OIL AND NATURAL GAS CORPORATION LTD Vs. DISCOVERY ENTERPRISES PVT. LTD

JUDGEMENT

(1.) This judgment has been divided into Sec. to facilitate analysis. These are:

(2.) On 22/3/2006, ONGC awarded a contract to Discovery Enterprises Private Limited ("DEPL"), the first respondent, which is a company belonging to the D P Jindal Group, for operating a floating, production, storage and offloading vessel ("vessel"). Pursuant to the stipulation contained in clause 25/7/11 of the contract, a vessel called Crystal Sea was imported on 11/5/2006. ONGC paid the customs duty in the amount of Rs.55.78 crores on the understanding that the vessel would be re- exported after work was complete under duty drawback whose formalities would be completed by DEPL. The vessel left Indian territorial waters and did not return. According to ONGC, DEPL failed to complete the formalities for duty drawback and did not compensate ONGC for customs duty and other expenses incurred in the amount of Rs.63.88 crores.

(3.) Clause 37 of the contract between ONGC and DEPL provides for the settlement of disputes of the parties through arbitration. On 25/4/2008, ONGC invoked arbitration against DEPL and JDIL and claimed an amount of Rs.63.88 crores. An Arbitral Tribunal consisting of Mr Justice S P Kurdukar (Retd.), Mr Justice M S Rane (Retd.) and Mr S Venkateswaran (Senior Advocate) was constituted. In its statement of claim filed before the Arbitral Tribunal, ONGC set up the case that DEPL and JDIL belonged to the DP Jindal Group of Companies and since they constitute a single economic entity, the corporate veil should be lifted to compel the non-signatory, JDIL, to arbitrate. According to ONGC, DEPL is an alter ego and agent of JDIL. The statement of claim read thus: