TATA INDUSTRIES LTD Vs. GRASIM INDUSTRIES LTD

JUDGEMENT

(1.) This petition under section 34 of the Arbitration and Conciliation Act 1996 raises a challenge to a procedural order of 13 May, 2010 of an arbitral tribunal constituted in pursuance of an order passed by a designated Judge of the Supreme Court under section 11(6).

(2.) On 15 December, 2000 a shareholders agreement was entered into between the first petitioner, the respondent and the predecessor of the Second petitioner. On 31 January, 2006 a notice of termination was served by the first petitioner on the ground that there was a breach of the shareholders' agreement arising out of the respondent having applied for a United Access Service Licence for Mumbai Metro Circle in violation of the provisions of Article 3.04(b). This was followed on 27 November, 2006 by a second notice by the first petitioner seeking to terminate the agreement on the ground that there was a breach of the confidentiality clause of the shareholders' agreement. On 5 May, 2006 the first petitioner issued a formal notice invoking the arbitration agreement between the parties under section 21 of the Arbitration and Conciliation Act, 1996. On 1 June, 2006 two share purchase agreements were executed between the parties in pursuance of which certain shares of the petitioners came to be sold to the respondent though without prejudice to the contentions of either party with reference to the termination notices and the rights which had accrued under the shareholders' agreement. The contention of the respondent on an application under section 1 1(6) being moved was that there was no live dispute that would survive between the parties in view of the share purchase agreements dated 1 June, 2006. Proceedings initiated before this Court under section 11(6) were withdrawn in view of the contention of the respondent that the presence of a foreign party would implicate an international commercial arbitration and that it would be only the Chief Justice of India who would have powers to constitute an arbitral tribunal under section 11(12).

(3.) On 9 July, 2008 a designated Learned Judge of the Supreme Court, in exercise of the jurisdiction under section 11(12) rejected the contention of the respondent that there was no live dispute that would survive as between the parties. A live dispute was found to exist and accordingly the application was disposed of by constituting an arbitral tribunal consisting of Dr. Justice A. S. Anand, Former Chief Justice of India, Mr. Justice Arun Kumar and Mr. Justice P. K. Balsubramanyan, Former Judges of the Supreme Court. The decision is reported in Tata Industries Limited vs. Grasim Industries Limited, 2008 10 SCC 187.