TaxTMI 
TaxTMI 
2010 (9) TMI 1228
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....f in Suit No. 1828 of 2010. By the said Notice of Motion, the appellant-MSM Satellite (Singapore) Pte Ltd. (hereinafter referred to as the "plaintiff" or "Sony") had applied for an injunction to restrain the defendant-World Sport Group (Mauritius) Limited (hereinafter referred to as the "defendant" or "Mauritius company") from referring the dispute between the parties to the suit to arbitration upon invoking an arbitration clause in the agreement between the parties dated 25th March 2009 and from continuing with the arbitration proceedings filed by the defendant in the International Chamber of Commerce (ICC). 2. The suit came to be filed by the appellant-plaintiff on 30th June 2010 upon the defendant-Mauritius company issuing notice dated 28th June 2010 to the plaintiff-Sony for invoking arbitration under the arbitration clause in the agreement between the parties dated 25th March 2009 titled as "the Deed for the Provision of Facilitation Services" (hereinafter referred to as "Facilitation Deed" for short). Under the Facilitation Deed, plaintiff-Sony was to pay the sum of Rs. 425 crores to the defendant-Mauritius company, out of which Rs. 125 crores was already paid by Sony to t....
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....d the Mauritius company through their representatives Mr. Andrew Georgiou and Mr. Venu Nair who were the common Directors of the Mauritius company and the Indian company called Worlds Sport Group in India. The said representatives of the Mauritius company reiterated that the Mauritius company had unfettered rights for the Indian sub-continent. They also represented to Plaintiff-Sony that by virtue of the MRLA between BCCI and the Mauritius company, the Mauritius company had the requisite media rights which it could relinquish to facilitate the acquisition of media rights directly from BCCI and that the rights arising out of the agreement between BCCI and defendant Mauritius company could be terminated and that thereafter plaintiff-Sony can directly enter agreement with BCCI to acquire Indian sub-continental media rights to the IPL. 3.4 On the basis of the above representation made by BCCI Commissioner Mr. Lalit Modi and the common Directors of the Mauritius company and the Indian company (World Sport Group India (Pvt.) Ltd.), the following new agreements dated 25th March 2010 were entered into: (i) Deed of termination between WSG (India) and plaintiff-Sony in term....
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....e accrued to the Plaintiff otherwise. 20. However, information recently received from BCCI after suspension of the IPL Commissioner, including letters and other correspondence as well as certain agreements, unknown to and unavailable to the Plaintiff at the relevant time of execution of the Deed, reveal that Defendant has fraudulently induced the Plaintiff into executing the Deed by suppressing the fact that the Media Rights forming subject matter of the MSMS-MRLA dated 25th March, 2009 had in fact reverted to BCCI and that as on date of Deed, the Defendant did not hold any of the rights whatsoever to the Indian Sub-continent media rights of the IPL. 21. During the IPL season 3 i.e. in April 2010 a controversy erupted in the BCCI regarding the alleged wrong doings of the Commissioner and various charges were levelled against him by the BCCI who reportedly issued show cause notices to Mr. Lalit K. Modi (the Commissioner), BCCI denied any knowledge about the Deed and the fees agreed to be paid by the Plaintiff to the Defendant there under in exchange for the Defendant relinquishing its Media Rights for the Indian sub continent in favour of the Plaintiff. 22....
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....m of Rs. 147 crores along with further interest at the rate of 16% on the principal amount of Rs. 125 crores. The plaintiff also prayed for interim relief to restrain BCCI from issuing any termination notice against the plaintiff on the basis of any agreement along with BCCI and Mauritius company or on the basis of any agreement dated 25th March 2009 between BCCI and WSG (India). The above Suit came to be filed by the plaintiff-Sony against the above three defendants on 25th June 2010 and notice thereof was served upon the defendants on 26th June 2010. When the Notice of Motion in the said Suit came up for hearing before the learned Single Judge on 28th June 2010, the learned Counsel for BCCI stated that BCCI would not terminate the MRLA agreement dated 25th March 2009 between BCCI and the plaintiff during pendency of the Notice of Motion and the matter was adjourned to 16th August 2010. 6. However, after filing of the above referred Suit, the plaintiff was served with a copy of the Mauritius company's letter dated 28th June 2010 addressed to the International Chamber of Commerce enclosing the request of the Mauritius company for arbitration as contemplated under the Facilit....
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....he plaintiff is a gross abuse of the judicial process and is an attempt to harass the plaintiff by engaging it in a protracted and expensive legal battle in Singapore and incur heavy expenses which are clearly avoidable. Admittedly, no part of the evidence material to the dispute is to be found at Singapore and none of the witness relevant to the issues are at Singapore. It is the settled legal position that when there are serious allegations of fraud or where the dispute requires detailed examination of witnesses, the same are not suitable for arbitration and have to be necessarily decided by Courts. Considering the nature of allegations which the plaintiff has raised against the defendant, which is bound to necessitate detailed evidence and cross examination of parties, it is apparent that even assuming, without admitting that the arbitration clause in the deed survived the rescission on the ground of fraud, it is only the Courts which would have jurisdiction to decide the dispute and having regard to the fact that this Court is the Court of inherent and natural jurisdiction, the dispute would be decided solely and exclusively by this Court in the Indian proceedings which are pri....
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.... Letters Patent. The Plaintiff and Defendant are both resident outside the jurisdiction of this Hon'ble Court. The Plaintiff executed the agreement outside India (in Los Angeles). Negotiations in relation to the deed for provision of facilitation services being Exhibit "I" to the plaint (Facilitation Deed"), were partly held outside India, more particularly with the Plaintiff's lawyers who were in England and the representatives of the parties hereto not being within the jurisdiction of this Hon'ble Court at all material times. On the Plaintiff's own showing, the whole of the cause of action has not arisen in Mumbai. The payment made till date under the Facilitation Deed was also made by the Plaintiff outside India and received by the Defendant outside India, i.e. outside the jurisdiction of this Hon'ble Court. The whole of the cause of action has not arisen within the jurisdiction of this Hon'ble Court. Since no leave has been taken under Clause XII, I submit that this suit is liable to be dismissed. b. the suit is barred by law; c. the plaint discloses no cause of action and the suit is liable to be dismissed on a demurrer; 9. At the h....
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....ave entered into an agreement on the same day i.e., 25th March 2009 with M/s. World Sports Group (Mauritius) Ltd., wherein you have agreed to pay a sum of Rs. 425 Crores towards "facilitation fee" for services supposedly rendered by WSG Mauritius Ltd. to enable you to obtain the contract for Media Rights for the Indian Subcontinent by means of the agreement referred above. You are hereby informed that BCCI is not aware of any facilitation services provided by World Sports Group (Mauritius) Ltd. World Sports Group (Mauritius) Ltd., had no role to play in the agreement signed by you with Mr. Lalit Kumar Modi for taking the Indian subcontinent rights. Monies expanded by you for the Indian Subcontinent rights referred above should rightfully be paid to BCCI alone and no other party. You are therefore requested to remit all amounts due and payable to WSG (Mauritius) Ltd., to the BCCI. We are sure that MSM Satellite (Singapore)'s favourable decision in this regard would help the relationship between BCCI and MSM Satellite (Singapore) grow stronger in the years to come. Thanking you Yours faithfully Sd/- N. Srinivasan Hon.....
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...., can be raised before the arbitral tribunal and the very scheme of the Act that rejection of such objections can only be challenged by making an application for setting aside an arbitral award under Section 34 of the Act shows the clear restrictive intent against the judicial intervention. 14. It is further submitted by Dr. Singhvi that the so-called fraud is nothing but a false allegation made by the plaintiff. The reference to the agreement dated 23rd March 2009 in the agreement dated 25th March 2009 between the plaintiff and the defendant was only a typographical mistake and even in the press statement issued by the plaintiff at Exhibit "K", there is no reference to the agreement dated 23rd March 2009. It is submitted that such a typographical mistake in the agreement dated 25th March 2009 by referring to the said agreement as merely dated 23rd March 2009 instead of agreement dated 15th March 2009 between BCCI and the defendant can never amount to fraud. 15. It is further submitted by Dr. Singhvi that as per the settled legal position, even in a case where allegations of fraud are made, the accuser cannot prevent the accused from going for arbitration and that it is only ....
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....llowing observations: 14. Whatever may be the merits of the writ application, we are of the view that it has been fairly conceded by the learned Senior Counsel appearing on behalf of Respondent 1 that the High Court should have had regard to Section 5 of the 1996 Act before granting the reliefs it did. Under Section 5 of the 1996 Act, courts are restrained from interfering with arbitration except in the manner provided in the 1996 Act. That the orders passed by the High Court would amount to a violation of this mandate is not seriously disputed by the respondents. We, accordingly, set aside the orders of the High Court without expressing our views on the merits of the contentions of the parties in any manner whatsoever.... 17.2 Reliance is also placed on the decision of the Apex Court in Secur Industries Ltd. v Godrej and Boyce Mfg. Co. Ltd. and Anr. (2004) 3 SCC 447, particularly paragraphs 11 and 12 thereof which read as under: 11. ...With the applicability of Part I of the 1996 Act in all its force, the extent of judicial intervention in arbitrations is limited by the non obstante provisions of Section 5 of the 1996 Act,... ...The validity of the pr....
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.... 4. Unless otherwise agreed, the Arbitral Tribunal shall not cease to have jurisdiction by reason of any claim that the contract is null and void or allegation that it is non-existent, provided that the Arbitral Tribunal upholds the validity of the arbitration agreement. The Arbitral Tribunal shall continue to have jurisdiction to determine the respective rights of the parties and to adjudicate their claims and pleas even though the contract itself may be non-existent or null and void. 19. In rejoinder, Mr. Dave has referred to Section 45 of the Arbitration Act which reads as under: 45. Power of judicial authority to refer parties to arbitration.- Notwithstanding anything contained in Part 1 or in the Code of Civil Procedure, 1908 (5 of 1908), a judicial authority, when seized of an action in a matter in respect of which the parties have made an agreement referred to in Section 44, shall, at the request of one of the parties or any person claiming through or under him, refer the parties to arbitration, unless it finds that the said agreement is null and void, inoperative or incapable of being performed. (emphasis supplied) It is submitted that the sai....
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.... (emphasis supplied) 21. Finally, Mr. Dave has stated at the bar that the appellant-plaintiff has no intention of evading, avoiding or delaying the liability to pay the amount, if any, to the BCCI but payment of any amount to respondent-defendant (Mauritius company) under the facilitation agreement by virtue of any award of the arbitrators for which the Mauritius company has moved the International Chamber of Commerce may not exonerate the plaintiff from its liability towards BCCI. By letter dated 30th May, 2010, BCCI has made it clear that any amount payable by the plaintiff Sony to the Mauritius company under the facilitation agreement dated 25th April, 2010 shall be paid to BCCI. Any award by the arbitrators in the proceedings which the respondent-defendant (Mauritius company) has proposed to institute before the International Chamber of Commerce and where the arbitrators are sought to be appointed will not bind BCCI which will be a stranger to such an arbitration award. It is submitted that the plaintiff has no objection to pay the entire amount of Rs. 425 crores as payable by the plaintiff under the facilitation agreement out of which Rs. 125 crores has already been paid to....
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....section (3) of Section 8 also provides that notwithstanding pendency of an application under Sub-section (1) of Section 8 made by a party for referring the parties to arbitration and that the issue is pending before the judicial authority, an arbitration may be commenced or continued and an arbitral award made. Section 16 of the Arbitration Act, 1996 also provides that the arbitral tribunal may rule on its own jurisdiction, including ruling on any objections with respect to any existence or validity of the arbitration agreement and for that purpose, a decision by the arbitral tribunal that the contract is null and void, shall not entail ipso jure the invalidity of the arbitration clause. Sub-section (5) of Section 16 also provides that the arbitral tribunal shall decide on a plea that it does not have the jurisdiction or that an arbitral tribunal is exceeding the scope of its authority and that if the arbitral tribunal negating such plea, the arbitral tribunal shall continue with the arbitral proceedings and make an arbitral award and the party aggrieved by the rejection of the preliminary pleas has to wait till the arbitral award is made and, thereafter only it can make an applica....
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....ny and plaintiff-Sony which were executed simultaneously are interlinked and have material cross references. The MSMS-MRLA dated 25th March, 2009 and the Deed, which were executed simultaneously, are interlinked and have material cross references. For e.g., Clause 6.2 of the Deed stipulates that the Deed shall automatically terminate upon the termination of the MSMS-MRLA dated 25th March, 2009 for any reason or if for any reason the Plaintiff ceases to be entitled to the media rights granted pursuant to the MSMS-MRLA dated 25th March, 2009. Similarly, it was interalia provided in Clause 10.4 of the MSMS-MRLA Dated 25th March, 2009 that upon receipt of the Defendant No. 1's notice in accordance with the Deed, the BCCI may immediately terminate the MSMS-MRLA dated 25th March, 2009 subject to certain conditions mentioned therein. 28. It is, therefore, clear that the facilitation deed agreement dated 25th March, 2009 was not a stand apart agreement between the sole plaintiff and the sole defendant in the second suit. It was a part of the agreement entered into amongst four parties who are all parties to the first suit filed by the plaintiff on 25th June, 2010 where Worl....
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..... Ltd., to enter into within the 72 hour validity contract dated 15-3-2009. Since in any case this contract was by mutual decision never to be implemented and WSG (Mauritius) Pvt. Ltd., was meant to be a conduit for receipt of "Facilitation Fee". WSG (Mauritius) Pvt. Ltd., was a totally unknown entity and no documents are available on record to show that this entity qualified the criteria under Clause 2.4 of the ITT. (b) The entire exercise of having WSG (Mauritius) Pvt. Ltd., as a Licensee of media Rights with an obligation to sub license within 72 hours appears to be ruse to bait SONY to match a practically non existing and bogus bid. Instead of going for a fresh tender process on termination of the WSG Contract, you have taken upon yourself to negotiate with select parties without even knowing the value of the property belonging to BCCI only to enable the payment of "Facilitation Fee" by Sony. 30. The appellant-plaintiff's reply dated 2nd June, 2010 to BCCI reads as under: June 2, 2010 To Mr. Shashank Manohar (President)/ Mr. N. Srinivasan (Honorary Secretary) The Board of Control For Cricket in India ('BCCI') ....
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....nd also to enter into such other agreements as may be mutually agreed with MSMS to more fully carry out the terms of the understanding set out herein; 4. If any proceedings are initiated against MSMS before a competent court/authority in relation to any payments that may be made to BCCI pursuant to its above letter of 30 May 2010, BCCI will in good faith actively assist and support MSMS in establishing its defence, and 5. The understanding as set out herein and in any future understanding in this respect shall be treated in strict confidence by both parties. We look forward to an early meeting. Yours sincerely, for MSM Satellite (Singapore) Pte Ltd. Sd/- Name : Andrew Kaplan Title : Director. 31. In the above factual background, the submission made by the learned Counsel for the appellant-plaintiff (Sony) that the facilitation agreement is contrary to public policy of India assumes utmost importance. Admittedly, BCCI is not a party to the arbitration proceedings initiated by the respondent Mauritius company. BCCI will not have any say in the said arbitration proceedings on the footing that in view of the cla....
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....t. Ltd., respondentMauritius company and the BCCI. 34. In this context, it will be relevant to refer to the provision of para 2 of the Arbitration and Conciliation Act, 1996 which provides for enforcement of certain foreign awards. Section 45 of the Act reads as under: 45. Power of judicial authority to refer parties to arbitration.- Notwithstanding anything contained in Part 1 or in the Code of Civil Procedure, 1908 (5 of 1908), a judicial authority, when seized of an action in a matter in respect of which the parties have made an agreement referred to in Section 44, shall, at the request of one of the parties or any person claiming through or under him, refer the parties to arbitration, unless it finds that the said agreement is null and void, inoperative or incapable of being performed. Provisions of Section 45 quoted hereinabove are also in consonance with the New York convention on the recognition and enforcement of foreign arbitral awards and particularly Clause 3 of Article II thereof. 35. It is also observed by Russell on Arbitration (Twenty-Third Edition-2007) as under: 7-058 Injunctions to restrain arbitral proceedings. Injunctions to rest....
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....r: 12. The arguments which have been raised before us by the learned Counsel on behalf of the respondent to a large extent related to the merits of the appellant's claim before the Council. Having regard to the scope of the authority of the arbitral tribunal under Section 16, this is not a matter which the court can adjudicate upon. Indeed it is incumbent on the court to refer the parties to arbitration under Section 8(1) of the 1996 Act if a suit is filed in a matter which is the subject-matter of an arbitration agreement. Furthermore, even while this question is pending decision before a court, the arbitral tribunal may proceed with the arbitration under Section 8(3) and make its award. The High Court could not, therefore, have stayed the proceedings before the Council. 37. In so far as the arbitration and sanctity of such agreements is concerned, reliance is placed upon Section 5 of the Arbitration and Conciliation Act, 1996 and also Sections 8 and 16 of the Act. Reliance on the other hand is placed on Section 45 of the Act on the words notwithstanding contained in Part I of the Act or in Code of Civil Procedure, 1908, the judicial authority shall at the request ....
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....titudes can be expected to increase with the withdrawal of appellate powers and sheltered by the lack of publicity provided by arbitration". 39. It is said that the Courts in England have not favoured the curtailment of powers of the Court. It has been observed that regarding the correct balance of the relationship between international arbitration and national Courts, it is impossible to doubt that at least in some instances the intervention of the Court may be not only permissible but highly beneficial. (See Coppee Lavalin SA/NV v. Ken-Re Chemicals and Fertilisers Ltd. (1994) 2 All ER 449. (emphasis supplied) 40. Even in the decisions that have been brought to our notice by Dr. Singhvi, it has been held that in case of allegations of fraud and serious malpractices on the part of the parties, such a situation can only be settled in Court through furtherance of judicial evidence by either party and such a situation cannot be properly gone into by the Arbitrator. The reason for this appears to be obvious. 41. Section 28 of the Indian Contract Act, 1872 reads thus: 28. Agreements in restraint of legal proceedings, void. - Every agreement (a) by which any....
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....e object in inserting Section 23 and Section 28 in the Indian Contract Act, 1872 from which assistance could be drawn, appears to be that a stipulation that no action should be brought in a Court of law for enforcing the rights under a contract would be void. Similarly, an agreement to refer arbitration, differences that may arise under a contract, does not oust the jurisdiction of the Court and is no bar to action, but may be a ground for staying action under the Arbitration Act. In England, it has been held that it would be against the policy to give effect to an agreement that a right should not be enforced through the medium of the ordinary tribunals. (See Chelmsford L.C. In Scott v. Liverpool (Corporation) 1958 L.J.C. 235 and Zarnikow v. Roth (1922) 2 KB 478). 44. Applying these tests to the facts of the present case would show that the appellant-plaintiff instituted a Suit in this Court against the defendant on the basis that it is organized under the laws of Singapore. It owns and operates cable and satellite television channels including the popular SET MAX channel. The defendant is a company incorporated in Mauritius carrying on business as a sports marketing agency. ....
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....enefit of the agreement or any part thereof but could sub-license the agreement within 72 hours of signature, failing which the Indian sub-continent media rights would automatically revert to BCCI by operation of Clause 13.5 of the same. Alleging that under the 21st January 2008 agreement between WSGI AND BCCI, the global media rights were originally granted to WSGI by the BCCI and this agreement provides that in case of termination of the agreement between the appellant and BCCI (the agreement termed as MSMS-MRLA), BCCI and WSGI would enter into good faith negotiations for exploitation for Indian sub-continent rights. It is alleged that even when the arguments were completed on 16th March 2009 and orders were reserved by the learned Single Judge, commercial negotiations between the appellant and BCCI acting through Mr. Lalit Modi continued, parallel to the Court proceedings in view of the imminent commencement of IPL-Season-2 in April 2009. It is alleged that Directors of the respondent and WSGI were also present. The Court declined to grant interim relief in the arbitration petition because third party rights had been created in favour of the respondent-Mauritius company and the ....
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....ases to be entitled to the media rights granted pursuant to this agreement. Clause 10.4 of the MSMS-MRLA dated 25th March 2009 provided that upon receipt of the respondent's notice in accordance with the deed, the BCCI can immediately terminate the agreement dated 25th March 2009 subject to certain conditions. 49. The plaintiff in paragraph 19 of the plaint states that it agreed to pay the BCCI the exact amount as rights fee which were supposed to be paid by the respondent under the WSGM-MRLA dated 15th March 2009. The plaintiff was made to believe that it was paying the facilitation fees under the deed to the defendant-Mauritius company for it having relinquished its media rights under the purported MRLA in favour of the plaintiff. However, as alleged in paragraph 20 of the plaint, information received from BCCI after suspension of Mr. Lalit Modi, IPL Commissioner and after having access to the letters and correspondence as well as certain other agreements which were not known to the plaintiff at the relevant time, revealed that the defendant-Mauritius company had fraudulently induced the plaintiff-Sonyinto executing the deed by suppressing the fact that the media rights fo....
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....t of Arbitration with a request for arbitration containing reliefs which are directly and substantially in issue before this Court in the Indian proceedings. The allegations in paragraphs 44, 45, 46 and 47 of the plaint are about the gross abuse of judicial process, proceedings in Singapore being vexatious, oppressive and forum non conveniense. It is alleged clearly that if BCCI is considering institution of civil and criminal proceedings against WSGI for the fraud purported by WSGI and the respondent-Mauritius company and that would be initiated in India. It is alleged that the Facilitation Deed was signed by the respondent-defendant in Mauritius. The fraud committed by the respondent-defendant is in Mumbai. The respondent-Mauritius company made false representations to the officials of the plaintiff's holding company within the jurisdiction of this Court and, therefore, apart from this Court, there is no other Court which could be construed as Court of natural jurisdiction. Further, there being serious allegations of fraud and which required detailed examination of witnesses, the same are not suitable for arbitration but have to be decided by Court. That is emphasized in para....
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....ies beyond the jurisdiction of an arbitrator, at any time, any party may seek equitable relief in a court of competent jurisdiction in Singapore, or such other court that may have jurisdiction over the Parties, without thereby waiving its right to arbitration of the dispute or controversy under this section. The parties hereby waive their right to jury trial with respect to all claims and issues arising under, in connection with, touching upon or relating to this deed, the breach thereof and/or the scope of the provisions of this section, whether sounding in contract or tort, and including any claim for fraudulent inducement thereof. 51. A bare perusal of this clause would indicate that it speaks of, firstly, the Governing Law. Secondly, all actions or proceedings arising in connection with, touching upon or relating to the deed, the breach thereof and/or the scope of this Section shall be submitted to the International Chamber of Commerce for final and binding arbitration. Thirdly, the arbitration would be subject to its rules and will be held in Singapore in the English language before a single arbitrator who shall be a retired Judge with at least ten years of commercial exper....
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....on with acquisition of media rights to cricket including with respect to IPL. In other words, they have worked together in connection with these media rights earlier and the recitals are that defendant-World Sports Group (Mauritius) Limited, its affiliates is associated with the appellant in finalising the agreement with BCCI styled as BCCI-MSM agreement and in relation to bids for media rights in connection with IPL and in return for performing the facilitation services, the appellant-plaintiff-Sony has agreed to pay to WSG a facilitation fee and provide bank guarantees for which the deed is executed. The term "BCCI" is defined in the agreement in the interpretation clause. There is a reference to BCCI-MSM agreement and that means the IPL media rights licensed agreement entered into on the same date as this deed between the BCCI and the appellant. Then, there is a definition of "BCCI termination notice". Thereafter, facilitation fee is defined to mean a sum of 425 crores (in Indian rupees) payable in accordance with Clause 3 and the WSG agreement means the IPL agreement dated 23rd March 2009 between BCCI and respondent. If Clauses 2, 3, 4, 5, 6, 7 and 8 are perused together with t....
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....y be kept out of the scrutiny of Indian Courts. In other words, if the Board authorises some of the parties to deal with the media rights pertaining to cricket and such parties or entities may not be India based, then, serious allegations of fraud and mal practices made by such parties against each other, should be subject matter of action only before a forum chosen by them and no Court of law in India will be able to touch upon or reach them even if they affect and concern the BCCI. Ultimately, the finances, funds and rights of BCCI are in issue. If parties who claim through or derive such rights from BCCI, enter into an agreement whereunder adjudication of dispute touching the contracts will be done excluding BCCI and in an arbitral tribunal based on a foreign soil, that is something which cannot be held to be in public interest or in furtherance of public policy of India. 55. The allegations in the plaint and particularly the statement that the appellant-plaintiff was induced to execute the agreement and pay the fees on the basis that they are paying the same to BCCI, cannot be lightly brushed aside. The respondent-Mauritius company has objected to the relief claimed by the a....
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....rned Single Judge that there was no relinquishment in the appellant-plaintiff's favour. The respondent's rights had to end before the respondent could give any rights in favour of the appellant. In paragraph 38 the deponent of the affidavit Mr. Harish Krishnamachar (constituted attorney of the defendant) states that he has checked with all persons involved negotiations on behalf of the defendant and no one has ever made any representation that the defendant had a contract dated 23rd March 2009. Without being technical, it is clear that it is the Constituted Attorney who is deposing about some facts which are in the personal knowledge of those involved in the negotiations. Therefore, his assertion must be understood accordingly. All that has been stated in this affidavit is that once the appellant-plaintiff enters into a facilitation deed with the stipulation of arbitration knowing fully well the effect and implications thereof, then, the appellant-plaintiff cannot urge that the forum chosen is inconvenient to parties because it alleges mis-representation and fraud. 56. We are of the view that the statements made in the affidavit over-look the allegations in the plaint an....
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....he appellant-plaintiff and they can be gone into by the arbitral tribunal considering the wording of the arbitration agreement, is incorrect. The learned Judge was in error in concluding that the cause of action of the plaintiff-appellant in the suit is their defence in the arbitration. All these conclusions are based upon a narrow view of the matter, the transactions and the dealings. The learned Judge over-looked a significant aspect arising out of the role of BCCI. It is BCCI which is distributing and handing over the rights and it is through BCCI that the appellant-plaintiff and the respondent-defendant derived them. Therefore, to take a view that the case of fraud can be gone into by the arbitrator, with respect, would not be valid and proper. The same is also vitiated because the learned Judge proceeded on the basis that by virtue of Section 5 of Arbitration and Conciliation Act, 1996, the Court cannot intervene and interfere with the arbitration agreement. Even that conclusion runs counter to the decisions which are relied on by the respondent-defendant. These decisions clearly indicate that when vital issues of fraud and public policy are raised and when interests of third ....
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....ld amount to allowing splitting up of matters and disputes pending in India and abroad. Thus, there is a possibility of conflicting verdicts and that would have an impact on applicability of Indian laws, which may ultimately be held to be applicable, at least in proceedings pending in India. It is in this sense that we feel that the implications of all this on Indian judicial process is an aspect which cannot be kept aside. In AIR 1991 SC 2234 (Byram Pestonji Gariwala v. Union Bank of India and Ors.), the Supreme Court held that Indian legal system is the product of history. It is rooted in our soil; nurtured and nourished by our culture; languages and traditions; fostered and sharpened by our genius and quest for social justice; it is not a mere copy of English Common law; though inspired and guided by it. Therefore, with respect, we cannot sustain the restricted view of the learned Single Judge. 60. The question is whether in the facts of the present case, it was incumbent upon the Court hearing Suit (Lodging) No. 1901 of 2010 to refer all the parties to the said suit (including BCCI) to arbitration. As already discussed elaborately earlier, since the dispute between the appel....