LexM/S LARSEN AND TOUBRO LIMITED SCOMI ENGINEERING BHD versus MUMBAI METROPOLITAN REGION DEVELOPMENT AUTHORITY
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
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SUPREME COURT REPORTS [2018] 14 S.C.R.
M/S LARSEN AND TOUBRO LIMITED SCOMI
ENGINEERING BHD
v.
MUMBAI METROPOLITAN REGION
DEVELOPMENT AUTHORITY
(Arbitration Petition (C) No. 28 of 2017)
OCTOBER 03, 2018
[R. F. NARIMAN AND NAVIN SINHA, JJ.]
Arbitration and Conciliation Act, 1996 – ss. 2(1)(f)(ii),
2(1)(f)(iii) and 11 – International Commercial Arbitration – Contract
for development of a Monorail system, between Mumbai
Metropolitan Regional Development Authority (MMRDA)-
respondent and a Consortium-petitioner (comprising an Indian
company and a Malaysian company) – Dispute arose between the
parties – Consortium made various interim claims and filed petition
u/s.11 of the Act – According to Consortium, since one of the parties
to the Arbitration Agreement, was a body corporate, incorporated
in a country other than India so it would attract s.2(1)(f)(ii) of the
Act and relied upon their status (i.e. an Indian company and a
Malaysian company) as independent entities – Propriety of – Held:
In another proceeding between the same parties arising out of the
self-same agreement, the High Court by order dated 20.10.2016
had upheld the order of the Arbitrator that the particular claim that
was made in that case could be made only as a Consortium and not
as two entities separately and the said judgment was final inter-
parties as no appeal was preferred – Thus, it is not open for the
petitioner to rely upon their status as independent entities – This
being the case, the un-incorporated “association” referred to in
s.2(1)(f)(iii) is attracted on facts of the case and not s.2(1)(f)(ii) as
the Malaysian body could not be referred to as an independent
entity following the judgment of the High Court – Further, the Indian
company was the lead partner and the Supervisory Board constituted
under the Consortium agreement made it clear that the lead partner
had the determining voice in that, as it appointed the Chairman of
the said Board and the fact that the Consortium’s office was in
Wadala, Mumbai and also that the lead member led the arbitration
[2018] 14 S.C.R. 22
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proceedings – This all pointed to the fact that the central
management and control of the Consortium appeared to be exercised
in India and not in any foreign nation – There is no “international
commercial arbitration” as defined u/s.2(1)(f) of the Act – Thus,
petition filed u/s.11 of the Act dismissed.
Arbitration and Conciliation Act, 1996 – s.2(1)(f)(iii) –
discussed.
Dismissing the Arbitration Petition, the Court
HELD: 1. Mumbai Metropolitan Region Development
Authority (MMRDA), the respondent, has relied upon an order
was passed by the High Court of Bombay, dated 20.10.2016
between the same parties, in which an interim Award dated
18.08.2016 was challenged, which was between the same parties
arising out of the self-same agreement. This order upheld the
interim Award of the Arbitrators in stating that the particular claim
that was made in that case could be made only as a Consortium
and not as two entities separately. That order has become final
as it has not been challenged by the petitioner before this Court.
[Para 3][33-C-D]
2. It is clear, as has been held by the judgment of the
High Court of Bombay, and which is binding inter-parties, that it
is not open for the petitioner to rely upon their status
as independent entities while dealing with the respondent and
they will have to deal with the respondent as a Consortium only.
[Para 9][35-G]
3. This being the case, it is clear that the un-incorporated
“association” referred to in Section 2(1)(f)(iii) would be
attracted on the facts of this case and not Section 2(1)(f)(ii) as the
Malaysian body cannot be referred to as an independent
entity following the judgment of the High Court of Bombay.
[Para 10][35-H; 36-A]
4. Section 2(1)(f)(iii) of the Act refers to two different sets
of persons: an “association” as distinct and separate from a “body
of individuals”. For example, under Section 2(31) of the Income
Tax Act, 1961, “person” is defined as including, under sub-clause
M/S L&T LTD. SCOMI ENGINEERING BHD v. MUMBAI
METROPOLITAN REGION DEV. AUTH.
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SUPREME COURT REPORTS [2018] 14 S.C.R.
(v), an association of persons, or body of individuals, whether
incorporated or not. It is in this sense, that an association is
referred to in Section 2(1)(f)(iii) which would therefore include a
consortium consisting of tExcerpt shown. Read the full judgment & AI analysis in Lexace.