ENERCON (INDIA) LTD Vs. ENERCON GMBH

JUDGEMENT

(1.) The above Writ Petitions have been filed invoking the Writ Jurisdiction of this Court under Article 227 of the Constitution of India challenging the order dated 27 th August 2009 passed by the learned District Judge, Daman by which order the Appeals being Misc. Civil Appeal Nos.1/2009, 2/2009, 3/2009 and 4/2009 came to be allowed and resultantly the order passed by the Trial Court dated 9 th January 2009 came to be set aside, resulting in the Application filed under Section 45 of the Arbitration and Conciliation Act, 1996 being allowed in terms of prayer clause 28(a) thereof, and the Injunction Application of the Petitioners abovenamed, who are the original Plaintiffs, came to be rejected.

(2.) The issue that arises in the above Petitions is therefore in two parts viz.

(3.) The Petitioner No.1 herein carries on business of manufacturing and marketing of the Wind Turbine Generators (WTG's) and components in India, and is also in the business of setting up wind power projects on turnkey basis. The Petitioner Nos.2 and 3 herein are the Directors of the Petitioner No.1 and are arrayed as the Plaintiff Nos.1 to 3 in the Suit in question. The Respondent No.1Enercon GmbH is a Company incorporated under the laws of Germany and is having its registered office at Aurich, Germany. One Dr.Alloys Wobben is a Director of the Respondent No.1. The Respondent No.2 - Wobben Properties GmbH is a Company incorporated under the laws of Germany and is also having its registered office at Aurich, Germany. The Respondent No.1 is engaged in mechanical engineering and possesses technical knowledge and equipment for manufacturing and marketing the Wind Turbine Generators and components. The Respondent No.1 carries on the said business all over the world. The Respondent Nos.1 and 2 are arrayed as the Defendant Nos.1 and 2 to the Suit in question. The Petitioners and the Respondents are running the joint venture business through the Petitioner No.1Company at Daman in India. Accordingly the parties have entered into various Agreements in furtherance of the said business. The Petitioner Nos.2 and 3, on 12/01/1994 entered into a Shareholding Agreement. In terms of the said Agreement the Respondent No.1 was holding 51% shares of the Petitioner No.1Company, and the Petitioner Nos.2 and 3 were holding 49% shares. The said Shareholding Agreement was subsequently amended by two Supplementary Shareholding Agreements dated 19/05/1998 and 19/05/2000. Pursuant to the said Supplementary Shareholding Agreements, the Respondent No.1 became a 56% shareholder in the Petitioner No.1Company whilst the shareholding of the Petitioner Nos.2 and 3 was reduced to 44%. On the same day i.e. on 12/01/1994, the Petitioner No.1 and the Respondent No.1 entered into a Technical KnowHow Agreement by which the Respondent No.1 had agreed to transfer to the Petitioner No.1 the right and the technology to use the technical knowhow for the manufacture of E26 Wind Turbine Generators specified therein and their components. A Supplementary Technical KnowHow Agreement amending the earlier Technical KnowHow Agreement was executed on 19/05/2000 by which a further licence to manufacture the E30 and E40 Wind Turbine Generators was conferred by the Respondent No.1 to the Petitioners. Under the terms of the Technical KnowHow Agreement, the Respondent No.1 has to continuously supply special components to the Petitioner No.1. In April 2004 the period of the Technical KnowHow Agreement expired, however, the Respondent No.1 continued to supply the Wind Turbine Generators and components. The Respondent No.2 has the patent of the said windmill technology; whereas the Respondent No.1 is a licensor to supply the said windmill technology, and the Petitioners are the licensees to use the said windmill technology. It appears that from the year 2000 onwards and till date the Petitioners are manufacturing the said Wind Turbine Generators and continue to use the patents that were licensed by these agreements. On 29/09/2006 the Petitioners and the Respondent No.1 entered into what is known as the "Agreed Principles" for the use and supply of the windmill technology. Under the said Agreed Principles the Petitioners and the Respondents agreed to enter into what is known as the Intellectual Property License Agreement ("IPLA" for short), which is the subject matter of the Suit in question. It is the case of the Petitioners that the Agreed Principles are the binding principles agreed between the parties, and which records an agreement that all definitive agreements between the parties that were to be prepared and finally executed would be on the basis of the binding principles agreed therein. One of the agreements contemplated by the said Agreed Principles was the IPLA. The Petitioner Nos.2 and 3 are the parties to the IPLA. It seems that the Petitioner No.2 has signed the IPLA on behalf of the Mehra family. At the time of the signing of the IPLA the Petitioners were already aware of the five models of the WTG's being E26, E30, E40, E48 and E53. It is the case of the Petitioners that the IPLA was merely a draft of the oral terms and not a concluded contract between the parties. It was their case that the said document was an unincorporated and inchoate document and was not a concluded contract. It appears that one Mr.Ketwigg , the Managing Director of Respondent No.1 in a letter dated 02/10/2006, addressed to Petitioner No.2 stated therein that all the necessary contracts between the parties should be completed by 19/10/2006. Further in the email dated 04/10/2006 Ms.Nicole Fritsch of the Respondent No.1 stated that she would try her best to prepare/adapt the agreements according to the Agreed Principles by 19/10/2006. It is the case of the Petitioners that to their utter shock and surprise, on 18/10/2006 Ms. Nicole Fritsch of the Respondent No.1 totally turned around and addressed a letter to the Petitioner No.2 falsely alleging that the draft IPLA which was signed on 29/09/2006 was a final document. Thereafter correspondence ensued between the parties and a contentious issue arose as to whether the IPLA can be called final or not. Thereafter spate of litigation ensued between the parties. This was as a result of the Respondent No.1 stopping supplies which resulted in the Petitioner Nos.2 and 3 filing a derivative Suit on the Original Side of this Court being Short Cause Suit No.2667 of 2007 seeking resumption of supplies. This Court has, by an interim order dated 31/10/2007 without prejudice to the individual contentions of the parties, directed resumption of supplies by the Respondent No.1 to the Petitioner No.1 until further orders of this Court. In view of the fact that the said order was not complied with by the Respondent No.1, there is a Contempt Petition which has been filed by the Petitioners, which is pending.