TaxTMI 
TaxTMI 
2017 (11) TMI 1987
X X X X Extracts X X X X
X X X X Extracts X X X X
.... decree of permanent injunction restraining Doosan India and its representatives, agents etc. from instituting or continuing or proceeding with arbitration proceeding against GMR Energy before the Singapore International Arbitral Centre (SIAC) being SIAC Arbitration No. 316/2016 (Arb. 316/16/ACU). SIAC Arbitration No. 316/2016 is based on the three agreements between Doosan India and GCEL all dated 22nd January, 2010 (for convenience 'EPC agreements' dated 22nd January, 2010) being (i) the Agreement for Civil Works, Erection, Testing and Commissioning (in short 'CWETC Agreement') executed between GCEL and Doosan India; (ii) the Onshore Supply Agreement executed between GCEL and Doosan India; (iii) the BTG Equipment Supply Agreement (in short 'Offshore Supply Agreement') also executed between GCEL and Doosan India; and (iv) the Corporate Guarantee dated 17th December, 2013 (in short 'Corporate Guarantee') executed between GCEL, GIL and Doosan India besides the two Memorandum of Understandings (in short the two 'MOUs') between Doosan India and GMR Energy dated 1st July, 2015 and 30th October, 2015 2. Basing its claim on the three agreements,....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ciliation Act, 1996 (in short 'Arbitration Act'). On completion of pleadings arguments have been heard on behalf of both the parties in the three applications, that is, under Order XXXIX Rule 1 and 2 CPC, Order XXXIX Rule 4 CPC and Section 45 of the Arbitration and Conciliation Act, 1996 (in short the Arbitration Act). 5. In support of the applications claim of Doosan India is that a valid and binding arbitration agreement exists between Doosan India, GCEL, GIL and GMR Energy being an alter ego and a guarantor of GCEL. Further as per the Independent Auditor Report of GCEL dated 27th May, 2016, GMR Energy is a holding company of GCEL and has taken over GCEL liabilities towards Doosan India. GMR Energy guaranteed to make payments and in fact made certain payments on behalf of GCEL in partial discharge of the liability of GCEL towards Doosan India and at that material time GMR Energy owned 100% stakes in GCEL, co-mingled funds, was run by the same family, had the same Directors and officers, interchangeably used each other's addresses and telephone numbers, observed little, if not any, corporate formality and separation and as such being the alter ego of GCEL, GMR Energ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ial arbitration and the Indian substantive law cannot be derogated from by and between two Indian parties as held by the Constitution Bench in the decision reported as 2012 (9) SCC 552 Bharat Aluminum Company and Ors. etc. etc. v. Kaiser Aluminium Technical Service, Inc. and Ors. etc. etc. 8. Distinguishing the decision in 1998 (1) SCC 305 Sumitomo Heavy Industries Ltd. v. ONGC Ltd. & Ors. relied upon by learned counsel for Doosan India reliance is placed on 2013 (3) CTC 709 National Highway Authority of India v. Oriental Structure Engineers Ltd. - Gammon India Ltd. (JV) to contend that the Arbitration Act is "matter of substantive law" and since governing law of the contract is Indian law, in the absence of a specific choice of law governing the arbitration agreement, the law governing the arbitration agreement would also be Indian law as held in the decision reported as 2005 (7) SCC 234 Shin-Etsu Chemical Co. Ltd. v. M/S. Aksh Optifibre Ltd. & Anr. Reliance is placed on the decision reported as 2014 (5) SCC 1 ENERCON (INDIA) Ltd. & Ors. v. ENERCON GMBH & Anr. wherein interpreting a similar arbitration agreement it was held that the arbitration clause only provided that venue o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t such persons for any act omission, obligation whether based upon piercing of the party's corporate veil or any other legal theory based upon exercise or control over the parties or otherwise. Reliance is placed on the decision reported as 2003 (4) SCC 341 Modi Entertainment Network & Anr. v. W.S.G. Cricket PTE Ltd. and Peterson Farms (Supra). 10. Further even the principle of alter ego would not entitle Doosan India to invoke arbitration against GMR Energy. Relying upon the decisions reported as 2010 (5) SCC 306 Indowind Energy Ltd. v. Wescare (India) Ltd., 2017 SCC Online Del 8345 Sudhir Gopi v. Indira Gandhi National Open University and 2014 (9) SCC 407 Balwant Rai Saluja & Anr. v. Air India Ltd. & Ors. it is contended that the principle of alter ego as being sought to be invoked cannot be invoked by Doosan India as each company is a separate and distinct legal entity and the mere fact that the two companies have common shareholders or common board of directors will not make the two companies a single entity. Reference is also made to the decision reported as 2017 (4) ArbLR 1(Delhi) Ameet Lalchand Shah v. Rishabh Enterprises decided by Division Bench of this Court. Even ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on of arbitration against the alter ego of a signatory is a well recognized principle not only in India but also in Singapore which is the chosen seat of arbitration. Reliance is placed on the decision reported as Chloro Controls (supra). Relying upon 2009 SGHC 42 Jiang Haiying v. Tan Lim Hui and Anr. a decision of the High Court of Singapore, learned counsel contends that since parties agreed to arbitration under the SIAC Rules with the seat of arbitration being at Singapore, Part-II of the Arbitration Act would apply. Referring to Sections 44 and 45 of the Arbitration Act it is contended that the two provisions recognize a situation where an arbitration agreement would extend to a non-signatory to a contract. 14. Learned counsel for Doosan India further submits that if there is an ex-facie or a prima facie basis for arbitration to proceed against the non party to the agreement, Section 45 of the Arbitration Act warrants that the judicial proceedings must be stayed in favour of the arbitration. Reliance is placed on Shin-Etsu Chemical (supra), 2016 (4) Arb. LR 250 Delhi Mcdonald's India Private Limited v. Vikram Bakshi and Ors. and 2015 SGHC 225 Malini Ventura v. Knight Cap....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... proceedings under Section 11 of the Arbitration Act and for no other purpose, thus the decision would not constitute a binding precedent as held by the Supreme Court in the decision reported as 2015 (3) SCC 49 Associate Builders v. Delhi Development Authority. Neither of the two decisions relied upon by learned counsel for GMR Energy i.e. Seven Islands (supra) and Aadhar Mercantile (supra) referred to the earlier decision of the Supreme Court in Atlas Exports (Supra). 17. It is further contended that the parties in the present case have agreed to seat the arbitration in Singapore in accordance with the SIAC Rules while the merits of the disputes to be conducted in accordance with laws of India which is permissible and not barred under the Indian law. Since the seat of arbitration is in Singapore, Part-II of the Arbitration Act would apply and the averments of learned counsel for GMR Energy that since all parties, that is, GMR Energy, GCEL, GIL and Doosan India are Indian parties, Part-I of the Arbitration Act would govern, is liable to be rejected. Reliance is placed on the decisions reported as Bharat Aluminum (supra), Sasan Power (supra), 2014 (7) SCC 603 Reliance Industries ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ant to Arb. 316/16/ACU would fall under Part-I or Part-II of the Arbitration Act? (ii) Whether on the basis of pleas in the notice of arbitration issued by Doosan India a case is made out by Doosan India to subject GMR Energy to arbitration with GCEL and GIL? (iii) Whether the Arbitral Tribunal has no jurisdiction to pierce the corporate veil? (iv) In the present suit whether this Court will form a prima facie opinion on the issue of alter ego or return a finding? (v) Whether the invocation of arbitration against GMR Energy is contrary to Rule 7 of the SIAC Rules? 21. Before dealing with the rival contentions of the parties it would be appropriate to note the salient averments in the notice of arbitration dated 11th December, 2016 issued by Doosan India to GMR Energy, GCEL and GIL which is the foundation of subjecting GMR Energy to arbitration as under: "B. GMR Infra - First Respondent 12. GMR Infra is a company incorporated and existing under the laws of India. According to GMR Infra's recent press release, GMR Infra operates in the name of GMR Group, which is "a leading global infrastructure conglomerate with interests in Airport, Energy, Transportation a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ther complications with some of the project lenders" and requested a meeting to discuss a modified payment plan for 2013. 28. Accordingly, on 14th November, 2013, senior executives representing the interests of Doosan India and GCEL met in Seoul. On behalf of GCEL, Mr. GBS Raju, Chairman of GMR Energy and elder son of GMR Group's Chairman (GM Rao), and Mr. Sanjay Barde, President of both GMR Energy and GCEL, negotiated. 29. During the Seoul meeting, the senior executives of GMR Energy and GCEl fully acknowledged their responsibility to pay the Outstanding Debt and agreed to a detailed revised payment and commissioning schedule, as well as terms relating to payment security and cost incurred during slowdown. These terms that were negotiated and agreed upon between GMR Energy/GCEL and Doosan Korea/Doosan India were memorialized, signed and executed by Doosan India and GCEL in a Memorandum of Understanding dated 12th December, 2013 ("MOU I"), a copy of which is appended as Appendix A. 30. Among other things, MOU I stated that: "it is acknowledged between the GCEL and Doosan [India], that there was some delay on the part of GCEL for the reasons despite it....
X X X X Extracts X X X X
X X X X Extracts X X X X
....payment obligations." 40. Subsequently, on 1 September, 2015, GMR Energy, in response to Doosan India's request for payment of INR 200 Crores owing by GCEL, represented that "we are already committing [INR] 62.5 + 51 Crores i.e. 113.5 Crores by December 2015. 41. However, GCEL continued to miss its payments. On 30 October, 2015, GCEL, Doosan India and GMR Energy entered into a Memorandum of Understanding ("MOU II"). Pursuant thereto, GCEL and GMR Energy agreed to make payment of INR 92.5 Crores by 20 December, 2015. GCEL also agreed to pledge to Doosan India its stock equivalent to any overdue amount not exceeding INR 437.50 Crores on the following due date until full payment was made on the overdue amounts: Amount Payment due date For overdue payment up to December 2015 By the end of January 2016 For any overdue payment in 2016 31 days following receipt of invoice by GCEL 42. MOU II further provided that "[GMR Energy] shall remain liable for the payment of overdue amount not exceeding 437.5 crores" and if GMR Energy failed to make payment, Doosan India was entitled to 30% of GCEL's profits in the preceding quarter. 43......
X X X X Extracts X X X X
X X X X Extracts X X X X
....ontrolled by one of India's richest men, Mr. GM Rao. All the companies bear his name. Mr. G.M. Rao's elder son, Mr. G.B.S. Raju, is the chairman of GMR's Energy division and is responsible for the group's energy business. Mr. G.M's Rao's second son, Mr. Kiran Kumar Grandhi is the Corporate Chairman of GMR Group overseeing the group's finance and corporate strategy. IV. ARBITRATION AGREEMENT 74. Doosan India, GCEL and GMR Infra have a valid arbitration agreement by which they have agreed to arbitrate the present dispute, as evidenced by the GMR Infra Guarantee, at Clause 17: "17.1 All disputes arising between the parties relating to this Guarantee or the interpretation of performance of this Guarantee (each a "Dispute") or any question regarding its existence, validity or termination shall be finally settled by arbitration before an arbitral tribunal consisting of three arbitrators. The arbitration shall be conducted in accordance with the arbitration rules of the Singapore International Arbitration Centre ("SIAC Rules"). as in force at the time. The guarantor and EPC Contractor shall each nominate one arbitrator for confirmatio....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ity as any party. ....... 21.4.5 The arbitral proceedings shall be conducted in the English language 21.4.6 The Parties agree that, where a Dispute arises and a dispute arises under one or more of the Other Contracts relating to the Project, which are so closely connected in the reasonable opinion of the Parties and the Parties deem it expedient for any Disputes and any such disputes, arising under one or more of the other contracts relating to the Project, to be resolved in the same proceedings, then the Parties may, at their option and by mutual agreement, consolidate and submit all such disputes for adjudication by the panel of arbitrators appointed hereunder and require such panel of arbitrators to adjudicate upon the same. Upon the aforesaid requirement by the Parties the panel of arbitrators shall determine the Dispute and all other disputes which have been consolidated, in accordance with provisions of this Section 21.4. 21.4.7 The arbitral award shall be final and binding upon the Parties and enforceable by any court having jurisdiction for this purpose. The arbitral award may be enforced against the Parties to the arbitration proceeding ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....by a panel of three (3) arbitrators in accordance with the provisions of the Singapore International Arbitration Centre(SIAC) or any re-enactment or modification thereof. Save as specified in this Section 19.4.1, no arbitration provisions contained in any other law, shall apply to arbitration of any Dispute. 19.4.2 Each arbitrator shall be and remain independent and impartial, and no arbitrator shall be of the same nationality as any party. ...... 19.4.5 The arbitral proceedings shall be conducted in the English language. ...... 19.4.7 The arbitral award shall be final and binding upon the Parties and enforceable by any court having jurisdiction for this purpose. The arbitral award may be enforced against the Parties to the arbitration proceeding or their assets wherever they may be found and a judgment upon the arbitral award may be entered in any court having jurisdiction." (Emphases added.) V. PLACE OF ARBITRATION 82. As noted, the four arbitration agreements in the EPC Agreements and GMR Infra Guarantee provide that the arbitration is to be submitted to the SIAC in Singapore, which is reasonably construed t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nt provides for the arbitration and reads as follows: "27. Arbitration 27.1. All disputes, differences arising out of or in connection with the agreement shall be referred to arbitration. The arbitration proceedings shall be conducted in English in Singapore in accordance with the Singapore International Arbitration Centre (SIAC) Rules as in force at the time of signing of this agreement. The arbitration shall be final and binding. 27.2. The arbitration shall take place in Singapore and be conducted in English language. 27.3. None of the party shall be entitled to suspend the performance of the agreement merely by reason of a dispute and/or a dispute referred to arbitration." 48. Clause 28 of the agreement describes the governing law and provides as follows: "This agreement shall be subject to the laws of India. During the period of arbitration, the performance of this agreement shall be carried on without interruption and in accordance with its terms and provisions." 49. As will be seen from Clause 27.1, the arbitration proceedings are to be conducted in Singapore in accordance with the SIAC Rules as in force at the ti....
X X X X Extracts X X X X
X X X X Extracts X X X X
....2, which made it clear that where the seat of arbitration is Singapore, the law of the arbitration under the SIAC Rules would be the International Arbitration Act, 2002 (Chap. 143-A, 2002 Edn., Statutes of the Republic of Singapore). Mr. Rautray submitted that it was a clear case of inadvertence in paras 50 to 52 that needs to be clarified by indicating that the curial law is the International Arbitration law of Singapore and not the SIAC Rules. 8. Having regard to the submissions made on behalf of the respective parties, we are inclined to agree with Mr. Rautray that the corrections and clarifications sought for have to be allowed. In particular, the observations made in paras 50-52 and 54 in Yograj Infrastructure case [Yograj Infrastructure Ltd. v. Ssang Yong Engg. & Construction Co. Ltd., (2011) 9 SCC 735 : (2011) 4 SCC (Civ) 864], if read together, indicate that, although, when the seat of arbitration was in Singapore, the SIAC Rules would apply, the same included Rule 32 which provides that it is the Singapore International Arbitration Act, 2002, which would be the law of the arbitration. Accordingly, it is clarified that while mention had been made in paras 50 to 52 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ready noticed, in para 20 of Sumitomo [(2008) 4 SCC 91], the Court had observed that a party to an arbitration agreement has to be a party to the judicial proceedings and then alone it will fall within the ambit of Section 2(h) of the 1996 Act. As far as the first issue is concerned, we shall shortly proceed to discuss it when we discuss the merits of this case, in light of the principles stated in this judgment. However, the observations made by the learned Bench in Sumitomo Corpn. [(2008) 4 SCC 91] do not appear to be correct. Section 2(h) only says that "party" means a party to an arbitration agreement. This expression falls in the chapter dealing with definitions and would have to be construed along with the other relevant provisions of the Act. When we read Section 45 in light of Section 2(h), the interpretation given by the Court in Sumitomo Corpn. [(2008) 4 SCC 91] does not stand the test of reasoning. Section 45 in explicit language permits the parties who are claiming through or under a main party to the arbitration agreement to seek reference to arbitration. This is so, by fiction of law, contemplated in the provision of Section 45 of the 1996 Act. 117. We have a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....first schedule applies." 22.8. The decision of Madhya Pradesh High Court in Sasan Power (supra) was taken up in appeal before the Hon'ble Supreme Court where this issue was given up however, the Supreme Court in 2016 (10) SCC 813 Sasan Power Ltd. v. North American Coal Corpn (India) dealt with and rejected the last contention raised by the plaintiff that the choice of foreign seat if any by Indian parties is in derogation of Indian law and it was held as under that this was not the scope of enquiry under Section 45 of the Arbitration Act: "48. It is settled law that an arbitration agreement is an independent or "self-contained" agreement. In a given case, a written agreement for arbitration could form part of another agreement, described by Lord Diplock as the "substantive contract" [Aughton Ltd. v. MF Kent Services Ltd., (1991) 57 BLR 1 (CA) "the status of a so-called "arbitration clause" included in a contract of any nature is different from other types of clauses because it constitutes a "self-contained contract collateral or ancillary to" "the substantive contract". These are the words of Lord Diplock in Bremer Vulkan Schiffbau and Maschinenfabrik v. South India....
X X X X Extracts X X X X
X X X X Extracts X X X X
....[Emphasis supplied] 22.9. It is thus evident that an arbitration agreement is an independent self-contained agreement not dependant on the substantive agreement, therefore irrespective of the contractual rights and obligations parties can opt for an international arbitration. Undoubtedly the decision of Madhya Pradesh High Court in Sasan Power (Supra) and the Supreme Court in Sasan Power Ltd. (supra) was rendered pre amendment to Section 2(1)(f) of the Arbitration Act however, needless to note that even in the present case, the agreements between the parties are prior to 23rd October, 2015 i.e. pre-amendment to Section 2 (1) (f) of the Arbitration Act. 22.10. Learned counsel for GMR Energy has relied upon the decision in TDM Infrastructure (supra) wherein Supreme Court noted as under: "14. Whereas Part I of the 1996 Act deals with domestic arbitration, Part II thereof deals with the foreign award. The term "international commercial arbitration" has a definite connotation. It, inter alia, means a body corporate which is incorporated in any country other than India. However, according to the petitioner, it is a Company whose central management and control is exercised ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....agreement and, thus, the question of applicability of sub-clause (iii) of Section 2(1)(f) would not arise. 21. The Chief Justice of India or his designate, furthermore, having regard to sub-section (9) of Section 11 of the 1996 Act must bear in mind the nationality of an arbitrator. The nationality of the arbitrator may have to be kept in mind having regard to the nationality of the respective parties. Only in a case where, however, a body corporate which need not necessarily be a company registered and incorporated under the Companies Act, as for example, an association or a body of individuals, the exercise of central management and control in any country other than India may have to be taken into consideration. 22. Chapter VI of the 1996 Act dealing with making of an arbitral award and termination of proceedings in this behalf plays an important role. In respect of "international commercial arbitration", clause (b) of sub-section (1) of Section 28 of the 1996 Act would apply, whereas in respect of any other dispute where the place of arbitration is situated in India, clause (a) of sub-section (1) thereof shall apply. When, thus, both the companies are incorpora....
X X X X Extracts X X X X
X X X X Extracts X X X X
....implied consent, or by repudiation or frustration, in much the same manner as in more ordinary forms of contract. Since this agreement has a distinct life of its own, it may in principle be governed by a proper law of its own, which need not be the same as the law governing the substantive contract. The second group of obligations, consisting of what is generally referred to as the 'curial law' of the arbitration, concerns the manner in which the parties and the arbitrator are required to conduct the reference of a particular dispute. According to the English theory of arbitration, these rules are to be ascertained by reference to the express or implied terms of the agreement to arbitrate. This being so, it will be found in the great majority of cases that the curial law, i.e., the law governing the conduct of the reference, is the same as the law governing the obligation to arbitrate. It is, however, open to the parties to submit, expressly or by implication, the conduct of the reference to a different law from the one governing the underlying arbitration agreement. In such a case, the court looks first at the arbitration agreement to see whether the dispute is on....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the continuance of the proceedings before the arbitrator to govern the procedure and conduct thereof. The courts administering the curial law have the authority to entertain applications by parties to arbitrations being conducted within their jurisdiction for the purpose of ensuring that the procedure that is adopted in the proceedings before the arbitrator conforms to the requirements of the curial law and for reliefs incidental thereto. Such authority of the courts administering the curial law ceases when the proceedings before the arbitrator are concluded. [Emphasis supplied] 22.13. Relying upon the decision in Shin-Etsu Chemical (Supra) learned counsel for GMR Energy also contended that as per the three EPC agreements and Corporate Guarantee, the law governing the contract between the parties is Indian law and in the absence of a specific choice of the law governing arbitration agreement, the law governing arbitration agreement would also be Indian law. In Shin-Etsu Chemical (supra) Supreme Court was dealing with an arbitration clause wherein the parties agreed to be governed by and construed and interpreted under the laws of Japan. It was agreed that all disputes arising....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t II are exclusive of each other is evident also from the definitions section in Part I and Part II. The definitions contained in Sections 2(1)(a) to (h) are limited to Part I. The opening line which provides "In this Part, unless the context otherwise requires....", makes this perfectly clear. Similarly, Section 44 gives the definition of a foreign award for the purposes of Part II (Enforcement of Certain Foreign Awards); Chapter I (New York Convention Awards). Further, Section 53 gives the interpretation of a foreign award for the purposes of Part II (Enforcement of Certain Foreign Awards); Chapter II (Geneva Convention Awards). From the aforesaid, the intention of Parliament is clear that there shall be no overlapping between Part I and Part II of the Arbitration Act, 1996. The two parts are mutually exclusive of each other. To accept the submissions made by the learned counsel for the appellants would be to convert the "foreign award" which falls within Section 44, into a domestic award by virtue of the provisions contained under Section 2(7) even if the arbitration takes place outside India or is a foreign seated arbitration, if the law governing the arbitration agreement is b....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the place or seat of the arbitration is not merely a matter of geography. It is the territorial link between the arbitration itself and the law of the place in which that arbitration is legally situated: When one says that London, Paris or Geneva is the place of arbitration, one does not refer solely to a geographical location. One means that the arbitration is conducted within the framework of the law of arbitration of England, France or Switzerland or, to use an English expression, under the curial law of the relevant country. The geographical place of arbitration is the factual connecting factor between that arbitration law and the arbitration proper, considered as a nexus of contractual and procedural rights and obligations between the parties and the arbitrators. The seat of arbitration is thus intended to be its centre of gravity." 22.17. The decision in Reliance Industries (supra) and Imax Corporation (supra) have been reiterated by Supreme Court in Indus Mobile Distribution (supra). In the present case the parties have agreed to be governed by SIAC Rules for arbitration and thus Singapore would not be a venue alone but also the seat of arbitration. 2....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ent, by which any party thereto is restricted absolutely from enforcing his rights under or in respect of any contract, by the usual legal proceedings in the ordinary tribunals, or which limits the time within which he may thus enforce his rights, is void to that extent. Exception 1.- This section shall not render illegal a contract, by which two or more persons agree that any dispute which may arise between them in respect of any subject or class of subjects shall be referred to arbitration, and that only the amount awarded in such arbitration shall be recoverable in respect of the dispute so referred." 11. The case at hand is clearly covered by Exception 1 to Section 28. Right of the parties to have recourse to legal action is not excluded by the agreement. The parties are only required to have their dispute/s adjudicated by having the same referred to arbitration. Merely because the arbitrators are situated in a foreign country cannot by itself be enough to nullify the arbitration agreement when the parties have with their eyes open willingly entered into the agreement. Moreover, in the case at hand the parties have willingly initiated the arbitration proceedin....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... arbitration to which the Convention set forth in the Schedule applies, and (a) in pursuance of an agreement in writing for arbitration to which the Convention set forth in the First Schedule applies, and (b) in one of such territories as the Central Government being satisfied that reciprocal provisions have been made, may, by notification in the Official Gazette, declare to be territories to which the said Convention applies. (b) in one of such territories as the Central Government, being satisfied that reciprocal provisions have been made may, by notification in the Official Gazette, declare to be territories to which the said Convention applies. 3. Stay of proceedings in respect of matters to be referred to arbitration. -- Notwithstanding anything contained in the Arbitration Act, 1940 (10 of 1940), or in the Code of Civil Procedure, 1908 (5 of 1908), if any party to an agreement to which Article II of the Convention set forth in the Schedule applies, or any person claiming through or under him commences any legal proceedings in any court against any other party to the agreement or any person claiming through or under him in respect of any matter agreed to be referre....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he other parties as defendants. (3) The court shall direct notice to be given to the parties to the arbitration, other than the applicant, requiring them to show cause, within a time specified why the award should not be filed. 6. Enforcement of foreign award.- (1) Where the court is satisfied that the foreign award is enforceable under this Act, the court shall order the award to be filed and shall proceed to pronounce judgment according to the award. (2) Upon the judgment so pronounced a decree shall follow, and no appeal shall lie from such decree except insofar as the decree is in excess of or not in accordance with the award. 49. Enforcement of foreign awards.-Where the court is satisfied that the foreign award is enforceable under this Chapter, the award shall be deemed to be a decree of that court. Appealable orders.-(1) An appeal shall lie from the order refusing to- refer the parties to arbitration under Section 45; enforce a foreign award under Section 48, to the court authorised by law to hear appeals from such order. (2) No second appeal shall lie from an order passed in appeal under this section, but nothing in this section shall....
X X X X Extracts X X X X
X X X X Extracts X X X X
....gs or was otherwise unable to present his case; or (c) the award deals with a difference not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration: Provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, that part of the award which contains decisions on matters submitted to arbitration may be enforced; or (d) the composition of the arbitral authority or the arbitral procedure was not in accordance with the agreement of the parties, or, failing such agreement, was not in accordance with the law of the country where the arbitration took place; or (e) the award has not yet become binding on the parties, or has been set aside or suspended by a competent authority of the country in which, or under the law of which, that award was made. (2) Enforcement of an arbitral award may also be refused if the court finds that- (a) the subject-matter of the difference is not capable of settlement by arbitration under the law of India; or (b) the enforcement of the award would be contrary to the public policy....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... (2) If the award or agreement to be produced under sub-section (1) is in a foreign language, the party seeking to enforce the award shall produce a translation into English certified as correct by a diplomatic or consular agent of the country to which that party belongs or certified as correct in such other manner as may be sufficient according to the law in force in India. Explanation.-In this section and all the following sections of this Chapter, 'court' means the Principal Civil Court of Original Jurisdiction in a district, and includes the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction over the subject-matter of the award if the same had been the subject-matter of a suit, but does not include any civil court of a grade inferior to such Principal Civil Court, or any Court of Small Causes. 9. Saving. -- Nothing in this Act shall- prejudice any rights which any person would have had of enforcing in India of any award or of availing himself in India of any award if this Act had not been passed; or (b) apply to any award made on an arbitration agreement governed by the law of India. 51. Saving. -- Nothing in this Chapter shal....
X X X X Extracts X X X X
X X X X Extracts X X X X
....has a narrower discretion to refuse to refer the parties to arbitration." 22.22. Yet another alternative argument raised by learned counsel for Doosan India which deserves to be accepted is that in case the contention of learned counsel for GMR Energy that the present arbitration is covered by Part-I is to be accepted then this Court will have no territorial jurisdiction to entertain the present suit for the reason in the jurisdictional para mentioned in the plaint GMR Energy submits that the closest connect of the parties to the present case is Chhattisgarh in India, thus the Court at Delhi is ousted of the territorial jurisdiction to try the suit and pass orders. 22.23. In view of the discussion aforesaid the contentions raised by learned counsel for GMR Energy are rejected and it is held that the arbitration that commenced at Singapore pursuant to Arb.316/16/ACU would fall under Part-II of the Arbitration Act and not Part-I. 23. Issue No. 2: Whether on the basis of pleas in the notice of arbitration issued by Doosan India a case is made out by Doosan India to subject GMR Energy to arbitration with GCEL and GIL? 23.1. Learned counsel for GMR Energy further contends th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the decision in M/s. P.K. Ramaiah (supra). Further, in terms of the decision reported as X v. Y & Z, 4A_128/2008 dated 19th August, 2008 even a guarantor cannot be pulled into an arbitration in case there is no arbitration agreement with the guarantor. Distinguishing the decisions relied upon by learned counsel for Doosan India, it is contended that they were on their peculiar facts and not applicable to the present case. 23.4. Learned counsel for Doosan India countering the submissions of learned counsel for GMR Energy contends that in Chloro Controls (supra) Supreme Court recognized the legal basis to bind a non-signatory to an arbitration agreement which inter alia are implied consent, third party beneficiary, guarantors, assignment or other transfer mechanism of control/rights, apparent authority, piercing of veil, agent principle relationship, agent vendor relations etc. In Jiang Haiying (supra) the High Court of Singapore referring to excerpts from Halsbury's Laws of Singapore held that privity rule, while strict, is not absolute and there are several situations where non-signatories may be considered as party to the arbitration agreement, one such being the corporate ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....porate signage and letterhead. (3) There is no corporate formality maintained between the GMR Infra, GCEL and GMR Energy. (4) At the time of execution of the EPC Agreements, GMR Energy was the 100% holding company of GCEL, which thereafter stands divested in favour of another sister entity, GMR Generation Assets Limited. (5) GMR Infra at the relevant time held 93.5% stake in the plaintiff and thus has a controlling stake in GCEL indirectly. (6) GMR Energy, GCEL and GMR Infra are all part of a family owned business controlled by Mr. G.M. Rao. (7) GMR Energy acknowledged the debt due by its subsidiary, GCEL towards Doosan and also made payments towards the release of such debt." 23.7. Supreme Court in the decision reported in Chloro Controls (Supra) held: "70. Normally, arbitration takes place between the persons who have, from the outset, been parties to both the arbitration agreement as well as the substantive contract underlining (sic underlying) that agreement. But, it does occasionally happen that the claim is made against or by someone who is not originally named as a party. These may create some difficult situations, but....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ignatory as well as the non-signatory parties. 73. A non-signatory or third party could be subjected to arbitration without their prior consent, but this would only be in exceptional cases. The court will examine these exceptions from the touchstone of direct relationship to the party signatory to the arbitration agreement, direct commonality of the subject-matter and the agreement between the parties being a composite transaction. The transaction should be of a composite nature where performance of the mother agreement may not be feasible without aid, execution and performance of the supplementary or ancillary agreements, for achieving the common object and collectively having bearing on the dispute. Besides all this, the court would have to examine whether a composite reference of such parties would serve the ends of justice. Once this exercise is completed and the court answers the same in the affirmative, the reference of even non-signatory parties would fall within the exception afore-discussed. 74. In a case like the present one, where origin and end of all is with the mother or the principal agreement, the fact that a party was non-signatory to one or other....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ined legal relationship between the parties, whether contractual or not, in relation to the differences that may have arisen concerning the subject-matter capable of settlement by arbitration. We have referred to a number of judgments of the various courts to emphasise that in given circumstances, if the ingredients above-noted exist, reference to arbitration of a signatory and even a third party is possible. Though heavy onus lies on the person seeking such reference, multiple and multi-party agreements between the parties to the arbitration agreement or persons claiming through or under such parties is neither impracticable nor impermissible. [Emphasis supplied] 23.8. In Renusagar Power Co. (supra) Supreme Court noting that the concept of lifting the corporate veil is a changing concept and is of expanding horizons held: "64. We are, however, of the opinion that these tests are not conclusive tests by themselves. Our attention was also drawn to the decision of the Madras High Court in Spencer & Co. Ltd. Madras v. CWT [AIR 1969 Mad 359 : 72 ITR 33 : 39 Com Cas 212 : ILR (1969) 2 Mad 450] where Veeraswami, J. held that merely because a company purchases almost the en....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ase of take over of the power station by the State or the Electricity Board. As the facts make it abundantly clear that all the steps for establishing and expanding the power station were taken by Hindalco, Renusagar is wholly owned subsidiary of Hindalco and is completely controlled by Hindalco. Even the day-to-day affairs of Renusagar are controlled by Hindalco. Renusagar has at no point of time indicated any independent volition. Whenever felt necessary, the State or the Board have themselves lifted the corporate veil and have treated Renusagar and Hindalco as one concern and the generation in Renusagar as the own source of generation of Hindalco. In the impugned order the profits of Renusagar have been treated as the profits of Hindalco. 67. In the aforesaid view of the matter we are of the opinion that the corporate veil should be lifted and Hindalco and Renusagar be treated as one concern and Renusagar's power plant must be treated as the own source of generation of Hindalco and should be liable to duty on that basis. In the premises the consumption of such energy by Hindalco will fall under Section 3(1)(c) of the Act. The learned Additional Advocate-General for ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....as it the agent of the English company, and that the English company was not, therefore, assessable to income tax. Renusagar was not the alter ego of Hindalco, it was submitted. On the other hand these English cases have often pierced the veil to serve the real aim of the parties and for public purposes. See in this connection the observations of the Court of appeal in DHN Food Distributors Ltd. v. London Borough of Tower Hamlets [(1976) 3 All ER 462]. It is not necessary to take into account the facts of that case. We may, however, note that in that case the corporate veil was lifted to confer benefit upon a group of companies under the provisions of the Land Compensation Act, 1961 of England. Lord Denning at p. 467 of the report has made certain interesting observations which are worth repeating in the context of the instant case. The Master of the Rolls said at p. 467 as follows: "Third, lifting the corporate veil. A further very interesting point was raised by counsel for the claimants on company law. We all know that in many respects a group of companies are treated together for the purpose of general accounts, balance sheet and profit and loss account. They are treat....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y of the company and attribute the acts of the company to those who are allegedly in direct control of its operation. The starting point of this doctrine was discussed in the celebrated case of Salomon v. A. Salomon and Co. Ltd. (1897) AC 22. Lord Halsbury LC (paragraphs 31-33), negating the applicability of this doctrine to the facts of the case, stated that: ...a company must be treated like any other independent person with its rights and liabilities legally appropriate to itself..., whatever may have been the ideas or schemes of those who brought it into existence. xxxx xxxx xxx xxxx xxxx xxxx 82. The present facts would not be a fit case to pierce the veil, which as enumerated above, must be exercised sparingly by the Courts. Further, for piercing the veil of incorporation, mere ownership and control is not a sufficient ground. It should be established that the control and impropriety by the Air India resulted in depriving the Appellants-workmen herein of their legal rights. As regards the question of impropriety, the Division Bench of the High Court of Delhi in the impugned order dated 02.05.2011, noted that there has been no advertence on ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....in the notice of arbitration, GMR Energy admitted its liability towards Doosan India and secondly during the pendency of the dealings between the parties, GMR Energy held 100% stakes in GCEL though the same were transferred again pending disputes between the parties. 23.14. Though the letter dated 3rd November, 2016 does not form the basis of the notice of arbitration however, since it has been heavily relied upon by learned counsel for GMR Energy it would be appropriate to note contents of the said letter: "November 3, 2016 Ref. No. : Raipur-DP-GH-L-0725 GMR Chhattisgarh Energy Ltd. Raikheda- Village, Tilda-Block, Dist. RAIPUR (C.G.) Pin-493 225 Attention: Mr. S.N. Barde/President C.C :Mr. Madhu Terdal/GMR Group CFO Mr. G.B.S. Raju/BCM Ref.1. [Raipur-DP-GH-L-0699] Ref.2. Standstill Agreement Subject: Corporate Guarantee Resolution Meeting with DPSI This letter is in continuation of the meeting held last week at Mumbai office of GMR Infrastructure Ltd. As we stressed during the meeting, the Contractor sincerely hopes that the prolong....
X X X X Extracts X X X X
X X X X Extracts X X X X
....b Park Raipur PM" 23.15. From the contents of the letter noted above it is evident that though Doosan India stated that the tripartite agreement between GCEL and GMR Energy and Doosan India became null and void on 31st December, 2015 and that the payment obligation was now on the GCEL and GIL by invocation of the corporate guarantee however, the said letter was without prejudice to the rights and remedies available to Doosan India in respect of any breach of agreements, MOUs, Corporate Guarantee and related documentation and agreements. Further whether a tripartite agreement resulting in the two MOUs between Doosan India, GCEL and GMR Energy could be novated by a unilateral letter is a question to be decided on merits during the arbitration and not in the present suit. 23.16. Learned counsel for GMR Energy heavily relied upon clause 23.12 of the agreement between the parties which provided as under: "23.12 Parties Obligation Non-Recourse The Parties have entered into this Agreement entirely on their own behalf, and in no manner for or on behalf of any shareholder of either Party, or any partner, shareholder, officer, director, employee or agent of e....
X X X X Extracts X X X X
X X X X Extracts X X X X
....go by the Arbitral Tribunal. Relying upon the decision in A. Ayyasamy (supra) wherein the Court laid down the non-arbitrability disputes, it is contended that the issue of alter ego does not fall in the category of non-arbitrable disputes hence can be determined by the Arbitral Tribunal. Reliance is also placed on the decision of the Bombay High Court in Integrated Sales (supra) wherein the High Court held that issues which were arbitrable can be gone into by a tribunal in a foreign seat arbitration. It is further contended that notions of international arbitration jurisprudence are different from notions of domestic arbitrability as noted in the book 'International Commercial Arbitration (Second Edition), 2nd edition by Gary B. Born'. 24.3. In Sudhir Gopi (supra) this Court was dealing with the arbitration agreement which falls in Part-I of the Arbitration Act, and held that whether a court will compel any person to arbitrate would have to be examined in the context of the specific provisions of the applicable statute. Though it is universally accepted principle that dispute resolution by arbitration must be encouraged, however, the courts determine the question whether....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nsideration in an application under Section 11 of the Arbitration Act, Category (1) being where the Chief Justice/his designate has to/must decide the issue; Category (2) where the Chief Justice/his designate may choose to decide the issues or leave them to the decision of the Arbitral Tribunal and Category (3) where the Chief Justice/his designate should leave the issues exclusively to the Arbitral Tribunal. Issues falling in the three categories were noted as under:- "22. Where the intervention of the court is sought for appointment of an Arbitral Tribunal under Section 11, the duty of the Chief Justice or his designate is defined in SBP & Co. This Court identified and segregated the preliminary issues that may arise for consideration in an application under Section 11 of the Act into three categories, that is, (i) issues which the Chief Justice or his designate is bound to decide; (ii) issues which he can also decide, that is, issues which he may choose to decide; and (iii) issues which should be left to the Arbitral Tribunal to decide. 22.1. The issues (first category) which the Chief Justice/his designate will have to decide are: (a) Whether the part....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... which rendered the discharge voidable at the instance of the claimant. If the Arbitral Tribunal comes to the conclusion that there was a valid discharge by voluntary execution of a discharge voucher, it will refuse to examine the claim on merits, and reject the claim as not maintainable. On the other hand, if the Arbitral Tribunal comes to the conclusion that such discharge of contract was vitiated by any circumstance which rendered it void, it will ignore the same and proceed to decide the claim on merits." 24.7. In A. Ayyasamy (supra) Supreme Court laid down that though the Arbitration Act does not specify but the courts have held that certain disputes like criminal offences of a public nature, disputes arising out of illegal agreements and disputes relating to status, such as divorce, cannot be referred to arbitration. The Court laid the categories of non-arbitrable disputes being: (i) patent, trademarks and copyright; (ii) antitrust/competition laws; (iii) insolvency/winding up; (iv) bribery/corruption; (v) fraud; and (vi) criminal matters. 24.8. Following the decision in SBP & Co. (supra) and National Insurance Co. Ltd.(supra) Supreme Court in Chloro Controls (supra) he....
X X X X Extracts X X X X
X X X X Extracts X X X X
....age of Section 16 in Part I of the 1996 Act. Thus, there could hardly be any possibility for the Court to take any other view in relation to an application under Section 45 of the 1996 Act. Since, the categorization referred to by this Court in National Insurance Co. Ltd. is founded on the decision by the larger Bench of the Court in SBP & Co., we see no reason to express any different view. The categorization falling under para 22.1 of National Insurance co. case would certainly be answered by the Court before it makes a reference while under para 22.2 of that case, the Court may exercise its discretion and decide the dispute itself or refer the dispute to the Arbitral Tribunal. Still, under the cases falling under para 22.3, the Court is expected to leave the determination of such dispute upon the Arbitral Tribunal itself. But wherever the Court decides in terms of categories mentioned in paras 22.1 and 22.2, the decision of the Court is unreviewable by the Arbitral Tribunal. 131. Another very significant aspect of adjudicating the matters initiated with reference to Section 45 of the 1996 Act, at the threshold of judicial proceedings, is that the finality of the decisio....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed, it shall refer the parties to arbitration." 24.9. Singapore High Court in the decision reported as 2006 SGHC 78 Aloe Vera of America, Inc. v. Asianic Food (S) Pte. Ltd. & Anr. held: "72. In my opinion, the above submissions are misplaced. It is clear from the wording of the section itself that the determination of whether a matter is arbitrable or not is governed by Singapore law. The law of Arizona is irrelevant. As far as Singapore law is concerned, as para 20.149 of Halsbury's points out, no specific subjects have been identified by statute as being or as not being arbitrable. Instead, Halsbury's states: It is generally accepted that issues, which may have public interest elements, may not be arbitrable, for example citizenship or legitimacy of marriage, grants of statutory licences, validity of registration of trade marks or patents, copyrights, winding-up of companies ... Whether a person is the alter ego of a company is an issue which does not have a public interest element. It normally arises in a commercial transaction in which one party is trying to make an individual responsible for the obligations of a corporation. In my judgment....
X X X X Extracts X X X X
X X X X Extracts X X X X
....gories of non-arbitrable disputes as specified in A. Ayyasamy (supra) and the nature of parties to the agreement being distinct from the formal validity of the arbitration agreement and a question of merit as held in Chloro Control (supra) would thus fall in the category (2) laid down by National Insurance Co. Ltd. (supra) even if considering that Doosan India has filed an application under Section 45 before this Court which is without prejudice to its right. Thus, the issue of alter ego based on the facts as noted in the present case and not on fraud can be decided by the Court as well as the Arbitral Tribunal. 25. Issue No. 4: In the present suit whether this Court will form a prima facie opinion on the issue of alter ego or return a finding? 25.1. Learned counsel for GMR Energy contends that the present case deals with a non-party to the agreement, which issue is covered by the decision of the Supreme Court in Chloro Controls (supra) wherein discussing the earlier judgment in Shin-Etsu Chemical (supra), Supreme Court held that the Court must return a final finding in an application under Section 45 of the Arbitration Act. 25.2. Learned counsel for Doosan India however c....
X X X X Extracts X X X X
X X X X Extracts X X X X
....at court to stay the proceedings so far as the proceedings relate to that matter. (2) The court to which an application has been made in accordance with subsection (1) shall make an order, upon such terms or conditions as it may think fit, staying the proceedings so far as the proceedings relate to the matter, unless it is satisfied that the arbitration agreement is null and void, inoperative or incapable of being performed. [emphasis added] 36. Bearing in mind the differences in the regimes governing international arbitration in Singapore and in England, I do not think it will be correct for me to fully take on board the approach of the English courts as set out in Albon and Al-Naimi. The regime in force here gives primacy to the tribunal although, of course, the court still has an important role to play. If I were to hold that, in a situation where the conclusion of the arbitration agreement is in issue, the jurisdiction in s 6(2) to stay the court proceedings would not bite unless I could conclude, on the basis of the usual civil standard, that the arbitration agreement had been entered into, I would be imposing too high a burden on the party seeking the implem....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ing reached that conclusion, the defendants are, prima facie, parties to an arbitration agreement and entitled to make an application for a stay under s 6. Further, I must grant that stay application unless I am satisfied that the arbitration agreement is null and void, inoperative or incapable of being performed. I am satisfied that none of those situations exist here. As Lightman J observed in Albon, the formulation "null and void" means "devoid of legal effect" which would be the result of the agreement being procured by duress, mistake, fraud or waiver. It does not apply to a situation in which no agreement was concluded at all. Further, for an arbitration agreement to be "inoperative", it must have been concluded but for some reason ceased to have legal effect (see Albon at [18])." 25.4. Following Malini Ventura (Supra) in Tomolugen Holding (supra) it was held: "63. The prima facie approach was also the view urged upon us by the amicus curiae, Prof Boo. We agree that a Singapore court should adopt a prima facie standard of review when hearing a stay application under s 6 of the IAA. In our judgment, a court hearing such a stay application should grant a stay in fav....
X X X X Extracts X X X X
X X X X Extracts X X X X
....be seized of jurisdiction, and will be able (and, indeed, on the full merits approach, obliged) to make a full determination on the existence and scope of the arbitration clause; this will deprive the putative arbitral tribunal of its kompetenz-kompetenz. In our view, the strength of the kompetenz-kompetenz principle cannot depend on the arbitrary choice of the claimant as to whether it will pursue its claim by way of court proceedings or by way of arbitration. That undermines the principles of judicial non-intervention and kompetenz-kompetenz which were at the forefront in the drafting of the Model Law and the enactment of the original IAA (see Assoc Prof Ho's remarks at the second reading of the 1994 International Arbitration Bill: Singapore Parliamentary Debates vol 63 at cols 625-626). We should point out that the strain which the English position puts on these principles of judicial non-intervention and kompetenz-kompetenz has not escaped criticism (see Arbitration Law (Robert Merkin gened) (informa, Looseleaf Ed, 15 August 2011 release) at para 8.21, as well as David Joseph QC, Jurisdiction and Arbitration Agreements and their Enforcement (Sweet & Maxwell, 2nd Ed, 2010) (....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... noticed, the Court clearly took the view that the findings returned by the Chief Justice while exercising his judicial powers under Section 11 relatable to Section 8 are final and not open to be questioned by the Arbitral Tribunal. Sections 8 and 45 of the 1996 Act are provisions independent of each other. But for the purposes of reference to arbitration, in both cases, the applicant has to pray for a reference before the Chief Justice or his designate in terms of Section 11 of the 1996 Act. We may refer to the exact terminology used by the larger Bench in SBP & Co. [(2005) 8 SCC 618] in relation to the finality of such matters, as reflected in para 12 of the judgment which reads as under: (SCC pp. 643-44) "12. Section 16 of the Act only makes explicit what is even otherwise implicit, namely, that the Arbitral Tribunal constituted under the Act has the jurisdiction to rule on its own jurisdiction, including ruling on objections with respect to the existence or validity of the arbitration agreement. Sub-section (1) also directs that an arbitration clause which forms part of a contract shall be treated as an agreement independent of the other terms of the contract. It also ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ibunal, the Arbitral Tribunal can turn round and say that the Chief Justice had no jurisdiction or authority to appoint the Tribunal, the very creature brought into existence by the exercise of power by its creator, the Chief Justice. The argument of the learned Senior Counsel, Mr. K.K. Venugopal that Section 16 has full play only when an Arbitral Tribunal is constituted without intervention under Section 11(6) of the Act, is one way of reconciling that provision with Section 11 of the Act, especially in the context of sub-section (7) thereof. We are inclined to the view that the decision of the Chief Justice on the issue of jurisdiction and the existence of a valid arbitration agreement would be binding on the parties when the matter goes to the Arbitral Tribunal and at subsequent stages of the proceeding except in an appeal in the Supreme Court in the case of the decision being by the Chief Justice of the High Court or by a Judge of the High Court designated by him." (Emphasis supplied) We are conscious of the fact that the above dictum of the Court in SBP case [(2005) 8 SCC 618] is in relation to the scope and application of Section 11 of the 1996 Act. It has been he....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ourt in accordance with law would certainly attain finality and would not be open to question by the Arbitral Tribunal, even as per the principle of prudence. It will prevent multiplicity to litigation and reagitating of same issues over and over again. The underlining (sic underlying) principle of finality in Section 11(7) would be applicable with equal force while dealing with the interpretation of Sections 8 and 45. Further, it may be noted that even the judgment of this Court in SBP & Co. takes a view in favour of finality of determination by the Court despite the language of Section 16 in Part I of the 1996 Act. Thus, there could hardly be any possibility for the Court to take any other view in relation to an application under Section 45 of the 1996 Act. Since, the categorization referred to by this Court in National Insurance Co. Ltd. is founded on the decision by the larger Bench of the Court in SBP & Co., we see no reason to express any different view. The categorization falling under para 22.1 of National Insurance co. case would certainly be answered by the Court before it makes a reference while under para 22.2 of that case, the Court may exercise its discretion and deci....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ted under Section 34 of the 1940 Act, it would be incumbent upon the court to decide first of all whether there is a binding agreement for arbitration between the parties to the suit or not. 131.4. Applying the analogy thereof will fortify the view that determination of fundamental issues as contemplated under Section 45 of the 1996 Act at the very first instance by the judicial forum is not only appropriate but is also the legislative intent. Even the language of Section 45 of the 1996 Act suggests that unless the court finds that an agreement is null and void, inoperative and incapable of being performed, it shall refer the parties to arbitration." 25.6. However, in Chloro Controls (supra) the Supreme Court was dealing with a case of reference to the arbitration under Section 45 and not an arbitration which had already been initiated. Carving out the distinction between the two in para 22 of the decision in National Insurance Co. Ltd. (supra) Supreme Court held that the Arbitral Tribunal was also competent to decide the issue including the validity of the arbitration agreement. In a case where the arbitration is not a court referred arbitration it would be thus in the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....its by the parties without going into a full-fledged trial. 26. Issue No. 6: Whether the arbitration against GMR Energy is contrary to Rule 7 of SIAC Rules? 26.1. The last issue raised by GMR Energy is that assuming SIAC Rules, 2016 are applicable to the arbitration even then GMR Energy could not be impleaded as a party without compliance of Rule 7 of SIAC Rules and without entailing an opportunity of hearing to GMR Energy even prior to the constitution of Tribunal. Doosan India self impleaded GMR Energy and thus the objections to GMR Energy to SIAC went unheard. In this regard GMR Energy through its letters dated 21st December, 2016, 13th January, 2017, 15th March, 2017, 20th May, 2017 and 27th May, 2017 objected to the applicability of the arbitration agreement to GMR Energy and its inclusion in the arbitration proceedings which went undetermined by SIAC. Even after the impugned letter dated 8th June, 2017 issued by SIAC, GMR Energy on 13th June, 2017 requested SIAC to first determine its objections which were not determined and compelling GMR Energy to file the present suit. 26.2. Countering the contention of non-invocation of Rule 7 of SIAC Rules, learned counsel for D....