TaxTMI 
TaxTMI 
2020 (5) TMI 32
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....ternational Arbitration Centre (SIAC) Arbitration No. 37 of 2016, as a decree of this court and for prayers consequential to the enforcement of the award. 2. Factual Conspectus Briefly the facts are: To appreciate the nature of the disputes it would be necessary to note as to how the parties stand in their contractual relations. The petitioner (for convenience "Banyan Tree") is a company incorporated under the laws of Mauritius. It is stated to be a closed-ended fund regulated by the Financial Services Commission in Mauritius having its shareholders interalia comprising of large global development financial institutions. The business of Banyan Tree in India is to make investments in mid-market companies with the objective of capital formation for the investee companies and long term capital appreciation for its investors. Banyan Tree is stated to have made an investment of about USD 7.5 million and holds 11.25% of the equity shareholding in respondent no.1-Axiom Cordages Limited which is a company incorporated in India under the provisions of the Companies Act, 1956. (for convenience respondent no. 1 is referred as "Axiom"). Axiom is engaged in the business of manufacturing and e....
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....as a merger of Axiom into Responsive, whereupon Banyan Tree would receive shares in Responsive, a publicly listed company. The third exit option was that Banyan Tree would exit its investment under the Put Option Deed whereby Banyan Tree would require Responsive and Wellknown to buy its shareholding in Axiom, should the first and second exit options were not to be available to Banyan Tree. 6. In Schedule 16 of the SSA, Banyan Tree's rights to exercise put option were provided in clause 9.1 in the following terms:- "9.1 Put Option The Investors shall have the right to, exercise the Put Option on the Promoters, in accordance with the Put Option Agreement within the Put Option Exercise Period in the manner prescribed therein. For the purpose of this Paragraph: "Put Option" shall mean the option granted by the Promoters to the Investors, to sell the Debentures and/or Equity shares issued upon Conversion and/or Subscription Shares, held by the Investors to the Promoters, in accordance with the Put Option Agreement. "Put Option Agreement" shall mean a put option agreement dated on or about the date hereof, entered into between, inter alia, the Investors, the Issuer, and the Prom....
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....iom on a stock exchange and subsequently made an offer to buy out Banyan Tree's shares in Axiom at a price that Banyan Tree refused. Such an offer according to Banyan Tree was also not as per the terms provided under the Put Option Deed. According to Banyan Tree during this entire period the promoters consistently recognized that it was incumbent upon them to provide Banyan Tree with an exit, based on the contractually agreed terms contained in the SSA as also the Put Option Deed. 12. Thereafter in August 2013, in contemplation of a proposed merger of Axiom with Responsive, the parties agreed that Banyan Tree would convert the compulsory convertible debentures it held in Axiom, into equity shares. The merger did not take place, however, Banyan Tree was nonethless required to convert its debentures into equity shares. 13. The first spark, is an event namely on 19 March 2014, Wellknown transferred the Escrow Shares out of the designated demat-Escrow Accounts without authority or consent of Banyan Tree and/or the Escrow Agent to a new account operated solely by Wellknown. Similarly on 23 July 2014 the cash account was closed without authority and consent of Banyan Tree and/or the Es....
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.... 15 July 2015 prepared by MZSK & Associates, Chartered Accountants, which was subsequently reviewed and endorsed by BDO India LLP in its Review Report dated April 2017. These experts calculated the said fair market value (FMV) of the put securities using the discounted cash flow method which according to Banyan Tree was an internationally accepted valuation method. Banyan Tree contended that as per Axiom's balancehseet the FMV calculated as per Schedule 3 of the Put Option Deed was significantly higher than the FMV derived by MZSK & Associates. The promoters however failed to purchase the put securities as per the terms of the Put Option Deed and as required under the put option notice. Moreover, Responsive on behalf of the Promoters, by its letter dated 30 September 2015 denied liability to buy Banyan Tree's shares alleging that the "Put Option Deed" is illegal, contrary to the laws of India and therefore void-ab-initio. 18. In the circumstances, Banyan Tree by its letter dated 1 October 2015 issued a 'Dispute Notice' as per clause 19.3(a) of the Put Option Deed to the promoters. Banyan Tree accordingly notified the Promoters that the dispute had arisen under the Put Option Deed ....
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.... from Banyan Tree's investment into Axiom. It was contended that the promoters illegally refused to perform their obligations under the Put Option Deed and their conduct of justifying their wrongful breach was contrary to their express representations and warranties. Banyan Tree contended that the Promoters had made clear representations and warranties as to the validity, legality and enforceability of these obligations under the Indian law. Banyan Tree argued that under Clause 7.4 of the Put Option Deed, Banyan Tree was required to obtain special permission from the Reserve Bank of India for the transaction. It was contended that Clause 7.4 provided that not only did the parties anticipate that the sale and purchase of the Put Option Securities might require special approval, but the Put Option Deed clearly allocated the responsibility of such approval as may be necessary to effect the transaction on the Promoters. Banyan Tree contended that the Promoter's obligation under Clause 7.4 was an absolute one and that it was the Promoter's obligation to take all necessary steps including obtaining special permission from the Reserve Bank of India to perform their obligations under Claus....
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....ught to rule that the Put Option Deed was contrary to Indian public policy and secondly unenforceable under Section 23 of the Indian Contract Act 1872. Responsive and Wellknown also objected to the jurisdiction of the tribunal to decide any issue as raised under the Share Subscription Agreement (SSA ). The arbitral tribunal on aforesaid conspectus framed the following three issues:- (i) Whether the Put Option Deed is valid and legal under Indian Law? (ii) Whether the Put Option Deed is legal under FEMA and its secondary legislations? (iii) Whether the Put Option Deed is legal under the SCREA and its secondary legislations? 23. The respondents cross examined Banyan Tree's witnesses but as contended by Banyan Tree chose not to cross examine the valuation expert and accordingly accepted the valuation of the put option shares calculated by Banyan Tree's experts. In August,2017 the arbitral proceedings were closed for an award to be pronounced. Further on 6 September 2017, the Section 9 petition filed by Banyan Tree in this Court was also disposed of in view of a joint statement made by the parties, directing that the ad-interim order shall continue to operate till the declaratio....
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....sement of deposits. It is contended that these awards were not challenged by the respondents and hence these findings according to Banyan Tree also stand subsumed in the put award and have become binding on the respondents. 26. On 30 January 2019, Banyan Tree applied for correction of certain clerical and/or typographical errors in the put award under rule 29.1 of the SIAC Rules. The arbitral tribunal corrected the put award as requested by Banyan Tree and accordingly a "memorandum of corrections" dated 25 February 2019, came to be issued. Thereafter on 11 February 2019 the respondents filed an application before the arbitral tribunal seeking an additional award and an interpretation of the put award. It is contended that Banyan Tree had opposed the said application interalia contending that the application is beyond the scope of the SIAC rules. It is stated that the said application is pending adjudication. Contentions of Banyan Tree in seeking enforcement of the foreign award:- 27. Banyan Tree contends that the Put award is a foreign award within the meaning of chapter I of part II of the A&C Act, namely that it is a New York Convention award. It is contended that the only rec....
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....ondents in opposing the petition is firstly on the ground that there is a section 34 petition filed by the respondents in this Court challenging the put award. It is stated that the said petition is pending, hence the present petition filed under section 47 and 48 of the A&C Act is not maintainable. It is next contended that there is another arbitration pending between the parties under the 'share subscription agreement-SSA', which is the parent agreement under which the put option right was granted to Banyan Tree. It is contended that in the said arbitration a declaration has been sought by the respondents that the put option deed is void ab- initio being illegal and unenforceable hence not binding on the parties. It is thus contended and that any action taken in furtherance thereof shall be against the public policy of India. It is contended that the SSA arbitration is at final stages, the award which would be made in the said arbitration would have a material and direct impact on the orders that would be passed on this petition, hence this petition should not be entertained. The next contention of the respondents is that the put option deed is in contravention of section....
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.... inadequately stamped At the outset it is contended that the put option deed is insufficiently stamped and cannot be relied upon in the present proceedings. It is contended that the 'Put Option Deed' was required to be stamped as per the provisions of article 5 (c) (ii) or article 5 (h) (A) (iv) of the Maharashtra Stamp Act 1958, whichever is higher. It being stamped with a value of Rs. 300/- is an insufficient stamping. According to the respondents section 47 enjoins upon a party applying for enforcement of a foreign award in India, to produce together with its application interalia "evidence" of the 'agreement for arbitration'. It is contended that section 33 of the Maharashtra Stamp Act 1958, it is the duty of any judicial authority empowered to receive evidence, to impound a document which is found to be unstamped or insufficiently stamped and to further send the said document for adjudication, in keeping with the objective and the public policy to protect the interests of the revenue. It is submitted that hence the judicial authority when it comes across an arbitration clause in an agreement which is found to be unstamped or insufficiently stamped, is enjoined....
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....ns of the Securities Contract Regulation Act 1956 (for short "the SCRA") and the notifications issued thereunder. The avowed public policy of the SCRA is to prevent speculation in securities and the same is also set out in the preamble of the SCRA namely 'an act to prevent undesirable transactions in securities by regulating the business of dealing therein...". Respondents refer to the definition of the term 'derivative', 'option in securities', 'spot delivery contract', as defined under the SCRA as also the provisions of section 16 which provides for power to prohibit contracts in certain cases and more particularly reference to section 18A which deals with contracts on derivatives, in support of this contention. It is submitted that the put option is violative of the provisions of the SCRA and the Foreign Exchange Management Act 1992 and the notifications issued thereunder on different counts as under :- (I) The development of law, on options in securities and derivatives, itself demonstrates that it has been the fundamental policy of Indian law to prohibit all contracts in derivatives except those expressly permitted under the provisions of SCRA. Ac....
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....ccordance with Section 18 A of the SCRA were permitted. (vi) On 23 May 2011 SEBI by its Interpretative Letter in Vulcan Engineers, issued under the SEBI (Informal Guidance) Scheme, 2003, in a similar contract as in the present case, it was opined that option contracts fall foul of the rule of spot delivery and were prohibited under the provisions of the SCRA. SEBI also opined that a put option, deriving its value from the underlying securities, had to meet the requirements and the mandate of section 18 A of the SCRA. This letter demonstrated SEBI's view being the market regulator in regard to the applicability of the provisions of the SCRA to the put option agreements. This letter of the SEBI was not considered by the arbitral tribunal. (vii) On 3 October 2013 SEBI vide its notification bearing No. LAD -NRO/GN/2013 - 14/26/6667 ("2013 SEBI Notification) issued under Section 16 of the SCRA interalia rescinded the notification dated 27 June 1969, and for the first time interalia permitted contracts in shareholders agreements or articles of association of companies, for purchase or sale of securities pursuant to the exercise of an option contained therein to buy or sell the s....
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.... the option, the shares of Axiom held by Banyan Tree would have to be purchased by respondent No. 2 and 3. Secondly the exchange fluctuation in regard to the put option was to be its value from the fluctuation in the conversion rates of USD in to INR. To support this contention reliance is placed on the decision of the Madras High Court in Rajshree Sugars and Chemicals limited versus Axis Bank Ltd and others AIR 2011 Madras 144. IV A derivative, like the put option, in the present case therefore, being an option attached to the shares of an unlisted public company, was not permitted at such time and would fall foul of the public policy under the SCRA. This is also bolstered by the observations of SEBI in the Interpretive Letter (supra) dated 23 May 2011 wherein SEBI clearly recorded that forward contracts namely contracts other than spot delivery contracts, are prohibited under the SCRA and put options are in violation of Section 18 A and hence prohibited. V The 2013 SEBI notification does not validate the put option for various reasons. In this regard at the outset it ought to be noted that the 2013 SEBI notification rescinds the 2000 SEBI notification, which held the field pr....
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....ause notice. In the facts of the said case there was nothing to show that the contract would be settled in any manner other than by way of spot delivery. In the facts of the present case the put option deed on consideration of the various provisions makes it clear that the same amounts to a forward contract inasmuch as price at which the put option will be exercised, being the put option price is predetermined price for future transfer of shares and on account of such transfer being effected, one month after the date of exercise of the option, the same will not be settled on a spot delivery basis, as seen from the definitions of 'put option price' and 'put settlement date' as contained in the put option deed. In fact, this decision would support the respondents as in the present case it is an undeniable fact that the put option which has been exercised by Banyan Tree will not be completed by means of spot delivery. VII The Supreme Court in the case of BOI Finance Ltd versus The Custodian and others (1997) 10 SCC 488, referring to the Government of India notification dated 27 June 1969 issued under section 16 of the SCRA has unequivocally held that the contract for....
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....ransfer or issue of securities by a person resident outside India. The permission to purchase shares by persons resident outside India in an Indian company was governed by the provisions of Regulation 5 NB: Permission for purchase of shares by certain persons resident outside India) of FEMA 20. In 2008 when the investment was made by Banyan Tree in the shares/equity of Axiom by virtue of the share subscription agreement, the transaction was governed by Regulation 5 (1) of FEMA 20. Banyan Tree was granted various investors rights in terms of clause 10 of the share subscription agreement read with schedule 16 thereof which interalia included the right to exercise put option. The provisions of regulation 5 (1), FEMA- 20, do not make any mention of permissibility of optionality clauses in such investments made by persons resident outside India. However the RBI by its notification dated 12 November 2013 (2013 RBI notification) amended certain provisions of FEMA 20, whereby a proviso came to be added to regulation 5 (1) of FEMA 20, by which it was provided that shares or convertible debentures containing an optionality clause but without any option or right to exit at an assured price sh....
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....eaves no room for doubt that option clauses in foreign investments made under the regime of FEMA 20, were "henceforth be allowed in equity shares and compulsorily and mandatorily convertible preference shares/debentures to be issued to a person resident outside India under the Foreign Direct Investment (FDI) Scheme", but without any right to exit with an assured return. It is submitted that the said Circular in clause 3 thereof also refers to the fact that the RBI since has amended FEMA 20 by the said 2013 RBI notification. Also a Press Release dated 9 January 2014 which leaves no room for doubt that till October 2013 equity shares which were issued to persons resident outside India were not permitted to carry optionality clause and the same was allowed for the first time. These developments in law have been completely overlooked by the award. In short the submission on this count is that the Put Option Deed is contrary to the FEMA-20 and the provision of FEMA. 34. Submissions on Fundamental Policy of India The arbitral award is contrary to the fundamental public policy of India for the following reasons: - (i) The put option was illegal and prohibited under the SCRA. This firs....
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.... of underlying securities. The term 'securities' is defined in section 2 (h) of the SCRA to include shares, debentures or any other marketable security of like nature. Also the term 'option in securities 'means a contract for the purchase or sale of a right to buy or sell securities in the future and includes a put call option in securities. (iii) It cannot be denied that Banyan Tree was issued debentures of Axiom which were subsequently converted into equity shares, this being the case, the shares in question clearly fell within the definition of the term 'securities'. It is an admitted position that the put option entitles the petitioner to call upon Responsive to purchase the said shares at a pre-determined price at a future date. That being the case, there is no basis whatsoever for holding that the Put Option Deed does not constitute a derivative. In fact the decision of the Madras High Court in the Rajshree Sugars (supra) holds that put options would constitute a derivative in terms of the SCRA. The arbitral tribunal itself in paragraph 192 has come to a categoric finding that an option in shares of public listed company would be a derivative of the ....
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.... 197 of the award is wholly incorrect when it holds that, the legislation such as FEMA and SCRA would not be conflict with each other. This in so far as FEMA permitted put options in shares of a 'private company' and SCRA prohibiting the same, thereby creating an inconsistency. It is evident that FEMA itself recognises the fact that optionality as deployed in shares of public companies was permitted for the first time in October 2013 as reflected in the 2013 RBI notification. Thus the conclusion of the arbitral tribunal in paragraph 197 of the arbitral award that options in shares of private unlisted companies like Axiom, cannot qualify as a derivative for the purposes of the SCRA is erroneous and contrary to the fundamental policy of Indian law, since the law has been consistent and clear not permitting optionality clauses in shares of public companies (listed/unlisted) prior to October 2013. The arbitral tribunal had also lost sight of the fact that even though section 20 of the SCRA was deleted with effect from 25 January 1995, section 18 A was introduced with effect from 16 December 1999. Hence it is not a case that after deletion of section 20, option contracts came to be perm....
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....unt in India. This arrangement demonstrated the knowledge that there was an assured return being provided to evade the provisions of law. The findings of the tribunal in this regard based on the decision of the learned single judge of the Delhi High Court in Cruz City 1 Mauritius Holdings versus Unitech Ltd (2017) 239 DLT 649 are completely misconceived. This decision itself is not applicable to the facts of the present case and is clearly distinguishable. This more particularly as the provisions of the SCRA were not considered by the learned Single Judge in the said decision, at all. Even otherwise this decision does not take into consideration the decision of the Supreme Court in Dropti Devi & Anr Versus Union of India and others (2012) 7 SCC 499 which holds that even though FEMA has replaced the FERA, the rigors under the FERA, continued to apply in order to preserve the economic fabric of the country and to that extent there is no difference between the two statutes. Also the decision of this Court in POL India Projects Limited versus Aurelia Reederei Eugen Friederich GmbH & Anr. (2015)7 Bom CR 757, inapplicable in the facts of the present case. Further the decision of th....
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....ly stamped. Conduct of the parties on this document cannot be ignored. (iii) The respondents contention in the present facts that the policy underlying section 18A of the SCRA it is to stop speculation/speculative trading is misplaced, as the put option deed can never result in speculation. Moreover, the notification dated 3 October 13 issued under section 16 and 28 of the SCRA, would establish that the policy of the SCRA is to treat as valid and enforceable, contracts for the purchase or sale of securities, pursuant to exercise of an option contained in a contract in shareholders agreements and the notification also expressly clarifies that the same shall be valid notwithstanding anything contained in section 18 A. (iv) Insofar as the submissions on 'FEMA and FEMA Regulations' are concerned, it is submitted that it has been reiterated by the judgements of the Delhi High Court and this Court that FEMA does not purport to invalidate any agreement or contract and is only concerned with actual transactions involving foreign exchange. A reference is made to the decisions in SRM Exploration P Ltd versus N & SN Consultants (2012) 129 DRJ 113 ; POL India Projects Limited versus Aureli....
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....r FERA (para 66), although contravention of its provisions is not regarded as a criminal offence (para 67). The Court rejected the challenge to the legality of COFEPOSA and held that there is no constitutional mandate that preventive detention cannot exist for an act where such act is not a criminal offence and does not provide for punishment (para 70). These observations of the Supreme Court while stressing the continued importance of FEMA, do not detract from the said decisions of the High Court that the foreign award in favour of a foreign investor, cannot be assailed as being contrary to the fundamental policy of Indian law on the ground that the contract under which investment was made and received by the Indian entity, was allegedly contrary to and in breach of FEMA. (ix) The circumstances of the present case are what are considered by the arbitral tribunal firstly that the investment of a substantial sum of USD 5 million, had been made by a foreign party/Banyan Tree; secondly that the respondents being the recipients of the said investment amount, had expressly and specifically represented and warranted to the foreign investor/Banyan Tree that the SSA and the put option de....
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....hase of securities', pursuant to the exercise of an option contained in shareholders agreement, is also apparent from the notification dated 3 October 2013 issued under Section 16 and 28 of the SCRA, which reads contracts in derivatives (covered by clause (b)) as distinct and different from a contract for sale or purchase of securities pursuant to the exercise of an option contained in a shareholders agreement, which is covered separately by clause (d) of the said notification. (xiii) It is submitted that the learned Single Judge of this court in Edelweiss Financial Services Ltd versus Percept Finserve Pvt Ltd (supra), repelled similar argument that a shareholders agreement containing an option to buy/sell their shares constituted an options contract and was illegal under Section 18A of the SCRA. (xiv) The respondents submission that the put option deed is not the spot delivery contract and was illegal under the 1969 Notification issued under Section 16 of the SCRA, until the issuance of notification dated 3 October 2013 is also ex-facie incorrect. Also the submission of the respondents that clause (d) of the notification dated 3 October 2013, establishes that shareholders agre....
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....sale and purchase of securities and would accordingly not be within the purview of the SCRA. It is submitted that only pursuant to the exercise of an option, would a contract for the sale or purchase of securities would arise falling within the SCRA. (xviii) The respondents submission that the put option deed was illegal and in contravention of the FEMA, as it provided for a fixed and are assured returns at a predetermined rate of 15% also is misconceived and contrary to the legal position. It is submitted that it is well settled that FEMA deals with actual transactions and dealings in foreign exchange, and does not purport to deal with or invalidate agreements or contracts. To support this submission reliance is placed on the decisions in SRM Exploration P Ltd versus N & SN Consultants (supra); POL India Projects Ltd versus Aurelia (supra); Cruz City I Mauritius Holdings (supra). (xix) The respondents submission that the Put Option Deed provided for an open-ended assured returns is also not correct. It is submitted that the Put Option Deed provides that the put option would expire on the successful completion of the IPO. In similar circumstances in Cruz City 1 Mauritius Holdin....
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....advocates M/. Rajani Associates, to Banyan Tree at the time of entering into the SSA and the Put Option Deed. (xxii) The fourth contention of the respondents that the RBI's press release dated 9 January 2014 and Circular dated 9 January 2014, poisted that agreements for FDI containing optionality clauses, entered prior thereto were illegal and invalid also is misconceived and incorrect. In this context it is submitted that the FEMA does not deal with agreements/contracts or render them illegal and covers only those actual transactions/dealings in foreign exchange. The RBI circular issued under the FEMA as also the regulations framed therein would never have the effect of rendering prior agreements containing optionality clauses, invalid or illegal. Moreover the circular dated 4 January 2014 does not even purport to render invalid or illegal prior FDI contracts containing an optionality clause. In fact Clause 4, of the circular expressly stipulates that " all existing contracts will have to comply with the above conditions to qualify as FDI compliant". Hence existing contracts containing optionality clauses, would qualify as FDI compliant, if they comply with the conditions stipul....
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....e Maharashtra Stamp Act 1958. For this reason this contract itself is illegal. Consequently the arbitration agreement as contained in the 'put option deed' is also illegal. The contract itself being illegal, there arises no question of enforcement of an award which seeks to enforce rights under an illegal contract; (ii) Put option deed is unenforceable and illegal under the provisions of the Securities Contracts (Regulation) Act 1956 (SCRA) and the notifications issued thereunder. (iii) Put option deed is unenforceable and illegal also under the provisions of Foreign Exchange Management Act, and the notifications issued thereunder. (iv) The arbitral award is contrary to the fundamental policy of Indian law. 41. Each of the above objections are being discussed in the ensuing paragraphs. (I) Put Option Deed Not Being Adequately Stamped 42. It is not in dispute that the entire adjudication before the arbitral tribunal leading to the award in question, was exclusively and solely on Banyan Tree seeking to enforce its 'exit rights' under the 'Put Option Deed,' being the principal document in question before the arbitral tribunal. Some background in this regard is require....
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.... document not being sufficiently stamped was raised. Thus according to Banyan Tree this objection is completely an afterthought apart from being untenable in law. 46. Banyan Tree has contested this plea of the respondents by placing on record an affidavit in opposition dated 1 July 2019, interalia contending that as a matter of fact and in law the document is adequately stamped, that too at the hands of the respondents at Rupees One Hundred, as per Article 5 (h) (B) of the Maharashtra Stamp Act. It is stated that as the document contained an indemnity by further stamp duty of Rupees Two Hundred was paid on the document. Banyan Tree on all counts has contested this plea of the respondents terming it to be a dishonest plea by the respondents. 47. The respondents response to the aforesaid conduct on their part as set out in Banyan Tree's reply, is quite peculiar as stated in paragraph 7 of the rejoinder affidavit dated 12 July 2019. Respondents contend that in so far as the certificate on stamp duty being paid on the Put Option Deed is concerned, as issued by Axiom, it was issued at that time after obtaining advice from lawyers and consultants, and now the respondents have a new adv....
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....s on the Put Option Deed. 49. Certainly when the arbitral tribunal accepted the put option deed in evidence and proceeded to adjudicate the rights of the parties arising under this document, certain legal consequences have occurred, when they take such position on the document. In this context Section 35 of the Maharashtra Stamp Act becomes relevant, which reads thus:- "Section 35. Admission of instrument where not to be questioned. Where an instrument has been admitted in evidence, such admission shall not, except as provided in section 58, be called in question at any stage of the same suit are proceedings on the ground that the instrument has not been duly stamped." 50. By application of the above provision the respondents are precluded from raising such an objection having accepted and/or by never raising this issue before the arbitral tribunal. Nothing precluded the respondents from raising any plea before the arbitral tribunal, under any of the provisions of the Indian law. In this context it would be relevant to refer the decision of the Supreme Court in Javer Chand versus Pukhraj Surana AIR 1961 SC 1655, wherein the Supreme Court has held, that when a document has onc....
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.... and 3, on whom an obligation was cast under the put option deed, to pay the requisite stamp duty, when consistently for a substantial period of ten years took a position that the put option deed was adequately stamped at their hands, cannot be heard to say and/ or are estopped in law, to challenge their own action and conduct, in contending that the document is not adequately stamped. Apart from being devastatingly unreasonable, it is too late in time for the respondents to assert such a plea. In fact, it is a frivolous contention. Such contention, in the present facts, cannot be considered, much less accepted to be any ground under Section 48 of the A&C Act, to hold that the put option deed is not valid under law, so as to refuse enforcement of the award. 54. The respondents reliance on the decision of the Supreme Court in SMS Tea Estates (P) Ltd versus Chandmari Tea Co (P) Ltd (supra) and Garware Wall Ropes Ltd versus Coastal Marine Constructions and Engineering Ltd (supra), which are in the context of section 11 of the Arbitration and Conciliation Act, 1996, in the facts of the present case, is also not well founded. There cannot be any dispute on the principle of law these de....
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....becomes applicable, which would lead to a conclusion that the put option deed is invalid and illegal under the SCRA. The contention is that it has been the fundamental policy of Indian law to prohibit all contracts in derivatives except those expressly permitted under the provisions of the SCRA. The put option deed was executed on 12 September 2008, at which point of time SEBI notification dated 1 March 2000 was in operation, interalia prohibiting forward contracts and requiring contracts for the sale or purchase of securities to qualify as 'spot delivery contracts'. Thus the SCRA would recognise only spot delivery contracts and derivative contracts. An option agreement in derivatives as contained in the put option deed, can never be permitted as it is not a spot delivery contract. The rigours of Section 18A of the SCRA were clearly attracted. The put option deed when tested by applying section 18A of the SCRA it is revealed that the same violates the said provision and was prohibited. The legislative intention behind SCRA is to prohibit any fixed return on investment in securities, put option deed by all parameters violates the mandate of not only the statutory notifications issue....
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.... are also required to be noted :- 2. Definitions - In this Act, unless the context otherwise requires,- (a) "contract" means a contract for or relating to the purchase or sale of securities; ... ... .. ... [(ac)] "derivative" includes- (A) a security derived from a debt instrument, share, loan, whether secured or unsecured, risk instrument or contract for differences or any other form of security; (B) a contract which derives its value from the prices, or index of prices, of underlying securities;] (C) commodity derivatives; and (D) Such other instruments as may be declared by the Central Government to be derivatives; ... ... .. ... ... (d) "option in securities" means a contract for the purchase or sale of a right to buy or sell, or a right to buy and sell, securities in future, and includes a teji, a mandi, a teji mandi, a galli, a put, a call or a put and call in securities; ... .. ... ... (h) "securities" include- (i) shares, scrips, stocks, bonds, debentures, debenture stock or other marketable securities of a like nature in or of any incorporated company or other body corporate; (ia) derivative; (ib) units or any other instrument issued by any ....
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....ecessary to prevent undesirable speculation in specified securities in any State or area, it may, by notification in the Official Gazette, declare that no person in the State or area specified in the notification shall, save with the permission of the Central Government, enter into any contract for the sale or purchase of any security specified in the notification except to the extent and in the manner, if any, specified therein. (2) All contracts in contravention of the provisions of sub-section (1) entered into after the date of the notification issued thereunder shall be illegal. ....... .......... .............. ....... 18A. Contracts in derivative - (1) Notwithstanding anything contained in any other law for the time being in force, contracts in derivative shall be legal and valid if such contracts are- (a) traded on a recognised stock exchange; (b) settled on the clearing house of the recognised (stock exchange or), in accordance with the rules and bye-laws of such stock exchange. (c) between such parties and on such terms as the Central Government may, by notification in the official Gazette, specify. (As inserted by Act 9 of 1995 w.e.f. 25 January 1995) .......
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....s and bye-laws of such stock exchange. 64. SEBI thereafter issued a notification dated 1 March 2000 under section 16(1) of the SCRA, providing that to prevent undesirable speculation in securities in the whole of India, it was declared that in all the territories where the SCRA was applicable, no person except with the permission of the SEBI shall enter into any contract for the sale or purchase of securities other than such spot delivery contract or contract for cash or hand delivery or special delivery or contract in derivatives as permissible under the SCRA or the Securities and Exchange Board of India Act 1992; and the rules and regulations made thereunder. It is seen that this notification was akin to the 1969 notification (supra), except for the fact that additionally a reference to 'contract in derivatives' came to be incorporated to be dealt in the manner as provided, as also a reference to the Securities and Exchange Board of India Act 1992 came to be made. 65. SEBI on 3 October 2013 issued another notification under section 16 and 28 of the SCRA, interalia rescinding notification dated 1 March 2000, except as respects 'things done or omitted to be done before such recis....
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....) above, shall be in accordance with the provisions of the Foreign Exchange Management Act, 1999 and rules or regulations made thereunder; Provided further that nothing contained in this notification shall affect or validate any contract which has been entered into prior to the date of this notification Explanation : It is hereby clarified that the contracts mentioned in clause (c) and (d) above shall be valid notwithstanding anything contained in section 18 A read with clause (d) of subsection (1) of section 23 of the Securities Contracts (Regulation) Act 1956(42 of 1956);......................." (emphasis supplied) 66. Referring to the statutory provisions of the SCRA and the notifications as noted above, the respondents have contended that the put option deed as executed on 12 September 2008, which is after the SEBI notification dated 1 March 2000 was in operation which prohibited forward contracts and/or permitted sale or purchase of securities interalia only by spot delivery. The respondents contend that the put option deed pertained to the shares/securities of Axiom, an unlisted public company, to be dealt not under a spot delivery or any permissible mode under the SCR....
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....e Notice means a written notice given in accordance with Clause 3 (Exercise of the Put Option and substantially in the form of Schedule 2 (Form of Put Exercise Notice); Put Option means the option granted by the Promoters to the Investor under Clause 2 (Grant of the Put Option); Put Option Price means, in respect of any Put Securities on any Put Settlement Date, the Target Value of such Put Securities on that Put Settlement Date; Put Securities means the Subscription Shares, the Series A Debenture and Equity Shares and Put Security means any of them; Put Settlement Date means each date specified as such in a Put Exercise Notice, which date shall be a date which falls one month after the date of service of the Put Exercise Notice; ..... .... ..... ... Subscription Shares means the 100 equity shares of the Issuer of a face value of Rs. 10 (Rupees Ten only) subscribed to by the Investor under the Subscription Agreement; Target Value means a value that results in an annual yield equal to 15.0% per annum in USD terms on the Total Investment Amount from the Issue Date to the date of exercise of the Put Option or in the event the Issuer is ineligible to come out with an IPO ....
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.... any time after 36 months from the Issue Date to and including the Expiry Date; (d) Notwithstanding anything contained in this Clause 3.1, the Investor shall have the option to put all the Put Securities to the Promoters at any time as it may deem fit: (i) on the occurrence of any Event of Default, if the same has not been remedied within the relevant cure periods, if any, provided in the Subscription Agreement. (ii) upon the Issuer taking steps in relation to making the IPO. 3.2 The Investor may, from time to time during the Exercise Period, deliver to RIL on behalf of the Promoters a Put Exercise Notice in respect of the Put Securities. 3.3 Exercise of the Put Option shall oblige the Promoters to purchase the Put Securities. 3.4 In the event the Investor does not exercise its right to participate in the initial public offering in the manner provided in Clause 9 of the Subscription Agreement, the Investor shall not have the right to exercise the Put Option on such number of Equity Shares that would otherwise have been eligible to offer by the Investor under the IPO. 4. Settlement of the Put Option 4.1 The consideration for the transfer by the Investor to the Promot....
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....cuments; or C) any law, lien, lease, order, judgment, award, injunction, decree, ordinance or regulation or any other restriction of any kind or character by which it is bound; and (ii) relieve any other party to a contract with it of its obligations or enable that party to vary or terminate its rights or obligations under that contract. 7.2 In order to ensure that the Promoters have sufficient liquidity to meet its payment obligations pursuant to this Deed, as and when due, the Promoters agree that they will, on or before the Closing Date, keep in escrow, equity shares owned and controlled by them in RIL in dematerialized firm constituting 26% of the paid-up equity capital of RIL ("RIL Shares") with an escrow agent to be appointed by the Promoters, in consultation with the Investor. The parties shall enter into such documentation and do all acts, deeds and things as may be necessary to give effect to the same. 7.3 The Promoters represent and warrant to the Investor (and the Promoters agree and acknowledge that the Investor is entering into this Deed in reliance on such representations and warranties) that as at the date hereof: (a) the constitutional documents of the Pro....
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....n required under any applicable law or regulation to enable it to perform its obligations under, or for the validity or enforceability of, this Deed. .............. ................ ............ 21. TERMINATION This Deed shall terminate on the expiry of the Exercise Period or the exercise of the Put Option in respect of all the Put Securities, whichever is earlier." 70. Considering the clauses of the put option deed, as noted above, it is quite clear that the put option deed is a fallout and consequence of what the parties had agreed in the share subscription agreement (SSA). By entering into the 'put option deed', the parties were giving effect to the agreement as contained in the SSA in which Axiom had agreed to issue to Banyan Tree compulsorily convertible debentures in the capital of Axiom in aggregate amount equivalent to USD 50 million. As a consideration to this subscription by Banyan tree ( as agreed under the SSA) which was for the of capital requirement of Axiom, Responsive and Wellknown agreed to grant to Banyan tree an option to sell the 'put securities', to Responsive and Wellknown on terms as agreed in the put option deed. Clause 2 of the put option dee....
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....into any speculation in the put securities, which is the primary factor to consider the applicability of the provisions of the SCRA and the notifications issued thereunder. Thus, even assuming that the contention of the respondent is to be accepted that the 27 June 1969 notification issued under section 16 of the SCRA, was in operation on the date the put option deed was executed, the said notification would not apply. This for the reason, that this notification was principally intended to prevent undesirable speculation on securities. Merely because the said notification provided that any contract for the sale or purchase of securities interalia cannot be other than spot delivery contracts under the act and rules and bylaws of a recognised stock exchange, that would not mean that the notification in any manner prohibited a put option in a share subscription agreement. This more particularly, as the intention of the parties when they enter into a share subscription agreement is to avail financial assistance from the investor and at the same time enabling the investor to secure the debt/financial assistance, by providing an agreeable form of security, by offering subscription to the....
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....came to be made. 73. Thus, by virtue of the said amendments and the consequent notification, a statutory regime was introduced under the SCRA by which a prohibition on options was deleted and recognition of contracts in derivatives/forward contracts by introduction of Section 18A came to be inserted. This was the legal position as prevailing on 12 September 2008 when the SSA and the Put Option Deed came to be executed between Banyan Tree and the Respondents. It also needs to be observed that section 18A of the SCRA by virtue of the opening words of the provision NB "Notwithstanding anything contained in any other law for the time being in force, contracts in derivative shall be legal and valid if such contracts are...." cannot be construed to mean that it would render illegal or invalidate any contract entered between the parties containing an option to sell securities. Moreover it declares the contracts to be legal and valid in the manner as provided for in sub clauses (a) to (c). Thus this is the statutory foundation in relation to trading/transactions in securities as strictly falling under the purview of the SCRA. 74. The developmental regime continued. Many aspects were requ....
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....he rights of the parties under any such agreement as the notification says shall remain undisturbed notwithstanding the issuance of this notification. It is quite clear, that this notification never intended to either invalidate any existing shareholders agreement containing an option in securities nor it in any manner intends to dilute the rights of the parties under any such agreement. To read this notification in the manner as suggested by the respondents namely to construe that it invalidates the put option deed, would in fact amount to doing violence to the plain language of the notification. In any event in issung this notification it can never be an intention that two classes of shareholders agreements, namely those agreements entered prior to the issuance of the notification and others after issuance of the notification, be created. This would lead to an anomalous position. In any event there was never an express statutory bar pointed out by the respondents to prohibit Put Options in Shareholders agreement. 76. It would be also relevant at this stage to note that the Reserve Bank of India in its Circular No. 4 dated July 15, 2014 issued under the caption "Foreign Direct In....
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....trary to the provisions of the SCRA. It is in this context, albeit not directly deciding an issue falling under Section 18A, the Division Bench held that a contract giving an option to one of the parties to sell or purchase the securities was a mere privilege, that may or may not be exercised and did not constitute a contract for the sale or purchase of securities falling within the SCRA. It was held that a contract for the sale of securities falling within the SCRA would come into existence only pursuant to exercise of the option. The Division Bench made the following observations in para 75, 77 and 80 of this judgement which are relevant in the present context :- 75. In a buy back agreement of the nature involved in the present case, the promissor who makes an offer to buy back shares cannot compel the exercise of the option by the promisee to sell the shares at a future point in time. If the promisee declines to exercise the option, the promissor cannot compel performance. A concluded contract for the sale and purchase of shares comes into existence only when the promisee upon whom an option is conferred, exercises the option to sell the shares. Hence, an option to purchase or....
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....similar issue as in the present case namely a share purchase contract in a share purchase agreement under which petitioner therein had an option to either resell the shares held by it to respondent No. 1 , who was bound to purchase the same at the price, which would give the petitioner an internal rate of return (IRR) of 10% on the original purchase consideration, or to interalia continue as a shareholder of respondent No. 2. The petitioner exercised the put option, requiring respondent no.1 to repurchase the shareholding of the petitioner in the respondent No. 2 for a sum of 22 crores giving an IRR of 10% on the original purchase consideration of 20 crores. AsRs. respondent No. 1 refused to comply, an arbitration was invoked under the SPA. The arbitral tribunal rejected the petitioner's claim on the ground that the transaction of a share purchase option was illegal being in breach of the SCRA. It is in this context, considering the challenge to the arbitral award the learned single judge referring to the decision of the Division Bench in MCX Stock Exchange Ltd (supra), held that the arbitral tribunal was in an error when it held that such a contract providing for an option to sell....
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.... obligation on Banyan Tree to sell the put securities. Thus, the nature of the put option deed is such that it cannot be classified as an exclusive contract in derivatives as understood under the SCRA, although there are some traits creating an impression that the provisions of the SCRA may be attracted, when they are actually not. As the option in favour of the Banyan Tree could neither be dealt nor traded on the stock exchange, being a specific buyback arrangement between the shareholders, there was no question of any speculative transaction between the parties, attracting the provisions of SCRA or the notifications issued thereunder. It is thus not possible to accept the respondents contention that the put option deed fell foul of section 18A of the SCRA, interalia being not traded on a recognised stock exchange. 80. The respondents reliance on the decision of the Supreme Court in BOI Finance Ltd versus Custodian and others (supra) would also not assist the respondents. This decision would not be applicable in the facts of the present case. This was the case in which the Custodian was asserting its rights to attach securities which were acquired by the appellant/BOI Finance Ltd....
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.... the transaction in the said case was a transaction purely dealing with purchase and sale of securities there was only an intention to speculate, which is completely different than what the parties had agreed in the Put Option Deed, the purpose of which was ancillary to the SSA. No doubt that the SCRA would be applicable to securities of companies which are not listed on the stock exchange as also held in Naresh Aggarwala & Co. versus Canbank Financial Services Ltd & Anr (supra) and Bhagwati Developers Private Limited versus Peerless General Finance and Investment Company Ltd & Anr (supra) however for more than one reason the decisions in BOI Finance Ltd. (Supra) would not be applicable. Firstly, the Court in this case was not dealing with a contract akin to the contract in the present case, which is an agreement between shareholders, the genesis of the put option deed being the SSA. The transaction which fell for a consideration of the Supreme Court was purely a transaction dealing in securities with a buyback formula, which was a forward transaction as prohibited under the SCRA and the notification issued thereunder. A distinction would be required to be certainly drawn, between ....
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....es is shorter and the history of futures trading in foreign currencies is only a few decades old in our country. The Court held that the transactions in derivatives being age-old insofar as commodities and stocks and securities are concerned, it was futile on the part of the plaintiff to contend that the transactions are either are prohibited by law or opposed to public policy, and that what was expressly permitted by law, cannot be held to be opposed to public policy. It was in fact observed that the Master Circular issued by the RBI from time to time and the regulations framed by the RBI under the FEMA permitted such transactions. Such transactions have the sanction of law the world over. Although the put option deed stricto sensu is not a contract in derivatives however even if it is assumed to have some traits of a contract in derivatives albeit not falling under the SCRA, it cannot be held that the put option deed was not permitted by law or was against the public policy. This was the age old recognition even for contracts in derivatives. 83. Thus there is nothing illegal when the arbitral tribunal holds that section 18 A of the SCRA does not absolutely prohibit put options i....
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....ign investments made under the regime of FEMA 20 were not permitted at the time when the SSA and the put option deed was executed between the Respondents and Banayan Tree. According to the respondents the impugned award completely overlooks these aspects, rendering the award illegal. 85. In my opinion, the above contentions of the respondents proceed on a fundamentally erroneous premise both on facts and on law. At the outset it is required to be noted that on a cumulative reading of clause 12.2.2 of the SSA read with clause 9 under schedule 16 (Investors Right) to the SSA, it is quite clear that the put option deed did not provide for an open-ended assured return to Banyan Tree, as an exit option. It is clear that the put option could be exercised by Banyan Tree within a specified time and was contingent on the respondents not completing an IPO. Further clause 4 of the put option deed which provides for 'settlement of the put option' in clause 4.5 thereunder, provided that on Banyan Tree exercising put option, the promoters would provide valuation certificates from the Auditor's of Axiom and a Chartered Accountant Specifying the Value of Put Securities in Accordance with the FDI ....
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....person resident outside India ,it is held that the put option deed was made to be compliant with the regime of regulation 9 and/or 10 (B). The tribunal has observed that the question as to which regime of permission was governing the put option deed had no legal substance or relevance for determining the question of the legality of the put option deed under FEMA, for the reason that FEMA and the subordinate legislation thereunder were not dealing with the legality of the contract like the put option deed, but dealt with the manner in which the contract could be performed from the foreign exchange perspective. I do not see any illegality in the tribunal reaching to this conclusion. This would also be clearfrom the following discussion. 87. FEMA which was brought into force on 1 June 2000 is the successor of the Foreign Exchange Regulation Act 1973 (for short FERA). By the year 1993 significant developments had taken place such as substantial increase in foreign exchange reserves, growth in foreign trade, rationalisation of tariffs, current account convertibility, liberalisation of Indian investments abroad, increased access to external commercial borrowings by Indian corporates and....
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....pment and maintenance of foreign exchange market in India. If the legislative scheme emanating from the provisions of FEMA is considered, it is quite clear that it principally concerns regulation and management of foreign exchange and remittances to a foreign country by any entity and the requisite permissions in that regard. There is no provision in FEMA which would void transactions. The regulations framed under the FEMA advance the purpose as contained in in the substantive provisions as contained in the FEMA. It certainly cannot be accepted as a legal proposition that the provisions of FEMA or the regulations made thereunder would invalidate or render void a contract like the put option deed. In the facts of the present case it may concern Banyan Tree when it remits the award money outside India, which Banyan Tree intends to comply, however this would not mean that merely as some future permissions, may be required to be obtained by Banyan tree under FEMA, it should be held that the enforcement of the foreign award should be refused. Considering the legislative scheme under FEMA it cannot be conceived, that any violation of the provisions of FEMA can either render the put optio....
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....spondent therein in objecting to the enforcement of the foreign award held that the enforcement of a foreign award cannot be declined on the ground of any regulatory compliance or violation of a provision of FEMA. In paragraph 110 of this decision the learned Single Judge observed as under: "110. The contention that enforcement of the award against Unitech must be refused on the ground that it violates any one or the other provision of FEMA, cannot be accepted, but any remittance of the money recovered from Unitech in enforcement of the award would necessarily require compliance of regulatory provisions and/or permissions" 92. In a recent decision of the Supreme Court in Vijay Karia and others versus Prysmian Cavi E Sistemi SRL & Ors. (2020 SCC Online SC 177) the Supreme Court again approved the view of the learned Single Judge of the Delhi High Court in Cruz City 1 Mauritius Holdings versus Unitech Ltd (supra), to hold that the Court would not refuse enforcement of a foreign award on the ground of violation of a FEMA regulation and that for any such violation the the award cannot be said to be void. 93. As clearly seen from the authoritative pronouncement of the Supreme Court ....
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....ssion in respect of the domestic award. The Court accordingly confirmed and approved the principles as laid down in Renusagar's case. It would be appropriate to note the following observations of the Supreme Court: 23. Of the many questions framed for determination in Renusagar, the two questions under consideration were: (i) "Does Section 7(1)(b)(ii) of the Foreign Awards Act preclude enforcement of the award of the Arbitral Tribunal, GAFTA for the reason that the said award is contrary to the public policy of the State of New York?", and (ii) "what is meant by public policy in Section 7(1)(b)(ii) of the Foreign Awards Act?". This Court held that the words "public policy" used in Section 7(1)(b)(ii) of the Foreign Awards Act meant public policy of India. The argument that the recognition and enforcement of the award of the Arbitral Tribunal, GAFTA can be questioned on the ground that it is contrary to the public policy of the State of New York was negated. A clear and fine distinction was drawn by this Court while applying the rule of public policy between a matter governed by domestic laws and a matter involving conflict of laws. It has been held in unambiguous terms ....
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....ur view, what has been stated by this Court in Renusagar with reference to Section 7(1)(b)(ii) of the Foreign Awards Act must apply equally to the ambit and scope of Section 48(2)(b) of the 1996 Act. In Renusagar it has been expressly exposited that the expression "public policy" in Section 7(1)(b)(ii) of the Foreign Awards Act refers to the public policy of India. The expression "public policy" used in Section 7(1)(b)(ii) was held to mean "public policy of India". A distinction in the rule of public policy between a matter governed by the domestic law and a matter involving conflict of laws has been noticed in Renusagar. For all this there is no reason why Renusagar should not apply as regards the scope of inquiry under Section 48(2) (b) . Following Renusagar, we think that for the purposes of Section 48(2)(b) , the expression "public policy of India" must be given a narrow meaning and the enforcement of foreign award would be refused on the ground that it is contrary to the public policy of India if it is covered by one of the three categories enumerated in Renusagar. Although the same expression 'public policy of India' is used both in Section 34 (2 ) (b)(ii) and Section 48(2)(b....
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....be breached; as a result of which the award cannot be enforced. ..... ...... .... 91. This reasoning commends itself to us. First and foremost,FEMA -unlike FERA - refers to the nation's policy of managing foreign exchange instead of policing foreign exchange, the policeman being the Reserve Bank of India under FERA. It is important to remember that Section 47 of FERA no longer exists in FEMA, so that transactions that violate FEMA cannot be held to be void. Also, if a particular act violates any provision of FEMA or the Rules framed thereunder, permission of the Reserve Bank of India may be obtained post-facto if such violation can be condoned. Neither the award, nor the agreement being enforced by the award, can, therefore, be held to be of no effect in law. This being the case, a rectifiable breach under FEMA can never be held to be a violation of the fundamental policy of Indian law. Even assuming that Rule 21 of the Non-Debt Instrument Rules requires that shares be sold by a resident of India to a nonresident at a sum which shall not be less than the market value of the shares, and a foreign award directs that such shares be sold at a sum less than the market value, the Res....
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..... The restrictions on the dealings in foreign exchange continue to be as rigorous in FEMA as they were in FERA and the control of the Government over foreign exchange continues to be as complete and full as it was in FERA. 67. The importance of foreign exchange in the development of a country needs no emphasis. FEMA regulates the foreign exchange. The conservation and augmentation of foreign exchange continue to be its important theme. Although contravention of its provisions is not regarded as a criminal offence, yet it is an illegal activity jeopardising the very economic fabric of the country. For violation of foreign exchange regulations, penalty can be levied and its noncompliance results in civil imprisonment of the defaulter. The whole intent and idea behind Cofeposa is to prevent violation of foreign exchange regulations or smuggling activities which have serious and deleterious effect on national economy." 93. It is important to note that this Court recognized that FEMA, unlike FERA, does not have any provision for prosecution and punishment like that contained in Section 56 of FERA. The observations as to conservation and/or augmentation of foreign exchange, so far as....
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....l view of the matter, in my opinion, the respondents in these circumstances cannot deprive Banyan Tree of the fruits of the arbitral award. 98. Resultantly the petition needs to succeed. It is accordingly allowed in terms of prayer clause (a). The Put Award dated January 15, 2019, (as subsequently corrected),in SIAC ARB 37 of 2016 is declared to be binding under section 46 and enforceable as a decree of this Court, under Part II of the Arbitration and Conciliation Act 1996. Ordered accordingly. 99. In regard to the other prayers the petitioner-Banyan Tree is at liberty to adopt appropriate proceedings as permissible in law. 100. Petition stands allowed in the aforesaid terms. No order as to cost. Commercial Arbitration Petition No.475 of 2019 101. This is also a petition filed by Banyan Tree. The parties to this petition are also common to the petition as decided by the above judgment. 102. By this petition Banyan Tree has prayed for enforcement of the Escrow Award dated 15 January 2019 (as subsequently corrected), of the Singapore International Arbitration Centre (SIAC) in Arbitration No. 36 of 2016, as a decree of this Court. 103. This arbitration had arisen under an Escro....