TaxTMI 
TaxTMI 
2020 (10) TMI 1397
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....nd other associated activities. Respondent No. 1 is one of the group companies of Respondent No 2. Respondent No. 2 was running his business, in India, through Respondent No. 1. 4. The aircraft, forming subject matter of the present controversy - which was an ATR 72-500, bearing Manufacturer Serial Number (MSN) 688 - was owned by Respondent No 1. 5. The petitioner proposed to lease the aforesaid aircraft (hereinafter referred to as "the aircraft") from Respondent No 1. The following communications ensued, between the petitioner and the respondent, prior to issuance of the Letter of Intent: (i) On 24th July, 2019, the respondent wrote, to the petitioner, acknowledging the desire, of the petitioner, to lease the MSN 688 aircraft, with effect from 1st October, 2019, for a period of 3 years. Lease rent was fixed at Rs. 37 lakhs per month, plus 5% GST, for the first 18 months, and Rs. 40 lakhs per month, plus 5% GST for the remaining 18 months. Additionally, the letter noted that the petitioner would have to pay Maintenance Reserves, to the respondent, @ US $400 per flying cycle/flying hour. (ii) On 19th August, 2019, the respondent wrote, to the petitioner, requiring the petition....
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....Proposal and the underlying documents for the contemplated transaction shall be governed by the laws of India without regard to conflict of laws principles. Lessee and Lessor agree to submit to the exclusive jurisdiction of the courts located in Singapore with regard to any claim of matter arising under or in connection with this Proposal or the Lease Documentation. The English-language shall be used in all documents and proceedings." 8. On 7th September, 2019, the respondent wrote to the petitioner, stating that it was confident of working with the DGCA to get the CoA issued for the aircraft. 9. On 12th November, 2019, a Lease Deed was executed, between the petitioner and the respondent. According to the petitioner, this Lease Deed was superseded by a subsequent Lease Deed, executed on 9th December, 2019. The respondent, however, refutes the submission, by pointing out that the Schedules to the Lease Deed dated 9th December, 2019, were not signed by the parties. For the purposes of this judgment, it would hardly matter whether one refers to the clauses of the first, or the second Lease Deed. Having said that, I am inclined to agree with the submission, of Mr. Gautam Narayan, lea....
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....est with the respondent. Clause 6 required the respondent to deliver, and the petitioner to accept, the aircraft, with a current and valid COR, issued by the IOMAR. Acceptance of the aircraft was, as per Clause 6.2, to be by way of execution of a Delivery Acceptance Certificate, in accordance with Schedule II to the Lease Deed. Clause 7 provided for the modes of termination of the Lease Deed, whereas Clause 8 stipulated the rent payable, and the date from which it would be payable. 14. The petition avers that the petitioner had paid, to the respondent, US $ 336,000 towards Security Deposit, Lease Rent, till 15th March, 2020, totalling US $ 112,000, and US $ 26,000 towards the CDSS Kit. 15. On 4th March, 2020, the petitioner wrote to the respondent, requiring for confirmation of the final date, by which the aircraft would be delivered. The respondent replied, on 5th March, 2020, alleging that delay in delivery of the aircraft was because of the delay, on the part of the petitioner, in finalising the painting, design, etc., for the livery of the aircraft. The petitioner responded, on 5th March, 2020 itself, stating that painting was the responsibility of the respondent, and pointin....
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...., and was ready for inspection and acceptance by the petitioner on 1st December, 2019, as per the terms of the Lease Agreement. Obtaining COR and COA, it was further asserted, was the responsibility of the petitioner, and not of the respondent. The communication alleged default, on the part of the petitioner, in payment of Security Deposit and Advance Lease Rent, as per the terms of the Lease Agreement. The delay in completion of the work, as desired by the petitioner, on the aircraft, it was further alleged, continued owing to the internal decision-making process of the petitioner. This delay, according to the communication, continued till March, 2020. The petitioner, it was alleged, became liable to pay Maintenance Reserves, to the respondent, w.e.f. 1st February, 2020. Thereafter, vide email dated 5th March, 2020, it was alleged that the petitioner had unilaterally terminated the Lease Agreement, thereby obviating the necessity of any termination notice having to be issued by the respondent. In these circumstances, it was alleged that the petitioner was liable to pay Rs. 19,20,460/-, to the respondent. 19. Vide a reply email dated 10th April, 2020, the petitioner denied the ass....
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....nd special equities are overwhelmingly in its favour. Denial of interim relief, as sought in the petition, it is further asserted, would result in irreparable injury to the petitioner. 24. The petition prays for (i) a restraint, against the respondents creating any third party interest/right/title on the aircraft, or from selling, transferring or encumbering the aircraft in any manner, (ii) a restraint, against the respondents, from taking the aircraft out of India, and (iii) a direction, to the respondents, to deposit US $ 530,000 (equivalent to Rs. 4,01,05,736/-) in an escrow account. 25. I have heard Mr. Gautam Narayan, learned Counsel for the petitioner, and Mr. Arvind Kamath, learned Senior Counsel for the respondent, at length. Rival Submissions and Findings Re. Territorial Jurisdiction 26. A preliminary objection was raised, by Mr. Arvind Kamath, learned Senior Counsel for the respondents, to the effect that this Court did not have the territorial jurisdiction to deal with this petition. As the objection goes to the root of the competence, of this Court, to entertain the petition on merits, it is necessary to examine this objection, before proceeding further, if n....
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....te to reproduce Section 2(2) and 20 of the 1996 Act, thus: "(2) This Part shall apply where the place of arbitration is in India: Provided that subject to an agreement to the contrary, the provisions of sections 9, 27 and clause (a) of sub-section (1) and sub-section (3) of section 37 shall also apply to international commercial arbitration, even if the place of arbitration is outside India, and an arbitral award made or to be made in such place is enforceable and recognised under the provisions of Part II of this Act." "International commercial arbitration" is defined, in clause (f) of Section 2 of the 1996 Act, thus: "(f) "international commercial arbitration" means an arbitration relating to disputes arising out of legal relationships, whether contractual or not, considered as commercial under the law in force in India and where at least 1 of the parties is - (i) an individual who is a national of, or habitually resident in, any country other than India; or (ii) a body corporate which is incorporated in any country other than India; or (iii) an association or a body of individuals whose central management and control is exercised in any country other than India; or ....
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....o to Section 2(2) does not, therefore, he submits, need to be "express"; it can also be implied. 36. Mr. Kamath also submits that the petitioner is not without a remedy in Singapore, and invites attention, in this context, to Section 12A of the International Arbitration Act, which empowers the Court to order interim measures. 37. In response to the objection, of Mr. Kamath, to the territorial jurisdiction of this Court to adjudicate on the present petition, Mr. Gautam Narayan advanced the following submissions: (i) The aircraft was located at Hyderabad. It was required to be registered with the DGCA, and operated in accordance with the Aircraft Act, 1934, Aircraft Rules, 1937 and the CAR issued by the DGCA. The most efficacious remedy, available to the petitioner was, therefore, by means of recourse to the jurisdiction of this Court under Section 9 of the 1996 Act. (ii) The proviso to Section 2(2) conferred Section 9 jurisdiction on this Court, even in respect of foreign seated arbitrations. This proviso was introduced, pursuant to the recommendations of the 246th Report of the Law Commission, intended to prevent dissipation of assets located in India. Mr. Gautam Narayan took....
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..... GMR Male International Airport Pte Ltd (2013) SGCA 16 and SSL International plc v. TTK LIG Ltd (2011) EWCA Civ 1170, which denied interim relief in cases in which an unacceptable degree of supervision in a foreign land would be involved. (ix) Courts in Singapore exercised the jurisdiction, to secure assets located abroad only if they had in personam jurisdiction over the parties, i.e., where the parties had presented themselves before Courts in Singapore. For this purpose, Mr. Gautam Narayan relied on Five Ocean Corporation v. Cingler Ship Pte Ltd. (2015) SGHC 311 As such, without first approaching the SIAC, it was not possible for the petitioner to petition the Courts at Singapore. (x) Section 12A of the International Arbitration Act did not apply at the pre-arbitration stage. Mr. Gautam Narayan relies, for this purpose, on the decision in Maldives Airport Co. Ltd (2013) SGCA 16. He also placed reliance on the judgment, of a Division Bench of the High Court of Andhra Pradesh in National Aluminium Co. Ltd v. Gerald Metals (2004) 2 Arb LR 382 (DB). Mr. Gautam Narayan also placed reliance on the judgments of this Court in Raffles Design International India Pvt. Ltd. v. Educomp....
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....sdiction to hear and decide the present case, and not whether the petitioner has any other alternate, or efficacious, remedy available with it. The plea of alternate remedy predicates the existence of jurisdiction and, consequently, the existence of a remedy before the Court which has been petitioned. There can be no question of an alternate remedy, if the remedy that has been invoked itself does not exist, in the first place. 42. I do not deem it necessary, however, to refer to the commentary on "International Commercial Arbitration" by Gary Born, or to Articles 19 and 17J of the UNCITRAL Model. Arbitration law, in India, is codified, in the form of the 1996 Act. Jurisdiction, in a Court, to adjudicate a petition under Section 9 of the 1996 Act, must, therefore, emanate from the 1996 Act itself. Any reference to the UNCITRAL Model, or to any textual commentaries may, if at all, be justified only if there is any ambiguity in any of the provisions of the 1996 Act, which requires resolution. 43. The provision, in the 1996 Act, which most fundamentally impacts the issue at hand is, unquestionably, Section 2(2). One has, however, also to take note of the definition of "Court", as con....
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....hal v. Chhatisgarh Investment Ltd, (2015) 12 SCC 225, Indus Mobile Distribution Pvt. Ltd v. Datawind Innovations Pvt. Ltd (2017) 7 SCC 678, Brahmani River Pellets Ltd. v. Kamachi Industries Ltd., BGS SGS Soma JV v. NHPC Ltd (2020) 4 SCC 234 and Mankastu Impex Pvt. Ltd. v. Airvisual Ltd. Precedential Analysis and the 246th Report of the Law Commission of India 45. BALCO (2012) 9 SCC 552: 45.1 BALCO (2012) 9 SCC 552, rendered by a Constitution Bench, emanated from Section 2(2) of the 1996 Act, prior to the insertion, in the said sub-Rule, of the proviso thereto. Section 2(2), as it stood at that time, therefore, made the provisions of Part I of the 1996 Act applicable "where the place of arbitration is in India". There was a difference, in the views of the Hon'ble Judges constituting a two-Judge Bench, resulting in the appeals, before it, being directed to be placed before the Hon'ble Chief Justice, for being listed before another Bench Bharat Aluminium Co. v. Kaiser Aluminium Technical Services Inc., (2012) 9 SCC 649. The appeal was placed before a 3-Judge bench which, vide its order dated 1st November, 2011 Bharat Aluminium Co. v. Kaiser Aluminium Technical Services Inc....
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.... however, dealt with an application under Section 9 of the 1996 Act. The facts, in this case, also deserve to be noticed. Bharti Shipyard Ltd. (hereinafter referred to as "BSL") entered into to shipbuilding contracts with Ferrostaal AG (hereinafter referred to as "FAG"), whereunder BSL was to construct vessels and deliver them to FAG. BSL and FAG agreed to settlement of the dispute, by arbitration, under the Rules of the London Maritime Arbitrators Association (LMAA), in London. Two requests, for arbitration of the disputes which arose between them, were submitted by FAG, in accordance with the rules of the LMAA. 45.5 During the pendency thereof, FAG filed applications, under Section 9 of the 1996 Act, seeking injunction against encashment of bank guarantees, issued under the contracts. The learned District Judge, Mangalore, granted ex parte ad interim injunction, against encashment of the bank guarantee and, later, vide judgment dated 14th January, 2011, allowed the application under Section 9. The judgment of the learned District Judge was, however, set aside by the High Court, vide judgment dated 9th September, 2011. BSL appealed to the Supreme Court. 45.6 Among the issues, ....
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....rmally the "law of the seat or place where the arbitration is held" (in para-76 of the report). The Constitution Bench went on to approve the theory, postulated in Redfern and Hunter on International Arbitration Blackaby, Partasides, Redfern and Hunter (Eds.), Redfern and Hunter on International Arbitration (5th Edn, Oxford University Press, Oxford/New York 2009)., that "the concept that an arbitration is governed by the law of the place in which it is held, which is the 'seat' (or 'forum' or locus arbitri) of the arbitration, is well established in both the theory and practice of international arbitration. Reliance was also placed on the Geneva Protocol, 1923, which stated that the arbitral procedure, including the Constitution of the Arbitral Tribunal, would be governed by the will of the parties and by the law of the country in whose territory the arbitration takes place. (iii) The omission of the word "only" in Section 2(2) of the 1996 Act, it was held, did not detract from the territorial scope of the application of Part I thereof. Accordingly, it was held (in para 78 of the report) that Part I would not apply to arbitrations which did not take place in India....
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....different countries. In these circumstances, it is by no means unusual for an Arbitral Tribunal to hold meetings - or even hearings - in a place other than the designated place of arbitration, either for its own convenience or for the convenience of the parties or their witnesses…. It may be more convenient for an Arbitral Tribunal sitting in one country to conduct a hearing in another country - for instance, for the purpose of taking evidence. In such circumstances, each move of the Arbitral Tribunal does not of itself mean that the seat of arbitration changes. The seat of the arbitration remains the place initially agreed by or on behalf of the parties." This, in our view, is the correct depiction of the practical considerations and the distinction between "seat" [Sections 20(1) and 20(2)] and "venue" [Section 20(3)]. We may point out here that the distinction between "seat" and "venue" would be quite crucial in the event, the arbitration agreement designates a foreign country as the "seat"/"place" of the arbitration and also select the Arbitration Act, 1996 as the curial law/law governing the arbitration proceedings. It would be a matter of construction of the individual ....
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.... have to be done by the courts of the country in which the arbitration is being conducted". Such a court, alone, it was held, was the "supervisory court possessed of the power to annul the award". (viii) Thereafter, from para 155 of the report, the Supreme Court addressed, squarely, the issue of "interim measures, etc. by the Indian courts where the seat of arbitration is outside India" - precisely the issue which arises in the present case. The very first submission, advanced to support the existence of jurisdiction, in Indian courts, to grant interim relief, under Section 9, even where the seat of arbitration was outside India, was the precise submission urged by Mr. Gautam Narayan before me, i.e., "that in such circumstances, the parties would be left remediless" as "no application for interim relief would be available under Section 9 of the Arbitration Act, 1996, in an arbitration seated outside India". The Constitution Bench was, therefore, exhorted to hold that "courts in India have the jurisdiction to take necessary measures for preservation of assets and/or to prevent dissipation of assets", even in such cases. The enunciation of the law, to the said effect, in Bhatia Int....
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....e remedy was pursued in England to its logical conclusion. Merely because the remedy in such circumstances may be more onerous from the viewpoint of one party is not the same as a party being left without a remedy. Similar would be the position in cases where parties seek interim relief with regard to the protection of the assets. Once the parties have chosen voluntarily that the seat of the arbitration shall be outside India, they are impliedly also understood to have chosen the necessary incidents and consequences of such choice. We, therefore, do not find any substance in the submissions made by the learned counsel for the appellants, that if applicability of Part I is limited to arbitrations which take place in India, it would leave many parties remediless. 164. If that be so, it is a matter to be redressed by the legislature." (Emphasis supplied) No consideration of sympathy, at the petitioner being rendered "remediless" can operate to confer jurisdiction, on this Court, if no such jurisdiction exists under the statutory dispensation in force. In deciding the sustainability of the objection, of Mr. Kamath, to the territorial jurisdiction of this Court to entertain the pre....
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....20 of the Code of Civil Procedure, 1908 (CPC), "there remains no doubt that the Chief Justice of the designated Judge of the Rajasthan High Court has jurisdiction in the matter". Even so, it noted (in para 31 of the report), "the question is, whether parties by virtue of Clause 18 of the agreement have agreed to exclude the jurisdiction of the courts at Jaipur or, in other words, whether in view of Clause 18 of the agreement, the jurisdiction of the Chief Justice of the Rajasthan High Court has been excluded". The Supreme Court proceeded to answer the question, thus (in para 22 of the report): "For answer to the above question, we have to see the effect of the jurisdiction clause in the agreement which provides that the agreement shall be subject to jurisdiction of the courts at Kolkata. It is a fact that whilst providing for jurisdiction clause in the agreement the words like "alone", "only", "exclusive" or "exclusive jurisdiction" have not been used but this, in our view, is not decisive and does not make any material difference. The intention of the parties by having Clause 18 in the agreement - is clear and unambiguous that the courts at Kolkata shall have jurisdiction which ....
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.... if Part I was expressly included "it would only mean that the parties have contractually imported from the Arbitration Act, 1996, those provisions which are concerned with the internal conduct of their arbitration and which are not inconsistent with the mandatory provisions of the [foreign] Procedural Law/Curial Law." The same cannot be used to confer jurisdiction on an Indian Court. However, the decision in BALCO was expressly given prospective effect and applied to arbitration agreements executed after the date of the judgment. 41. While the decision in BALCO is a step in the right direction and would drastically reduce judicial intervention in foreign arbitrations, the Commission feels that there are still a few areas that are likely to be problematic. (i) Where the assets of a party are located in India, and there is a likelihood that that party will dissipate its assets in the near future, the other party will lack an efficacious remedy if the seat of the arbitration is abroad. The latter party will have two possible remedies, but neither will be efficacious. First, the latter party can obtain an interim order from a foreign Court or the arbitral tribunal itself and file ....
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....rcial arbitration. These changes would become apparent from the amended Section 2(1)(e), which already stands reproduced in para 43 supra. (ii) The Law Commission Report also contains the following recommendations, for amendments in Section 2 of the 1996 Act: "(v) In sub-section (1), after clause (h), insert clause "(hh) "seat of the arbitration" means the juridical seat of the arbitration". [NOTE: This definition of "seat of arbitration" is incorporated so as to make it clear that "seat of arbitration" is different from the venue of arbitration. Section 20 has also been appropriately modified.] (vi) In sub-section (2), add the word "only" after the words "shall apply" and delete the word "place" and insert the word "seat" in its place. [NOTE: this amendment ensures that an Indian Court can only exercise jurisdiction under Part I where the seat of the arbitration is in India. To this extent, it overrules Bhatia International v. Bulk Trading S.A. and Anr., (2002) 4 SCC 105, and re-enforce the "seat centricity" principle of Bharat Aluminium Company and Ors. etc. v. Kaiser Aluminium Technical Service, Inc., (2012) 9 SCC 552] Also insert the following proviso "Provided that....
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....einafter. 48. B.E. Siomese Von Staraburg Niedenthal (2015) 12 SCC 225 48.1. In the context of the controversy before me, this judgment, though brief, assumes considerable importance. An agreement, for raising mines, located in Goa, was executed, between the appellant (hereinafter referred to as "BES") and the respondent (hereinafter referred to as "CIL"), whereunder CIL was the exclusive purchaser of ore, mined by BES. Clause 13 of the raising agreement expressly stipulated that "the courts at Goa shall have exclusive jurisdiction". Disputes arose, resulting in CIL filing an application, under Section 9 of the 1996 Act, for interim protection, in the Court of the District Judge, Raipur. BES questioned the jurisdiction of the District Judge, Raipur, to adjudicate the lis, on the ground that the mines were located in Goa, the agreement was executed in Goa and the second respondent was residing at Goa. CIL contended, per contra, that the working of the company was at Raipur and that the cause of action also arose in Raipur. The District Judge, Raipur, rejected the objection of BES. Aggrieved thereby, BES appealed to the Chhattisgarh High Court. The High Court directed the District ....
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....hin the jurisdiction of which no part of the cause of action had arisen. This Court opined that only courts of Delhi, Chennai or Amritsar, would have jurisdiction in the matter and that, therefore, the petitioner had correctly filed the Section 9 petition in this Court. This Court proceeded to confirm the interim order dated 22nd September, 2015 and also disposed of the Section 11 petition, by appointing Justice S.N. Variava, a learned retired Judge of the Supreme Court, as the sole arbitrator. 49.4. Indus challenged this judgment, before the Supreme Court. The Supreme Court quoted extensively from BALCO (2012) 9 SCC 552, and reproduced, with approval, the following passage from the judgment of the Court of Appeal, England, in A v. B (on which BALCO (2007) 1 All ER (Coram) 591 : (2012) 9 SCC 552, too, relied): "... an agreement as to the seat of an arbitration is analogous to an exclusive jurisdiction clause. Any claim for a remedy ... as to the validity of an existing interim or final award is agreed to be made only in the courts of the place designated as the seat of arbitration." 49.5. The Supreme Court endorsed the view, earlier expressed in Enercon (India) Ltd v. Enercon....
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....ies to exclude all other courts. For an exhaustive analysis of the case law, see Swastik Gases (P) Ltd. v. Indian Oil Corpn. Ltd., (2013) 9 SCC 32. This was followed in a recent judgment in B.E. Simoese Von Staraburg Niedenthal v. Chhattisgarh Investment Ltd., (2015) 12 SCC 225. Having regard to the above, it is clear that Mumbai courts alone have jurisdiction to the exclusion of all other courts in the country, as the juridical seat of arbitration is at Mumbai. This being the case, the impugned judgment is set aside. The injunction confirmed by the impugned judgment will continue for a period of four weeks from the date of pronouncement of this judgment, so that the respondents may take necessary steps under Section 9 in the Mumbai Court. The appeals are disposed of accordingly." (Emphasis supplied) 50. Brahmani River Pellets 50.1. The Supreme Court was seized, in this case, with the question of whether an application for appointment of an arbitrator, under Section 11(6) of the 1996 Act, would lie before the Madras High Court, despite the venue of arbitration having been fixed as Bhubaneswar, in the agreement between the parties. 50.2. The agreement related to sale of 40,000....
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....other courts. In the present case, the parties have agreed that the "venue" of arbitration shall be at Bhubaneswar. Considering the agreement of the parties having Bhubaneswar as the venue of arbitration, the intention of the parties is to exclude all other courts. As held in Swastik Gases (P) Ltd. v. Indian Oil Corpn. Ltd., (2013) 9 SCC 32: (2013) 4 SCC (Civ) 157, non-use of words like "exclusive jurisdiction", "only", "exclusive", "alone" is not decisive and does not make any material difference. 19. When the parties have agreed to have the "venue" of arbitration at Bhubaneswar, the Madras High Court erred in assuming the jurisdiction under Section 11(6) of the Act. Since only the Orissa High Court will have the jurisdiction to entertain the petition filed under Section 11(6) of the Act, the impugned order is liable to be set aside." (Emphasis supplied) 51. BGS SGS Soma JV (2020) 4 SCC 234 51.1. This was a batch of three Civil Appeals, emanating from three petitions, under Section 34 and, thereafter, three appeals under Section 37, of the 1996 Act. Two issues arose before the Supreme Court, of which one, alone, is relevant for our purpose. These issues were (i) the maintain....
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....f the Arbitral Tribunal had taken place at New Delhi, and the award was also posted in New Delhi, New Delhi was the "seat" of the arbitral proceedings between the parties. Even if it were to be assumed that both New Delhi and Faridabad had jurisdiction, it was contended that, New Delhi having been chosen by the parties, the Section 34 petition would necessarily have to be filed before the court at New Delhi. Once the venue of the arbitral proceedings had been fixed between the parties, such venue was liable to be regarded as the "seat" of arbitration, for which purpose reliance was placed on the judgment of the Constitution Bench in BALCO (2012) 9 SCC 552 The subsequent judgment of the Supreme Court in U.O.I. v. Hardy Exploration & Production (India) Inc. (2019) 13 SCC 472, which suggested otherwise was, it was submitted, wrongly decided. 51.5. Similar submissions were advanced by learned counsel appearing on behalf of the appellant in the other two appeals. 51.6. NHPC contended, per contra, that the arbitration clause, in the contract between the parties, did not expressly state that New Delhi, or Faridabad, was the "seat" of the Arbitral Tribunal. It merely referred to a conv....
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....established in the international instruments, namely the New York Convention of 1958 and the UNCITRAL Model Law of 1985. It is true that the terms "seat" and "place" are often used interchangeably. In Redfern and Hunter on International Arbitration (Para-3.51), the seat theory is defined thus: 'The concept that an arbitration is governed by the law of the place in which it is held, which is the "seat" (or "forum" or locus arbitri) of the arbitration, is well established in both the theory and practice of international arbitration. In fact, the Geneva Protocol, 1923 states: '2. The arbitral procedure, including the constitution of the Arbitral Tribunal, shall be governed by the will of the parties and by the law of the country in whose territory the arbitration takes place.' The New York Convention maintains the reference to 'the law of the country where the arbitration took place' [Article V(1)(d)] and, synonymously to 'the law of the country where the award is made' [Articles V(1)(a) and (e)]. The aforesaid observations clearly show that the New York Convention continues the clear territorial link between the place of arbitration and the law governi....
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....he Arbitration and Conciliation Act, 1996" (August, 2014) (hereinafter referred to as "the Law Commission Report, 2014"), under which Sections 20(1) and (2) would refer to the "seat" of the arbitration, and Section 20(3) would refer only to the "venue" of the arbitration. Given the fact that when parties, either by agreement or, in default of there being an agreement, where the Arbitral Tribunal determines a particular place as the seat of the arbitration under Section 31(4) of the Arbitration Act, 1996, it becomes clear that the parties having chosen the seat, or the Arbitral Tribunal having determined the seat, have also chosen the courts at the seat for the purpose of interim orders and challenges to the award. 49. Take the consequence of the opposite conclusion, in the light of the facts of a given example, as follows. New Delhi is specifically designated to be the seat of the arbitration in the arbitration clause between the parties. Part of the cause of action, however, arises in several places, including where the contract is partially to be performed, let us say, in a remote part of Uttarakhand. If concurrent jurisdiction were to be the order of the day, despite the seat ....
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....ovided for arbitration to be conducted in accordance with the Rules of the ICC in Paris (a supranational body of rules), a provision that "the venue of arbitration shall be London, United Kingdom" did amount to the designation of a juridical seat.' In para 54, it is further observed as follows: 'There was a little debate about the possibility of the issues relating to the alleged submission by the claimants to the jurisdiction of the High Court of Delhi being heard by that Court, because it was best fitted to determine such issues under the Indian law. Whilst I found this idea attractive initially, we are persuaded that it would be wrong in principle to allow this and that it would create undue practical problems in any event. On the basis of what I have already decided, England is the seat of the arbitration and since this carries with it something akin to an exclusive jurisdiction clause, as a matter of principle the foreign court should not decide matters which are for this Court to decide in the context of an anti-suit injunction.'" (emphasis in original) 53. In Indus Mobile Distribution (P) Ltd. v. Datawind Innovations (P) Ltd., (2017) 7 SCC 678: (2017) 3 SC....
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....award at that place. This language has to be contrasted with language such as "tribunals are to meet or have witnesses, experts or the parties" where only hearings are to take place in the "venue", which may lead to the conclusion, other things being equal, that the venue so stated is not the "seat" of arbitral proceedings, but only a convenient place of meeting. Further, the fact that the arbitral proceedings "shall be held" at a particular venue would also indicate that the parties intended to anchor arbitral proceedings to a particular place, signifying thereby, that that place is the seat of the arbitral proceedings. This, coupled with there being no other significant contrary indicia that the stated venue is merely a "venue " and not the "seat" of the arbitral proceedings, would then conclusively show that such a clause designates a "seat" of the arbitral proceedings. In an international context, if a supranational body of rules is to govern the arbitration, this would further be an indicia that "the venue", so stated, would be the seat of the arbitral proceedings. In a national context, this would be replaced by the Arbitration Act, 1996 as applying to the "stated venue", whi....
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....ertheless, continue to apply. The beneficial reach of this proviso was, however, conditioned by the caveat that there should be no "agreement to the contrary". It is in the awareness of this proviso that Mr. Kamath has, consciously, sought to contend that the second sentence in Clause 22.1 of the Lease Deed constituted such an "agreement to the contrary". Whether it does, or does not, is examined, in detail, hereinafter. 53. Mankastu Impex 53.1. To a case covered by the proviso to Section 2(2) of the 1996 Act, this judgment assumes especial significance. 53.2. The Supreme Court was concerned, here, with a petition, under Section 11 (6) of the 1996 Act, seeking appointment of an arbitrator. A Memorandum of Understanding (MOU) was executed, between the petitioner Mankastu Impex Pvt. Ltd. (hereinafter referred to as "Mankastu") and the respondent Airvisual. Ltd. (hereinafter referred to as "Airvisual"), whereunder Airvisual agreed to sell, to Mankastu, air quality monitors, for onward sale. Mankastu was appointed as the exclusive distributor, for sale of the products within India. Disputes surfaced, leading to the filing, by Mankastu, before this Court, of a petition, under Secti....
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....whether "in view of Clause 17.2 of the MOU ... The parties have agreed that the seat of arbitration is in Hong Kong and whether this Court lacks jurisdiction to entertain the present petition filed under Section 11 of the Arbitration and Conciliation Act, 1996". It appears that, while using the expression "this Court", the Supreme Court essentially intended to refer to the High Court of Delhi. 53.6. The Supreme Court observed, relying on Enercon India (2014) 5 SCC 1, that the receipt of arbitration was a vital aspect of any arbitration proceedings, and that its significance was "that it determines the applicable law when deciding the arbitration proceedings and arbitration procedure as well as judicial review over the arbitration award". It was "all about which court would have the supervisory power over the arbitration proceedings". (in para 20 of the report) 53.7. While proceeding to hold that the expressions "seat of arbitration" and "venue of arbitration" were not interchangeable, the Supreme Court held that, on a plain reading of the arbitration agreement between Mankastu and Airvisual, it was "clear that the reference to Hong Kong as "place of arbitration" is not a simple....
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....ment Act, 2015 (w.e.f. 23-10-2015), a proviso has been added to Section 2(2) of the Act as per which, certain provisions of Part I of the Act i.e. Section 9 - interim relief, Section 27 - court's assistance for evidence, Section 37(1)(a) - appeal against the orders and Section 37(3) have been made applicable to "international commercial arbitrations" even if the place of arbitration is outside India. Proviso to Section 2(2) of the Act reads as under: "2. Definitions -- (1) ***** (2) Scope.--This Part shall apply where the place of arbitration is in India: Provided that subject to an agreement to the contrary, the provisions of Sections 9, 27 and clause (a) of subsection (1) and sub-section (3) of Section 37 shall also apply to international commercial arbitration, even if the place of arbitration is outside India, and an arbitral award made or to be made in such place is enforceable and recognised under the provisions of Part II of this Act." It is pertinent to note that Section 11 is not included in the proviso and accordingly, Section 11 has no application to "international commercial arbitrations" seated outside India. 27. The words in Clause 17.1, "without regar....
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....s the "seat of arbitration". 58. With the introduction of this proviso, the fixation of Singapore as the "place" or the "seat" of arbitration would not, ipso facto, divest this Court of Section 9 jurisdiction. Such divestiture would occur only if there is any "agreement to the contrary". The submission of Mr. Kamath is that Clause 22.1, specifically the second sentence in the said Clause, which stipulates that "the parties shall submit to the exclusive jurisdiction of the courts of Singapore", constitutes "agreement to the contrary", within the meaning of the proviso to Section 2(2). 59. I must admit that, at first glance, I was inclined to accept this submission of Mr. Kamath. Presented as it was, it was undoubtedly attractive. A deeper analysis, however, convinced me to decide otherwise. 60. There is a qualitative, an unmistakable, difference, between the jurisdiction exercised by a Court under Section 9, and the jurisdiction exercised by the Court under other provisions of the 1996 Act, such as Section 11, 34 and 36. Section 9 is available at the pre-arbitration stage, before any arbitral proceedings, and could be subject to supervision by any judicial forum, have commenced. ....
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....at Section 12A of the International Arbitration Act would not readily enable the petitioner to seek interim relief, at the pre-arbitral stage, from Singapore courts. In the first place, Section 12A does not indicate, expressly or by necessary implication, that it would apply at the pre-arbitral stage. For ready reference, Section 12A may be reproduced as under: "Court-orders interim measure 12A.- (1) This section shall apply in relation to an arbitration - (a) to which this Part applies; and (b) irrespective of whether the place of arbitration is in the territory of Singapore. (2) Subject to subsections (3) to (6), for the purpose of and in relation to an arbitration referred to in subsection (1), the High Court or a Judge thereof shall have the same power of making an order in respect of any of the matters set out in section 12(1)(c) to (i) as it has for the purpose of and in relation to an action or a matter in the court. (3) The High Court or a Judge thereof may refuse to make an order under subsection (2) if, in the opinion of the High Court or Judge, the fact that the place of arbitration is outside Singapore or likely to be outside Singapore when it is designate....
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....ake orders in aid of arbitrations that were seated in Singapore and overseas. However, I agree with Ms. Ang that if the seat of the arbitration is in Singapore and the assets are overseas, the court would have the power to protect or preserve assets and evidence situated outside Singapore. Indeed, the language of s. 12A is wide enough to confer such a power on the High Court. This exercise of power to grant interim measures is not unlike the exercise of the court's powers and jurisdiction in granting an injunction that covered assets outside Singapore provided the court has in personam jurisdiction over the parties to the local proceedings." 64. Accession, by this Court, to the submissions of Mr. Kamath, would, therefore, justify the apprehension, expressed by the Law Commission, regarding the deleterious consequences of excluding, in the case of foreign-seated arbitrations, the applicability of Section 9 of the 1996 Act. 65. There is yet another way of looking at the issue. What is required, by the proviso to Section 2(2) of the 1996 Act, in order to render the proviso inapplicable in a particular case, is an "agreement to the contrary". The agreement, which would exclude th....
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....egs the issue. The question is not whether the agreement to the contrary is express or implied - indeed, it may be either - but whether there is an agreement to the contrary. The expression "subject to any agreement to the contrary" was understood, in Phonogram Ltd v. Lane (1981) 3 All ER 182, as meaning "unless otherwise agreed". Read in the context of the proviso to Section 2(2), it would have to be seen whether, by Clause 22.1, the petitioner and the respondent had "otherwise agreed", i.e., agreed to exclude the applicability of Section 9 of the 1996 Act. Ex facie, I am unable to convince myself that the answer to this question can be in the affirmative. 69. The Lease Deed, significantly, was executed much after the introduction of the proviso in Section 2(2) of the 1996 Act, in 2019. It cannot be reasonably assumed that the contract, of this magnitude, would have been executed without a thorough study of the law, the statutory provisions, and without obtaining appropriate legal advice. If the parties desired to contract themselves out of Section 9 of the 1996 Act, therefore, the Lease Deed ought, specifically, to have said so. There is, however, no such a recital in the Lease ....
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....ment to the contrary", within the meaning of the proviso to Section 2(2) of the 1996 Act. 72. The above view resonates with the opinion expressed by the Division Bench of the High Court of Bombay in Heligo Charters (2018) 5 AIR Bom R 317, to the effect that "operation of provisions of Section 9 cannot be excluded in absence of a specific agreement to the contrary" (in para 16 of the report). I express my respectful agreement therewith. 73. Mr. Kamath also sought to submit that, in any event, this Court would have no jurisdiction to entertain the present petition, is no part of the cause of action has arisen within its jurisdiction. I am not inclined to accept this submission. The respondent having chosen not to traverse the averments, in the petition, by filing any counter affidavit, the Court has to proceed by treating the averments as unrebutted. It is specifically averred, in the petition, that the Lease Deed, dated 9th December, 2019, was executed at New Delhi. It is also averred (in para 4.4.15 of the petition), thus: "Proceeding on the basis of the promises and commitments given by the Respondents to the Petitioner, the Petitioner as the Lessee and Respondent No. 1 as the....
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....ated 9th December, 2019. 75. In any event, there being no dispute about the fact that the Lease Deed dated 9th December, 2019 was signed by the parties at New Delhi, it cannot, in my view, be justifiably contended, by the respondent, that no part of the cause of action arose within the jurisdiction of this Court. This contention of Mr. Kamath, therefore, stands rejected. 76. For all these reasons, I am of the opinion that the present petition is maintainable before this Court, and reject, therefore, the objection of want of territorial jurisdiction, as advanced by Mr. Kamath. On Merits 77. On merits, Mr. Gautam Narayan submits that, till date, the aircraft has not been delivered, by the respondents to the petitioner, in accordance with the covenants of the Lease Deed. He draws my attention to Clause 4.1 of the Lease Deed, read in conjunction with paras 3.1, 3.2 and 3.5 of the CAR dealing with Airworthiness, dated 10th September, 1998, which (to the extent relevant) read thus: Clause 4.1 of the Lease Deed "The Lessee shall be responsible to cause that the Aircraft is duly registered with Director General of Civil Aviation, India, in the Lessor's name as Owner and Lessor,....
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....rtificate of Registration. ix. Fee for registration as prescribed in Rule 25 paid by web based online transaction system of DGCA (Bharatkosh)." (Emphasis supplied) 78. Mr. Gautam Narayan points out that, further, Clause 6.2 of the Lease Deed required the Lessor to deliver the Aircraft to the Lessee in accordance with the terms and conditions of the Lease Deed, whereupon the Lessee was to accept the Aircraft by execution of a Delivery Acceptance Certificate, in accordance with Schedule II to the Lease Deed. Execution of the Delivery Acceptance Certificate, therefore, submits Mr. Gautam Narayan, was conditional on delivery of the aircraft in accordance with the covenants of the Lease Deed. The Delivery Acceptance Certificate, in the format prescribed in Schedule II to the Lease Deed, required the petitioner to certify the "delivery of the Aircraft together with all fixed equipment, parts, components and accessories installed including but not limited to, all log books, documents and records related thereon". 79. In the absence of the Certificate of Deregistration, certifying that the Aircraft was no longer registered with any foreign authority, Mr. Gautam Narayan submits that no....
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.... the delivery but the delay was from BCPL especially for the painting of your livery and the time taken to decide on the design of the paint spec. Let me also draw your attention to our decision to complete the aircraft painting (white paint only) & instructed GMR to slot it accordingly. BCPL at the time was also informed of our decision and only then BCPL finalized the livery pattern and the paint spec., not to mention, the 4K USD additional funds spent to procure the paint on priority. Man Power agreement - PFA the agreement which initially was for 3 months. However we are fine to terminate the agreement right away and also write off the services given from 15th Feb till date. We have already handed over everything to Manisha and supporting her till date. Let me know your thoughts. We see bulk upload mail being added to our mails. Whilst it is internal to you, we have no idea who that mail id belongs to and why are our mails directed to them. Please clarify. Warm Regards Chenna Reddy N. Ezen Aviation" (Emphasis supplied) (ii) e-mail dated 9th March, 2020, from the respondent to the petitioner: "Hello Manisha, As of now Big Charters Private Limited (BCPL) has unilat....
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...., the respondent had stated that it was "fine to terminate the agreement right away". As such, Mr. Gautam Narayan points out that the move, towards termination of the agreement - albeit illegally - was of the respondent, and not of the petitioner. He submits that the allegation that the petitioner had "unilaterally terminated" the Lease Agreement was not borne out either by the facts or the law. No such document of "unilateral termination", he points out, is forthcoming on the record. In each response, dated 9th March, 2020, Mr. Gautam Narayan points out that the petitioner categorically disabused the respondent of its contention that the petitioner had terminated the Lease Agreement. At this juncture, he submits, the respondent sought to raise a new contention, viz., that, by asking for refund, in its letter dated 5th March, 2020 (whereas, Mr. Gautam Narayan points out, refund was sought, by the petitioner, in its letter dated 22nd March, 2020, and not vide its letter dated 5thMarch, 2020), the petitioner had unilaterally terminated the agreement. This contention, submits Mr. Gautam Narayan, is directly in the teeth of Clause 7 of the Lease Deed, which deals with termination there....
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....ermination by the Lessee for breach by the Lessor: Notwithstanding the generality of the foregoing, in the event the Lessor commits a breach of its representations and warranties and covenants recorded hereunder, the Lessee shall be entitled to terminate this Deed, by giving notice in writing of the same to the Lessor and the Lessor shall have the right to remedy the breach within a period of 60 (Sixty) days (or such longer period as may be reasonably necessary to cure such breach) from the date of receipt of the written notice issued by the Lessee intimating Lessor of such breach. 7.4. Procedure for Termination of Deed - Earlv Termination or End of Lease Term: The following procedure shall be followed for termination of Deed at the end of lease term or at early termination: 7.4.1. The Lessee shall permit representative/s appointed by the Lessor to inspect the Aircraft in order to assess condition of Aircraft, Aircraft records. 7.4.2. Upon redelivery of the Aircraft as per Deed by the Lessee to the Lessor, the Security Deposit shall be refunded by the Lessor to the Lessee after deducting any amounts due and receivable by Lessor towards: (i) the arrears of Rent, and any ....
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....re-estimate, as the minimum compensation payable by the Lessee to the Lessor. 7.4.5. Without prejudice to any other right or remedy that may be available to the Lessor, if Lessee fails to return the Aircraft thereof to the Lessor as per the terms of this Lease Deed, the Lessor shall be entitled to take all steps as may be available to it to take possession of the Aircraft." There could, therefore, submits Mr. Gautam Narayan, be no question of any "unilateral termination", far less "implied unilateral termination", by the petitioner, of the Lease Deed. Termination had, necessarily, to be by way of a written notice. In this context, Mr. Gautam Narayan also invited attention to Clause 26.1 of the Lease Deed, which stipulated thus: "Any notice required or otherwise given pursuant to this Deed shall be in writing and mailed, certified return receipt requested, postage prepaid, or delivered by overnight delivery service" Mr. Gautam Narayan submits, therefore, that the plea of "unilateral termination", by the petitioner, of the Lease Agreement, was merely by way of a smokescreen, created by the respondent to wriggle out of its obligations under the Lease Agreement. 83. Mr. Gautam N....
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....or potential threat." 85. Parallely, points out Mr. Gautam Narayan, the CAR Section 8 - Aircraft Operations, dated 30th October, 2018, which dealt with "Operation of Commercial Air Transport - Aeroplanes" stipulated, in Clause 13.2.3(b), thus: "13.2.3 In all aeroplanes which are equipped with a flight crew compartment door in accordance with 13.2.2: (b) mean shall be provided for monitoring from either pilot's station the entire door area outside the flight crew compartment to identify persons requesting entry and to detect suspicious behavior or potential threat. All new aircraft to be imported after 1st of Jan, 2008 should have cockpit door surveillance system (CDSS) installed at the time of import. Aircraft already importing should comply with this requirement during their next 'C' check falling after 1st Jan, 2008." (Emphasis supplied) 86. Delivery of an aircraft, without CDSS fitted, submits Mr. Gautam Narayan could not, therefore, be regarded as "delivery", within the meaning of the Lease Agreement. 87. Contending that, therefore, there had been clear breach of the Lease Deed by the respondent, Mr. Gautam Narayan submits that the petitioner has succeeded i....
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....ia. E-mail, dated 22nd March, 2020, from the petitioner to the respondent, it is submitted, confirmed that the petitioner had applied for permission to import the aircraft into India. The fact of non-completion of the import formalities, which was an obligation on the petitioner, he submits, has been suppressed by the petitioner, and defeats the prayers made in the petition. This suppression of facts, he submits, also disentitled the petitioner to any equitable relief from this Court. 91. Delay in securing registration of the aircraft in India, Mr. Kamath submits, is attributable to the non-completion of import formalities by the petitioner. In the written submissions filed by the respondent, after conclusion of hearing, it has been averred thus: "The registration of the aircraft in India is the responsibility of the Petitioner. The Petitioner claims to have taken steps for registration before the DGCA. Section 3.5 of the CAR dated 10/09/1998 lists out documents required for registration. The very first document is the customs clearance certificate/BoE of the aircraft. Obtaining the certificate/BoE is the responsibility of the Petitioner. The Petitioner has failed to obtain the ....
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....on, if at all, he submits, arose from email correspondences between the petitioner and the respondent, and non-fulfilment thereof could not be regarded as infraction of any of the terms of the Lease Deed. He also points out, in this context, that Clause 32.1 of the Lease Deed specifically stated that prior agreements or understandings stood terminated, and that the Lease Deed was a self-contained document. The Clause read thus: "32.1 This Deed contains all of the terms and conditions agreed by and between the Parties hereto with respect to lease of the Aircraft and on and from the Lease Commencement Date, the prior agreements or understandings pertaining to any such matters (including the Letter of Intent) shall stand terminated except with regard to any accrued rights thereunder. No provision of this Deed may be amended or added to except by an Addendum in writing to be duly signed by the Parties herein." Breach of any obligation, by the respondent, unrelated to the Lease Deed, submits Mr. Kamath, cannot be agitated in proceedings under Section 9 of the 1996 Act. This issue is, therefore, according to him, entirely irrelevant to these proceedings. 94. Mr. Kamath also disputes ....
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....plea, of Mr. Gautam Narayan, that his client was unable to obtain CoA, from the DGCA, was untenable and premature. In any event, he submits, the existing CoA, of the aircraft, was valid till November, 2020, and could, therefore, be got validated, by the DGCA, under Clause 3.1 of the CAR dated 25th November, 2014, at any time. 97. Adverting, thereafter, to Schedule II to the Lease Deed, Mr. Kamath submits that the documents, stipulated in the said Schedule, were required to be in the Aircraft, and were available in the Aircraft at the time of its landing in India. As such, he submits, without taking delivery of the Aircraft, the petitioner could not, very well, contend that there was failure, on the part of the respondent, in providing the documents, to which Schedule II, to the Lease Deed, referred. 98. As such, submits Mr. Kamath, no prima facie case of breach, by the respondent, of any of the covenants of the Lease Deed, existed, as could maintain this petition, under Section 9 of the 1996 Act. 99. Arguing in rejoinder, Mr. Gautam Narayan submitted that, in its e-mail dated 24th January, 2020, the respondent had acknowledged the fact that Bill of Entry, in respect of the Aircr....
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....d the respondent, Mr. Gautam Narayan reiterates that his client never signified any intention to terminate the agreement, in terms of Clause 7 of the Lease Deed. 103. Mr. Gautam Narayan submits, finally, that, in the circumstances, the balance of convenience was clearly in favour of his client, to whom the respondent had held out solemn assurances, on which it reneged. Analysis 104. While proceeding to examine the rival contentions of learned counsel, I am required to be mindful of the fact that the present proceedings are under Section 9 of the 1996 Act. 105. Section 9 has its own distinct indicia and, while it is fundamentally guided by the three considerations of existence of a prima facie case, balance of convenience and irreparable loss, which guide the exercise of discretion under Order XXXIX CPC, there is a fundamental difference between the two provisions. 106. Interim relief, under Order XXXIX, is in the nature of an interlocutory order pending disposal of a suit. Pre-arbitral interim relief under Section 9 of the 1996 Act, on the other hand, is primarily aimed at securing the corpus of the dispute so that arbitral proceedings are not rendered a futility before they c....
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....d the court finds that, were interim protection, under Section 9, not granted, there is a likelihood of frustration of the arbitral proceedings, the court would proceed to grant relief under Section 9. 109. This aspect is underscored by a comparison of the words used in Order XXXIX of the CPC, vis-a-vis those employed in Section 9 of the 1996 Act. Order XXXIX of the CPC empowers the court to "grant a temporary injunction", till the disposal of the suit, or till further orders. Section 9 of the 1996 Act, per contra, empowers the court to grant "an interim measure of protection". The word "protection", as used in Section 9(1)(ii), underscores, as it were, the raison d'etre of the provision. 110. A section 9 court is, therefore, concerned with protecting the corpus of the arbitral dispute, so that the arbitration can take off and fructify. Once a dispute, amenable to, and deserving of, resolution by arbitration, is found to exist, and the apprehension, of dissipation of the assets forming the corpus of the dispute, is found to be real and subsisting, or where the circumstances indicate that enforcement of the award, as and when delivered, would otherwise be hindered, a Section 9....
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....ifically includes a certificate of de-registration, from the previous registering authority, as one of the documents to be presented to the DGCA, in order for the aircraft to be registered in India for commercial operations. 118. It is not in dispute that, till date, no certificate of de-registration of the aircraft, issued by the IOMAR, or any other document, to the effect that the aircraft was no longer registered with the IOMAR, was provided to the petitioner by the respondent. 119. As such, the respondent cannot be said to have supplied, to the petitioner, all requisite documentation, on the basis of which the petitioner could obtain registration of the aircraft in India. 120. Mr. Kamath did not, either in his oral or in his written submissions, dispute the fact that the certificate of de-registration was a mandatory document, for registering the aircraft in India, though it was submitted that the relevant documents were the certificate of CoR and CoA. The applicability of Clause 3.5 of the CAR, of 10th September, 1998, dealing with the airworthiness, has also not been questioned. 121. Rather, the written submissions of the respondent, as reproduced in para 84 hereinabove, ....
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....craft in India. Having defaulted in that regard, the respondent cannot be heard to contend, in defence, that the petitioner had also defaulted in filing the Bill of Entry, without which the aircraft could not be registered. 129. The arbitral tribunal, if and when constituted, is not required to opine on the registration of the aircraft, or how such registration could be obtained. It would be required to examine whether there has, or has not, been a breach, by the respondent, of the covenants of the Lease Deed, as alleged by the petitioner. That, prima facie, has taken place. 130. Prima facie, therefore, there is merit in the submission of Mr. Gautam Narayan that the plea of non-filing of the Bill of Entry has been advanced, by the respondent, only to cover up the default, on the part of the respondent, in providing the certificate of de-registration of the aircraft. In view thereof, I am not inclined to enter, for the purposes of the present order, into the factual dispute of whether the petitioner has, or has not, filed the Bill of Entry. Re: Alleged unilateral termination of the Lease Deed 131. Mr. Gautam Narayan has also disputed the stand, of the respondent, that there had ....
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....sing the argument of "unilateral termination" as a pretext to avoid its obligations under the Lease Deed. 138. No termination of the Lease Deed has, therefore, taken place. Re: Non-installation of CDSS 139. Mr. Kamath has sought to contend that the Lease Deed did not require installation of CDSS on the aircraft and that, therefore, even assuming the aircraft had been supplied without pre-installed CDSS, no breach of the Lease Deed could be alleged to have taken place on that count. He has also sought to draw sustenance from Clause 6.3 of the Lease Deed, which required the aircraft to be delivered to the lessee, i.e., the petitioner in "as is" condition. Mr. Kamath seeks to contend, by relying on this clause, that the petitioner had covenanted to receive the aircraft in the condition in which it had left Vietnam. In Vietnam, he submits, installation of CDSS was not a mandatory requirement. As such, according to Mr. Kamath, the respondent was not required to install the CDSS in the aircraft, before delivering it to the petitioner. 140. I am not inclined to agree with Mr. Kamath. The fact that the CDSS was required to be installed on the aircraft, in order for the aircraft to be re....
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....n so far as reasonable, practicable and provided herein." 144. Clause 6.3 starts with the words "subject to the generality of the foregoing". "The foregoing" would include Clause 6.2, which commences with a non-obstante clause, and required the respondent to deliver, to the petitioner, the aircraft in accordance with the terms and conditions of the Lease Deed. It was only thereafter that the petitioner was required, as lessee, to accept the aircraft by execution of the delivery acceptance certificate. The terms and conditions of the Lease Deed included Clause 4.1, which required the lessor to provide all necessary documentation, required by the lessee for registering the aircraft with the DGCA. Evidence of installation of the CDSS in the imported aircraft would also, therefore, be one of the requirements, in order for the aircraft to be registered with the DGCA in India. On this count, too, therefore, the submission of Mr. Gautam Narayan, that the respondent was in breach of the covenants of the Lease Deed, merits acceptance. Re: Liability to pay maintenance reserves 145. There is also, prima facie, substance in the contention, of Mr. Gautam Narayan, that no liability on the pet....
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....thout the consent of this Court, notice was issued, to the respondent, to show cause as to why action for contempt be not initiated against it. Further orders were passed by this bench, resulting in the respondent appealing, before the Division Bench of this Court, by way of FAO (OS) (COMM) 124/2020 (Ezen Aviation Pvt. Ltd v. Big Charter Pvt. Ltd). Notice was issued, in the said appeal, on 12th October, 2020, and the order, of this Court, was modified, by allowing the respondent to dismantle and shift the landing gears and other accessories of the aircraft to the warehouse of M/s. GMR Air Cargo and Aerospace Engineering Ltd., donate the bare shell of the aircraft, without any accessories of landing gears to the National Institute of Technology, Warangal, sell the landing gears and other spare parts and raise an amount of Rs. 4,30,00,000/-, which was to be deposited with the Registry of this Court. This arrangement, it was clarified, would be subject to the outcome of these proceedings. 149. In view of these supervening developments, after orders were reserved, prayers (a) and (b) in the petition do not survive for consideration. 150. Prayer (c) in the petition is for directing th....