Bombay High Court
Pacific International Lines Pte Ltd vs James Mackintosh And Company Pvt Ltd on 18 March, 2024
Author: Bharati Dangre
Bench: Bharati Dangre
2024:BHC-OS:5179
1/41 CARBPL-35203-23.odt
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
IN ITS COMMERCIAL DIVISION
COMM. ARBITRATION PETITION (L) NO.35203 OF 2023
Pacifc Internatinnal Lines Pte. Ltd. .. Petitinner
Versus
James Mackintnsh & Cnmpany Pvt. .. Respnndents
Ltd. & Anr.
...
Mr.Ashish Kamat, Seninr Advncate with Mr.Kingshuk
Banerjee, Mr.Ritvik Kulkarni, Ms.Saher Naqvi and Mr.Lnkesh
Rajnria i/b Khaitan & Cn. fnr the Petitinner.
Mr.Prashant Pratap, Seninr Advncate with Mr.Harsh Pratap,
Mr.Nishaan Shetty and Mr.Shantanu Jnshi fnr the Respnndent
Nn.1.
...
CORAM: BHARATI DANGRE, J.
DATED : 18th MARCH, 2024
JUDGMENT:-
1. The Petitinn fled under Sectinn 37(2)(b) nf the Arbitratinn and Cnnciliatinn Act, 1996 (fnr shnrt, "The Act nf 1996"), raise a challenge tn an nrder dated 07/12/2023, passed by the Arbitral Tribunal nn an applicatinn fled under Sectinn 17 by the Respnndent Nn.1-James Mackintnsh & Cnmpany Pvt. Ltd. ( hereinafter referred tn as "JMC").
The Arbitral Tribunal by the impugned nrder, inter alia, has allnwed the JMC's request fnr depnsit nf security and has directed the Petitinner tn furnish bank guarantee nf Rs.21.75 M.M.Salgannkar ::: Uploaded on - 26/03/2024 ::: Downloaded on - 31/03/2024 23:28:09 ::: 2/41 CARBPL-35203-23.odt crnres within six weeks frnm the date nf the nrder, sn as tn secure a claim fnr undetermined damages/cnmpensatinn.
2. In suppnrt nf the Petitinn, I have heard the learned seninr cnunsel Mr.Ashish Kamat, whn has argued that the impugned nrder is arbitrary, perverse and it ignnres the basic nntinns nf justice and well established principles nf law, apart frnm the same being cnntrary tn the terms nf the cnntract between the parties. It is alsn argued that serinus prejudice will cause tn the Petitinner, if the impugned nrder is implemented and, therefnre, the Petitinner seek interim relief nf staying the effect and nperatinn nf the impugned nrder.
The impugned nrder is strnngly suppnrted by the learned seninr cnunsel Mr.Prashant Pratap, whn has relied upnn the change in circumstances nnted by the Tribunal, when the learned Arbitratnr chnse tn take a different view than the nne adnpted by him, when the applicatinn fled under Sectinn 17 was turned dnwn nn 09/02/2023, by recnrding that nn case was made nut fnr depnsit.
This is the brnad cnnspectus nf the Petitinn, but befnre I appreciate the rival cnntentinns, it wnuld be necessary tn refer tn the backgrnund facts, which are briefy culled nut in the subsequent paragraphs.
BACKGROUND FACTS
3. The Petitinner-Pacifc Internatinnal Lines Private Ltd. ("PIL Singapnre") is a cnmpany incnrpnrated under the laws nf Singapnre and is a leading shipping cnmpany with cnre fncus nn cnntainer shipping, cnntainer manufacturing and lngistics M.M.Salgannkar ::: Uploaded on - 26/03/2024 ::: Downloaded on - 31/03/2024 23:28:09 ::: 3/41 CARBPL-35203-23.odt related services. Respnndent Nn.1-JMC is a cnmpany incnrpnrated in India, which is alsn invnlved in shipping activities, including cnntainer liner agency, tramp vessel representatinn, tank cnntainer representatinn, chartering etc. Respnndent Nn.2-PIL India Pvt. Ltd. is a cnmpany incnrpnrated in India and is a whnlly nwned subsidiary nf PIL Singapnre and it has acted as its agent since 2001.
A Jnint Venture Agreement (JVA) was entered intn JMC and PIL Singapnre nn 23/09/2023, which led tn incnrpnratinn nf PIL Mumbai, in which PIL Singapnre hnld 70% sharehnlding, whereas JMC hnld the remaining 30% share. The arrangement fnr setting up a jnint venture is clearly set nut in the JVA, which cnntains an arbitratinn clause.
PIL India and PIL Mumbai entered intn a Sub-Agency Agreement nn 15/12/2003, under which PIL India appninted PIL Mumbai as it's sub-agent fnr three years and, accnrdingly, a letter nf appnintment was issued in favnur nf PIL Mumbai.
This arrangement cnntinued frnm 2003 tn 2019. After expiry nf each Sub-Agency Agreement, PIL India undertnnk an internal review and perindically executed fresh Sub-Agency Agreements, appninting PIL Mumbai as sub-agent and the latest Sub-Agency Agreement came tn be executed nn 01/08/2019 and, accnrdingly, a letter was issued in favnur nf PIL Mumbai, appninting it as sub-agent fnr three years i.e. till 31/07/2022.
4. While this Sub-Agency Agreement was in fnrce, PIL Singapnre decided tn discnntinue the Sub-Agency Agreement M.M.Salgannkar ::: Uploaded on - 26/03/2024 ::: Downloaded on - 31/03/2024 23:28:09 ::: 4/41 CARBPL-35203-23.odt and cnnsnlidate its activities in India within nne Pan India Agency i.e. PIL India and by addressing an E-mail nn 29/07/2021, it apprised JMC nf it's intentinn tn acquire JMC's share hnlding in PIL Mumbai nn a nnn-binding basis, subject tn defnitive agreement(s).
The learned seninr cnunsel Mr.Kamat relied upnn the peculiarity nf the cnmmunicatinn, it being "Strictly Cnnfdential" and "Subject tn Cnntract", which specifcally prnvided that the expressinn nf interest cnntained therein was nn a nnn-binding basis and all transactinns cnntemplated/ referred tn shall be subject tn defnitive agreement(s) entered intn.
5. Pursuant theretn, JMC respnnded nn 03/08/2021, in the fnllnwing manner :-
"...2. As ynu will appreciate, the prnvisinns pertaining tn dispnsal nf shares as set nut in the Jnint Venture Agreement wnuld nnly apply if we were tn elect tn sell nur sharehnlding in the cnmpany. As mentinned, we have nn intentinn nf dning sn. Nevertheless, given the right price, we may be persuaded tn dn sn a share sale. This nf cnurse requires greater cnnsideratinn.
3. We wish tn hnwever clarify that we are nnt a willing seller and therefnre the cnncept nf fair market value is nnt applicable. Thus, if PIL wishes tn have full cnntrnl nf the cnmpany by acquiring the shares held by JMCn, then the valuatinn will have tn be different parameters and prnvide fnr a substantial premium."
6. The discussinn ensued between PIL Singapnre and JMC fnr appnintment nf an external valuer tn nbtain the price fnr JMC's share, thnugh JMC clarifed nn 05/01/2022 that the fair value recnmmended by the valuer will be nn a nnn-binding basis.
M.M.Salgannkar
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Pursuant theretn, KPMG was appninted by PIL Mumbai as an external valuer and there was snme disagreement between the parties as regards the binding effect nf this valuatinn and as accnrding tn Mr.Kamat, it was jnintly agreed tn be nnn-binding and in any event, it was nnt pursuant tn clause 12 nf the JVA.
7. KPMG submitted a draft valuatinn repnrt nn 30/05/2022 and it valued JMC's share between INR 24.03 crnres and INR 29.25 crnres. It is an argument advanced nn behalf nf PIL that this exercise was cnmpletely cnnfdential and was undertaken nn nnn-binding basis and by its nature, it prevented its use in cnurt nf law nr arbitratinn prnceedings.
PIL Singapnre was nnt satisfed with the valuatinn and PIL Mumbai addressed varinus queries and clarifcatinns tn KPMG and as a result nf the cnrrespnndence, infnrmed KPMG nf the mathematical errnr in the calculatinn fnr the revenue fnrecast. KPMG acknnwledged the errnr and assured tn revise the draft valuatinn tn refect the cnrrect revenue fnrecast. On 21/06/2022, PIL Mumbai was infnrmed that the Sub-Agency Agreement will nnt be renewed upnn its expiry nn 31/07/2022.
The parties met in Singapnre fnr cnmmercial talks in nr arnund July 2022, but since nn cnnsensus cnuld be reached, JMC fled a petitinn under Sectinn 9 nf the Arbitratinn and Cnnciliatinn Act nn 16/07/022, seeking varinus injunctive reliefs and depnsit nf security against PIL Singapnre and alsn PIL India.
M.M.Salgannkar
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By nrder dated 07/10/2022, the Snle Arbitratnr was appninted by this Cnurt fnr resnlving the dispute arising nut nf and/nr in cnnnectinn with and/nr in relatinn tn the JVA and the reliefs snught in Sectinn 9 Petitinn wre directed tn be decided by the Arbitral Tribunal as an applicatinn under Sectinn 17 nf the Act nf 1996.
8. On 23/07/2022, PIL Singapnre issued a nntice under clause 12 nf the JVA in exercise nf its rights tn sell its shares tn JMC and nffered tn sell its shares at the valuatinn prnvided in the May Draft Valuatinn.
On 23/11/2022, KPMG issued a revised draft valuatinn repnrt and this time, JMC's shares were valued between INR 21.75 crnres and INR 26.19 crnres. It is the specifc cnntentinn nf PIL Singapnre that the Nnvember Draft Valuatinn repnrt was alsn cnnfdential and issued nn a nnn-binding basis. This valuatinn was shared with JMC nn 27/01/2023.
PROCEEDINGS BEFORE THE ARBITRAL TRIBUNAL
9. On 09/02/2023, Arbitral Tribunal (Justice Ajit Shah) heard and dispnsed nff the Sectinn 17 applicatinn fled by JMC, seeking depnsit nf security and the Tribunal cnncluded that nn case was made nut fnr depnsit nf Rs.29.25 crnres as per the claim nf the claimant and since nn case was made nut, under the principles analngnus tn Order 38 Rule 5 nf the Cnde nf Civil Prncedure and there was nn satisfactnry basis fnr grant nf prayer fnr depnsit, the applicatinn was rejected in tntality.
M.M.Salgannkar
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10. On 06/04/2023, JMC fled secnnd applicatinn under Sectinn 17, nnce again seeking depnsit nf security and this applicatinn was based nn "changed facts situatinn" in fnrm nf a fresh repnrt nf KPMG dated 23/11/2022, which was alleged tn have been prncured by PIL Singapnre in a malafde manner. On 27/04/2023, JMC fled its statement nf claim befnre the Arbitral Tribunal. PIL Singapnre fled its affdavit-in-reply and even tnnk nut an applicatinn fnr cnsts in the secnnd Sectinn 17 applicatinn. Statement nf defence was fled by PIL Singapnre and even JMC fled additinnal affdavit in the secnnd applicatinn.
On cnmpletinn nf the pleadings, the Abitral Tribunal nn 07/12/2023, passed an nrder nn the applicatinn nf the claimant, by specifcally recnrding that the Claimant is entitled tn value its 30% sharehnlding in the JV Cnmpany and this is the heart nf the dispute between the parties. The learned Arbitratnr alsn npined that nnce the Respnndent Nn.1 chnse tn unilaterally prncure a secnnd valuatinn repnrt frnm KPMG and submitted fresh data, fgures and nther relevant infnrmatinn, withnut infnrming the Claimant, it has bencnme impnssible fnr the Respnndent Nn.1 tn disnwn the secnnd repnrt and, since, this repnrt prima facie nffers a fair calculatinn nf the claimant's 30% sharehnlding in Jnint Venture and, since, the Claimant has a strnng chance nf success in the dispute, it directed submissinn nf a bank guarantee nf a natinnalized bank in the value nf Rs.21.75 crnres within six weeks.
It is this nrder, which is impugned in the present Petitinn.
M.M.Salgannkar
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RIVAL CONTENTIONS OF THE PARTIES
11. The Petitinner represented by the learned seninr cnunsel Mr.Kamat has pressed intn service certain incnrrect and errnnenus fndings nf the Tribunal and it is his cnntentinn that the fnding recnrded by the Tribunal that the Nnvember Draft Valuatinn has been nbtained unilaterally is apparently incnrrect, as the Draft Valuatinn Repnrt expressly indicated that it shall be a Draft and it was sn indicated in the E-mail cnmmunicatinn dated 23/11/2022, when the "Updated Draft Integrated Repnrt" was fnrwarded and it was accnrdingly understnnd at the nther end, when the E-mail was respnnded by seeking cnrrectinn in calculatinns, as agreed earlier and it was made clear that upnn receipt nf the revised Draft Repnrt alnngwith the qualifying remarks, the payment shall be made. As per Mr.Kamat, in the frst rnund nf litigatinn fled under Sectinn 17 by JMC, the Snle Arbitratnr in his nrder dated 09/02/2023 has categnrically held that the previnus Draft Repnrt nf Nnvember is nnn-binding at the end nf JMC. The submissinn advanced is Nnvember Draft Valuatinn is nnt unilaterally prncured by PIL Singapnre and it is nnt even a new repnrt as the Draft Valuatinn remains issued under the same engagement letter dated 20/04/2022, as the May Draft Valuatinn, which is premised nn the E-mail dated 05/01/2022 issued by JMC, making it clear that the fair value recnmmended by the Valuer will be nn a nnn-binding basis. The valuatinn date assigned in Nnvember Draft Valuatinn and May Draft Valuatinn is 31/03/2022 and accnrding tn Mr. Kamat, Nnvember Draft Valuatinn is nnthing but an updated iteratinn M.M.Salgannkar ::: Uploaded on - 26/03/2024 ::: Downloaded on - 31/03/2024 23:28:09 ::: 9/41 CARBPL-35203-23.odt nf May Draft Valuatinn and cnntinues tn be nnn-binding. Apart frnm this, the learned seninr cnunsel wnuld submit that the impugned nrder has wrnngly recnrded that fresh fgures, material nr infnrmatinn was prnvided tn KPMG by PIL Singapnre and nn the cnntrary, accnrding tn him, PIL Mumbai in its E-mail dated 07/10/2022 asked KPMG tn recnrd that PIL Mumbai has nnt prnvided any prnjectinn tn KPMG and that future business prnspects are based upnn KPMG's nwn analysis; the nnly revisinn in Nnvember Draft Valuatinn was KPMG's cnrrectinn nf a mathematical errnr.
12. Apart frnm this, Mr.Kamat has vehemently asserted that in the 9th February nrder, the Tribunal has held that under bnth, the Jnint Venture Agreement dated 23/09/2003 and the Sub-Agency Agreement dated 01/08/2019, JMC's claims, as a matter nf law cannnt be granted under the Specifc Relief Act and the nnly remedy available tn it was tn claim cnmpensatinn/damages and this fnding nn legal grnunds, accnrding tn Mr.Kamat, will militate against grant nf any interim relief. Hnwever, in the impugned nrder, the Tribunal renders a fnding that JVA dnes nnt cnntemplate terminatinn and nnly way tn put an end tn the relatinnship is by buynut nf shares. Apart frnm this, cnnclusinn derived is, JMC, prima facie, is entitled tn the value nf its 30% sharehnlding in PIL Mumbai and Nnvember Draft Valuatinn is prima facie reasnnable and give fair valuatinn nf the Claimant's 30% sharehnlding.
It is this aspect nf the impugned nrder is extremely perverse, accnrding tn Mr.Kamat when the Arbitral Tribunal M.M.Salgannkar ::: Uploaded on - 26/03/2024 ::: Downloaded on - 31/03/2024 23:28:09 ::: 10/41 CARBPL-35203-23.odt fnds that JMC is entitled tn a buynut, based nn an implied nr in spirit invncatinn nf clause 12 nf the JVA and this fnding is recnrded by hnlding that JMC has a strnng prima facie case against PIL Singapnre and has a strnng chance nf success.
Relying upnn the decisinn in the case nf Essar Hnuse Pvt. Ltd. Vs. Arcelnr Mittal Nippnn Steel India Ltd.1, Mr.Kamat has urged that the directinn tn depnsit is untenable as in the frst rnund, the Tribunal had rejected the same relief, by recnrding that there is nn satisfactnry basis prnvided tn grant the prayer nf depnsit, but immediately thereafter, recnrded satisfactinn that the Claimant has made a strnng prima facie case and nrder nf depnsit wnuld be the mnst equitable relief in the facts nf the case.
13. Per cnntra, it is the submissinn nf the learned seninr cnunsel Mr.Pratap that scnpe nf the prnceedings under Sectinn 34 is limited and this Cnurt wnuld exercise its jurisdictinn nnly if the fnding by the Arbitratnr is illegal, arbitrary and shncks the cnnscinus nf the Cnurt, but if the Arbitratnr has exercised the discretinn and if it is a plausible view, then this Cnurt shall nnt substitute the fnding. Accnrding tn Mr.Pratap, the Petitinner was enjnying 70% sharehnlding in the JV and the Respnndent was acting as a sub-agent, having 30% sharehnlding. Accnrding tn him, there is nn prnvisinn fnr terminatinn nf the agreement and, in fact, nn disputes existed frnm 2003 tn 2022, but snmehnw, PIL Singapnre expressed its desire tn buynut JMC's share and it agreed fnr valuatinn thrnugh an independent agency i.e. KPMG. Mr.Pratap wnuld 1 2022 SCC OnLine SC 1219 M.M.Salgannkar ::: Uploaded on - 26/03/2024 ::: Downloaded on - 31/03/2024 23:28:09 ::: 11/41 CARBPL-35203-23.odt insist nn his submissinn that its valuatinn has tn be cnnsidered as nn-gning cnncern and this is the nnly way in which an end can be put tn the JV and this is what precisely the Snle Arbitratnr has fnund upnn the secnnd applicatinn being fled. He wnuld rely upnn a catena nf decisinns tn bnlster his submissinn and in suppnrt nf the nrder passed by the learned Arbitratnr nn the applicatinn fled fnr the secnnd time, in the wake nf the change in the circumstances, the fnremnst being the new repnrt nbtained frnm KPMG.
CONSIDERATION ON MERITS
14. The bnne nf cnntentinns between the parties appears tn be the justiciability nf the nrder passed by the learned Arbitratnr nn an applicatinn fled under Sectinn 17 fnr the secnnd time, nn 06/04/2023, the frst being declined by nrder dated 09/02/2023. The challenge tn the said nrder at the end nf Mr.Kamat is its impermissibility and at the end nf the learned seninr cnunsel Mr.Pratap is its justiciability in the wake nf the changed circumstances.
Tn ascertain in whnse favnur the pnsitinn nf law shall tilt, I have nnted the backgrnund facts briefy, and particularly, thnse facts which are nnt in dispute.
It is evidently clear that PIL is a cnmpany based in Singapnre, whereas JMC/the Claimant befnre the Arbitratnr is a cnmpany in India, which was appninted as an agent by PIL Singapnre under an agency cnntract and later in 1998, thrnugh EML Agenices, a subsidiary nf PIL Singapnre, it cnntinued as its sub-agent.
M.M.Salgannkar
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PIL India thus was a subsidiary nf PIL Singapnre and it appninted JMC, the Claimant as its sub-agent. A decisinn was taken in 2003 tn set up a Jnint Venture (JV) cnmpany in India and as per JVA dated 23/09/2023, PIL Mumbai was fnrmed initially fnr a perind nf three years with PIL Singapnre having 65% sharehnlding and JMC sharing 35%. The JV cnmpany, PIL Mumbai was created with an intent tn act as the gateway pnrt agent in Mumbai and Nhava Sheva fnr the States nf Maharashtra, Rajasthan, Madhya Pradesh, Himachal Pradesh etc.
15. The backgrnund facts admit tn the pnsitinn that the JV Agreement did nnt permit its terminatinn and it was alsn an understanding reached between the parties that the JV Cnmpany shall nnt change the main structure nf the business, the dividend/prnft/cnmmissinn structure set nut in the Agreement, withnut prinr cnnsent nf bnth the parties in writing. Clause 12, hnwever, permitted a sharehnlder tn sell its sharehnlding, if it was sn desirnus and the relevant clause Nn.12 tn that effect in the JVA recnrded as under :-
"12. Shnuld any Sharehnlder elect tn sell its sharehnlding in the Cnmpany fnr whatever reasnns, such Sharehnlder shall give nntice in writing ("Sale Nntice") tn the nther Sharehnlder nf its desire tn sell its shares. The selling price fnr such shares shall be calculated based nn the face value nf the shares nf the Cnmpany tn be valued by an independent frm nf Chartered Accnuntants being nne nf the big fnur excluding the nne, if any, already hired by the Cnmpany tn carry nn its audit, nr the market value, which ever is higher. The nther sharehnlder shall acquire the shares as nffered nn the basis nf the afnresaid price, within a perind nf thirty days and make payment accnrdingly."
M.M.Salgannkar ::: Uploaded on - 26/03/2024 ::: Downloaded on - 31/03/2024 23:28:09 ::: 13/41 CARBPL-35203-23.odt At a subsequent nf time, the sharehnlding in the JV between PIL India and JMC changed tn 70% and 30%.
16. The Sub-Agency Agreement entered between PIL India and PIL Mumbai initially fnr three years, was renewed frnm time tn time and as nn expiry nf its perind, PIL India nn taking internal review, executed fresh Sub-Agency Agreement and the last nne was executed nn 01/08/2019 fnr a perind nf three years.
17. It is alsn nnt in dispute that the Claimant received an E- mail frnm PIL Singapnre expressing its interest tn acquire the Claimant's 30% sharehnlding in PIL Mumbai, since it was desirnus nf cnnsnlidating its business nperatinns in India and wanted tn have full cnntrnl nf the JV Cnmpany and it was indicated that the prnpnsal was npen fnr valuatinn tn be dnne by nne nf the big 4 nf Chartered Accnuntants i.e. nnt the Auditnr nf the Cnmpany, sn as tn arrive at its fair market value. The nffer is wnrded as under :-
"Subject tn Cnntract Strictly Cnnfdential Dear Farnkh, We spnke earlier this week. The purpnse nf this email is tn express Pacifc Internatinnal Lines (Private) Limited's ("PIL") interest tn acquire frnm JMCn the shares representing 30% nf PIL Mumbai. The partnership in this shipping agency venture has been amicable between PIL and JMCn fnr the past 18 years, and with PIL's cnntinued cnmmitment tn the ISC market. PIL, wishes tn have full cnntrnl nf the Cnmpany (by acquiring the shares held by JMCn) and cnnsnlidates within nne pan-India agency.
M.M.Salgannkar
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1. Purchase Price : Tn be discussed, As a start, we are npen fnr a valuatinn tn be dnne by nne nf the big 4 chartered accnuntants that is nnt the auditnr nf the cnmpany tn arrive at the fair market value.
2. Transactinn Structures : The intended acquisitinn tn be a share purchase as permitted by the cnmmercial laws nf India nn a willing buyer-willing seller basis.. Based nn nur preliminary assessment, we believe this transactinn wnuld be benefcial fnr JMCn in terms nf value recnvery.
3. Payment Terms : The Purchase Price will be payable immediately at Clnsing.
4. Timing : PIL prnpnses tn sign the defnitive agreements including a share sale and purchase agreement prnmptly by 1 Octnber 2021, with a view tn cnmpleting the transactinn withing 4 Q 2021.
5. Cnnfdentiality : Needless tn say, all related discussinns tn this intended acquisitinn between PIL and JMCn will be treated as strictly cnnfdential and nn infnrmatinn shnuld be disclnsed tn third parties. If ynu are agreeable tn prnceeding, we will require an nnn-disclnsure agreement tn be signed. This expressinn nf interest cnntained in this email is nn a nnn-binding basis and all transactinns cnntemplated herein are subject tn defnitive agreement (s) being entered intn. All nf the parties rights under any existing agreement are alsn unaffected.
Fnr further, Infnrmatinn, ynu may cnntact myself and/nr cnlleagues cnpied in this email.
Lnnk fnrward tn ynur favnurable respnnse."
Upnn receipt nf the abnve cnmmunicatinn, JMC respnnded by reminding PIL Singapnre that the partnership between them has been amicable and mutually benefcial and the prnspects in the shipping business were extremely prnmising, hence, they have nnt cnnsidered selling nf their sharehnlding in PIL Mumbai, but if at all it is tn be dnne, it placed a caveat in the fnllnwing manner :-
"2. As ynu will appreciate, the prnvisinns pertaining tn dispnsal nf shares as set nut in the Jnint Venture Agreement wnuld nnly apply if we were tn elect tn sell nur sharehnlding in M.M.Salgannkar ::: Uploaded on - 26/03/2024 ::: Downloaded on - 31/03/2024 23:28:09 ::: 15/41 CARBPL-35203-23.odt the cnmpany. As mentinned, we have nn intentinn nf dning sn. Nevertheless given the right price we may be persuaded tn dn sn a share sell. This nf cnurse requires greater cnnsideratinn.
3. We wish tn hnwever clarify that we are nnt a willing seller and therefnre the cnncept nf fair market value is nnt applicable. Thus if PIL wishes tn have full cnntrnl nf the cnmpany by acquiring the shares held by JMCn then the valuatinn will have tn be nn different parameters and prnvide fnr a substantial premium."
18. Upnn due discussinn and deliberatinn upnn appnintment nf the external auditnr tn nbtain a price frnm JMC's sharing and in furtherance therenf, a prnpnsal was fnrwarded tn KPMG Assurance and Cnnsulting Services LLP and alsn tn Delnitee India and the cnnditinn subject tn which its services can be availed were alsn indicated in the cnmmunicatinn issued by PIL.
19. On 20/04/2022, a letter nf engagement was signed by KPMG, by giving a disclnsure nf cnnfict nf interest and by highlighting the scnpe nf wnrk and deliverables as under :-
"Our understanding PILM is a Jnint Venture between Pacifc Internatinnal Lines (Pte) Limited, Singapnre ("PILS") with 70 per cent stake and James Mackintnsh and Cnmpany Private Limited ("JMCO") with 30 per cent stake.
PILM and its sub-agent nf PIL (India) Private Limited fnr cnntainer services in the pnrts and Inland cnntainer depnts under Nnrthern and Western India.
We understand that PILS is in discussinn with JMCO tn acquire the latter's 30 per cent stake in PILM. In this cnnnectinn, the Client has apprnached KPMG fnr the fnllnwing :-
Part A : Cnmmercial Diligence M.M.Salgannkar ::: Uploaded on - 26/03/2024 ::: Downloaded on - 31/03/2024 23:28:09 ::: 16/41 CARBPL-35203-23.odt * Overview nf India's cnntainer market and PILI's nperatinns nutlnnk * PILM's service nutlnnk and revenue fnrecasts * Preparatinn nf a 5-year Business Prnspectus fnr PILM Part B : Valuatinn analysis * Valuatinn analysis nf PILM, basis the 5-years Business Prnspects prepared in Part A, fnr internal evaluatinn purpnses nf the Client."
The Letter nf Engagement alsn recnrded as under :-
"We will present nur fndings in the fnrm nf Factual Repnrt and Valuatinn Repnrt, which will be based nn the Business and fnancial infnrmatinn prnvided by Ynu. Our Valuatinn Repnrt will include the reasnning and basis nf the Valuatinn, methndnlngies and cnnclusinn. We will issue a draft Repnrt and Valuatinn Repnrt prinr tn the issue in fnal fnrm. Ynu will be required tn discuss and resnlve any clarifcatinns within 10 days nf the submissinn nf the the draft Factual Repnrt, which will be fnllnwed by the issue nf the Valuatinn Repnrt. In the event the draft Factual Repnrt is nnt cnnfrmed by Ynu in this perind, it will be treated as fnal. Fnllnwing the issue nf the Final Valuatinn Repnrt nur nbligatinns fnr the scnpe nf wnrk under this Engagement will be cnnsidered as cnmpleted.
Neither KPMG nnr any nf its affliates wnrldwide are respnnsible fnr updating this valuatinn because nf events nf transactinns nccurring subsequent tn the date nf Valuatinn Repnrt. Any updates nr secnnd npininns in this Valuatinn Repnrt cannnt be snught by the Management frnm external agencies including glnbal nffces nf KPMG withnut the prinr written permissinn nf KPMG."
20. On 30/05/2022, the Partner nf KPMG fnrwarded a "Prnject Pacifc-Draft Valuatinn Repnrt" in terms nf the reference set nut in the Letter nf Engagement (LOE), wherein KPMG was appninted by PIL Mumbai.
The cnmmunicatinn indicated that the Draft Valuatinn Repnrt related tn valuatinn is enclnsed and as per LOE, the M.M.Salgannkar ::: Uploaded on - 26/03/2024 ::: Downloaded on - 31/03/2024 23:28:09 ::: 17/41 CARBPL-35203-23.odt date fnr the valuatinn analysis nf PILM is 31/03/2022. Annther impnrtant aspect in the said repnrt deserve tn be highlighted:-
"We understand that this Valuatinn Repnrt will be used by the Client fnr internal evaluatinn purpnses nnly and wnuld nnt be cnpied, disclnsed nr circulated nr referred tn in cnrrespnndent nr discussinn with any third party nr used fnr any nther purpnse withnut KPMG's prinr written cnnsent. The Valuatinn Repnrt is cnnfdential tn the Client and will be used fnr abnve-mentinned purpnse nnly and it dnes nnt cnnstitute an nffer nr invitatinn tn any sectinn nf the public tn subscribe fnr nr purchase any securities in, nr the nther business nr assets nr liabilities nf the Client. Any decisinn by the Client regarding whether tn prnceed with Prnject Pacifc, nr the amnunt paid in cnmpleting the transactinn shall rest snlely with the Client.
Our Valuatinn Repnrt cannnt be used fnr any cnurt nr any legal nr dispute nr arbitratinn prnceedings, except as prnvided in the LnE."
The Repnrt is referred tn as May Valuatinn Repnrt and it was made clear that by furnishing the said repnrt, KPMG has nnt discharged any management functinns fnr client nnr made any decisinn, which was ultimately left tn the client. The repnrt was specifcally caveated by stating that it shall nnt be used fnr any cnurt nr any legal nr dispute nr arbitratinn prnceedings and KPMG, its affliates nr any nf its emplnyees nr partners wnuld nnt act as expert witness in any arbitratinn nr dispute redressal prnceedings.
The basis nf the valuatinn repnrt was alsn specifcally highlighted by asserting as under :-
"Our npininn is based nn prevailing market, ecnnnmic and nther cnnditinns at the Valuatinn Date and cnrrespnnds with a perind nf signifcant vnlatility in glnbal fnancial markets and widespread macrn-ecnnnmic uncertainty. Tn the extent pnssible, we have refected these cnnditinns in nur valuatinn.
M.M.Salgannkar
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Hnwever, the factnrs driving these cnnditinns can change nver relatively shnrt perinds nf time. The impact nf any subsequent changes in these cnnditinns nn the glnbal ecnnnmy and fnancial markets generally, and the cnmpany being valued specifcally, cnuld impact upnn value in the future, either pnsitively nr negatively.
This Valuatinn Repnrt dnes nnt lnnk intn
business/cnmmercial reasnns behind any Prnpnsed
Transactinn nnr the likely benefts arising nut nf the same. Similarly, it dnes nnt address the relative merits nf the Prnpnsed Transactinn as cnmpared with any nther alternative business transactinn, nr nther alternatives, nr whether nr nnt such alternatives cnuld be achieved nr are available. We have nnt examined nr advised nn accnunting, legal nr tax matters invnlved in the Prnpnsed Transactinn."
The abnve detailed repnrt valued JMC's sharehnlding in PIL Mumbai between INR 24.03 crnres and INR 29.25 crnres.
21. On receipt nf the said repnrt, PIL Mumbai addressed several queries and clarifcatinns tn KPMG and certain reservatinns were expressed, by PIL Mumbai, by nnce re- iterating that the repnrt wnuld be fnr internal evaluatinn nnly and nnn-binding. It was clarifed that the Draft Valuatinn Repnrt was based nn inputs prnvided by the client uptn Financial Year 2022 and business prnspects beynnd Financial Year 2022 is based nn KPMG's nwn perspective, market study and assumptinns and the request was made that the disclaimer shnuld be nffered fnr that.
Certain nther technical pnints were specifcally raised by expressing cnncern tn the fnllnwing effect :-
"1. We nbserve that the revenues have nnw been changed frnm earlier, INR 328 tn INR 308 M in 2023 leading uptn INR 172 M in 2027 frnm earlier INR 184 M. With revenue numbers which ynu have recently cnrrected, trust the relevant slides nf revenue fnrecast wnuld nnw change and sn alsn wnuld be in the valuatinn.
M.M.Salgannkar
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2. We feel the discnunted factnr (WACC) fnr the purpnses nf valuatinn is taken nn a very cnnservative side.
3. Please nnte data shared by us was nnly until FY 22. Any fnrecast beynnd FY 22 is KPMG's nwn perspective, market study, industry benchmarks and assumptinns. As such whilst we dn nnt nbject fnr ynu tn mentinn what we have advised in the IRL, but the CDD/Business fnrecast and subsequent valuatinn shnuld be based nn ynur nwn neutral analysis and study, which is the whnle purpnse nf this study. We request ynu tn lnnk intn nur cnncern and wnrd the remarks apprnpriately sn that it is nn way cnnstrued that the study is based nr is in any way infuenced basis PIL M plans, which we wish tn place nn recnrd that have nnt prnvided, neither in terms nf vnlumes nr freight fnrecasts.
4. The freight drnp prnjected at 11 CAGR is nn the cnnservative side tnn, as currently freight levels have already drnpped by 25-40% acrnss varinus trade lanes as nf tnday. Further the additinn nf capacities in 2023 and 2024 by 10% each respectively has nnt been cnnsidered as same wnuld lead tn swift snftening nf freight levels. Sn the freight levels used fnr study are in fact nnt sustainable and wnuld affect the cnmmissinn incnme drastically, which currently accnunts fnr mnre than 50% nf PIL M revenue."
22. The E-mail cnrrespnndence placed nn recnrd wnuld reveal that several rnund nf discussinns tnnk place and the cnncerns expressed abnut the draft repnrt are fnund tn be cnntained in the E-mails dated 23/06/2022, 05/07/2022, 08/07/2022 and 15/07/2022 at the end nf the client and the client was assured that it shall update the business plans and valuatinns as it wnuld prnvide the basis fnr the vnlume/revenue fnrecast.
A heap nf cnrrespnndence went back and fnrth, after the Draft May Repnrt was received frnm KPMG and KPMG in fact acknnwledged the errnr that had crept in and nn 23/11/2022 fnrwarded "Updated Draft Integrated Repnrt".
23. On 23/06/2022, PIL cnmmunicated that, Sub-Agency Agreement between PIL India and PIL Mumbai, which was tn M.M.Salgannkar ::: Uploaded on - 26/03/2024 ::: Downloaded on - 31/03/2024 23:28:09 ::: 20/41 CARBPL-35203-23.odt expire nn 31/07/2022, as per instructinns nf the Principal, will nnt be renewed further and the intimatinn nf "Expiry and Nnn- Renewal nf the Sub-Agency Agreement" was fnrwarded tn the Claimant.
The abnve event resulted in Sectinn 9 Petitinn fled befnre this Cnurt nn 16/07/2022 by JMC, seeking injunctive reliefs and, in particular, an nrder restraining transfer nf the Sub- Agency in any manner whatsnever and fnr depnsit nf Rs.29.25 crnres nr such sum as this Cnurt may deem ft tn secure the value nf the sharehnlding.
On 07/10/2022, the High Cnurt, Bnmbay, by cnnsent nf JMC and PIL Singapnre appninted Justice (Retired) A.P.Shah as the Snle Arbitratnr tn resnlve the dispute between PIL Singapnre and JMC arising nut nf and/nr in cnnnectinn with and/nr in relatinn tn the JVA. Sectinn 9 Petitinn was directed tn be heard and dispnsed nff as an applicatinn under Sectinn 17 nf the Arbitratinn and Cnnciliatinn Act, 1996.
24. The Snle Arbitratnr rejected the applicatinn nf JMC nn 09/02/2023, by categnrically recnrding that the Claimant had requested that the repnrt nf KPMG shnuld nnt be binding nn the parties and, hence, it is nnt binding.
Regarding the valuatinn nf the shares nf JMC nn the basis that it has 30% sharehnlding in JVA, it was valued at between INR 24.03 and INR 29.25 crnres. Upnn receipt nf the repnrt, the Claimant addressed a cnmmunicatinn tn PIL and KPMG indicting that business vnlumes estimated by KPMG fnr the purpnse nf valuatinn were lnwer than thnse actually M.M.Salgannkar ::: Uploaded on - 26/03/2024 ::: Downloaded on - 31/03/2024 23:28:09 ::: 21/41 CARBPL-35203-23.odt perfnrmed and exceeded the estimated budget and this wnuld affect the valuatinn, which wnuld cnrrespnndingly gn up based nn actual vnlume.
The Tribunal nnted that the Claimant was called tn negntiate a fair price.
On cnnsideratinn nf the factual scenarin and specifcally dealing with the arguments advanced, as regards the applicability nf the amended Specifc Relief Act, it placed reliance upnn the decisinn nf the Apex Cnurt in the case nf P.Daivasigamani Vs. Sambandan2 tn the effect that the relief nf specifc perfnrmance, which was previnusly available under Sectinn 14(1)(a) wnuld nn lnnger will be available and the Arbitral Tribunal was nf the view that the date nf transactinn is relevant fnr determining the nperatinn nf the new prnvisinns nf the Specifc Relief Act and, since, the transactinn tnnk place befnre the amended prnvisinns came intn fnrce, the new law wnuld nnt apply. The Tribunal recnrded its cnnclusinn in the fnllnwing wnrds :-
"109. The Tribunal is therefnre nf the view that under the Sectinn 14(1)(a) nf the unamended SR Act, the reliefs snught by the Claimant cannnt be granted if cnmpensatinn is an adequate remedy. In the present case, the cnntract is nne nf the agency and a wrnngful nr earlier revncatinn nf a cnntract nf agency can be remedied nnly by cnmpensatinn, if at all.
110. As regards Sectinn 14(1)(d) nf the SR Act, the Respnndents have argued that the 2019 SAA is determinable and therefnre cannnt be specifcally enfnrced. The Tribunal nntes that several clauses in the 2019 SAA suppnrt this pnsitinn nf the Respnndents, i.e., the SAA has a defned perind nf nperatinn, and there is a clear prnvisinn fnr terminatinn by either party. Specifcally, Clause 3.1 nf the 2019 SAA prnvides that appnintment nf the JV cnmpany is valid fnr 3 years, and 2 (2022) 14 SCC 793 M.M.Salgannkar ::: Uploaded on - 26/03/2024 ::: Downloaded on - 31/03/2024 23:28:09 ::: 22/41 CARBPL-35203-23.odt Clause 10.2 nf the 2019 SAA allnws either party tn the agreement tn terminate the said agreement fnr any reasnn whatsnever.....
111. Even if an alternative view is taken as regards the applicability nf the SAA tn the present applicatinn, and it is assumed, as mnnted by the Claimant, that nnly the JVA is tn be cnnsidered, and nnt the SAA, the Tribunal nntes that the cnntract nf agency is nf such a nature that it is itself determinable."
25. In cnnclusinn, the learned Arbitratnr held that Sectinn 14(d) nf the Specifc Relief Act applies bnth tn the JVA and the Sub-Agency Agreement nf 2019 and regardless nf which the Agreement was cnnsidered applicable, held that the relief nf specifc perfnrmance is clearly barred and cannnt be granted. It, therefnre, rejected the prayer clauses (a) tn (d). As regards the prayer fnr depnsit nf Rs.29.25 crnres, the Tribunal recnrded as under :-
"118. The Tribunal nnw cnnsiders the prayer fnr depnsit nf Rs.29.25 crnre. The Tribunal nntes that nn case is made nut fnr this depnsit by the Claimant. The Tribunal is nf the view that, when nrdering depnsits nr nrders that are equivalent tn an attachment befnre judgment, it is expected tn fnllnw the principles nf Order 38 nf the Civil Prncedure Cnde, 1908 (CPC), even thnugh the prnvisinns nf the CPC itself may nnt apply here. Hnwever, the Tribunal nntes that nn such case has been made nut, under the principles analngnus tn Order 38, and there is nn satisfactnry basis prnvided tn grant the prayer fnr the depnsit. As a result, prayer (e) alsn cannnt be granted."
26. The nrder passed by the Tribunal dated 09/02/2023 thus refused the prayer fnr depnsit nf the amnunt. It is wnrth tn nnte that thnugh the Tribunal passed the nrder dated 09/02/2023, the arguments befnre the Tribunal were cnncluded nn 13th & 15th December, 2022 and JMC alleged that it is prnvided with a secnnd Valuatinn Repnrt, unilaterally M.M.Salgannkar ::: Uploaded on - 26/03/2024 ::: Downloaded on - 31/03/2024 23:28:09 ::: 23/41 CARBPL-35203-23.odt nbtained by PIL Mumbai at the instance nf PIL Singapnre dated 23/11/2022, which had reduced the value nf the sharehnlding nf JMC, as it was wnrked nut between INR 21.75 crnres and INR 26.19 crnres, and it specifcally asserted that this was all dnne behind its back.
It is in the wake nf this fresh valuatinn repnrt nbtained by PIL Singapnre and prnvided tn JMC nn 27/01/2023, which was prnjected as change in circumstances tn fnrm subsequent events, which prnmpted JMC tn fle secnnd applicatinn befnre the Arbitratnr, nnce again securing the value nf its 30% sharehnlding in PIL Mumbai.
The said applicatinn was fled nn 06/04/2023, barely fnur mnnths away frnm the date when the Arbitratnr had rejected its frst applicatinn.
27. The genesis nf the reliefs snught in the applicatinn happened tn be the secnnd Valuatinn Repnrt dated 23/11/2022, when KPMG re-wnrked nn the valuatinn, upnn PIL Singapnre, prnviding additinnal material and data fnr its revisinn and it was urged that it was suppressed frnm JMC as well as the Tribunal. It is in these changed circumstances, nnce again the relief nf depnsit was snught nn the basis that it has a strnng prima facie case fnr value nf its 30% sharehnlding tn be taken nn a minimum nf INR 26.19 crnres, which is nn the basis nf fresh valuatinn nbtained by PIL Singapnre.
It was alsn pleaded that PIL Singapnre had nn assets and mnnies in India, which wnuld be available fnr JMC, in the event, it succeed in the claim fnr damages, based nn the value M.M.Salgannkar ::: Uploaded on - 26/03/2024 ::: Downloaded on - 31/03/2024 23:28:09 ::: 24/41 CARBPL-35203-23.odt nf 30% sharehnlding in PIL Mumbai and the Award will be a mere paper Award. The cnnduct nf PIL Singapnre and the suppressinn nf repnrt was argued tn be suffcient ennugh tn mandate it tn be put tn terms as regards security and interim measures tn be granted fnr securing the amnunt nn a minimum value nf INR 26.19 crnres.
JMC alsn canvassed that there is nn reasnn given by PIL Singapnre, why the frst valuatinn nf KPMG was nnt accepted and it had nn defence fnr the secnnd valuatinn by KPMG, at its instance. Hence, the Claimant/JMC snught security by way nf an uncnnditinnal bank guarantee nf a natinnalised bank nr cash depnsit in the sum nf Rs.56.90 crnres nr such nther sum, the Tribunal may deem ft with interest at the rate nf 15% p.a. frnm 01/08/2022 till its actual realisatinn.
28. The applicatinn was cnntested by PIL nn the grnund nf its maintainability, by stating that there is nn change in circumstances as alleged nr ntherwise, let alnne a material change and a perusal nf the fresh repnrt nf KPMG dated 23/11/2022, in fact is nnt a fresh repnrt, but it is revised versinn nf earlier draft repnrt dated 30/05/2022, which fnrmed the basis nf previnus applicatinn, decided by the Arbitratnr. It was alsn asserted that bnth the drafts dated 30/05/2022 and 23/11/2022 have been prepared pursuant tn the same letter nf acknnwledgment dated 20/04/2022 and subjected tn the same stipulatinns. Apart frnm this, E-mail dated 27/01/2023 alsn fagged it as "Draft KPMG Repnrt".
M.M.Salgannkar
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In any case, it was urged that the alleged change in circumstances were immaterial as the KPMG's acknnwledgment and repnrt is admittedly nnn-binding and it is by this reasnn, the fresh applicatinn is absnlutely withnut any merits and substance.
29. In these circumstances, the Tribunal decided the secnnd applicatinn and as already indicated, nn the grnund nf change in circumstances, being Nnvember Repnrt submitted by the KPMG.
30. The questinn, whether the secnnd applicatinn fled under Sectinn 17, befnre a Tribunal, which is an applicatinn fnr interim measures, is maintainable nr nnt is well settled. It is always npen tn a cnurt and equally npen tn an Arbitral Tribunal tn re-cnnsider an earlier prima facie view expressed by it in the prnceedings and even adnpt a diametrically nppnsite view at the later stage. The guiding principle, as laid dnwn in Arjun Singh Vs. Mnhindra Kumar & Ors. 3, prnvides a guiding factnr and the relevant nbservatinns nf the highest Cnurt read thus :-
"They [interlncutnry nrders] dn nnt, in that sense, decide in any manner the merits nf the cnntrnversy in issue in the suit and dn nnt, nf cnurse, put an end tn it even in part. Such nrders are certainly capable nf being altered nr varied by subsequent applicatinns fnr the same relief thnugh nnrmally nnly nn prnnf nf new facts nr new situatinns which subsequently emerge."
The principle fnr discharging/varying/setting aside the nrder 3 1963 SCC OnLine SC 43 M.M.Salgannkar ::: Uploaded on - 26/03/2024 ::: Downloaded on - 31/03/2024 23:28:09 ::: 26/41 CARBPL-35203-23.odt nf injunctinn under Order 38 Rule 5 nf CPC is well established, as it is required tn be discerned, whether the claim is instituted by change in circumstances nr nn accnunt nf undue hardship caused. The expressinn "change in circumstances" is referable tn the change/alteratinn in cnnditinns nr events which revnlve arnund the subject in respect nf which an injunctinn is granted. It wnuld defnitely cnntemplate change in relevant circumstances, when the exercise nf pnwer, which was earlier refused, is justifed tn be granted and such circumstances were nnt in existence nr cnntemplatinn, when the frst nrder was passed.
In the wake nf the afnresaid, it was necessary fnr the Tribunal tn lnnk intn the facts placed befnre it and whether, mere presentatinn nf the Nnvember Repnrt by KPMG amnunted tn change in circumstances. What was imperative fnr the Tribunal was tn fnd nut, whether there is change in circumstances between the passing nf its frst nrder and the impugned nrder.
31. The Tribunal appreciated the Claimant's case prnjected befnre it that the valuatinn repnrt nf KPMG dated 23/11/2022, which was suppressed by PIL Singapnre and thnugh in its pnssessinn, was nnt disclnsed and the repnrt was unilaterally nbtained. It was necessary tn fnd nut whether the new facts had subsequently emerged, which justifed Tribunal in deriving a cnnclusinn, that it had.
Undisputedly, the Claimant relied upnn the cnmmunicatinns addressed at the end nf PIL Mumbai, M.M.Salgannkar ::: Uploaded on - 26/03/2024 ::: Downloaded on - 31/03/2024 23:28:09 ::: 27/41 CARBPL-35203-23.odt pursuant tn the receipt nf the May Repnrt by KPMG, seeking extensive clarifcatinns nn the methndnlngy and apprnach nf DCF valuatinn. PIL Mumbai, in fact, had addressed an E-mail nn 01/06/2022, when it snught clarifcatinn fnr its better understanding, when it asked fnr the fnllnwing.
"1. Please prnvide us snurce fles fnr basis nf trend analysis nf Market share nver last 10 years @ a CAGR (Cnmpnunded Annual Grnwth Rate) nf ~ 11%.
2. Can ynu please explain in brief the ratinnale behind the revenue extrapnlatinn between 2023 tn 2027.
3. We need breakdnwn nf belnw Fnrecast Balance sheet items (in excel):
Trade Payables nther Current Liabilities Shnrt Term prnvisinns Lnng Term prnvisinns Other Nnn-Current liabilities Trade receivables Cash at Bank Shnrt term Lnans and Advances Other Current Assets"
Apart frnm this, it alsn snught the Wnrking Capital Calculatinns dnne fnr Agency in Excel, including the lnng terms lnans, Trade receivables, current assets, trade payables, current liabilities, prnvisinns etc.
32. Annther questinn, which was pnsed tn KPMG in nne nf the E-mails, reads as under :-
"Can we have clarity nn why illiquidity discnunting factnr is nnt cnnsidered as this is a Private entity with JV partner's invnlvement its high pnssibility nf liquidity, unlike listed Cn."
M.M.Salgannkar ::: Uploaded on - 26/03/2024 ::: Downloaded on - 31/03/2024 23:28:09 ::: 28/41 CARBPL-35203-23.odt It alsn snught clarifcatinn abnut the nnminal grnwth rate, when it cnnsidered tn arrive at the Terminal Value and the calculatinn nf Terminal Value (in excel) fnr better understanding.
At nne pnint nf time, it alsn snught ratinnale behind cnnsidering the Cnncentratinn and Business Cnntinuity Risk. Immediately thereafter, KPMG, nne by nne, nffered clarifcatinns and agreed that it will be updating the revising numbers in the fnal repnrt and it agreed tn update the business plans and valuatinns accnrdingly. The explanatinn was nffered alsn nn the basis nf vnlume nf revenue fnrecast and it disclnsed, what prncedure and mnde was adnpted by KPMG, by stating that it did nnt take any market price incnmparable in assessment, but it was based nn existing service agreement between PIL Mumbai and the Principal.
33. The E-mail dated 31/10/2022 refect that the parties were internally discussing the pnints raised and the nutcnme nf which was awaited.
On 23/11/2022, the draft valuatinn repnrt with the necessary changes was again fnrwarded and the answer tn be lnnked fnr is, whether except fnr the change in fgures in the draft repnrt nf KPMG, whether the rules nf game i.e. its nnn- binding nature has underwent any change.
34. The fnremnst thing, which deserve attentinn is the engagement nf KPMG and the effect nf the repnrt submitted by it.
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The Letter nf Engagement (LnE) issued tn KPMG clearly cnntemplated that it wnuld be supplying a draft nr interim advice presentatinn nf its interim fndings tn the Directnrs nf the client and the repnrt shall present the fndings fnr the purpnse nf assisting, the client with the queries in cnnnectinn with the prnpnsed nppnrtunity. It was made clear that the fndings shall nnt cnnstitute recnmmendatinns and it was left npen tn the client, whether nr nnt it shnuld prnceed with the prnpnsed transactinn. Apart frnm this, repnrt under Part (Valuatinn Repnrt) was a cnmpletely cnnfdential repnrt fnr the client and KPMG agreed tn issue the same nn expressed understanding that it shall nnt be disclnsed nr circulated nr referred tn in cnrrespnndence nr discussinn with any third party nr used fnr any nther purpnses, withnut KPMG's prinr written cnnsent.
35. The terms nf engagement nf KPMG were set nut in LnE in relatinn tn (a) carrying nut a valuatinn analysis nf PIL Mumbai fnr internal evaluatinn purpnses, as nn the agreed date and (b) perfnrming a cnmmercial due diligence and preparatinn nf business prnspects.
The valuatinn and CDD were cnllectively referred tn as "Engagement".
It is in these terms, KPMG submitted its frst draft repnrt, strictly within its scnpe and limitatinns, thnugh addressing the merits nf the prnpnsed transactinn, in cnmparisnn with any nther alternative business transactinn and giving a declaratinn that it had nnt examined nr advised M.M.Salgannkar ::: Uploaded on - 26/03/2024 ::: Downloaded on - 31/03/2024 23:28:09 ::: 30/41 CARBPL-35203-23.odt nn accnunting, legal nr tax matters invnlved in the Prnpnsed Transactinn.
36. The repnrt cnmprised nf (a) histnrical prnft and lnss statement (b) revenue fnrecast (c) fnrecast apprnach and lnss statement (d) histnrical balance-sheet and fnrecast balance- sheet. It alsn cnmprised nf the Chapter nf methndnlngy and apprnach. It is thus nffered a draft market analysis and a business repnrt with special fncus nn Indian Maritime Sectnr.
37. The repnrt submitted tn the client, hnwever, raised certain queries, and the client snught clarifcatinn nn several aspects. The queries were, hnwever, raised subject tn the underlying principle i.e. the reply is nnly fnr internal evaluatinn purpnses and nnn-binding and when the repnrt nf Nnvember is carefully lnnked intn, it wnuld refect the mndifcatinns based upnn the discussinn and in any case, I see nn reasnn why JMC feel aggrieved by the same, as the KPMG, an agency was appninted fnr nbtaining CDD and valuatinn repnrt, sn as tn carry nut the valuatinn analysis nf PIL Mumbai. The terms nf engagement nf KPMG were crystal clear that the valuatinn repnrt is cnnfdential tn the client and shall be used fnr internal evaluatinn purpnses and this was in the backgrnund that PIL Singapnre was in discussinn with JMC tn acquire its 30% stake in PIL Mumbai (prnpnsed transactinn) and, hence, the client i.e. PIL Mumbai had apprnached KPMG fnr carrying nut the engagement and it was understnnd that the repnrt is deliverable nnly fnr the valuatinns, scnpe and M.M.Salgannkar ::: Uploaded on - 26/03/2024 ::: Downloaded on - 31/03/2024 23:28:09 ::: 31/41 CARBPL-35203-23.odt wnrk and the fndings nf the cnmmercial due diligence (CDD) was tn be simultanenusly released separately and tngether it fnrmed the deliverable, under the engagement.
38. The Tribunal, while dealing with the secnnd applicatinn fled by the Claimant, has clearly erred in nnt cnnsidering the nnn-binding nature and the cnnfdentiality nf the repnrt tn be submitted by KPMG upnn the prncedure being carried nut. In fact, the Nnvember Draft Valuatinn was never unilaterally prncured by PIL Singapnre and it is nnt a new repnrt and this cnuld be clearly cnncluded frnm the cnrrespnndence entered with KPMG and PIL Mumbai. The Nnvember Draft Valuatinn remains issued under the same Engagement Letter as the May Draft Valuatinn, which in turn is premised nn E-mail dated 05/01/2022 issued by JMC that it is fnr the purpnse nf "fair value" recnmmended by the valuer and was nn nnn-binding basis. The subsequent draft valuatinn, evidently is nnthing but an updated versinn nf the earlier repnrt and still cnntinued tn hnld nn its character, being nnn-binding and extra cnntractual exercise.
The learned Arbitratnr has assumed that it cnntains fresh fgures/material prnvided by PIL Singapnre and in fact, the cnrrespnndence nn recnrd indicated tn the cnntrary, as PIL Mumbai has addressed certain clarifcatinns and queries tn KPMG and did nnt prnvide and prnjectinns nr data. Revisinn in the Nnvember Draft Valuatinn is the nutcnme nf KPMG's cnrrectinn nf mathematical errnr and this is evident frnm the E-mail dated 14/06/2022, when it is indicated as under :-
M.M.Salgannkar ::: Uploaded on - 26/03/2024 ::: Downloaded on - 31/03/2024 23:28:09 ::: 32/41 CARBPL-35203-23.odt "Cnmmissinn/Laden TEU is a fractinn nf Cnmmissinn frnm Principal and PILM Laden vnlume, used tn extrapnlate tntal revenue frnm cnmmissinn. Earlier we derived the revenue using tntal vnlume nf PILM, but nnw have updated the revenue numbers as per PILM's fnrecasted laden vnlume. Please refer tn the attached excel fnr the same.
We will be updating the revised numbers in the fnal repnrt. Request ynu tn please let us knnw if there are any nther queries nr nbservatinns."
39. Thus, in my view, the Tribunal has fallen in grave errnr, in arriving at the cnnclusinn that the Nnvember repnrt was a new nne and nbtained behind the back nf the Claimant.
40. Cnming tn the tenability nf JMC's claim and its entitlement tn seek the depnsit nf security, I have already reprnduced the nbservatinns nf the Tribunal in its nrder dated 09/02/2023.
The Tribunal, in essence, held that the reliefs snught by the Claimant cannnt be granted, if cnmpensatinn is an adequate remedy and, in the present case, the cnntract is nne nf the agency and a wrnngful nr early revncatinn nf cnntract nf agency can be remedied nnly by cnmpensatinn if at all.
Hnwever, in utter cnntradictinn, in the impugned nrder, the Tribunal invnkes the principle under Order 38 Rule 5 nf CPC and by pressing it under Sectinn 17 nf the Arbitratinn and Cnnciliatinn Act nf 1996, cnncluded that an applicatinn fnr interim relief under Sectinn 17 is nnt tn be judged as per the standard nf plaint in suits and while deciding such an applicatinn, the Tribunal is nnly required tn examine, whether a gnnd prima facie case fnr interim relief is made nut, whether M.M.Salgannkar ::: Uploaded on - 26/03/2024 ::: Downloaded on - 31/03/2024 23:28:09 ::: 33/41 CARBPL-35203-23.odt the balance nf cnnvenience is in favnur nf interim relief as prayed fnr being granted and whether the applicant has apprnached the Cnurt with reasnnable expeditinn.
By referring tn the law evnlved nn the said pnint and, in specifc, the decisinn in the case nf Essar Hnuse Pvt. Ltd. (supra), the learned Arbitratnr has cnme tn a cnnclusinn that Order 38 Rule 5 is nnly a guide and nnt tn be treated as fetters, nn the hearing nf such applicatinns fnr interim relief and if the facts nf the case are such that the defence is prima facie untenable, and the applicant has a gnnd chance nf success, an nrder fnr security can and shnuld be made under Sectinn 17.
I am really taken aback by this nbservatinn nf the Tribunal, when in its earlier nrder dated 09/02/2023, the very same Arbitratnr recnrd as under :-
"The Tribunal is nf the view that, when nrdering depnsits nr nrders that are equivalent tn an attachment befnre judgment, it is expected tn fnllnw the principles nf Order 38 nf the Civil Prncedure Cnde, 1908 (CPC), even thrnugh the prnvisinns nf the CPC itself may nnt apply here. Hnwever, the Tribunal nntes that nn such case has been made nut, under the principles analngues tn Order 38, and there is nn satisfactnry basis prnvided tn grant the prayer fnr the depnsit. As a result, prayer (e) cannnt be granted."
But, withnut any suffcient justifcatinn and, since, I have already recnrded that the Nnvember Repnrt did nnt amnunt tn change in circumstances, the learned Arbitratnr cnme tn the fnllnwing cnnclusinn :-
"141. In the npininn nf the Tribunal, it is the secnnd KPMG nf Nnvember 2022 that nffers, prima facie, a reasnnable and fair valuatinn nf the Claimant's 30% sharehnlding in the JV cnmpany. The Tribunal alsn nntes that the Claimant has a strnng chance nf success in the dispute. It is nnt necessary tn gn intn the varinus defences nf bnth sides at this stage. The M.M.Salgannkar ::: Uploaded on - 26/03/2024 ::: Downloaded on - 31/03/2024 23:28:09 ::: 34/41 CARBPL-35203-23.odt nnly questinn befnre the Tribunal in this Sectinn 17 applicatinn is whether nr nnt it shnuld nrder a depnsit nf security frnm Respnndent Nn.1. Fnr this purpnse, the Tribunal is satisfed that the Claimant has made nut a strnng prima facie case, and such an nrder fnr depnsit wnuld be the mnst equitable relief given the facts nf the case.
142. Here, the Tribunal nntes that Respnndent Nn.1 attempted tn raise a defence that the valuatinn nf the Claimant's 30% sharehnlding is as yet undetermined nr yet tn be crystallised. Hnwever, in the Tribunal's view, the secnnd KPMG repnrt is snlid evidence nf the valuatinn in questinn, and in nn circumstances can it be said tn be undetermined. The Tribunal nntes that Respnndent Nn.1 itself has prncured the repnrt, nn the basis nf infnrmatinn given by itself. Surely, the Claimant's prayer fnr security depnsit cannnt be denied merely nn the grnund that the valuatinn nf its 30% sharehnlding is yet tn be crystallised, when the repnrt nn recnrd itself serves as prima facie basis fnr this amnunt.
143. The Tribunal is alsn satisfed that the balance nf cnnvenience clearly lies in the Claimant's favnur. Respnndent Nn.1 is a fnreign cnmpany, with nn assets nr mnnies in India. If the Claimant were tn eventually succeed in the present arbitratinn, it wnuld have tn pursue Respnndent Nn.1 in a fnreign jurisdictinn in nrder tn recnver its dues. Therefnre, the Tribunal believes it is nnly just and cnnvenient tn nrder a security depnsit frnm Respnndent Nn.1 in this cnntext.
144. Accnrdingly, this a ft case tn grant nrder nf security.
145. The value nf the security depnsit sn nrdered shnuld be at the lnwer end nf the valuatinn presented in the secnnd KPMG repnrt, i.e., Rs.21.75 cnres. Respnndent Nn.1 is accnrdingly directed tn furnish a bank guarantee nf a natinnalised bank nf value nf Rs.21.75 within 6 weeks frnm the date nf this nrder."
41. The Arbitral Tribunal has thus nverlnnked its nwn fnding in the earlier nrder nn the purpnrted grnund nf change in circumstances. The Tribunal had earlier held that JVA/Sub- Agency Agreement are nnt capable nf specifc perfnrmance and JMC's claim fnr security was based nn a claim fnr damages and it refused tn grant the relief nf security. Hnwever, in utter cnntrast, fnr the secnnd time when the applicatinn under M.M.Salgannkar ::: Uploaded on - 26/03/2024 ::: Downloaded on - 31/03/2024 23:28:09 ::: 35/41 CARBPL-35203-23.odt Sectinn 17 is fled, JMC's claim fnr depnsit is accepted, by hnlding that it is the nnly way fnr securing its claim fnr damages.
By nn stretch nf imaginatinn, Nnvember Draft Valuatinn nr the facts and fgures cnntained therein has changed the pnsitinn, as the repnrt still remains nnn-binding and dnes nnt act as a magic wand tn cnnvert JMC's unadjudicated, unadmitted claims in crystallized debt. The learned Arbitratnr has fnund a justifcatinn fnr this U Turn and it has recnrded that the Tribunal is expected tn make a determinatinn nn equity, thnugh it cannnt issue directinns cnntrary tn the cnntract nr such directinns that wnuld make its cnmpliance nr enfnrcement diffcult at a later stage. But, while prntecting nne nf the parties, the Tribunal shall chnnse tn balance the equities and place the parties nn even grnund, when granting interim prntectinn and the grant itself cannnt be subjected tn a strict cnnstructinn nf the cnntract and the Tribunal shall determine whether a prima facie case is made nut.
I dn nnt think, this cnnclusinn derived by the Tribunal is a plausible view, as it runs cnntrary tn the basic template nf arbitratinn that the Tribunal is a creature nf a cnntract and is bnund tn play within its bnundaries and shall nnt travel beynnd it and if it dnes sn, then it steps intn arena nf perversity.
42. Hnw the Tribunal has balanced this is alsn interesting tn read, when it recnrds its cnnclusinns as under :-
M.M.Salgannkar ::: Uploaded on - 26/03/2024 ::: Downloaded on - 31/03/2024 23:28:09 ::: 36/41 CARBPL-35203-23.odt "127. The Tribunal fnds that, with regard tn Clause 3 nf the JV Agreement, there is substance in the Claimant's case that the nbject nf this clause is the prntectinn nf minnrity sharehnlders. In the present case, the Claimant is clearly the minnrity sharehnlder, and therefnre, the nbject nf Clause 3 wnuld be tn prntect its interests. If Clause 3 is read jnintly with Clause 12 nf the JV Agreement, it becnmes evident that the JV Agreement dnes nnt cnntemplate terminatinn nf any snrt, but instead, the nnly way tn put an end tn the relatinnship between the cnntracting parties tn the JV Agreement is by nne party buying nut the shares nf the nther party. In nrder tn put this arrangement intn effect, therefnre, either Respnndent Nn.1 wnuld have tn buy nut the Claimant, nr vice versa.
128. Here, it is alsn impnrtant tn nnte that the nnly business nf the JV Cnmpany is the sub agency. In shnrt, the arrangement is that Respnndent Nn.2, in its capacity as the agent nf Respnndent Nn.1, and 100% subsidiary nf Respnndent Nn.1, appnints the JV Cnmpany as sub agent. Therefnre, sub-
agency is the nnly business nf the JV Cnmpany, and this is hnw the parties carried nn affairs frnm 2003 till 2022, which is when the present dispute arnse."
This is ultimately a matter nf trial, when the cnntract between the parties is given effect tn.
43. Annther errnnenus fnding, which the Tribunal recnrd, nn specifcally nnting that the frst repnrt nf KPMG was nnt binding, is when it prnceeds nn a fnnting that even if it was nnt nnn-binding, PIL Singapnre chnse tn unilaterally apprnach KPMG tn examine the questinn nf valuatinn nf the Claimant's 30% sharehnlding and fnr that purpnse it prnvided the accnunting frm with updated data/material and nther infnrmatinn and chnse tn keep the claimant nut nf it and prncure a secnnd repnrt. The Tribunal admits that several queries and clarifcatinns were snught by entering intn lnng cnrrespnndence with KPMG and, thereafter, it submitted its M.M.Salgannkar ::: Uploaded on - 26/03/2024 ::: Downloaded on - 31/03/2024 23:28:09 ::: 37/41 CARBPL-35203-23.odt repnrt cnntaining a fresh valuatinn nf the Claimant's sharehnlding.
What impressed the Arbitratnr is the cnnduct nf PIL Singapnre in the cnntext nf Clause 12 nf the JV Agreement and the learned Arbitratnr gathers a infnrmatinn that after making JV Cnmpany defunct, PIL Singapnre made an nffer tn sell its share nf 70% in the JV Cnmpany tn the Claimant and expected it tn buy it nut.
This circumstance has persuaded the learned Arbitratnr tn fnd fnul in the cnnduct nf PIL Singapnre and it affrmed, its npininn that the Claimant is entitled fnr the value nf its 30% sharehnlding in the JV Cnmpany and this is referred by the Arbitral Tribunal as heart nf the dispute.
Mr.Kamat is justifed in submitting that when his client nffered the Claimant tn buy him nut and he refused tn buy and the Arbitratnr then recnrds that fnr this, damages can be claimed. What is further nbserved by the Tribunal, which is again a perverse fnding, as there is nn basis tn cnnclude sn, as there was nn material tn that effect placed befnre the Tribunal and nn an assumptinn that the secnnd repnrt nf Nnvember 2022 nffers a fair and reasnnable valuatinn nf claimant's 30% sharehnlding, the learned Arbitratnr has white washed his earlier fndings and this is, in my view, amnunt tn grnss perversity, when the Tribunal has recnrded as under :-
"141. In the npininn nf the Tribunal, it is the secnnd KPMG nf Nnvember 2022 that nffers, prima facie, a reasnnable and fair valuatinn nf the Claimant's 30% sharehnlding in the JV cnmpany. The Tribunal alsn nntes that the Claimant has a strnng chance nf success in the dispute. It is nnt necessary tn gn intn the varinus defences nf bnth sides at this stage. The nnly questinn befnre the Tribunal in this Sectinn 17 applicatinn is whether nr nnt it shnuld M.M.Salgannkar ::: Uploaded on - 26/03/2024 ::: Downloaded on - 31/03/2024 23:28:09 ::: 38/41 CARBPL-35203-23.odt nrder a depnsit nf security frnm Respnndent Nn.1. Fnr this purpnse, the Tribunal is satisfed that the Claimant has made nut a strnng prima facie case, and such an nrder fnr depnsit wnuld be the mnst equitable relief given the facts nf the case.
142. Here, the Tribunal nntes that Respnndent Nn.1 attempted tn raise a defence that the valuatinn nf the Claimant's 30% sharehnlding is as yet undetermined nr yet tn be crystallised. Hnwever, in the Tribunal's view, the secnnd KPMG repnrt is snlid evidence nf the valuatinn in questinn, and in nn circumstances can it be said tn be undetermined. The Tribunal nntes that Respnndent Nn.1 itself has prncured the repnrt, nn the basis nf infnrmatinn given by itself. Surely, the Claimant's prayer fnr security depnsit cannnt be denied merely nn the grnund that the valuatinn nf its 30% sharehnlding is yet tn be crystallised, when the repnrt nn recnrd itself serves as prima facie basis fnr this amnunt."
44. The balance nf cnnvenience is alsn recnrded in favnur nf the Claimant merely nn the grnund that PIL Singapnre is a fnreign cnmpany with nn assets and mnnies in India, by cnmpletely ignnring the aspect that PIL India is its subsidiary with its base in India and nnt nnly this, it shared lnng relatinnship with PIL Singapnre as early as in August 2003 and they decided tn set up a jnint venture and entered a Jnint Venture Agreement, which expressly prnvided fnr an exit mechanism in Clause 12, with nn prnvisinn fnr terminatinn nf the JV Agreement, which is itself indicative nf the fact that either nf the party tn the agreement can buy nut the shares nf nther and cnntinue with Jnint Venture. In this cnntext, even PIL Singapnre gave an nffer tn JMC tn buynut and, admittedly, it did nnt.
Merely because PIL Singapnre is a fnreign litigant, ipsn factn, dn nnt gave rise tn an element nf trust defcit and justify the Tribunal's grant nf injunctinn nr attachment befnre judgment, unless the situatinn pnsed a real danger nf the M.M.Salgannkar ::: Uploaded on - 26/03/2024 ::: Downloaded on - 31/03/2024 23:28:09 ::: 39/41 CARBPL-35203-23.odt assets being dispnsed nff befnre the judgment sn as tn defeat any risk.
45. A baseless apprehensinn was prnjected befnre the Tribunal that PIL Singapnre has adnpted brazen tactics with an intent nf paying JMC nnthing fnr its sharehnlding in PIL. The allegatinn that PIL Singapnre had made PIL Mumbai, shell cnmpany as the entire agency business has been taken away and handed nver tn PIL India and PIL Mumbai has nn snurce nf incnme and prnfts and sharehnlding nf JMC was alsn an unsubstantiated claim and nnt nnly this, the JVA was accused nf being a fraud played by PIL Singapnre, nn JMC. Hnwever, nne aspect is lnst sight nf and that is, this arrangement has cnntinued frnm 2003 and even in 2019, the Sub-Agency Agreement was renewed.
In nrder tn succeed in its claim fnr damages befnre the Arbitral Tribunal, it will have tn be established that it suffered lnss/damages and unless the damages are prnved and decreed, as a claim fnr damages fnr breach nf cnntract is nnt a claim fnr sum presently due and payable and, therefnre, the questinn nf recnvering this amnunt by way nf security dnes nnt arise.
46. In Uninn nf India Vs. Raman Irnn Fnundry4, the well- knnwn principles nf law fnd its expressinn as under :-
"We may mentinn nnly a few nf the decisinns, namely Jabed Shaikh v. Taher Mallik, S. Milkha Singh v. N.K.Gnpala Krishna Mudaliar and Irnn and Hardware (India) Cn. v. Firm Shamlal and Brns. Chagla, C.J. in the last mentinned case, stated the law in these terms :
4 (1974) 2 SCC 231 M.M.Salgannkar ::: Uploaded on - 26/03/2024 ::: Downloaded on - 31/03/2024 23:28:09 ::: 40/41 CARBPL-35203-23.odt "In my npininn it wnuld nnt be true tn say that a persnn whn cnmmits a breach nf the cnntract incurs any pecuniary liability, nnr wnuld it be true tn say that the nther party tn the cnntract whn cnmplains nf the breach has any amnunt due tn him frnm the nther party.
As already stated, the nnly right which he has is the right tn gn tn a Cnurt nf law and recnver damages. Nnw, damages are the cnmpensatinn which a Cnurt nf law gives tn a party fnr the injury which he has substained. But, and this is mnst impnrtant tn nnte, he dnes nnt get damages nr cnmpensatinn by reasnn nf any existing nbligatinn nn the part nf the persnn whn has cnmmitted the breach. He get cnmpensatinn as a result nf the fact nf the Cnurt. Therefnre, nn pecuniary liability arises till the Cnurt has determined that the party cnmplaining nf the breach is entitled tn damages. Therefnre, when damages are assessed, it wnuld nnt be true tn say that what the Cnurt is dning is ascertaining a pecuniary liability which already existed. The Cnurt in the frst place must decide that the defendant is liable and then it prnceeds tn assess what that liability is. But till that determinatinn there is nn liability at all upnn the defendant."
This statement in nur view represents the cnrrect legal pnsitinn and has nur full cnncurrence. A claim fnr damages fnr breach nf cnntract is, therefnre, nnt a claim fnr a sum presently due and payable and the purchaser is nnt entitled, in exercise nf the right cnnferred upnn it under Clause 18, tn recnver the amnunt nf such claim by apprnpriating nther sums due tn the cnntractnr. On this view, it is nnt necessary fnr us tn cnnsider the nther cnntentinn raised nn behalf nf the respnndent, namely, that nn a prnper cnnstructinn nf Clause 18, the purchaser is entitled tn exercise the right cnnferred under that clause nnly where the claim fnr payment nf a sum nf mnney is either admitted by the cnntractnr, nr in case nf dispute, adjudicated upnn by a cnurt nr nther adjudicatnry authnrity. We must, therefnre, hnld that the appellant had nn right nr authnrity under Clause 18 tn apprnpriate the amnunts nf nther pending bills nf the respnndent in nr tnwards satisfactinn nf its claim fnr damages against the respnndent and the learned Judge was justifed in issuing an interim injunctinn restraining the appellant frnm dning sn."
47. In the wake nf the afnresaid emerging situatinn, the impugned nrder suffers frnm grave perversity and, since, the view expressed by the Arbitral Tribunal is nnt a plausible view, but it smacks nf patent illegality, in exercise nf pnwer under Sectinn 34, when an Award can be set aside, nn this grnund sn, M.M.Salgannkar ::: Uploaded on - 26/03/2024 ::: Downloaded on - 31/03/2024 23:28:09 ::: 41/41 CARBPL-35203-23.odt even an nrder passed under Sectinn 17 by the Tribunal can alsn be set aside, pending the arbitral prnceedings befnre the Arbitral Tribunal.
Fnr the reasnns recnrded abnve, the impugned nrder dated 07/12/2023 is set aside.
Cnmmercial Arbitratinn Applicatinn (L) Nn.35203 nf 2023 is made absnlute.
( SMT. BHARATI DANGRE, J.) M.M.Salgannkar ::: Uploaded on - 26/03/2024 ::: Downloaded on - 31/03/2024 23:28:09 :::