9911796707
TMI Blog2005 (7) TMI 643X X X X Extracts X X X X X X X X Extracts X X X X ..... 2, another agreement was entered into between the same parties known as technical knowhow agreement. In the year 1994 Rotos S.p.A. got merged with the petitioner and all rights, interests etc. of Rotos S.p.A. including the `Rotos' logos, its brand name and trade name `Rotos' stood vested in the petitioner. As per this technical knowhow agreement, the petitioner and Rotos S.p.A had to provide technical knowhow to the company for which company was to pay lump-sum fee of US 3,20,000. Since this involved payment of foreign exchange by the company to the petitioner, approval of Government of India to this agreement was necessary. The said technical collaboration agreement was approved by the Government of India on 19.11.1992 and after this approval a supplementary knowhow agreement dated 19.2.1993 was also entered into between the parties. As per this supplementary knowhow agreement dated 19.2.1993 the knowhow fee of US $ 3,20,000, subject to taxes, was payable by the company to the petitioner in the following manner: (a) First 1/3rd Installment after the agreement is filed with Reserve Bank of India / authorised Foreign Exchange dealer. (b) Second 1/3rd Installment on d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in all respects and, therefore, Technical Knowhow Fee of US $ 3,20,000 became payable. The Company has, however, paid only first Installment of US $ 74,666.67 and has not made payments towards second and final 1/3rd Installments each. Therefore, petitioner's case is that the respondent company is indebted to the petitioner. In the circumstances, petitioner vide notices dated 27.2.98 and 4.4.98 issued under Section 434 of the Companies Act called upon the company for payment of the dues of balance Technical Knowhow Fee of US $ 2,13,334 with interest @ 24% p.a. The company replied to first notice vide letter dated 18.3.98 and did not dispute the demand. However, no reply was sent to second notice. Since the company neglected to pay the amount, the petitioner has filed this petition invoking deeming provisions contained under Section 434 of the Companies Act contending that respondent company is unable to pay the debts. It is also stated that the company has not filed any detailed balance sheet and other statutory documents as required under law after September,1993; has been irregular in holding statutory meetings and AGMs; the petitioner as shareholder has not received any inti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s governing grant of injunction-an equitable relief-by a court will also govern grant of anti-suit injunction which is but a species of injunction. When a court restrains a party to a suit/proceeding before it from instituting or prosecuting a case in another court including foreign court, it is called anti-suit injunction. It is a common ground that the courts in India have power to issue anti-suit injunction to a party over whom it has personal jurisdiction, in an appropriated case. This is cause courts of equity exercise jurisdiction in personam. However, having regard to the rule of comity, this power will be exercised sparingly because such an injunction though directed against a person, in effect causes interference in the exercise of jurisdiction by another court. 25. Now adverting to the facts of this case, the jurisdiction clause in the contract runs thus: This agreement shall be governed by and construed in accordance with English law and the parties hereby submit to the non-exclusive jurisdiction of the English courts (without reference to English conflict of law rules). 7. On merits it is averred that proper technical know-how was not provided by the petition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll be supplied to two sets of reproducible transparencies and shall be in English language and in metric system of measurement. 4.5 ATURIA/ROTOS shall as provided in Article V. familiarise CONTINENTAL technicians at ATURIA/ROTOS's plant at Milano or any other manufacturing facility with Technical Know-how so as to enable CONTINENTAL to undertake the manufacture of Products. ARTICLE VII: CONSIDERATION AND TAXES 7.1 CONTINENTAL shall in consideration of the grant of the Technical Know-how and documentation hereunder, the technical services (except services rendered of ATURIA/ROTOS technicians) and all other obligation of ATURIA/ROTOS hereunder pay to ATURIA/ROTOS a lump sum of USA $ 320,000 (U.S. Dollars Three Hundred and Twenty Thousand) subject to applicable Indian taxes in the manner to be mutually decided by the parties hereto. Admittedly, payment of technical know-how fee of US $ 3,20,000 was subject to approval by the Government. The Government gave its approval vide letter dated 19th November 1992 and changed the modalities for making the payment of this fee. Instead of making lump sum payment it was to be given in three Installments in the manner already indicat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was no question of making any further payment towards technical know-how fee. Since the disputes raised by the respondent were bona fide, the only option for the petitioner was to get the same settled by means of arbitration, in view of arbitration agreement between the parties. 12. If one were to look into the correspondence in isolation, the argument of the respondent company would impress. However, this argument glosses over two significant aspects, namely, (i) learned counsel for the respondent referred to the correspondence for the period up to 1994 only. Subsequent correspondence would show that further drawings were sent to the satisfaction of the respondent and even commercial production started; (ii) the respondent, in subsequent letters even acknowledged its liability and agreed to make the payment. These two aspects could be demonstrated from the following communications exchanged between the parties. 13. It may first be noted that drawings were sent by the petitioner to the respondent vide letters dated 18th March 1993 and 6th April 1993. The respondent vide letter dated 11th May 1993 informed the petitioner that on the basis of said drawings the respondents were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t there will never be any risk to ATURIA/ROTOS image in Indian market as our future is also linked in developing and upgrading the image of Aturia/Rotos in the Indian market. Only a good image can be helful to us. Wherever we have supplied submersible pumps under your know-how, the customers are highly satisfied with the quality of the product and have placed repeat orders for the same. Further once Aturia name is popular in India market, we have plans to import certain sophisticated pumps manufactured by Aturia, Italy for refinery, Oil and Natural Gas, Petro-Chemicals and other products for which there is a big scope in India. As a matter of fact, we are thinking of recruiting a person to handle import of such special pumps in India and send him to Aturia, Gessate factory for one month training in order to upgrade his knowledge and expertise in selling such pumps in India. 13. This letter would make entire correspondence relied upon by the respondent as history and would signify that even if there were initial hiccups in acting on the basis of technical know-how and the drawings provided by the petitioner, this problem was ultimately sorted out; the respondent company went into ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f reply dated 18th March 1998 given by the respondent to the petitioner's legal notice under Section 434 of the Companies Act, as in this reply the respondent only expressed bad financial position and did not raise other disputes. The defense now raised is, therefore, clearly sham and a ploy to deny the alleged dues of the petitioner which became payable in terms of Technical Know-How Agreement after proper technical know-how with complete drawings was provided by the petitioner to the respondent. 16. In view of this discussion, the argument of the learned counsel for the respondent that it is matter which should have been remitted for arbitration does not cut any ice. No doubt, Article 6.12 of the Agreement provides for resolution of disputes by means of arbitration and the arbitration has to proceed in accordance with the laws of Switzerland. However, only when it is found that the defense of the respondent company raises bona fide disputes which cannot be adjudicated in these proceedings which are of summery nature and require evidence that the petitioner could be relegated to the arbitration. Further, the question of applicability of laws of Switzerland would arise only ..... X X X X Extracts X X X X X X X X Extracts X X X X
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