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-   Company.   Had   there   not   been   a   bid   by   the  petitioner,   JRE   could   not   have   been   brought   into  existence   and   could   not   have   been   concerned   with  the   execution   of   the   project.   He,   therefore,  submitted   that   the   petitioner   cannot   be   a   third  party totally unrelated to the transaction or the  project.   Learned   Senior   Counsel,   Shri   Thakore  submitted   that   the   petitioner   -   IMC   itself   has  fulfilled   the   condition   precedent   in   compliance  with   the   terms   and   conditions   and   the   special  purpose   vehicle   -   JRE   is   incorporated.   He   again  emphasized   that   the   concession   agreement   also  provides   that   it   has   accepted   and   in   condition  precedent,   it   has   been   specifically   stated   about  the   acceptance   of   all   the   conditions   of   the  concession agreement. Learned Senior Counsel, Shri  Thakore, therefore, submitted that IMC and JRE are  "alter ego" and any such contention which has been  C/SCA/5694/2018 JUDGMENT raised   to   pose   the   petitioner   as   totally   third  party, has no merits. Learned Senior Counsel, Shri  Thakore   referred   to   the   judgment   of   the   Hon'ble  Apex   Court   in   case   of  Chloro   Controls   India  Private   Ltd.   (supra)  and   emphasized   the  and   submitted   that   it   has   reference   to   the  doctrine   of   group   company.   He   submitted   that   the  intention of the party has to be gathered from the  document   and   it   is   evident   from   the   concession  agreement   and   condition   precedent   that   the  petitioner   has   filled   in   the   bid   and   after  acceptance,   has   created   special   purpose   vehicle  and has entered into concession agreement through  JRE,   which   is   a   special   purpose   vehicle.   He,  therefore, submitted that it has to be considered  in background of the facts.

37. Therefore with the aforesaid preface, first aspect  which   is   required   to   be   considered   is   the  concession   agreement   and   whether   the   petitioner  could   be   joined   as   party   respondent.   Again   for  that   matter,   the   submissions   have   been   made   that  the   petitioner   is   not   a   signatory   to   the  concession   agreement   and,   therefore,   is   not   a  party   to   the   agreement   and,   therefore,   could   not  C/SCA/5694/2018 JUDGMENT have   been   dragged   to   the   arbitration   proceeding  when the petitioner is not the signatory or party  to   that   agreement.   Again   much   emphasis   has   been  given to the concession agreement that it does not  contain any arbitration clause. In any event, what  has   been   emphasized   is   that   the   rights   and  obligation   of   the  parties   to   the   concession  agreement  are   to   be   decided   within   the   framework  of the concession agreement and the petitioner is  a   third   party   or   is   not   signatory   even   and,  therefore,   could   not   have   been   joined   as   party  pending   proceeding   before   the   Hon'ble   Arbitral  Tribunal,   is   the   moot   question   to   be   considered.  Again   for   that   purpose,   this   submission   proceeds  in   the   background   of   the   suggestion   or   the  assumption   that   the   petitioner   is   a   third   party.  It is at this stage,  prima facie for dealing with  these issues, aspect of lifting of corporate veil  has   to   be   examined.   Therefore   again   reference   is  required   to   be   made   to   the   background   and  undisputed   facts,   which   will   be   stated  hereinafter.

52. Therefore the interpretation, as stated above, has  to be given keeping in mind the intention of the  Legislature and also framework or the mechanism of  the   arbitration   evolved   for   such   purpose. 

Therefore   while   considering   the   word   "party",   it  has   to   be   with   broader   concept   or   understanding  lifting corporate veil.

53. Though   the   submissions   have   been   made   by   learned  Senior   Counsel,   Shri   Soparkar   that   this   judgment  will not have any application, cannot be accepted.  Further the submissions which have been made with  emphasized   on   the   judgment   of   the   Hon'ble   High  Court of Bombay that the Hon'ble Arbitral Tribunal  is   not   a   Court   and,   therefore,   will   not   have  jurisdiction to lift the corporate veil, has to be  considered   with   the   facts   and   the   background   of  the   case   and   it   cannot   be   said   that   any   such  C/SCA/5694/2018 JUDGMENT preposition of law is laid down. In any case, the  Hon'ble Delhi High Court has taken different view,  which   has   been   emphasized   by   learned   Senior  Counsel, Shri Thakore. Again the judgments, which  have   been   cited,   have   to   be   considered   in   the  background  of the facts  and also keeping in mind  the   underlying   legislative   intention   and   the  purpose   of   the   Arbitration   Act.   As   stated   above,  the   Arbitration   Act   has   been   made   to   provide   a  mechanism   or   framework   to   settle   the   dispute   and  any   narrow   or   restrictive   interpretation,   which  frustrate   the   objection,   cannot   be   readily  accepted.  Again  at the cost of repetition,  it is  stated   that   there   may   not   be   a   lack   of   inherent  jurisdiction   under   Articles   226   and   227   of   the  Constitution of India that the High Court may in a  give   case   when   there   is   absolutely   violation   of  rules of natural justice to a party, who is sought  to be proceeded without notice, could be examined.  However in the facts of the case, as stated above,  narrow   interpretation   of   a   word   "party"   as  referred to in Section 21 of the Arbitration  Act  would not be justified. Therefore though there may  not   be   any   inherent   lack   of   jurisdiction   under  C/SCA/5694/2018 JUDGMENT Articles 226 and 227 of the  Constitution of India  as   a   matter   of   propriety   and  self­impose  discipline,   this   Court   would   decline   to   exercise  the   jurisdiction   and   it   would   not   be   justified  when   the   Hon'ble   Arbitral   Tribunal   is   seized   of  the matter.

58. Therefore,   the   submissions,   which   have   been   made  by   learned   Senior   Counsel,   Shri   Soparkar   would  required   that   it   has   to   be   considered   in  C/SCA/5694/2018 JUDGMENT background of the facts and the modern trend where  group   of   Companies   are   functioning   with   multiple  contracts   for   the   same   project   or   different  protect under one umbrella Company. Therefore, the  doctrine   of   group   companies   and   lifting   of  corporate   veil   have   to   be   considered   with  reference   to   modern   tendency   to   ignore   separate  legal entity and look at the economic entity of a  group   as   a   whole   whether   there   is   identity   and  community of interest between the companies within  groups   particularly   when   they   are   related   as  holding   company   and   wholly   owned   subsidiary   or  subsidiary.   Thus   when   the   subsidiary   does   not  enjoy   real   autonomy   in   determining   course   of  action in the market, it could be said that it has  no personality of its own and it has one and the  same   as   a   foreign   company.   Thus   when   JRE   is  created as special purpose vehicle for the purpose  of   project,   for   which,   bid   is   given   by   the  petitioner,   the   contentions   about   the   separate  identity or the concept of holding and subsidiary  company   as   separate   legal   entity   have   to   be  considered. Therefore the submission that both the  Companies   have   a   separate   corporate   existing   and  C/SCA/5694/2018 JUDGMENT merely   because   one   company   is   holding   or  subsidiary does not mean that they constitute one  single   company,   has   to   be   considered   with  background of the facts and material. The doctrine  of group companies is applied in modern times when  group   of   companies   are   functioning   and   when  associated   companies  constitute   genus   of   species  thereof as a holding and subsidiary relationship,  since   holding   and   subsidiary   relationship  necessarily   implies   care   control   by   holding  company   over   the   subsidiary,   which   may   have   been  created for use for the purpose  of business.  For  example,   whether   the   use   of   the   trade   mark   by  subsidiary may fairly be treated as use by holding  company.   A   useful   reference   can   be   made   to   the  judgment   of   the   Hon'bla   High   Court   of   Madras   in  case   of  Fatima   Tile   Works   &   Anr.   Vs.   Sudarsan  Trading   Co.   Ltd.   &   Anr.,  reported   in  1992   (74)  Company   Case   423.   Further   even   instances   or   the  grounds   where   the   piercing   corporate   veil   is  permitted   in   the   instances   include   the   cases,  where   a   concept   of   agency   is   established.  Therefore   either   for   a   particular   project   or   the  transaction   or   even   business   of   the   Company   when  C/SCA/5694/2018 JUDGMENT prima facie it is suggested that one is working as  an   agent   of   other   and   there   is   relationship   of  principal   and   agent   may   be   under   the   Companies  Act, which may be holding and subsidiary company,  the   lifting   of   piercing   of   the   corporate   veil  would   be   permissible   once   the   agency   is  established.   In   the   instant   case,   again   at   the  cost   of   repetition,   it   is   required   to   be   stated  that the bid document (RPF) clearly provides that  the   petitioner   as   applicant   had   undertaken   to  create special purpose vehicle for the project and  entered   into   an   agreement   with   the   respondent   -  Port Trust through a company created as a special  purpose   vehicle.   Therefore,   the   doctrine   of  lifting   of   corporate   veil   marks   change   in   the  approach regarding the concept of separate entity  or   personality   of   corporation.   As   stated   above,  due   to   complexity   of   the   economic   affairs,  judicial   decisions   have   also   recognized   such  exception to the rule about the separate jurisdict  personality   of   corporation,   which   may   have   to   be  done   to   meet   with   the   requirement   of   changing  modern   style   of   business   with   operation   of   group  companies   under   one   umbrella   with   multiple  C/SCA/5694/2018 JUDGMENT agreements   or   the   transactions.   Therefore   the  ultimate aim of the Court or the Tribunal or the  Legislation is to do justice to the parties. While  doing   so,   the   Court   has   to   consider   either   on  public   policy   or   on   the   principles   that   such  devise has been used to evade the obligation. The  doctrine   of   group   of   companies   has   been   accepted  as   exception   to   Salomon   principle   of   separate  identity   of   each   company.   In   doctrine   of   group  company,   the   presumption   of   the   agency   and   the  trusteeship   may   justify   depending   upon   the   facts  of   the   case.   Therefore   as   observed   and   discussed  in the judgment of the Hon'ble Apex Court in case  of State of U.P. & Ors. Vs. Renusagar Power Co. &  Ors.,   reported   in  1991   (70)   Company   Cases   127,  when   there   is   evidence   of   a   general   tendency   to  ignore   the   separate   legal   entities   of   various  companies   within   a   group   and   to   look   instead   at  the economic entity of the whole group. Thus when  the   parent   company   owns   all   the   shares   of   the  subsidiaries and having so much so that there are  other such subsidiaries, which are bound hand and  foot   to   the   parent   company.   That   is   exactly   the  case in the facts of the case when JRE is created  C/SCA/5694/2018 JUDGMENT as   special   purpose   vehicle   for   the   completion   of  the project, for which, the bid was given by the  petitioner. Further when such issues of alter ego  arise   particularly   in   modern   trend   of   economic  activities, the Courts have to pierce the veil to  serve the real aim and object of the Act and the  Court has to look at the business realities of the  situation depending upon the facts of the case and  may   not   confine   them   to   narrow   legalistic   view.  Therefore   horizon   of   the   doctrine   of   lifting   of  corporate veil is expanding in modern times and it  has   been   accepted   as   exception   to  Salomon  principles   of   distinct   legal   entity   of   the  company. Therefore the submissions which have been  made   by   learned   Senior   Counsel,   Shri   Soparkar,  cannot be accepted.