LexSIRAJUDEEN KASIM & ANR. versus M/S PARAMOUNT INVESTMENTS LTD.
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[201 O] 9 S.C.R. 444
SIRAJUDEEN KASIM & ANR.
v.
MIS PARAMOUNT INVESTMENTS LTD.
(Arbitration Petition No. 17 of 2009)
AUGUST 2, 2010
[ASOK KUMAR GANGULY, J.]
Arbitration and Conciliation Act, 1996:
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ss. 2(f}, (h) and 11 - International commercial arbitration
-
Party -
Appointment of arbitrator -
Shareholders'
Agreement (SHA) between P1 and P2 on one side and R on
the other for procuring farm out transactions of oil and gas
blocks for P2 - Later, disputes arose and a settlement
0 agreement entered into between P1 and R - Further disputes
arose - Notice by P1 invoking arbitration clause of SHA -
Suit by R in foreign court in terms of settlement agreement -
HELD: From a perusal of clause 10 of Settlement Agreement
and the arbitration clause in SHA, it does not appear prima
facie that the rights of both P1 and P2 under SHA have been
E superseded by Settlement Agreement - Further, the question
whether the rights of P1 and P2 under SHA have been
superseded is an arbitrable issue which can be examined by
the arbitrator - Besides, admittedly, P2 is not a party to
settlement agreement, therefore, its rights under the arbitration
F clause are prima-facie not superseded by the settlement
agreement - P2 is a party to the arbitration agreement within
the meaning of s. 2(h) byt-it is not a party to the settlement
agreement -
Therefore, whether its rights have been
superseded by settlement agreement- sfso may be an
G arbitrable issue to be examined by the arbitrator - Prior to
filing of suit, the settlement agreement and the Power of
Attorney had been revoked and request to appoint an
arbitrator had been reiterated - Besides, P2 is not a party to
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444
SIRAJUDEEN KASIM & ANR. v. PARAMOUNT
445
INVESTMENTS LTD.
the suit - Thus, there are disputes between the parties and
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there is a valid arbitration clause which has been invoked prior
to the filing of the suit - It is also not in dispute that the
arbitration procedure between the parties has failed -
Therefore, the arbitrator is appointed.
National Insurance Company Ltd. vs. Boghara Polyfab
Pvt. Ltd. 2008 (13) SCR 638 = (2009) 1 SCC 267 - relied
on.
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Sukanya Holdings (P) Ltd. vs. Jayesh H. Pandya and
Anr. 2003 (3) SCR 558 = (2003) 5 SCC 531 - distinguished. t
Case Law Reference:
2003 (3) SCR 558
2008 (13) SCR 638
distinguished
para 21
relied on
para 25
CIVIL ORIGINAL JURISDICTION : Arbitration Petition No.
17 of 2009.
Rajeev Kumar, Ajay Sharma for the Petitioners.
C.A. Sundaram, Nikhil Nayyar, T.V.S. Raghavendra
Sreyas, Zafar lnayat, Abhishek Gupta, Anand Kaur, Rohini
Musa for the Respondent.
The order of the Court was delivered by
ORDER
GANGULY, J. 1. This petition has been filed under Section
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F
11 of the Arbitration and Conciliation Act, 1996 (hereinafter, "the
said Act") by the Petitioner praying for appointment of an
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arbitrator to adjudicate the claims and disputes between the
petitioner and the respondent as the parties have been unable
to concur upon the arbitrator.
2. The first petitioner (hereinafter, P1) is Sirajuddin Kasim,
an Indian, who is the Director, Promoter and shareholder of the
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446
SUPREME COURT REPORTS
[2010] 9 S.C.R.
A second petitioner holding 75% of issued share capital of the
second petitioner (hereinafter P2). P2 is a company
incorporated under the laws of the Republic of Singapore and
inter alia deals and trades in cotton, timber, logging, acquisition,
operation and sale of oil and gas assets, mining of Manganese
B and other metals. The respondent on the other hand is a
company incorporated under the Laws of Mauritius. The
respondent is engaged inter alia in the business of making
investments by way of equities in private and public companies
on a negotiated basis.
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3. The petitioners' case is that the understanding between
the parties was that the respondent would procure farm out
transactions of oil and gas blocks for P2. For such farm out
transactions, the respondent would be paid a commission
separately. On the date of the Shareholders' Agreement (SHA),
D P2 was allotted oil and gas blocks in the Republic of Gabon.
There were proposed oil blocks to be procured by execution
of Production Sharing Contract ("PSC") in Brunei as well as in
Tajikistan. In their affidavit the respondent admitted this
arrangement between the petitioners and the respondent and
E also admitted the receipt in the name of Valpro, a sum of US
$ 625,000, claiming that Excerpt shown. Read the full judgment & AI analysis in Lexace.