VENTURE GLOBAL ENGINEERING versus SATYAM COMPUTER SERVICES LTD. AND ANOTHER.

Citation: [2010] 9 S.C.R. 858 · Decided: 11-08-2010 · Supreme Court of India · Bench: P. SATHASIVAM · Disposal: Appeal(s) allowed

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Judgment (excerpt)

A 
B 
[2010] 9 S.C.R. 858 
VENTURE GLOBAL ENGINEERING 
v. 
SATYAM COMPUTER SERVICES LTD. AND ANOTHER. 
(Civil Appeal No. 6519 of 2010) 
AUGUST 11, 2010 
[P. SATHASIVAM AND ASOK KUMAR GANGULY, JJ.] 
Arbitration and Conciliation Act, 1996: s. 34, Explanation 
- Public policy - Award induced or affected by fraud - Held: 
C It falls within the grounds of excess of jurisdiction and lack of 
due process and is opposed to public policy - Concealed 
facts disclosed after passing of award having causative link 
with the facts constituting or inducing the award are relevant 
to demonstrate that there was fraud in making of the award -
D In the instant case, amendment application filed by plaintiff 
for bringing materials on record for seeking the setting aside 
of the award - Ground being that there was fraud in making 
of the award - In the interest of justice, plaintiff allowed to bring 
those materials on record as the same were not wholly 
E irrelevant and might have bearing on the plaintiff's prayer for 
setting aside the award - Administration of justice - Abuse 
of process of law - Fraud - Code of Civil Procedure, 1908 -
0.8 r.9. 
Code of Civil Procedure, 1908: 0. 8 r. 9 -
Filing of 
F amendment petition and additional pleadings - Permissibility 
- Held: In dealing with a prayer for amendment, courts 
normally prefer substance to form and techniques, and 
interests of justice is one of the most relevant considerations 
- Therefore, if a party is entitled to amend its pleadings, 
G having regard to the justice of the case, the right of the party 
to amend cannot be defeated just because a wrong section 
or a wrong provision was quoted in the amendment petition -
In the instant case, High Court erred in rejecting the plaintiff's 
prayer for amendment on a hyper techniool ground that a 
H 
858 
VENTURE GLOBAL ENGINEERING v. SATYAM 
859 
COMPUTER SERVICES LTD. 
wrong provision was quoted in the amendment petition -
A 
Practice and procedure. 
The appellant having its principal office in USA 
entered into an agreement with the first respondent for 
establishing a company (second respondent). Dispute 8 
arose between them and the matter was referred to 
arbitration. An arbitration award was passed on 3rd April, 
2006 whereby the appellant was required to transfer its 
entire shareholding in the second respondent to the first 
respondent. The first respondent filed a petition for 
enforcement of award before the U.S. District Court. On C 
28th April, 2006, the appellant filed a suit for declaration 
in the civil court to set aside the award and also prayed 
for a permanent injunction against the transfer of shares 
under the arbitral award. On 7th January, 2009, the 
chairman and founder of the first respondent confessed D 
that the balance sheets of the first respondent were 
fraudulently inflated. As a result, the auditors of the first 
respondent, declared that the financial statements could 
no longer be considered accurate or reliable. In the light 
of these developments, the appellant filed an interim E 
application before the trial court to bring certain facts on 
record and also filed additional pleadings in respect of 
the same under Order 8 Rule 9, CPC. The trial court 
allowed the application of the appellant. The High Court 
allowed the revision petition filed by the first respondent 
F 
and held that an application under Order 8 Rule 9, CPC 
for bringing additional pleadings on record was not 
maintainable. The. judgment of High Court was 
challenged by filing the instant appeal. 
It was contended for the respondents that the 
grounds which were sought to be incorporated by way 
of amendment were not relevant and did not come 
within the concept of public policy as explained in the 
Explanation to Section 34 of the Arbitration and 
G 
H 
860 
SUPREME COURT REPORTS 
(2010] 9 S.C.R. 
A 
Conciliation Act, 1996; and that the facts which were 
sought to be brought on record, even if they were 
accepted to be true, had no bearing on the material facts 
on which the award was based. 
B 
Allowing the appeal, the Court 
HELD: 1. In dealing with a prayer for amendment, 
courts normally prefer substance to form and 
techniques, and the interest of justice is one of the most 
relevant considerations. Therefore, if a party is entitled to 
C amend its pleadings, having regard to the justice of the 
case, the right of the party to amend cannot be defeated 
just because a wrong section or a wrong provision was 
quoted in the amen

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