LexM/S. EVEREST HOLDING LTD. versus SHYAM KUMAR SHRIVASTAVA & ORS.
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[2008] 14 S.C.R. 1221 MIS. EVEREST HOLDING LTD. A v. SHYAM KUMAR SHRIVASTAVA & ORS. (Arbitration Petiton No. 13 of 2007) OCTOBER 24, 2008 B [DR. MUKUNDAKAM SHARMA, J] } Arbitration and Conciliation Act, 1996: ss. 2(f), 11 (6) and (9) - International Commercial arbi- tration - Appointment of arbitrator - Joint Venture Agreement c containing arbitration clause - Joint Venture company con- stituted - Dispute regarding the amount paid by sister con- cerns of parties towards equity contribution or working ex- penses - Respondents pleading that the dispute related to transactions not between parties to agreement but between D their sister concerns and, therefore, no reference could be made to arbitrator - HELD: There is a valid arbitration agree- ment between the parties as contained in the JVA, which the parties are required to adhere to - If there is any dispute be- tween the parties to the agreement arising out of or in relation E to the subject matter of the said JVA, all such disputes and differences have to be adjudicated upon and decided through process of arbitration by appointing a mutually agreed arbi- trator - Though the JVA may have been terminated and can- ~ celled but it was a valid JVA containing a valid arbitration F agreement for settlement of disputes arising out of or in re/a- tion to the subject matter of the JVA - Contributions made towards execution of the JVA and for the functioning of the Joint Venture Company by party or on its behalf by its affili- ,ates whether would and should be treated as contributions G made by the party in specific term and the clause in the JVA ,. are also matters to be adjudicated upon by the arbitrator - In the JVA it was agreed to by the parties that the equity shares of the Company could be subscribed by either of the parties 1221 H 1_?22 SUPREME COURT REPORTS [2008] 14 S.C.R. A or by its affiliates and that the shareholding of its affiliates ? should be considered as shareholdings of the party to the extent it is recognized - The affiliates were a/so made to be bound by the terms and conditions of the agreement - There- fore, the disputes which arise out of JVA, if referred to an arbi- B trator would not in any manner amount to bifurcation of the causes of action or bifurcation of parties - On the parties hav- ing mutually agreed, arbitrator appointed who would decide .... the dispute arising out of the JVA as expeditiously as pos- sible. [para 16-19 and 21) c SBP & GP v. Patel Engineering Ltd. and Another 2005 (4) Suppl. SCR 688 = (2005) 8 SCC 618; Rashtriya /spat Nigam Ltd. v. Verma Transport Co. 2006 (4) Suppl. SCR 332 = (2006) 7 sec 275 - relied on. D Sukanya Holdings (P) Ltd. v. Jayesh H. Pandya and Another 2003 (3) SCR 558 = 2003) 5 SCC 531 - distin- guished. ~ Arbitration - Power of arbitrator to adjudicate with regard to equity contribution towards constitution of company which E may be a matter relating to winding up of the company- HELD: Though arbitrator would have no power to order for winding up of the company since such power is conferred on and vested with Court as envisaged under the Companies Act, but in terms of the arbitration agreement, the arbitrator can a/ways find out F and adjudicate as to whether or not a Company is functional and if it was not functional in that event he could always find , out the nature and status of its assets and can a/so issue di- rections and pass orders regarding dues and liabilities and a/so for taking recourse to appropriate remedy [para 17-18] G Haryana Telecom Ltd. v. Sterlite Industries (India) Ltd. 1999 (3) SCR 861 = (1999) 5 SCC 688 - referred to. I<· CASE LAW REFERENCE: 2005 (4) Suppl. SCR 688 relied on para 13 H ,; t ~ ~ M/S. EVEREST HOLDING LTD. v. SHYAM 1223 KUMAR SHRIVASTAVA & ORS. 2003 (3) SCR 558 ·distinguished para 15 2006 (4) Suppl. SCR 332 relied on para 16 1999 (3) SCR 861 referred to. Para 18 ORIGINALCIVILJURISDICTION :Arbitration Petition No. 13 of 2007 ~- Rajiv Dutta, Praveen Swarup and M.F. Humayunisa for the Appellant. Shyam Diwan, Atul Shankar Mathur, Body Rangandhan, Nupur Mukherjee and Mis. Khaitan & Co. for the Respondents. The Order of the Court was delivered by DR. MUKUNDAKAM SHARMA, J. 1. This Order would dispose of the petition filed by the petitioner praying for ap- pointment of an arbitrator under Section 11 (6) and (9) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to
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