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2014 (1) TMI 735
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.... The respondent HPL on the other hand, claims that the Arbitration Agreement contained in clause 15 of the Agreement dated 12th January, 2002 is void and/ or unenforceable and/or has become inoperative and/or incapable of being performed. 3. A dispute arose between the parties regarding the allotment of shares and the appellant filed Company Petition No. 58 of 2009 before the Company Law Board (in short 'CLB')on the grounds of oppression and mismanagement. The appellant also sought transfer of 155 million shares in favour of Chatterjee Petrochem (India) Pvt. Ltd. (in short "the CPIL"), the Indian counterpart of CPMC as was decided in the Agreement. 4. The Company Petition was disposed of by the CLB by upholding the decision of the Company to allot 155 million shares by Indian Oil Corporation (in short 'IOC'). The transfer of 155 million shares to CPIL by WBIDC was also confirmed. The CLB further directed the Government of West Bengal and WBIDC to transfer 520 million shares held by them in HPL to Chatterjee Groups. 5. The Government of West Bengal preferred an appeal against the said Order before the High Court of Judicature at Calcutta under the provisions of Section 10F ....
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....ce the alleged breach of the agreements referred to hereinabove, was really in the nature of a breach between two members of the Company and not the Company itself. It is not on account of any act on the part of the Company that the shares transferred to CP(I)PL were not registered in the name of the Chatterjee Group. There was, therefore, no occasion for the CLB to make any order either under Sectio n 39 7 o r 40 2 of the aforesaid Act. If, as was observed in M.S.D.C. Radharamanan's case (supra), the CLB had given a finding that the acts of oppression had not been established, it would still be in a position to pass appropriate orders under Sectio n 40 2 of th e Act. That, however, is not the case in the instant appeals." (emphasis laid by this Court) 7. On this decision given by this Court, the appellant sought to invoke the arbitration clause contained in the agreement dated 12th January, 2002 and made a request for arbitration. The respondent no.1 on the other hand, filed a suit before the High Court of judicature at Calcutta praying that the arbitration clause in the agreement be declared as void. 8. Learned senior counsel on behalf of the appellant Dr. Abhishek Manu ....
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....n violation of Section 5 of the A & C Act which limits judicial authority's intervention in arbitration and therefore the impugned order of injunction passed by the High Court of Judicature at Calcutta was contrary to law and therefore, the same is liable to be set aside. In this regard, the learned senior counsel relied upon the three Judge Bench decision of this Court in Bhatia International v. Bulk Trading S.A. and Anr. (2002) 4 SCC 105 to contend that section 5 of the A & C Act provides that no judicial authority shall intervene except where it is provided. The relevant paragraph will be extracted in the reasoning portion of the judgment. 11. Mr. Sudipto Sarkar, learned senior counsel also appearing on behalf of the appellant further contended that the maintainability of the arbitration of the disputes between the parties can be established by relying on the decision of this Court in Venture Global Engineering v. Satyam Computer Services Ltd. and Anr. (2008) 4 SCC 190 wherein it was held that Part I of the A & C Act will be applicable to international arbitrations as well. Therefore, Mr. Sarkar contended that the Arbitration clause will be a bar for judicial intervention in ....
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....or counsel, Mr. K.K. Venugopal, appearing on behalf of Respondent no. 2, Govt. of West Bengal, contended that the Arbitration and Conciliation Act, 1996 does not apply to the present case. According to the learned senior counsel, a party may purport to appoint an arbitrator who may enter upon the arbitration even when there is serious dispute as to whether the arbitration clause exists. In spite of the fact that no arbitration clause exists, if a party resorts to arbitration, then neither section 8 nor section 45 of the A & C Act in case of international arbitration would provide for adjudication of the issue as to whether the arbitration clause exists. It is only where a suit has first been filed, in point of time, on the substantive agreement or the underlying agreement, either by way of specific performance or for compensation for breach of contract, that section 8 or section 45 of the A & C Act would come into play. However, we are not inclined to comment on this contention since it is not pertinent to the case. 16. The learned senior counsel for Respondent no. 2 also contended that when no arbitration clause exists in the agreement, the matter cannot be adjudicated either u....
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....e decided as the threshold issue in the present case. In relation to this, he placed reliance upon the three Judge Bench decision of this Court in Chloro Controls India Pvt. Ltd. v. Severn Trent Water Purification Inc. and Ors. (2013) 1 SCC 641. 20. In the light of the facts and circumstances presented before us on the basis of admitted documents on record, and also based on the legal contentions urged by the learned senior counsel on behalf of both the parties, the following issues would arise for consideration of this Court in these proceedings: 1.Can the Arbitration clause under clause 15 of the letter of Agreement dated 12th January, 2002 be invoked by the appellants and whether Clause 7.5 of the subsequent Agreement dated 8th March, 2002 invoking the exclusive jurisdiction of the courts of Calcutta nullify the scope of arbitration as mentioned in the previous agreement dated 12th January, 2002? 2. Is the suit, filed by the respondents, seeking injunction against arbitration of disputes between the parties sought for by the appellants as per Clause 15 of the principal agreement referred to supra maintainable in law? 3.What Order? Answer to Point no.1 21. We ar....
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.... Case (supra) does not apply. Real intention of the parties in the instant case was to substitute one agreement with another. 26. Clause 1 of the supplementary agreement dated 30th July, 2004 reads as under: "Pursuant to the said Principal Agreement GoWB has caused WBIDC to transfer to Chatterjee Petrochem (India) Private Limited (CPIL), an affiliate of CPMC Rs. 155 crores of shares from the shareholding of WBIDC existing on the date of principal agreement..." (emphasis laid by this Court) The abovementioned clause goes to show that CPIL is an affiliate of CPMC. This is to say, that by means of the letter dated 8th March,2002 CPMC becomes a guarantor whereas CPIL becomes the borrower. Therefore, the same does not change the rights and responsibilities of the parties under the agreement dated 12th January, 2002. 27. Further, the letter written by CPMC to WBIDC along with the agreement dated 8th March, 2002 reads as follows: "...It is clarified that the aforesaid shall not prejudice any of our rights under the said Agreement dt. January 12, 2002 and all terms and conditions thereof shall continue to remain valid, binding and subsisting between the parties to be acted u....
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....e except where so provided. The Scheme of the Act is such that the general provisions of Part I, including Sectio n 5 , will apply t o all Chapters or Parts of the Act." (emphasis laid by this Court) 30. Further, it is pertinent to read Clause 7.5 of the Agreement dated 8th March, 2002 carefully. Clause 7.5 reads thus: "Jurisdiction: Courts at Calcutta alone shall have jurisdiction in all matters relating to this Agreement." The phrase 'this agreement' means the Agreement dated 8th March, 2002 which is essentially a supplementary Agreement and does not, by any mean, make the Principal Agreement dated 12th January, 2002 subject to the jurisdiction of the Court. 31. Therefore, we are of the opinion that both the learned single Judge and the Division Bench erred in arriving at the conclusion mentioned above and their findings are liable to be set aside. In the light of the case mentioned above and also on the basis of the clauses of the Principal Agreement dated 12th January 2002 and subsequent Agreements dated 8th March 2002 and 30th July, 2004, read with section 5 of the A&C Act, we are inclined to observe that the Arbitration clause in the Principal Agreement continu....
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....suit of one's choice......" (emphasis laid by this Court) 34. The learned senior counsel for respondent no. 3 further places reliance upon the Constitution Bench decision of seven Judges in SBP & Co. v. Patel Engineering Ltd. & Anr. (2005) 8 SCC 618 wherein it was held that: "19.....When the defendant to an action before a judicial authority raises the plea that there is an arbitration agreement and the subject matter of the claim is covered by the agreement and the plaintiff or the person who has approached the judicial authority for relief, disputes the same, the judicial authority, in the absence of any restriction in the Act, has necessarily to decide whether, in fact, there is in existence a valid arbitration agreement and whether the dispute that is sought to be raised before it, is covered by the arbitration clause...." (emphasis laid by this Court) 35. We have already held that the Principal Agreement dated 12th January, 2002 continues to be in force with its arbitration clause in place. We have also mentioned, while answering point no. 1, that section 5 of the A&C act will be applicable to Part II of the Act as well. The Agreement dated 12th January, 2002 remai....