SHAKTI NATH & ORS. V. ALPHA TIGER CYPRUS INVESTMENT NO. LTD. & ORS.
Decided on: Relevant sections February 18, 2020. Section 34 and 37 of the Arbitration and Conciliation Act, 1996 Act
BRIEF FACTS AND PROCEDURAL HISTORY:
- The present Appeal has been filed to challenge an award passed in an ICC arbitration with its seat in New Delhi. The Appellant has challenged the judgment dated 08.05.2017 passed under Section 37 of the Arbitration and Conciliation Act, 1996 (“Act”), whereby a division bench of the Delhi High Court rejected the Appeal.
- The factual background in which the present Appeal has been filed is as follows The Appellant-Promoters entered into a Shareholders Agreement (“SHA”) and a Share Subscription and Purchase Agreement (“SSPA”) with Respondents No.1 and 2 both dated 21.03.2008 to acquire 50% shareholding in Respondent No. 3 for the development of a Special Economic Zone for Information Technology and Information Technology Enabled Services.
- The project was to be developed on a plot of land admeasuring approx. 45,202 sq. mts. in NOIDA (“Project Land”) which was allotted to one M/s Sarv Mangal Real Tech Pvt. Ltd. (“M/s Sarv Mangal”). The Project Land was sub-leased by M/s Sarv Mangal to Respondent No. 3. The SHA and SSPA were terminated. The parties entered into a Restated Shareholders Agreement (“RSHA”) and a Restated Share Subscription and Purchase Agreement (“RSSPA”) both dated 02.07.2009. As per Clause 3.3 and 3.4 of the RSSPA, Respondents No. 1 and 2 were required to contribute Rs.45 crore to purchase and subscribe the shares in Respondent No.3, which was brought in by 17.12.2009.
- The Appellants terminated both the agreements on 17.12.2009. The Respondents No. 1 and 2 invoked arbitration and submitted the Request for Arbitration to the ICC Court under the RSHA and RSSPA.
- The Appellants filed objections under S. 34 of the 1996 Act before the Delhi High Court. The learned Single Judge vide Order dated 09.02.2017 rejected the challenge on merits, and held that it was an undisputed fact that Respondents No. 1 and 2 had brought in a sum of Rs.45,00,27,747/- for the project.
- Aggrieved, the Appellants preferred an Appeal under S. 37 of the Act before the Division Bench of the Delhi High Court. The Division Bench vide judgment and order dated 08.05.2017 rejected the Appeal as being devoid of any merit.
- Whether Appellants are allowed to able to acquire the sub-lease of the Project Land, viz. M/s. Good Living Infrastructure Pvt. Ltd or not?
- During the course of hearing on 22.1.2020, the dues payable to NOIDA were crystallized as follows-
- Pending Instalment amounts with Simple Interest @ 14% p.a. Rs.23,21,00,000
- Lease Rent dues with Simple Interest @ 14% p.a. Rs.11,93,00,000
- Time Extension charges Rs.6,57,38,900
- In the event of any default in payment of the amounts by Appellants, the entire amount awarded as per the award dated 20.01.2015, would become enforceable. However, prior to enforcement, a window of 2 months would be granted to the Appellants to make provision for compliance. On the expiry of the aforesaid period of 2 months, the entire decree would become executable forthwith.
- The court also held M/s Good Living Infrastructure Pvt. Ltd. is bound by the unconditional undertaking submitted an Affidavit before this Court. Any default by M/s Good Living Infrastructure Pvt. Ltd. would be treated as a breach of the undertaking submitted to this Court.
- The present Appeal is accordingly disposed of as per the aforesaid Consent Terms.
- Pending applications, if any, stand disposed.