TaxTMI 
TaxTMI 
2020 (2) TMI 820
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....pondents. The National Company Law Tribunal ("Tribunal" for short), Bengaluru Bench, initially passed interim order on 12th June, 2019. However, subsequently on the application moved by the Respondents, the Tribunal by impugned order dated 23rd August, 2019, vacated the interim order, relevant of which reads as follows: "16. In the result, both IA. Nos. 341 & 342 of 2019 in C.P No. 102 of 2019 are disposed of by vacating the interim orders passed on 12.06.2019 with immediate effect, with reference to Para (c) of the order viz. "An order to ad-interim injunction is granted restraining Respondent No.5 from altering, in any manner whatsoever, the shareholding composition of Respondent No.4 or causing the same to be altered in any manner and to direct the Respondent No. 2 to 5 to give access to the Petitioner Company/GETL immediate access to all of the Company's data including electronics data and emails of employees of the Company which are saved on/ available on the servers of Respondent No.5 and/or its group Companies". 2. The aforesaid order is under challenge in Company Appeal (AT) Nos. 236 & 237 of 2019. 3. In the said Company Petition under Sections 241-242 of the....
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....rketing Services Agreement for providing 'General Electric Company's international sales and marketing network to 'GE Triveni Limited'. 'GE Triveni Limited' was also granted a license to use General Electric Company's trademarks and tradenames. 7. It was further submitted that in October 2016, 4th Respondent- 'Baker Hughes LLC, A GE Company' was incorporated for the purpose of facilitating the merger of Baker Hughes Inc. and the oil and gas operating segment of 'General Electric Company' ("Merger"). In 2017, 'General Electric Company' informed 'GE Triveni Limited' that as part of the integration plan for the intended GE Oil & Gas merger with Baker Hughes Inc GE Mauritius proposed to transfer its shareholding to 2nd Respondent- 'DI Netherlands BV'. 'GE Triveni Limited' was however specifically assured that this will not change the business relationship in any way. Ultimately all entities will be (and will remain) controlled affiliates of General Electric Company. As a result of the Merger, the relevant steam turbine business of 'General Electric Company' and 'Baker Hughes Inc.' was transferred to 4th Respondent- 'Baker Hughes LLC, A GE Company' and 5th Respondent- 'General Electr....
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....GE Triveni Limited' will remain fully enforceable. By filing such an Affidavit, 4th and 5th Respondents in fact submitted to the jurisdiction of Tribunal. Although the Tribunal did not accept this Affidavit, it vacated the interim order on the ground that it lacked jurisdiction over 4th and 5th Respondents who were foreign companies. 11. The Appellant- 'Triveni Turbine Limited' challenged the impugned order by way of the instant appeals. On 27th August 2019, when the appeals were heard for the very first time, the 4th and 5th Respondents reiterated their proposed undertaking before the Tribunal. After noting their submission, this Appellate Tribunal permitted 4th and 5th Respondents to transfer the title of all the shares to any party provided that the said Respondents comply with the following directions: (a) the share transfer shall not affect the business of 'Triveni Turbine Limited' and 'GE Triveni Limited'; (b) the share transfer would not affect all the five agreements entered into between the parties; (c) obligations of the 4th and 5th Respondents existing on 12th June 2019 shall be performed. It further observed that all transactions of shar....
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....lete data and review the same. 16. Further, it was submitted that in the Board meeting held on 30^th October 2019, 'GE Triveni's' Board was reminded of a past request made to 4^th and 5th Respondents to provide to 'GE Triveni Limited' details of the enquiries / orders falling within the output range of 'GE Triveni Limited', for the past three years. Even though the information was vital to 'GE Triveni's' sustainability, it has not been provided. It was further proposed that a special audit be conducted by a third-party agency on the data, with the scope being to examine the integrity and completeness of the data and identify if there are any conflicts in "corporate governance" related matters. Nominee directors of 4th and 5th Respondents serving on the Board, however, opposed this proposal. 17. The Appellant was, therefore, constrained to file IA No. 4019/2019 seeking various directions including inter alia an investigation or third party audit in relation to emails which have been made available and the missing and/or deleted emails sent and received by the CFO and CTO. 18. Learned counsel for the Appellant submitted that an investigation and/or audit is necessary for reg....
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....nsel appearing on behalf of 'Baker Hughes LLC, A GE Company' opposed the prayer. 20. Learned counsel appearing on behalf of 'General Electric Company'- (5^th Respondent) submitted that the ex-parte order was passed without jurisdiction and thus rightly vacated by the impugned order. The subject matter of the ex parte Order was an injunction over a proposed transfer of shares which had their situs outside India and the said proposed transfer of shares was between foreign entities. The subject matter of the ex-parte order, i.e. transfer of 5^th Respondent's shareholding in 4th Respondent, did not have any nexus with India, as the situs of the shares was not India. Consequently, the said ex-parte order was passed wholly without jurisdiction. 21. It was submitted that the Companies Act, 2013, does not provide the NCLT and this Appellate Tribunal with powers to pass orders having extraterritorial effect as there is no express provision to this effect. It is settled law that a statute does not operate in relation to foreigners or foreign property, unless the contrary is stated. 22. It was further submitted that the Tribunal is constituted under the Companies Act, 2013. Therefore....
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....at the time of passing of the ex-parte order. The exparte order, which was passed in favour of the Appellant, does not even record any submission relating to the prayer for investigation, let alone reject such prayer. Consequently, the Appellant cannot now, at the stage of the Appeal, seek any relief for investigation. 27. It was submitted that in the absence of any finding of oppression/mismanagement by the Tribunal, even on a prima facie basis, no relief of investigation can be made out. The Appellant seek investigation in the hope of obtaining material in relation to its case of alleged oppression/mismanagement. This is not permissible. It is settled law that investigation cannot be granted if it tantamounts to a roving/fishing enquiry. 28. Learned Senior Counsel appearing on behalf of 2nd and 3rd Respondents submitted that the appeal deserves to be dismissed. The Impugned Order merely issues notice on the Applications and observes that the Applications should be heard first. This is an innocuous order and also a logical one wherein the Tribunal correctly decided that matters relating to jurisdiction ought to be heard first. The 2nd Respondent ought to be given a chance to....
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....96 and is not maintainable as the Arbitration Act does not provide for an appeal against such an Order. The Impugned Order was passed in respect of an application filed under Section 45 of the Arbitration & Conciliation Act, 1996, and was thus passed under Section 45 of the Arbitration & Conciliation Act, 1996. 33. According to learned counsel, once it is established that the Impugned Order was passed under Section 45 of the Arbitration & Conciliation Act, 1996, it must necessarily follow that such an order would only be appealable if such an appeal was expressly provided for against such an order under Section 50 of the Arbitration & Conciliation Act, 1996. 34. Further, it was submitted that the Appellant has not approached this Appellate Tribunal with clean hands. The Appellant has deliberately not disclosed the fact that it is challenging the maintainability of the arbitration proceedings before the arbitral tribunal itself. It is settled law that an action ought to be dismissed if the party bringing the action approaches the Court with unclean hands by suppressing material documents. 35. It was submitted that the order dated 24th October, 2019 passed by this Appellate ....
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....ration agreement is null and void, inoperative and incapable of being performed, such objections, if left open and not decided finally at the threshold itself may result in not only parties being compelled to pursue arbitration proceedings by spending time, money and efforts but even the arbitral tribunal would have to spend valuable time in adjudicating the complex issues relating to the dispute between the parties, that may finally prove to be in vain and futile. Such adjudication by the arbitral tribunal may be rendered ineffective or even a nullity in the event the courts upon filing of an award and at execution stage held that agreement between the parties was null and void inoperative and incapable of being performed. The Court may also hold that the arbitral tribunal had no jurisdiction to entertain and decide the issues between the parties. 131.2. The issue of jurisdiction normally is a mixed question of law and facts. Occasionally, it may also be a question of law alone. It will be appropriate to decide such questions at the beginning of the proceedings itself and they should have finality. 131.3. Even when the arbitration law in India contained the provi....
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....ct to the decision of these appeals. 8. The obligation of 4th ('Baker Hughes LLC, A GE Company') and 5th Respondent ('General Electric Company') as existing on 12th June, 2019, shall also continue till the next date. Post both the appeals 'for admission (after notice)' on 25th September, 2019 on the top of the list." 42. The aforesaid interim order having already passed, we find no further order is required to be passed and the impugned order dated 23rd August, 2019 passed by the Tribunal stands substituted by the interim order already passed by this Appellate Tribunal, as recorded above. The said interim order shall continue till the pendency of the petition under Sections 241-242 of the Companies Act, 2013. 43. So far as the impugned order dated 27th September, 2019 is concerned, the Tribunal has merely issued notice under Section 45 of the Arbitration & Conciliation Act, 1996. 44. In the aforesaid background, we are not inclined to interfere with the impugned order dated 27th September, 2019. The Tribunal is required to decide the Interlocutory Applications filed under Section 45 after hearing the parties without being influenced by the order passed by....