. Beyond this parties are not agreed on any issue.
38. We are also of the opinion that since the ratio of law laid down in Balco [Balco v. Kaiser Aluminium Technical Services Inc. has been made prospective in operation by the Constitution Bench itself, we are bound by the decision rendered in Bhatia International. Therefore, at the outset, it would be appropriate to reproduce the relevant ratio of Bhatia OMP 04/2008 and connected matters Page 36 of 62 International in para 32 which is as under:
"32. To conclude, we hold that the provisions of Part I would apply to all arbitrations and to all proceedings relating thereto. Where such arbitration is held in India the provisions of Part I would compulsorily apply and parties are free to deviate only to the extent permitted by the derogable provisions of Part I. In cases of international commercial arbitrations held out of India provisions of Part I would apply unless the parties by agreement, express or implied, exclude all or any of its provisions. In that case the laws or rules chosen by the parties would prevail. Any provision, in Part I, which is contrary to or excluded by that law or rules will not apply."
39. In view of the aforesaid, it would be necessary to analyse the relevant articles of the PSC, to discover the real intention of the parties as to whether the provisions of the Arbitration Act, 1996 have been excluded. It must, immediately, be noticed that Articles 32.1 and 32.2 deal with applicable law and language of the contract as is evident from the heading of the article which is "Applicable law and language of the contract". Article 32.1 provides for the proper law of the contract i.e. laws of India. Article 32.2 makes a declaration that none of the provisions contained in the contract would entitle either the Government or the contractor to exercise the rights, privileges and powers conferred upon it by the contract in a manner which would contravene the laws of India.
40. Article 33 makes a very detailed provision with regard to OMP 04/2008 and connected matters Page 37 of 62 the resolution of disputes through arbitration. The two articles do not overlap--one (Article 32) deals with the proper law of the contract, the other (Article 33) deals with ADR i.e. consultations between the parties; conciliation; reference to a sole expert and ultimately arbitration. Under Article 33, at first efforts should be made by the parties to settle the disputes among themselves (Article 33.1). If these efforts fail, the parties by agreement shall refer the dispute to a sole expert (Article 33.2). The provision with regard to constitution of the Arbitral Tribunal provides that the Arbitral Tribunal shall consist of three arbitrators (Article 33.4). This article also provides that each party shall appoint one arbitrator. The arbitrators appointed by the parties shall appoint the third arbitrator. In case, the procedure under Article 33.4 fails, the aggrieved party can approach the Permanent Court of Arbitration at The Hague for appointment of an arbitrator (Article 33.5). Further, in case the two arbitrators fail to make the appointment of the third arbitrator within 30 days of the appointment of the second arbitrator, again the Secretary General of the Permanent Court of Arbitration at The Hague may, at the request of either party appoint the third arbitrator. In the face of this, it is difficult to appreciate the submission of the respondent Union of India that the Arbitration Act, 1996 (Part I) would be applicable to the arbitration proceedings. In the event, the Union of India intended to ensure that the Arbitration Act, 1996 shall apply to the arbitration proceedings, Article 33.5 should have provided that in default OMP 04/2008 and connected matters Page 38 of 62 of a party appointing its arbitrator, such arbitrator may, at the request of the first party be appointed by the Chief Justice of India or any person or institution designated by him. Thus, the Permanent Court of Arbitration at The Hague can be approached for the appointment of the arbitrator, in case of default by any of the parties. This, in our opinion, is a strong indication that applicability of the Arbitration Act, 1996 was excluded by the parties by consensus. Further, the arbitration proceedings are to be conducted in accordance with the Uncitral Rules, 1976 (Article 33.9). It is specifically provided that the right to arbitrate disputes and claims under this contract shall survive the termination of this contract (Article 33.10).
41. The article which provides the basis of the controversy herein is Article 33.12 which provides that venue of the arbitration shall be London and that the arbitration agreement shall be governed by the laws of England. It appears, as observed earlier, that by a final partial consent award, the parties have agreed that the juridical seat (or legal place of arbitration) for the purposes of arbitration initiated under the claimants' notice of arbitration dated 16-12-2010 shall be London, England.
42. We are of the opinion, upon a meaningful reading of the aforesaid articles of the PSC, that the proper law of the contract is Indian law; proper law of the arbitration agreement is the law of England. Therefore, can it be said as canvassed by the respondents, that applicability of the OMP 04/2008 and connected matters Page 39 of 62 Arbitration Act, 1996 has not been excluded?"
30. In para 5, the Supreme Court referred to paras 57, 74 to 77, of its earlier judgment in Reliance Industries vs. UOI (supra), which I reproduced as under:-
"57. In our opinion, these observations in Sulamerica Cia Nacional de Seguros SA v. Enesa Engelharia SA - Enesa MANU/UKWA/0347/2012 : (2013) 1 WLR 102 are fully applicable to the facts and circumstances of this case. The conclusion reached by the High Court would lead to the chaotic situation where the parties would be left rushing between India and England for redressal of their grievances. The provisions of Part I of the Arbitration Act, 1996 (Indian) are necessarily excluded; being wholly inconsistent with the arbitration agreement which provides "that arbitration agreement shall be governed by English law". Thus the remedy for the Respondent to challenge any award rendered in the arbitration proceedings would lie under the relevant provisions contained in the Arbitration Act, 1996 of England and Wales. Whether or not such an application would now be entertained by the courts in England is not for us to examine, it would have to be examined by the court of competent jurisdiction in England."
"74. We are also unable to agree with the submission of Mr Ganguli that since the issues involved herein relate to the public policy of India, Part I of the Arbitration Act, OMP 04/2008 and connected matters Page 40 of 62 1996 would be applicable. Applicability of Part I of the Arbitration Act, 1996 is not dependent on the nature of challenge to the award. Whether or not the award is challenged on the ground of public policy, it would have to satisfy the precondition that the Arbitration Act, 1996 is applicable to the arbitration agreement. In our opinion, the High Court has committed a jurisdictional error in holding that the provisions contained in Article 33.12 are relevant only for the determination of the curial law applicable to the proceedings. We have already noticed earlier that the parties by agreement have provided that the juridical seat of the arbitration shall be in London. Necessary amendment has also been made in the PSCs, as recorded by the final partial consent award dated 14-9- 2011. It is noteworthy that the Arbitration Act, 1996 does not define or mention juridical seat. The term "juridical seat" on the other hand is specifically defined in Section 3 of the English Arbitration Act. Therefore, this would clearly indicate that the parties understood that the arbitration law of England would be applicable to the arbitration agreement.
75. In view of the aforesaid, we are unable to uphold the conclusion arrived at by the Delhi High Court that the applicability of the Arbitration Act, 1996 to the arbitration agreement in the present case has not been excluded.
76. In view of the above, we hold that:
76.1 The petition filed by respondents under Section 34 of OMP 04/2008 and connected matters Page 41 of 62 the Arbitration Act, 1996 in the Delhi High Court is not maintainable.
76.2 We further overrule and set aside the conclusion of the High Court that, even though the arbitration agreement would be governed by the laws of England and that the juridical seat of arbitration would be in London, Part I of the Arbitration Act would still be applicable as the laws governing the substantive contract are Indian laws.
76.3 In the event a final award is made against the respondent, the enforceability of the same in India can be resisted on the ground of public policy.
76.4 The conclusion of the High Court that in the event, the award is sought to be enforced outside India, it would leave the Indian party remediless is without any basis as the parties have consensually provided that the arbitration agreement will be governed by the English law. Therefore, the remedy against the award will have to be sought in England, where the juridical seat is located. However, we accept the submission of the appellant that since the substantive law governing the contract is Indian law, even the courts in England, in case the arbitrability is challenged, will have to decide the issue by applying Indian law viz. the principle of public policy, etc. as it prevails in Indian law. (emphasis supplied by this Court)
77. In view of the above, the appeal is allowed and the impugned judgment [(2013) 199 DLT 469] of the High OMP 04/2008 and connected matters Page 42 of 62 Court is set aside."
31. In Union of India vs. Reliance Industries Ltd.(supra), the Supreme Court finally concluded as under:-
"22. On the facts in the present case, it is clear that this Court has already determined both that the juridical seat of the arbitration is at London and that the arbitration agreement is governed by English law. This being the case, it is not open to the Union of India to argue that Part-I of the Arbitration Act, 1996 would be applicable. A Section 14 application made under Part-I would consequently not be maintainable. It needs to be mentioned that Shri Ranjit Kumar‟s valiant attempt to reopen a question settled twice over, that is by dismissal of both a review petition and a curative petition on the very ground urged before us, must meet with the same fate. His argument citing the case of Mathura Prasad Bajoo Jaiswal v. Dossibai N.B. Jeejeebhoy, (1970) 1 SCC 613, that res judicata would not attach to questions relating to jurisdiction, would not apply in the present case as the effect of clause 34.2 of the PSC raises at best a mixed question of fact and law and not a pure question of jurisdiction unrelated to facts. Therefore, both on grounds of res judicata as well as the law laid down in the judgment dated 28.5.2014, this application under Section 14 deserves to be dismissed. It is also an abuse of the process of the Court as has rightly been argued by Dr. Singhvi. It is only after moving under the UNCITRAL Arbitration Rules and getting an adverse OMP 04/2008 and connected matters Page 43 of 62 judgment from the Permanent Court of Arbitration dated 10.06.2013 that the present application was filed under Section 14 of the Arbitration Act two days later i.e. on 12.6.2013."
32. In Yograj Infrastructure Ltd.(supra), the Supreme Court was dealing with clause 27 of the Agreement, which is reproduced as under:-
"27. Arbitration.
27.1 All disputes, differences arising out of or in connection with the Agreement shall be referred to arbitration. The arbitration proceedings shall be conducted in English in Singapore in accordance with the Singapore International Arbitration Centre (SIAC) Rules as in force at the time of signing of this Agreement. The arbitration shall be final and binding.
27.2 The arbitration shall take place in Singapore and be conducted in English language.
27.3 None of the Party shall be entitled to suspend the performance of the Agreement merely by reason of a dispute and/or a dispute referred to arbitration."
The Supreme Court also noted clause 28 of the Agreement, which stipulated as under:-
"Clause 28. This agreement shall be subject to the laws of India. During the period of arbitration, the performance of this agreement shall be carried on without interruption and in accordance with its terms and provisions."
33. The Supreme Court in paras 47 to 55 has held as under:- OMP 04/2008 and connected matters Page 44 of 62
"47. Clause 27 of the Agreement provides for arbitration and reads as follows:
27. Arbitration.
27.1 All disputes, differences arising out of or in connection with the Agreement shall be referred to arbitration. The arbitration proceedings shall be conducted in English in Singapore in accordance with the Singapore International Arbitration Centre (SIAC) Rules as in force at the time of signing of this Agreement. The arbitration shall be final and binding.
27.2 The arbitration shall take place in Singapore and be conducted in English language.
27.3 None of the Party shall be entitled to suspend the performance of the Agreement merely by reason of a dispute and/or a dispute referred to arbitration.
48. Clause 28 of the Agreement describes the governing law and provides as follows:
This agreement shall be subject to the laws of India. During the period of arbitration, the performance of this agreement shall be carried on without interruption and in accordance with its terms and provisions.
49. As will be seen from Clause 27.1, the arbitration proceedings are to be conducted in Singapore in accordance with the SIAC Rules as in force at the time of signing of the agreement. There is, therefore, no ambiguity that the procedural law with regard to the arbitration proceedings, is the SIAC Rules. Clause 27.2 makes it clear OMP 04/2008 and connected matters Page 45 of 62 that the seat of arbitration would be Singapore.
50. What we are, therefore, left with to consider is the question as to what would be the law on the basis whereof the arbitral proceedings were to be decided.
51. In our view, Clause 28 of the Agreement provides the answer. As indicated hereinabove, Clause 28 indicates that the governing law of the agreement would be the law of India, i.e., the Arbitration and Conciliation Act, 1996. The learned Counsel for the parties have quite correctly spelt out the distinction between the "proper law" of the contract and the "curial law" to determine the law which is to govern the arbitration itself. While the proper law is the law which governs the agreement itself, in the absence of any other stipulation in the arbitration clause as to which law would apply in respect of the arbitral proceedings, it is now well-
settled that it is the law governing the contract which would also be the law applicable to the Arbitral Tribunal itself. Clause 27.1 makes it quite clear that the Curial law which regulates the procedure to be adopted in conducting the arbitration would be the SIAC Rules. There is, therefore, no ambiguity that the SIAC Rules would be the Curial law of the arbitration proceedings. It also happens that the parties had agreed to make Singapore the seat of arbitration. Clause 27.1 indicates that the arbitration proceedings are to be conducted in accordance with the SIAC Rules.
52. The immediate question which, therefore, arises is whether in such a case the provisions of Section 2(2), which OMP 04/2008 and connected matters Page 46 of 62 indicates that Part I of the above Act would apply, where the place of arbitration is in India, would be a bar to the invocation of the provisions of Sections 34 and 37 of the Act, as far as the present arbitral proceedings, which are being conducted in Singapore, are concerned.
53. In Bhatia International (supra), wherein while considering the applicability of Part I of the 1996 Act to arbitral proceedings where the seat of arbitration was in India, this Court was of the view that Part I of the Act did not automatically exclude all foreign arbitral proceedings or awards, unless the parties specifically agreed to exclude the same.
54. As has been pointed out by the learned Single Judge in the order impugned, the decision in the aforesaid case would not have any application to the facts of this case, inasmuch as, the parties have categorically agreed that the arbitration proceedings, if any, would be governed by the SIAC Rules as the Curial law, which included Rule 32, which categorically provides as follows:
"32. Where the seat of arbitration is Singapore, the law of the arbitration under these Rules shall be the International Arbitration Act (Cap. 143A, 2002 Ed, Statutes of the Republic of Singapore) or its modification or reenactment thereof."
55. Having agreed to the above, it was no longer available to the Appellant to contend that the "proper law" of the agreement would apply to the arbitration proceedings. The OMP 04/2008 and connected matters Page 47 of 62 decision in Bhatia International v. Bulk Trading S.A. (2002) 4 SCC 105, which was applied subsequently in the case of Venture Global Engg. v. Satyam Computer Services Ltd. (2008) 4 SCC 190 and Citation Infowares Ltd. v. Equinox Corporation (2009) 7 SCC 220, would have no application once the parties agreed by virtue of Clause 27.1 of the Agreement that the arbitration proceedings would be conducted in Singapore, i.e., the seat of arbitration would be in Singapore, in accordance with the Singapore International Arbitration Centre Rules as in force at the time of signing of the Agreement."
34. In a more recent judgment of the Supreme Court in Harmony Innovation Shipping Ltd vs. Gupta Coal India Ltd (2015) 9 SCC 172, the Supreme Court was concerned with an agreement, which stipulated that the contract is to be governed and construed according to the English Law. The Supreme Court held it forms as a part of arbitration clause. The Supreme Court also noted that there were ample indication through various phrases like "arbitration in London to apply", arbitrators are to be the Members of "London Arbitration Association" and the contract "to be governed and construed according to the English Law". The Supreme Court also observed, there is no other stipulation relating to applicability of any law to the Agreement. That apart, Supreme Court also noted that if the dispute is for an amount of less $ 50000 then the OMP 04/2008 and connected matters Page 48 of 62 arbitration should be conducted in accordance with small claims, procedure of London Maritime Arbitration Association. The Supreme Court also held that if the stipulations are noted by it are read and appreciated in the contextual perspective, "the presumed intention" of the parties is clear as crystal that the juridical seat of arbitration would be London.
35. Noting the facts of each case as relied upon by Mr. Krishnan and referred to above, it is clear, the clauses in the agreement in the cases are at variance with the clauses in this case. In those cases, the Supreme Court on the reading of the clauses, held, that Part-I shall not be applicable.
36. In the present case, the arbitration clause stipulates that the arbitration shall be, in accordance with the Rules of conciliation and arbitration of International Chamber of Commerce, Paris. The contract shall be governed by the Indian laws. The Agreement does not stipulate the law which shall govern the arbitration agreement. The case of Mr. Krishnan is, since the parties have agreed, the arbitration would take place in London and no other place, there was an implied exclusion to the applicability of Indian law to the arbitration agreement and accordingly the procedure for challenging the Award would be governed by the law of the seat of Arbitration i.e English law. OMP 04/2008 and connected matters Page 49 of 62
37. I am unable to agree with the submission of Mr. Dayan Krishnan for the simple reason; the law previous to the decision of the Constitution Bench in Balco was governed by Bhatia International (supra); which is followed in Venture Global Engineering (supra), the Supreme Court emphasised the aspect of „closest and most real connection‟. Likewise in National Thermal Power Corporation vs. Singer Company (supra), one of the tests, that was applied was to examine whether the contract has in every respect the closest and most real connection with the Indian system of law. It was observed in the said case, although the venue of the arbitration was outside India, that venue had no connection with the contract of the parties except that it was a neutral place.
38. In Enercon (India) Ltd. and Ors. Vs. Enercon GMBH and Anr. (2014) 5 SCC 1, the contract provided that it would be subject to the Indian law, the venue of the arbitration was London. However, the Court found on the facts of the case that the law governing the contract, the law governing the arbitration agreement and the law of the arbitration/curial law are all stated to be Indian. In that view of the matter, the Court rejected the submission of Enercon GMBH that the term „venue‟ ought to be read as „seat‟. It was observed that "in virtually all jurisdictions, it is an accepted proposition of law that the OMP 04/2008 and connected matters Page 50 of 62 seat normally carries with it the choice of that country's arbitration/Curial law. But this would arise only if the Curial law is not specifically chosen by the parties." On the facts of that case, it was concluded that the parties have exclusively chosen the Indian law i.e Act of 1996 as the curial law. It was further observed "If one has regard to the factors connecting the dispute to India and the absence of any factors connecting it to England, the only reasonable conclusion is that the parties have chosen London, only as the venue of the arbitration. All the other connecting factors would place the seat firmly in India."
39. In a recent judgment in the case of Carzonrent India Pvt. Ltd (supra), this Court has interpreted identical provisions of the Agreement, wherein the parties chose Singapore as the venue of arbitration, held that there is nothing in clause 14, which indicates that there is any implied exclusion of the applicability of Indian law. On the other hand, the clause begins by stating that the agreement is being negotiated by the parties with a view towards its interpretation under the law of the jurisdiction in which the licensed business shall be conducted in India. This reflects the close connection of Indian law to the arbitration agreement as well since it forms part of the Contract. (Emphasis supplied).
40. I agree with the submissions of Mr. Abhinav Vashist and Mr. OMP 04/2008 and connected matters Page 51 of 62 Sandeep Sethi that ITECL is a company incorporated under the Companies Act having registered office in India; the SHA has been executed by the parties in India; the Agreement between the parties is to be governed by the laws of India.
41. That apart, what is also a relevant factor is that it is the understanding of Roger Shashoua and two others about the applicability of Act of 1996 to the agreement, inasmuch as they have filed a petition under Section 9 of the Act before this Court being OMP 186/2005 to seek interim measures and surely cannot now contend otherwise. This aspect is conclusive to hold that, part I of the Act of 1996 shall be applicable to the Arbitration Agreement.
42. Insofar as the reliance placed by Mr. Dayan Krishnan on the judgment of the England and Wales High Court in the case filed by Mr. Roger Shashoua and two others against Mukesh Sharma dated May 7, 2009 with citation No. 2009 EWHC 957 (COMM) is concerned, the issue was, the claimants Roger Shashoua and two others sought a restraint order against Mukesh Sharma from bringing or participating in any proceedings outside the jurisdiction that challenge, impugne or being as their object or effect the prevention or delay in enforcement by the claimants of an interim arbitration Award. In other words, the Roger Shashoua and two others sought an anti suit injunction against Mukesh OMP 04/2008 and connected matters Page 52 of 62 Sharma.
43. In para 46 of the judgment, Mukesh Sharma had submitted that Roger Shashoua and two others had submitted to the jurisdiction of this court by making an application in 2005 under Section 9 of the Act of 1996 for interim protective measures. It was the submission of Roger Shashoua and two others that under Article 23 of the ICC Rules, they were entitled before the file was transmitted to the Arbitral Tribunal, to apply to competent judicial authority for interim or conservatory measures. By that Article the application to such a judicial authority for such measures is not to be deemed to be an infringement or waiver of the arbitration agreement and is not to effect the relevant powers reserved to the arbitral tribunal. It cannot, therefore, effect the seat of the arbitration, the agreement to the curial law and the exclusive supervisory powers of the English courts in relation to the conduct of the arbitration and the validity of the award.
44. In para 47, it is noted that Mukesh Sharma had submitted that Roger Shashoua‟s and two others conduct before this court when making submissions in the context of the Mukesh Sharma‟s section 34 petition throughout 2008 also amounts to a submission to the jurisdiction of this Court, whilst Roger Shashoua and two others maintained that, not only it is impossible for them to have submitted prior to notice being OMP 04/2008 and connected matters Page 53 of 62 issued in the proceedings but that, in any event, as a matter of fact, their counsel throughout made it plain that Roger Shashoua and two others did object to the jurisdiction of the Court to determine the matters, which Mukesh Sharma wished to put it before it.
45. In para 48, the High Court has held as under:-
"48. On both these matters there is a large body of factual evidence which is seriously in dispute. There are conflicting statements from Indian lawyers as to what actually took place in the Indian courts. There are also conflicting statements from 2 former Chief Justices of India on the law of India and the effect of what was and was not done in the Indian courts. Disputes on Indian law and practice constitute matters of fact for this court and it is therefore clear to me that I cannot decide either primary issues of fact or issues of Indian law and practice on the basis of the statements put before me. This inevitably means that a mini trial is required for determination of these points with oral evidence. Although it was contended that the burden of proof of submission to the jurisdiction lay upon the defendant and only went to the matter of this court's discretion in the context of the granting of the anti suit injunction, where the issues of principle have been decided by me in favour of the claimants, it is plain that my discretion would be influenced by a finding that the claimants had submitted to the jurisdiction of the Indian courts in the context of the section 34 application, whether OMP 04/2008 and connected matters Page 54 of 62 that submission was seen through the eyes of Indian law or the principles of English private international law."
46. In para 50 also, the High Court of England and Wales held as under:-
"50. For the same reasons as set out above in the context of the arguments about submission to the jurisdiction of the High Court of Delhi, I am unable to come to a final conclusion about this without hearing full evidence about what took place and the effect of it from the perspective both of Indian law and the principles of English conflict of laws."
47. Similarly, in para 52, the Court held as under:-
"52. The former allegation is tied in with the arguments about submission to the jurisdiction which, for the reasons set out above, I cannot finally decide without oral evidence."
48. In para 54 also, the Court held as under:-
"54. There was a little debate about the possibility of the issues relating to the alleged submission by the claimants to the jurisdiction of the High Court of Delhi being heard by that court, because it was best fitted to determine such issues under Indian law. Whilst I found this idea attractive initially, I am persuaded that it would be wrong in principle to allow this and that it would create undue practical problems in any event. On the basis of what I have already decided, England is the seat of the arbitration and since this OMP 04/2008 and connected matters Page 55 of 62 carries with it something akin to an exclusive jurisdiction clause, as a matter of principle the foreign court should not decide matters which are for this court to decide in the context of an anti suit injunction. As I have said, the question of submission goes to the exercise of my discretion to grant an injunction and this is not simply a matter of Indian law. The principles of English private international law are called into play when deciding whether what took place in India and its effect in Indian law should impact upon the exercise of this court's discretion. If for example the claimants had submitted to the jurisdiction of the Indian courts as a matter of technicality, whilst making it plain that they had no intention of doing so, that would be a much less forceful point for the defendant than a full blown submission to the jurisdiction of the Delhi High Court, which would be recognised anywhere in the world as being a voluntary acceptance of that court's jurisdiction to act at the behest of the defendant to do all the things which the claimant now says it should not do. Whether there was a submission, the form which that submission took, the ambit of it and the nature of it are all matters which might well affect the decision of this court."
49. From the above, it is noted that the Court was conscious of the fact that the effect of submitting to the jurisdiction of this court by filing an application under Section 9 cannot be decided without hearing full evidence about what took place and effect of it from the perspective of OMP 04/2008 and connected matters Page 56 of 62 both Indian Law and the principles of English conflict of laws. No doubt, the High Court has held that England is the seat of arbitration and on the principle akin to exclusive jurisdiction clause, it held, as a matter of principle, the foreign Court should not decide matters, which are for that Court to decide in the context of an anti suit injunction. In fact, in para 55 of the judgment, the Court did say that, to decide the issue of submission to the jurisdiction of the Courts in India, requires a specific hearing which cannot be determined on statements alone. Suffice to state that the Court itself has stated, the effect of submission to the jurisdiction need to be decided, and there was no final decision on that count. Further, the Court was taking a prima facie view for grant of anti suit injunction.
50. Insofar as the conclusion of the High Court on London being seat of arbitration and it had the jurisdiction on the principles akin to exclusive jurisdiction clause, the same is at variance with the law in India, in terms of National Thermal Power Corporation (supra); Bhatia International (supra) which was later followed by the Supreme Court in Venture Global (supra). The judgment is overlooking the fact that the substantive law applicable to the Agreement was Indian law and if one has regard to the factors connecting the dispute, in the absence of any factors connecting it to England, even if one of the company is registered OMP 04/2008 and connected matters Page 57 of 62 in London, the parties have chosen London as the „venue‟ of the arbitration and not the „seat‟, and the judgment would not help Mr. Krishnan, so also in view of the provision of Section 13(c) of the CPC.
51. The other issue, which arises for consideration is whether the order passed by learned District Judge, Gautam Budh Nagar, U.P dated July 6, 2011 directing the return of the petition to the petitioner is justified. At the outset, I may state here, the reasoning given by the learned District Judge in directing return of the petition under Section 34 of the Act to ITECL on the ground that Roger Shashoua and two others had earlier filed a petition under Section 47 and 49 of the Act of 1996 in this Court and the said petition being prior in time, the petition under Section 34 would be hit by Section 42, is erroneous in view of the judgment of this Court in Daelim Industrial Co. Ltd. vs. Numaligarh Refinery Ltd. 2009(3) Arb.LR 524 (Delhi), wherein this Court in para 16 held as under:-
"16. Applying the same reasoning, Section 42 would also not apply to execution applications. The execution application is not "arbitral proceedings" within the meaning of Section 42 of the Act and is not a subsequent application arising out of the agreement and the arbitral proceedings. In fact the arbitral proceedings come to an end when the time for making an application to set aside the arbitral OMP 04/2008 and connected matters Page 58 of 62 award expires and the execution application is an enforcement of the award. Thus the place of filing of the execution application need not be the place of the filing of the application under Section 34 of the Act for the reason of Section 42 of the Act."
52. Admittedly, the petition filed by Roger Shashoua and others, is under Section 47 and 49 of the Act, so the bar of Section 42 would not be applicable to the petition under Section 34 of the Act filed by ITECL before the District Judge, Gautam Budh Nagar.
53. But the question that would arise, is, whether the order of the learned District Judge, on being set aside, the case needs to be remanded back to the concerned Court for a decision on merit including the maintainability. Mr. Vashist had relied upon the judgment of the Supreme Court in the case of Hari Vishnu Kamath (supra), the said proposition is well settled that a High Court exercising jurisdiction under Article 226 in certiorari proceedings would only rectify the errors and would not re-appreciate the facts. But I note, extensive submissions have been made by Mr. Vashist in support of his stand that the Court of District Judge, Gautam Budh Nagar had the jurisdiction to entertain petition under Section 34 of the Act. If that be so, the said submission need to be tested. If the Court is convinced that on a prima facie view, the Court of learned District Judge, Gautam Budh Nagar has the OMP 04/2008 and connected matters Page 59 of 62 jurisdiction, then the petition filed by ITECL would be maintainable in Gautam Budh Nagar and the petitions, which have been filed in this Court need to filed before the Ld. District Judge, Gautam Budh Nagar as the petition filed by the ITECL, as contended by Mr. Vashist is prior in time. Suffice to state, such a plea would not be acceptable, moreso, when it is the case of ITECL that Roger Shashoua and two others had filed a petition under Section 9 of the Arbitration & Conciliation Act being OMP No.186/2005 seeking interim measures in this Court. There is no dispute, the petition filed by the petitioner before the Gautam Budh Nagar under Section 34 was in the year 2010, much after the said petition was filed. So, the bar of Section 42 would hit the petition being Misc. Case No. 33/2010. Even otherwise, the submission of Mr. Vashist that the ITECL had filed a suit being 257/2005 earlier to the petition being OMP 186/2005, before the Court in Gautam Budh Nagar is concerned, the suit not being an application arising from the arbitration agreement, such a plea, so also the plea on an application under Section 8 of the Act of 1996, as filed by Roger Shashoua and ors before the Ld. District Judge, Gautam Budh Nagar, in view of the judgment of the Supreme Court in State of West Bengal vs. Associated Contractors (2015) 1 SCC 32 vide para 25(c) would not be available to Mr. Vashist. The petition under Section 9 filed by Roger Shashoua and others in this OMP 04/2008 and connected matters Page 60 of 62 Court is the first and prior to the petition under Section 34 of the Arbitration & Conciliation Act by ITECL before the Ld. District Judge and would be hit by Section 42 of the Act of 1996 and would not be maintainable.
54. Further, insofar as the submission of Mr. Vashist that the dispute relates to SHA; to the property in Noida, the corporate office of ITECL is in Noida, the subject-matter of dispute between the parties relatable to Noida property is also without merit and the same would also not confer jurisdiction on the Noida Court as the cause of action, subject-matter of the dispute between the parties is the resolution dated October 29, 2003 and other reliefs relatable to transfer of shares etc, which need to be seen from the perspective of the registered office of the ITECL which is in Delhi.
55. Noting the impugned order of the District Judge is erroneous and not legally tenable but no purpose would be achieved by remanding the case back to the District Judge, Gautam Budh Nagar, as it is clear that on the ground that a petition under Section 9 of the Act of 1996, being OMP 186/2005 was initially filed by Roger Shashoua and others in this Court, the same would trigger the bar of Section 42 of the Act of 1996 making the petition under Section 34 as not maintainable before the District Judge, Gautam Budh Nagar, the writ petition being W.P.(C) No. OMP 04/2008 and connected matters Page 61 of 62 10954/2015 needs to be dismissed. It is ordered accordingly.
56. Insofar as the submission of Mr. Dayan Krishnan on the non- maintainability of petitions under Section 34 of the Act of 1996 is concerned, the said plea is rejected in view of my discussion made above.
57. Having decided the aforesaid two issues in terms of this order, the petitioner ITECL shall file the petition under Section 34, which was directed to be returned back in terms of the order of the Ld. District Judge, Gautam Budh Nagar before this Court on or before 15 th July, 2016. On such filing, the same shall be registered and shall be listed along with O.M.P 04/2008, O.M.P 255/2010 & O.M.P 914/2011 for hearing on 20th July, 2016.
(V.KAMESWAR RAO) JUDGE JUNE 07, 2016 ak OMP 04/2008 and connected matters Page 62 of 62