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TMI Blog2015 (1) TMI 1511X X X X Extracts X X X X X X X X Extracts X X X X ..... ns showing the involvement of the second Respondent and the decision of this Court in CHLORO CONTROLS (I) P. LTD. VERSUS SEVERN TRENT WATER PURIFICATION INC. ORS. [ 2014 (1) TMI 830 - SUPREME COURT] would justify appointment of an Arbitrator on behalf of both the Respondents and permit the process of Arbitration to be conducted by lifting the corporate veil to ascertain the role of the second Respondent in the transactions in question as claimed by the Petitioner. Shri Justice A.K. Patnaik, a former judge of this Court, is appointed to act as the arbitrator on behalf of both the Respondents. The two learned Arbitrators will now proceed to appoint a third Arbitrator i.e. Umpire and thereafter the arbitration proceedings will commence and conclude as expeditiously as possible - petition allowed. - Hon'ble Judges Ranjan Gogoi, J. JUDGMENT Ranjan Gogoi, J. 1. Both these applications/petitions Under Section 11(6) of the Arbitration and Conciliation Act, 1996 (for short, the Arbitration Act ) have been filed by the Petitioner seeking appointment of an Arbitrator to go into the disputes and differences that have arisen between the Petitioner and the Respondents under the Share Purch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ively settled by reference to binding arbitration under the Indian Arbitration and Conciliation Act, 1996 and to be administered by the arbitral tribunal by reference to three arbitrators, one arbitrator to be appointed by the Purchaser, one to be appointed by the Seller and the third to be appointed by the two appointed arbitrators (who shall serve as the presiding arbitrator) before commencement of the arbitration within 30 (thirty) days from the date of Dispute Notice Under Section 9.1, failing which the arbitrator(s) shall be, appointed in accordance with the provisions of the Indian Arbitration and Conciliation Act, 1996. 9.2.2 The Parties agree that: (a) They shall be bound by any arbitral award or order resulting from any arbitration conducted hereunder; (b) Any judgment on any arbitral award or order in any arbitration held pursuant to this Section 9 may be entered in any Court having jurisdiction in relation thereto or having jurisdiction over any of the Parties or any of their assets or an application may be made to such court for a judicial recognition of the award or an order of enforcement thereof, as the case may be; (c) All proceedings in any such arbitration shall b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Respondent inducing the Petitioner to believe that the said payment would be used to resolve the litigation involving the Respondent. It is stated that in breach of faith the second Respondent used the consideration to obtain a settlement and a no-sue covenant only for himself in execution proceedings initiated before the Supreme Court of British Columbia against the assets of second Respondent for the execution of judgment delivered by US federal Court awarding an amount of US$ 547,091.88 in the litigation against the first Respondent. Second Respondent in his e-mails dated 29th, 30th and 31st January, 2013 falsely represented that the litigation was settled on behalf of all parties. 5. On 8th May, 2013 the Petitioner received a notice from the lawyer of RHO, demanding a sum of US$ 480,000 from MIV India. The Petitioner expressed its discontent to the second Respondent on 17th May, 2013 and was again given assurances. Subsequently, on 21st May, 2013, the lawyer for RHO informed the Petitioner that they had moved an application for transfer of all assets of MIV India, including the remaining 1,401,159 shares (which were yet to be transferred to the Petitioner), owing to the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d before the Court may be extracted herein below: 102. Joinder of non-signatory parties to arbitration is not unknown to the arbitration jurisprudence. Even the ICCA's Guide to the Interpretation of the 1958 New York Convention also provides for such situation, stating that when the question arises as to whether binding a non-signatory to an arbitration agreement could be read as being in conflict with the requirement of written agreement Under Article I of the Convention, the most compelling answer is no and the same is supported by a number of reasons. 103. Various legal basis may be applied to bind a non-signatory to an arbitration agreement: 103.1 The first theory is that of implied consent, third party beneficiaries, guarantors, assignment and other transfer mechanisms of contractual rights. This theory relies on the discernible intentions of the parties and, to a large extent, on good faith principle. They apply to private as well as public legal entities. 103.2 The second theory includes the legal doctrines of agent-principal relations, apparent authority, piercing of veil (also called the alter ego ), joint venture relations, succession and estoppel. They do not rely on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ween the parties. The Petitioner had appointed its Arbitrator (Mr. Justice S.H. Kapadia, a former Chief Justice of India) and despite notice, the Respondents have failed to make the requisite appointment. The said lapse/failure would confer jurisdiction Under Section 11(6) of the Arbitration Act to appoint an Arbitrator on behalf of the Respondents. The facts stated in the present applications showing the involvement of the second Respondent and the decision of this Court in Chloro Controls India Private Limited (supra), in my considered view, would justify appointment of an Arbitrator on behalf of both the Respondents and permit the process of Arbitration to be conducted by lifting the corporate veil to ascertain the role of the second Respondent in the transactions in question as claimed by the Petitioner. 12. I, therefore, appoint Shri Justice A.K. Patnaik, a former judge of this Court, to act as the arbitrator on behalf of both the Respondents. The two learned Arbitrators will now proceed to appoint a third Arbitrator i.e. Umpire and thereafter the arbitration proceedings will commence and conclude as expeditiously as possible. The terms of appointment of the Arbitrator(s) will ..... X X X X Extracts X X X X X X X X Extracts X X X X
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