Bombay High Court

Ashok Kumar Goel vs Ebixcash Limited on 8 October, 2024

2024:BHC-OS:15701                                                              CARBPL-2579-2024-JR.doc




                                                                                                     Shephali


                                                                                          REPORTABLE



                                     IN THE HIGH COURT OF JUDICATURE AT BOMBAY

                                           ORDINARY ORIGINAL CIVIL JURISDICTION

                                                  IN ITS COMMERCIAL DIVISION

                              COMMERCIAL ARBITRATION PETITION (L) NO. 25579 OF 2024




                         1.    Ashok Kumar Goel,
                               Top Floor, Times Tower, Kamla Mills
                               Compound, Senapati Bapat Marg,
                               Lower Parel,
                               Mumbai 400 013

                         2.    Vyoman India Private Limited,
                               (Formerly Vyoman Tradelink India
                               Private Limited)
                               A company within the
                               meaning of the Companies Act, 2013 and
 SHEPHALI                      having its registered office at New
 SANJAY
 MORMARE                       Prakash Cinema, N. M. Joshi Marg,
  Digitally signed by
  SHEPHALI SANJAY
  MORMARE
                               Lower Parel,
  Date: 2024.10.09
  10:29:25 +0530
                               Mumbai - 400 013.                                           ...Petitioners


                                 ~ versus ~


                         1.    EbixCash Limited & Ors,



                                                           Page 1 of 41
                                                        8th October 2024




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       (Formerly EbixCash Private Limited) )
       A company within the meaning of the
       Companies Act, 2013 and having
       registered office at l0l, First Floor,
       4832124, Ansari Road, Darya Ganj,
       New Delhi - 1l0 002 and its corporate
       office at Plot No. 122 & 123, NSEZ,
       Phase - II, Noida Gautam Buddha Nagar,
       Uttar Pradesh 201 305

 2.    EbixCash World Money Limited,
       A company within the meaning of the
       Companies Act, 2013 and having its
       office at 8th Floor, Manek Plaza,
       Kalina CST Road,
       Kolekalyan, Santacruz (East),
       Mumbai 400 098.

 3.    Ebix Singapore Pte. Limited,
       A company registered under the laws of
       Singapore and having its address at 1
       Harbourfront Avenue, #14-07
       Keppel Bay Tower,
       Singapore (098632).

 4.    Ebix Payment Services Private Limited,
       A company within the meaning of the
       Companies Act, 2013 and having its
       registered office at 2nd Floor,
       Manek Plaza, Kalina CST Road,
       Kolekalyan, Santacruz (East),
       Mumbai - 400 098.                                         ...Respondents




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                                 8th October 2024




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 A PPEARANCES


 For the Petitioners               Mr Sharan Jagtiani, Senior Advocate,
                                          with Nitesh Jain, Juhi Mathur,
                                          Sonia Dasgupta Ananyaa
                                          Jagirdar Surbhi Agarwa & Atul
                                          Jain, i/b Trilegal.

 For Respondents Nos 1, 2 & 4      Mr Mayur Khandeparkar, with Chetan
                                          Yadav, Allen Mathew & Pratibha
                                          Tiwari, i/b VJ Juris Advocates.




                               CORAM : ARIF S. DOCTOR, J.

                                DATED : 8th October 2024.


 ORAL JUDGMENT (Per Arif S. Doctor, J):-

1. The captioned Commercial Arbitration Petition is filed under

Section 9 of the Arbitration and Conciliation Act 1996 (Arbitration Act)

in which the Petitioner seeks the following reliefs:

" A. Direct Respondents Nos.l-3 to deposit the sum of INR 145 crore being B0% of the Enhanced Call Price determined by the Valuation Report dated 22 January 2024 issued by PwC, with this Hon'ble Court as security, pending the hearing and final disposal of the arbitral proceedings and enforcement of the arbitral award that may be passed therein;

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B. In the alternative, direct Respondents Nos. 1-3 to furnish an irrevocable bank guarantee of a nationalized bank, or such other security, in favour of the Prothonotary, Hon'ble Bombay High Court for the sum of INR 145 crore, being 80% the Enhanced Call Price redeemable by the Petitioners upon the issuance of the final award by the arbitral tribunal in SIAC Arbitration No. 80 of 2024 and up to the total sum of any amounts which the tribunal orders the Respondents to pay to the Petitioners;

C. In furtherance of Relief A and B, Order appointment of a Court Receiver or such other person as this Hon'ble Court deems appropriate as Court Receiver, to do all such things including to take possession and control of all the immovable and movable properties, present and future (including general fees, income, rent, revenues, interest, other income, receivables, profits, etc.) of the Respondents including their equity interests in Schedule A and other properties disclosed by the Respondents with full powers under Section 94 and Order XL Rule I of the Code including the power to call for / demand, recover, take possession thereof and to sell the same by public auction or by private treaty and to deposit all receivables / sale proceeds in a separate account to be opened and operated by the Court Receiver to be utilized as a deposit or used as a collateral to procure a bank guarantee to the extent of INR 145 in terms of the directors passed by this Hon'ble Court;

D. In the further alternative, attach all saleable and unsecured assets owned by Respondents Nos. 1-3 or over which Respondents Nos. l-3 exercise a disposing power, whether such assets are movable, immovable, tangible, intangible, including but not limited to securities, bank accounts, investments, valuables etc. upto the value of INR 145 crore;

E. Pass an Order of injunction restraining Respondents Nos. l-3 from, in any manner dealing with, and / or

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encumbering and / or disposing off, dissipating, and / or creating third party rights and/or alienating any of the moveable or immoveable properties or assets owned or belonging to Respondents Nos. l -3, including the assets listed in Schedule A hereto, standing in the name of Respondents Nos.1-3 or over which Respondents Nos. 1-3 exercise any disposing power;

F. Direct the Respondents to disclose all their assets on oath, including providing further and better particulars as to the movable and immovable properties, along with details of all the Respondents' bank accounts and the monies lying therein, receivables, shares held in any companies and any other interests in any other entity including financial statements and list of all assets of such entities, government securities, bonds, mutual funds or other securities for money, lands, houses or other buildings, goods, money, bank notes, cheques, bills of exchange, properties, valuables, whether tangible or intangible or all other saleable moveable and immovable properties belonging to the Respondents or over the profits of which the Respondents have a disposing power which they may exercise for their own benefit whether the same may be held in the name of the Respondents or held by another person in trust for them or on their behalf;

G. Grant ex-parte ad interim reliefs in terms of prayers (E) and (F) above."

2. Before, however, adverting to the rival contentions it is necessary

to set out the following facts to give context to the rival contentions, viz.

i. The disputes between the Parties arises out of a

Shareholders Agreement ("SHA") dated 12th May 2017 by

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and under which the Respondents were to purchase the

shareholding of the Petitioner in Respondent No. 4

company in the manner more particularly set out in

Clause 15.6 and 15.7 of the SHA. The SHA also contains

an arbitration clause that provides for arbitration in

accordance with the Singapore International Arbitration

Chamber ("SIAC") Rules in the event of any disputes and

differences arising between the Parties under the SHA.

ii. Admittedly, disputes and differences between the Parties

arose since the Petitioner terminated the SHA and the

Respondent did not comply with its obligations under

Clause 15.6 and 15.7 of the SHA. It was thus that an

Arbitral Tribunal came to be constituted as per the SIAC

Rules.

iii. The Arbitral Tribunal by an Award dated 1st June 2023

("First Award") inter alia upheld the termination of the

SHA and the obligation of Respondent Nos. 1 to 3 to

purchase the shares of the Petitioner, the Tribunal

however rejected the valuation report submitted by

Deloitte on the ground that it lacked independence and

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directed another Independent Valuer to carry out a fresh

valuation. The Arbitral Tribunal also vide an Order dated

1st September 2023 ("Cost Award") awarded the

Petitioners a sum of Rs 9 crores approximately as costs.

The Petitioners thereafter filed two Petitions under Section

49 of the Arbitration Act before the Delhi High Court for

enforcement of the First Award and the Cost Award.

iv. Thereafter, on 30th November 2023, the Petitioner

appointed Price Waterhouse & Co LLP ("PwC") as the

eligible valuer under the SHA to determine the enhanced

call price in respect of the Respondents' liability which

had already been determined by the First Award.

v. PwC on 2nd January 2024, issued a valuation report

determining the enhanced call price at Rs. 181 crores. The

Petitioners thus called upon the Respondents to make

payment of the said amount towards the Petitioners'

shareholding in Respondent No. 4. The Respondents,

however, refused to make payment of the enhanced call

price on various grounds including disputing the

independence of the valuer, i.e. PwC.

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vi. On 19th January, 2024 the Delhi High Court in the

enforcement Petitions filed by the Petitioners to enforce

the First Award and the Cost Award, passed an Order of

status quo qua the assets of the Respondents as more

particularly set out in the said Petitions.

vii. Since the Respondents refused to make payment to the

Petitioners at the enhanced call price the Petitioners on

20th February 2024, did the following, (i) invoked

arbitration under SIAC Rules in terms of Clause 20 of the

SHA and (ii) applied for emergency interim relief under

Schedule-I of the SIAC Rules.

viii. By two separate Orders dated 13th March 2024, the

Delhi High Court allowed both the Petitions filed by the

Petitioners under Section 49 of the Arbitration Act i.e. for

enforcement of the First Award as also the Cost award.

Thus, both the First Award and the Cost Award have

attained finality and have been recognised as being valid

under Indian Law in accordance with Part- II of the

Arbitration Act. These orders have not been challenged by

the Respondents.

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ix. On 14th March 2024 the Emergency Arbitrator vide its

order (EA Decision) decided the application filed by the

Petitioner and ordered and directed the Respondent Nos. 1

to 3 to furnish an irrevocable bank guarantee in the sum

of INR 145 crores in favour of the Petitioners within a

period of 14 days. This time expired on 28th March 2023

x. The Respondents thereafter made various

representations/assurances to the Petitioners indicating

that they were making efforts to comply with the EA

Decision. The Respondents however represented to the

Petitioners that they were unable to furnish a bank

guarantee as directed, in view of the Order dated 19th

January 2024 passed by the Delhi High Court by which

the assets of the Respondents were injuncted from dealing

with their assets. The Respondents thus on 16th April

2024 made an application before the Delhi High Court for

modification of the Order dated 19th January 2024 which

came to be allowed in terms of the Order dated 1st May

2024.

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xi. Thereafter, on 31st May 2024, the Respondents filed an

application to modify the Emergency Arbitrator's decision

before the regular Arbitral Tribunal by seeking

substitution of the bank guarantee with some other form

of security. The reason for seeking such substitution inter

alia was that the banks in India were not accepting the

assets of the Respondents as collateral security because of

the pending bankruptcy proceedings against Respondent

No. 4 in the United States.

xii. Thereafter, a detailed hearing was held before the Arbitral

Tribunal and the Arbitral Tribunal on 24th July 2024

issued an Order ("Tribunal's Order") reviewing the

Emergency Arbitrators' decision, by which the Arbitral

Tribunal rejected the Respondents' request for

modification of the EA Decision and directed the

Respondents to provide security to the Petitioners security

in the form of bank guarantee in the amount of Rs. 145

crores within a period of 14 days.

xiii. Since the Respondents did not comply even with the

Tribunal's Order , the Petitioners on 13th August 2024

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filed the present Petition under the provisions of Section 9

of the Arbitration and Conciliation Act 1996 seeking the

reliefs extracted above.

3. Mr. Jagtiani, Learned Senior Counsel appearing on behalf of the

Petitioners, at the outset, submitted that though the EA Decision was

termed an "Emergency Interim Award" the same was in fact only an

interim Order and was not a final award as contemplated under Part II

of the Act. He then in support of his contention invited my attention to

paragraph 8 of Schedule 1 of the SIAC Rules and pointed out that the

same made specific and distinct use of the words " award" and "order".

He pointed out that the Hon'ble Supreme Court in the case of

Amazon.com NV Investment Holdings LLC Vs. Future Retail Limited and

Ors.1 recognising this fact had specifically noted that an Emergency

Arbitrator's "award" was in fact an order. It was thus his submission

that the EA Decision would not be one which was enforceable under

Part II of the Arbitration Act and hence, the Petitioner would always

have recourse to Section 9 of the Arbitration Act by virtue of the proviso

to Section 2(2) of Arbitration Act.

1 (2022) 1 SCC 209

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4. Mr. Jagtiani then fairly submitted that recourse to Section 9 of

the Arbitration Act was not available for the purpose of enforcing the

orders of an emergency arbitrator and/or an arbitral tribunal, but this

did not mean that the Court could not in an application filed under

Section 9 independently assess the facts and grant interim relief if a

case for the grant of such reliefs was otherwise made out. In support of

his contention, he placed reliance upon the decision of the Delhi High

Court in the case of Raffles Design International India Private Limited &

Anr. vs Educomp Professional Education Ltd & Ors.. 2

5. Mr. Jagtiani did not dispute that the grant of interim reliefs was

entirely within the discretion of the Court but submitted that given the

fact that party autonomy was the bedrock of arbitration, and the parties

having agreed to a procedure which contemplated the appointment of

an Emergency Arbitrator, the parties must then necessarily be bound by

the decision of the Emergency Arbitrator. In support of his contention,

that due deference must be given to the EA Decision, he placed strong

reliance upon the judgement of the Hon'ble Supreme Court in the case

of Amazon.com NV Investment Holdings LLC (supra) which in the

context of an Emergency Arbitrators Award, held as follows, viz.

2 (2016) SSC OnLine Del 5521

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"40. An Emergency Arbitrator's "award" i.e. order, would undoubtedly be an Order which furthers these very objectives i.e. to decongest the Court system and to give the parties urgent interim relief in cases which deserve such relief. Given the fact that party autonomy is respected by the Act and that there is otherwise no interdict against an Emergency Arbitrator being appointed, as has been held by us hereinabove, it is clear that an Emergency Arbitrator's order, which is exactly like an Order of an Arbitral Tribunal once properly constituted, in that parties have to be heard and reasons are to be given, would fall within the institutional rules to which the parties have agreed, and would consequently be covered by Section 17(1), when read with the other provisions of the Act, as delineated above.

41. A party cannot be heard to say, after it participates in an emergency award proceeding, having agreed to institutional rules made in that regard, that thereafter it will not be bound by an Emergency Arbitrator's ruling. As we have seen hereinabove, having agreed to para 12 of Schedule 1 to the SIAC Rules, it cannot lie in the mouth of a party to ignore an Emergency Arbitrator's award by stating that it is a nullity when such party expressly agrees to the binding nature of such award from the date it is made and further undertakes to carry out the said interim Order immediately and without delay."

Basis the above, Mr. Jagtiani submitted that the Parties having vested

jurisdiction in the Emergency Arbitrator, the Respondents ought not to

be permitted to renege from the EA Decision. He additionally pointed

out that the EA Decision was rendered after following due process and

in respect of which, no grievance was even raised by the Respondents. It

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was thus his submission that this Court could and must in the facts of

the present case, give strong weightage to the EA Decision.

6. Mr Jagtiani then submitted that it was well settled that Section 9

of the Arbitration Act was intended to structurally support arbitration.

He further pointed out that in the facts of the present case, both the

Emergency Arbitrator and the Arbitral Tribunal had reached their

respective conclusions after detailed hearings and had only thereafter

directed the Respondents to furnish the Petitioners security in the form

of a bank guarantee. He submitted that due deference must therefore be

given to these decisions by this Court. Mr. Jagtiani then placed reliance

upon the judgement of this Court in the case of Plus Holdings Lts

Xeitgiest Vs. Entertainment Group Ltd. 3 and pointed out that this Court

had in that case granted ad interim relief based entirely upon the view

taken by the Emergency Arbitrator. It was this approach which he

submitted must be adopted and encouraged to structurally support

arbitration.

7. Mr. Jagtiani then, from the EA Decision pointed out that the

justification for directing the Respondents to furnish a bank guarantee

3 2019 SCC OnLine Bom 13069

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and no other form of security, even though offered by the Respondents

was expressly dealt with by the Emergency Arbitrator as follows, viz.

"126 (d). PWC is one of the named independent valuers prescribed in the SHA. Furthermore, the contractual definition does not expressly require the independent valuer to be independent from the Parties (which has been the focus of the Respondents' objection). Rather, the parties may have merely intended to record their agreement that the valuation should not be done internally but by one of the Big Four consultancy companies. ln any event, the Respondents have not established (or even expressly asserted in writing) any links between the claimants and PWC, but only between pwc and themselves (which arguably should have made them more rather than less comfortable with PWC's appointment).

e. The Claimants have the express right under Article 15.6 of the SHA to make the appointment of the Independent Valuer" This is not a right shared with the Respondents which have already lost the first arbitration and which have been ordered to purchase their shares.

f. The Sole Arbitrator's decision not to issue an Additional Award confirming the appointment of PWC does not preclude the claimants from appointing PWC themselves as they are expressly entitled to do under Article 15.6.

h. ln reality, the Respondents did nothing. They neither challenged the appointment formally through Article 20.1, nor cooperated with PWC as it sought to discharge its function. It even asked to be excluded from the communications with PWC, thereby frustrating the effort of the Claimants and PWC to conduct the valuation transparently, independently of either side, and based on all available information.

134. Having waited nearly four and a half years since first discovering the Respondents' breach of the SHA and triggering their

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right to sell their shares to the Respondents, the Claimants should be put into a position in which they cannot suffer irreparable harm should one or more of the Respondents collapse. This appears distinctly possible following the demise of Ebix lnc; Ebix Singapore not being a going concern without a letter of undertaking from the bankrupt Ebix lnc (while Ebix Singapore completes the circle by serving as a guarantor of Ebix lnc's credit facilities from its lenders that amount to US$ 650 million and also continues to be a guarantor under its Restructuring Support Agreement executed with its lenders); Ebix World not being a going concern without a letter of assurance from Ebix lndia; and Ebix lndia having its IPO shelved and two directors resigning recently (see the flow chart at paragraph 2 above).

142. The balance of interests and relative hardships militates in favour of the granting of relief in circumstances where the Respondents have admitted they are liable to purchase the shares; they have already delayed completing the share purchase by over four years; the Respondents have not complied with Lord Neuberger's decisions on costs and nominal damages nor their undertaking to cooperate with the lndependent Valuer; there is a significant risk the Respondents may not be able to honour any award rendered in the Claimants' favour given their delays in paying the more modest sums ordered by Lord Neuberger (and broader financial challenges); and the Respondents obfuscation has compelled the Claimants to pursue actions in multiple fora in Singapore and India."

8. He then submitted that the Respondents in the Affidavit in Reply

to the present Petition has taken only the ground of maintainability and

did not raise a single grievance re the aforesaid findings as also did not

dispute that EA Decision was after the Parties were given a full and fair

opportunity of hearing. It was thus his submission that there was no

reason for this Court to not rely upon/adopt the reasoning, basis which

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the EA Decision was passed, instead of considering the matter de novo,

since no new factual basis was even asserted by the Respondents which

this Court was required to consider..

9. Mr. Jagtiani then without prejudice to the above, submitted that

even if the observations in the EA Decision and the Tribunal's Order

were not taken into consideration, and this Court was to consider the

matter de novo, an overwhelming case for the grant of interim relief as

prayed for had been made out by the Petitioner, given the conduct of

the Respondents. In support of this contention, he highlighted the

following, viz.

i. That the Respondents' obligation and liability to purchase the

shares of the Petitioners was now final and established by the

First Award and that the Respondents had in various statutory

filings as also in their financial statements admitted their

liability to purchase the Petitioners' shares in Respondent

No.4.

ii. That the Respondents had consistently failed to comply with

as also unreasonably delayed compliance with the obligation

to make payment of nominal damages and/or costs which

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had been awarded in favour of the Petitioner as also failure to

make payment of the Respondents' share of arbitral fees.

iii. That the Respondents had made several assurances to the

Petitioner that they would be complying with the EA

Decision, despite which fact, they did not do so.

iv. The Respondents represented that they were unable to

furnish the bank guarantee since the Respondents had been

injuncted from dealing with their assets by the Delhi High

Court

v. That the Respondents had infact even sought a modification

of the EA Decision by seeking liberty to furnish other

securities in place of having to furnish a Bank Guarantee.

vi. That before the Arbitral Tribunal the Respondents had relied

upon the bankruptcy proceedings which were then pending

against the ultimate holding company of the Respondents i.e.,

one Ebix Inc. to use that as a ground for not being able to

comply with the EA Decision.

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It was basis the above that Mr. Jagtiani submitted that the Petitioners

had made out a case for the grant of urgent ad interim and interim

relief as prayed for and that the same was essential as an interim

measure of protection to secure the amount in dispute in the arbitration

proceedings.

10. Mr. Khandeparkar, Learned Counsel Appearing on behalf of

Respondent Nos.1, 2 and 4 at the outset raised a preliminary objection

to the very maintainability of the Petition. He submitted that the Petition

was not maintainable since what the Petitioners were effectively

seeking was enforcement of the EA Decision and Tribunal's Order

without filing an enforcement Petition under Section 49 of the

Arbitration Act.

11. Mr. Khandeparkar submitted that the EA Decision was not a

decision as contended by the Petitioners but was in fact an Award

which was required to be enforced under the provisions of Section 49

of the Arbitration Act. In support of his contention, he placed reliance

upon Clause 1.3 of the SIAC rules which he pointed out defined an

Award to include "a partial interim or final Award and an Award of an

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Emergency Arbitrator". It was thus his submission that the EA Decision

was to be enforced in the manner contemplated under Part II of the

Arbitration Act and that a Petition under Section 9 of the Arbitration

Act was thus not maintainable.

12. Mr. Khandeparkar then placed reliance upon the judgment of

this Court in the case of Hyundai Heavy Industries Company Limited vs.

Del Seatek India Private Limited 4 to submit that this Court had held that

an Interim Foreign Arbitration Award and an Interim Cost Award

which were passed in an arbitration held in London (England) under

the rules of the London Court of International Arbitration (LCIA) were

foreign awards within the meaning of Section 44 of the Arbitration Act.

He submitted that in the present case, the Petitioners had admittedly not

filed any petition under Section 49 of the Arbitration Act seeking

recognition and/or enforcement of the EA Decision or Tribunal's Order.

13. Mr. Khandeparkar then from the decision of the Delhi High

Court in the case of Raffles Design International India Private Limited &

Anr. (supra) pointed out that the same in fact held that recourse to

Section 9 was not available for the purpose of enforcing the orders of

the Arbitral Tribunal. It was basis this he submitted that the present

4 2022 SCC Online Bom 11571

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Petition filed under Section 9 was not maintainable, since what the

same sought was an enforcement of the Emergency Award.

14. Mr. Khandeparkar then without prejudice to the aforesaid

submitted that the present Petition was also not maintainable, since the

application of Part I of the Arbitration Act had been excluded by the

parties. In support of his contention, he invited my attention to Clause

20.1 of the SHA and pointed out that the same expressly provided that

the arbitration was to be in accordance with the SIAC Rules basis which

he submitted that the Parties had excluded the application of Part I of

the Arbitration Act. In support of his contention, he placed reliance

upon the judgement of the Hon'ble Supreme Court in the case of BGS

SGS Soma Vs. NHPC Limited 5 and Imax Corporation V/s E-City

Entertainment (India) Pvt. Ltd.6 in support of his contention that once

parties had consciously agreed that the juridical seat of the arbitration

was to be Singapore, then it was no longer open to them to contend that

the provisions of Part I of the Arbitration Act would be applicable. It

was on this basis that he reiterated that in the present case Article 20 of

the SHA specifically stipulated that the seat and venue of arbitration

5 (2020) 4 SCC 234

6 (2017) 5 SCC 331

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would be Singapore and the SIAC Rules would apply, the Parties had

excluded the applicability of Part I of the Arbitration Act.

15. He then without prejudice to the above, fairly pointed out that

Rule 30.3 of the SIAC Rules provided for a request for interim relief to

be made by party prior to the constitution of the tribunal or in

exceptional circumstances .He then submitted that in the facts of the

present case, it was not open to the Petitioners to content that the

present Petition was maintainable under Rule 30.3 since (a) Rule 30.3

provided for recourse to the judicial authority only in exceptional

circumstances (b) the Petition did not make out a case of exceptional

circumstances and (c) that the Petitioners had admittedly not

approached this Court taking recourse to Article 30.3 of the SIAC Rules

but had done so under Clause 19.1 of the SHA. He, then pointed from

Clause 19.1 that the same specifically provided that the jurisdiction of

the Courts in Mumbai was "subject to Article 20 of SHA " It was thus his

submission that once the parties had elected to invoke Article 20 of the

SHA the jurisdiction of this Court under Part I of the Arbitration Act

was clearly ousted.

16. Mr. Khandeparkar then placed reliance upon a judgment passed

by Learned Single Judge of the Delhi High Court in the case of Ashwani

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Minda and Anr. vs. U Shin Limited & Anr. 7 to submit that the Delhi

High Court had in the said case held that a Section 9 Petition was not

maintainable in respect of an international seated arbitration if parties

by an agreement expressly or impliedly excluded the applicability of

Section 9. He also pointed out from the said judgement that the same

held that the legislative intent of Arbitration Act was to provide an

efficacious alternate relief in the Indian Court where the tribunal is

either not constituted or is otherwise unable to grant efficacious relief.

He submitted that the Parties having chosen the Tribunal, the seat and

the applicable rules and the forum to seek interim reliefs cannot now

revise their choice in the manner that the Petitioners were now

attempting to do. He pointed out that the decision of Single Judge in the

case of Ashwani Minda and Anr. (supra) was upheld by the Division

Bench and was subsequently confirmed by the Hon'ble Supreme Court.

17. It was basis the above that he submitted that the Petition under

Section 9 could not be filed, and the proper recourse would have been

for the Petitioner to have filed a Petition for enforcement of the EA

Award under Part II of the Arbitration Act. He submitted that the

enforcement Petition being an efficacious remedy, there was no

exceptional circumstances which necessitated the filing of the present

7 2020 SCC Online Del 1648

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Petition. He further submitted that there was no provision in the SIAC to

challenge the Award of the Emergency Arbitrator and that final

arguments in the arbitration between the parties were concluded and

the Final Award was expected on or before 29th October 2024. It was

thus that he submitted the Petition be dismissed.

18. Mr. Khandeparkar then in the alternative and without prejudice

to the above submitted that even in the event that this Court finds that

the Petition is maintainable, the same would have to be considered

afresh in view of the provisions of Indian Law and dehors the findings

rendered by the Emergency Arbitrator as also Arbitral Tribunal in the

Tribunal's Order . He submitted that the entire basis on which relief

had been sought for in the present Petition was the EA Decision and the

Tribunal's Order. He submitted that it was not open to this Court to

place reliance upon the same since the very issue of valuation was one

which was pending consideration before the Arbitral Tribunal. He then

submitted that Respondents had refused to accept the sum of INR 145

crore being 80% of the Enhanced Call Price determined by

the Valuation Report dated 22nd January 2024 fixed by PwC, since he

submitted that PwC was not an independent valuer. He then submitted

that the arbitration proceedings pending between the Parties was to be

concluded on or before 29th October 2024 and thus it was his

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submission that the valuation of the shares was not having been finally

determined, no Order could be presently passed basis the valuation of

the shares done by PwC.

19. He then submitted that the Order dated 13th January 2024

passed by the Delhi High Court in the Execution Application filed by the

Petitioner would show that the Petitioners had only sought enforcement

of the Cost Award and the First Award was not yet recognized. It was

thus his submission that the Respondents obligation to purchase the

Petitioners' shares in Respondent No.4 had not yet been crystallized nor

quantified as a debt and thus there was no existing debt due as on date.

He also then submitted that the shares were still held by the Petitioners,

however the valuation of the shares was yet to be adjudicated and

determined finally. He thus submitted that no Order in the nature of an

attachment before judgment or to secure the value of the said shares

could be presently passed, especially since the shares were held by the

Petitioners. He submitted that if this Court were to grant relief on the

basis of the valuation of PwC, it would mean that this Court had

accepted the valuation report which was specifically under challenge.

20. Mr. Khandeparkar then also submitted that the very ground on

which the EA Award was passed did not subsist today. He pointed out

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that the application filed before the Emergency Arbitrator was on the

basis that Ebix Inc. i.e. the ultimate holding company of the Respondents

was undergoing liquidation/bankruptcy proceedings in the United

States. He, however, submitted that the Chapter 11 Bankruptcy

proceedings against Ebix Inc. had since come to an end in the month of

August, which fact was made known to the Petitioner by the

Respondents' Advocates vide their email l dated 1st July 2024. He

submitted that the Petitioners had deliberately suppressed the fact that

the bankruptcy proceedings against Ebix Inc. no longer subsisted on the

date when the Petition was filed. He then also submitted that the

Petitioners' submissions regarding the Petitioners' conduct was also

highly exaggerated and distorted since it was based on mere ipse dixit

of the Petitioners inter alia that the Respondents were in financial

distress.

21. Mr. Khandeparkar then also pointed out that the list of assets of

the Respondents set out in Schedule A was more than 10 times the value

of the claim of the Petitioners and that the said assets were not

encumbered. He submitted that the Petitioners' claim to seek a deposit

of the amount and/or in the alternative, a bank guarantee was nothing

more than an attachment before judgment as contemplated under

Order 38 Rule 5 of the CPC. He then placed reliance upon the judgment

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of a Division Bench of the Delhi High Court in the case of Skypower

Solar India Private Limited vs. Sterling and Wilson International FZE 8 to

point out that the Order directing a party to furnish a bank guarantee

would fall under Order 38 Rule 5 of the CPC and therefore the tests

applicable to the grant of reliefs under Order 38 Rule 5 of the CPC

would have to be met before such Order can be passed.

22. Mr. Jagtiani dealing with the preliminary objections raised by

Mr. Khandeparkar submitted that the same were entirely misconceived.

He first invited my attention to Section 2(2) of the Arbitration Act and

point out that a plain reading of the same made expressly clear that

Section 9 would apply to international commercial arbitrations, even if

the arbitration was outside India. He thus submitted to accept the

Respondents contention that Section 9 would be excluded simply

because the place of arbitration was Singapore, was not only contrary to

a plain reading of proviso to Section 2(2) of the Arbitration Act but

would also result in rendering the 2015 amendment to the Arbitration

Act nugatory.

8 2023 SCC Online Del 7240

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23. He pointed out that the preliminary objection as raised by the

Respondent had been considered and rejected in a catena of

judgements9 including of this Court. He then from the judgement of this

Court in the case of Ultra Deep Subsea Pvt. Ltd. (supra) pointed out that

this Court had expressly held as follows, viz.:

"20. As can be seen from these decisions, to oust the jurisdiction of this Court under Section 9, there must be a specific Agreement between the parties which would indicate a clear intention to oust the jurisdiction of this Court to grant relief under Section 9 of the Indian Arbitration Act. In the facts of the present case, I have already opined that merely because the parties agreed that the arbitration would be conducted in London and would be governed by the English Law, would not amount to an "agreement to the contrary" as contemplated in the proviso to Section 2(2) of the Indian Arbitration Act. In this view of the matter, I find no substance in the first argument canvassed by Mr. Andhyarujina and the same is accordingly rejected."

Basis the above he submitted that Clause 20.2 of the SHA could by no

stretch of imagination mean that the Parties had agreed to exclude Part

I of the Arbitration Act, since the same admittedly did not contain any

such agreement to specifically oust Part I of the Arbitration Act.

9 Shanghai Electric Group Co. Ltd. vs. Reliance Infrastructure Ltd., 2022 SCC OnLine Del 2112 Chemex Oil (P) Ltd. vs. Seastarr International (P) Ltd., 2022 SCC OnLine Cal 4034 Heligo Charters Private Ltd. vs. Aircon Feibars FZE . 2017 SCC Online Bom 631 PASL Wind Solutions Pvt. Ltd. (2021) 7 SCC 1

8th October 2024

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24. He then submitted that in the facts of the present case, there was

admittedly no express agreement to exclude the applicability of Part I of

the Arbitration Act between the parties either in Clause 20 of the SHA

or elsewhere in the SHA. He submitted that the Respondents' reliance

upon the decision of the Hon'ble Supreme Court in the case of BGS SGS

Soma (Supra) was entirely misplaced, since the issue before the Hon'ble

Supreme Court was not the applicability the proviso to Section 2(2) of

Arbitration Act but was in respect of the seat of arbitration in case of

domestic arbitration to determine as to which Court the challenge to

the award would lie. He submitted that similarly the judgment of Imax

Corporation (supra) on which reliance was placed by the Respondents

was also equally misplaced since the issue pertained to the challenge of

foreign award under Section 34 of Arbitration Act and was not in

context of the applicability of Section 9 to foreign seated arbitrations in

view of the proviso to Section 2(2) of the Arbitration Act.

25. He then submitted that even the second preliminary objection

raised by the Petitioners that the EA Decision was required to be

enforced under Part II was also equally untenable. He reiterated that the

EA Decision was not a final award but was only in the nature of interim

relief to protect and/or secure the Petitioner's claim pending the final

Arbitral Award. He pointed out that the decision of this Court in the

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case of Hyundai Heavy Industries Company Limited (supra) upon

which reliance was placed by the Respondents, though the same

pertained to an interim foreign arbitration award was of no avail, since

it finally determined a part of the dispute in that case.

26. He then pointed out that the Respondents' contention that the

Petitioners had suppressed documents in respect of US Bankruptcy

proceedings was not only baseless but was also reckless and malafide.

He first pointed out that as per the Respondents' own pleaded case, the

email dated 1st July 2024 only indicated that the lenders of Ebix Inc.

had approved a Chapter 11 Plan (First Amended Plan) for the purchase

of the shares and assets of Ebix Inc. by a consortium of Eraaya

Lifespaces Limited, Vikas Lifecare Limited and Vitasta Software India

Private Limited and that the transaction was stated to be completed at

the end of July 2024. He took pains to point out that the email did not

in any manner indicate that the plan was submitted to the Bankruptcy

Court, or that it was accepted by the Bankruptcy Court or that Ebix Inc.

was out of bankruptcy.

27. He then pointed out that it was the email dated 1st July 2024,

that the Respondents had alleged that the Petitioners had been informed

that Ebix Inc. had exited bankruptcy proceedings and therefore the

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Respondents' contention in this regard was demonstrably at odds with

their own pleaded case. He then submitted that the Order dated 2nd

August 2024 passed by the US Bankruptcy Court, by which the Chapter

11 Plan was approved was infact annexed to the Petition. It was thus

that he reiterated that the Respondents' contention of suppression was

malafide and reckless and was only to mislead the Court.

28. Mr. Jagtiani then also pointed out that the Respondent's offer to

furnish other forms of security had not only been considered and

rejected by the Arbitral Tribunal but was also a complete red herring.

He submitted that a bank guarantee was the most appropriate form of

security since (i) the Respondents had admitted their liability to

purchase the Petitioners' shareholding in Respondent No. 4 at the

Enhanced Call Price before various regulators and the Court as also that

(ii) two different proceedings vested with jurisdiction by the parties (i.e.,

the Emergency Arbitrator and the Arbitral Tribunal) had found it

appropriate to grant the Petitioners liquid security, and (iii) the

Respondents had despite various assurances and representations failed

to furnish the bank guarantee as also make payment of the amounts

awarded as costs.

29. After having heard Learned Counsel at great length and having

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considered their rival contentions as also the case law upon which

reliance was placed, I find that the Petitioner has made out a case for

the grant of interim reliefs. I say so for the following reasons, viz.

A. First, I find that the first preliminary objection of the Respon-

dents i.e. that the EA Decision was an Award and therefore was

required to be enforced under the provisions of Part II of the

Arbitration Act is entirely devoid of any merit. In my view, to

determine whether such decision/award is a final decision or

award, what is crucial is the substance of the decision/award

and not merely its nomenclature. In other words, one has to see

whether such a decision/award has finally determined and/or

disposed of the lis or any part of the lis between the parties. In

the present, it was not even the Respondents' case that the EA

Decision has finally determined any part of the lis between the

Parties which is pending adjudication in the Arbitration Pro-

ceedings. Hence, by no stretch of imagination and/or ingenuity

can it be said that the EA Decision is an Arbitral Award as con-

templated under Part II, which would have to be or is in fact

even capable of being enforced under Part II of the Arbitration

Act.

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B. Additionally, I must note that the SIAC Rules as pointed out by

Mr. Jagtiani make specific and distinct use of the words

"award" and "order". I am also fortified in my view that the de-

cision of an Emergency Arbitrator and Tribunal's Order were

orders and not awards, despite its nomenclature, in view of the

observation made by the Hon'ble Supreme Court in the case of

Amazon.com NV Investment Holdings LLC (supra). Second, I

find the Respondents' next contention, i.e. that Parties had by

virtue of Clause 20 of the SHA excluded the applicability of

Part I i.e. Section 9 of the Arbitration Act is equally untenable

and devoid of merit. Clause 20 of the SHA merely provides for

arbitration under the provisions of SIAC in the event of any

dispute and/or claim arising between the parties in connection

with or in relation to the SHA. Admittedly, there is no express

exclusion of Part I of the Arbitration Act either in clause 20 or

for that matter any other clause of the SHA. Proviso to Section

2(2) in plain terms specifically provide for the applicability of

Section 9 to International Commercial Arbitrations subject to

an agreement to the contrary. Hence, absent any express agree-

ment in writing entered into between the Parties to exclude

Part I of the Arbitration Act, to accept the contention of Re-

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spondents would be in the teeth of proviso to Section 2(2) and

effectively render the same nugatory.

C. I am fortified by my view from the findings of this Court in the

case of Ultra Deep Subsea Pvt Ltd. (supra) wherein it was ex-

pressly held in the context of exclusion of Section 9 to foreign

seated arbitrations, that, "there must be a specific Agreement

between the parties which would indicate a clear intention to

oust the jurisdiction of this Court to grant relief under Section

9 of the Indian Arbitration Act" clear, unequivocal and unam-

biguous. This is plainly lacking in the present case. Clause 20

of the SHA does not contain any such agreement to exclude

Part I, much less any clear, unequivocal and unambiguous in-

tention. Also, this contention has been taken and negated in a

catena of judgements10 of the Hon'ble Supreme Court, Delhi

High Court, Calcutta High Court and of this Court as I have

also noted above.

10 Shanghai Electric Group Co. Ltd. vs. Reliance Infrastructure Ltd., 2022 SCC OnLine Del 2112 Chemex Oil (P) Ltd. vs. Seastarr International (P) Ltd., 2022 SCC OnLine Cal 4034 Heligo Charters Private Ltd. vs. Aircon Feibars FZE . 2017 SCC Online Bom 631 PASL Wind Solutions Pvt. Ltd. (2021) 7 SCC 1

8th October 2024

CARBPL-2579-2024-JR.doc

D. Third, the Respondent's reliance upon the judgements of the

Hon'ble Supreme Court in the case of BGS SGS Soma and Imax

Corporation are plainly misconceived since the said judge-

ments do not deal with the issue of the applicability of Section

9 to international commercial arbitration in context of the pro-

viso of Section 2(2) of Arbitration Act. The issues which fell for

consideration in both the said judgements were in respect of

Section 34 of the Arbitration Act and the question of the ap-

plicability of the proviso to Section 2(2) of the Arbitration Act

did not fall for determination in either of the said cases.

Equally, the judgment of Division Bench of Delhi High Court

in Ashwani Minda (supra) would also not be applicable to the

present case, since the said judgment infact did not examine

the correctness of finding of judgment of Single Judge of Delhi

High Court qua the applicability of Part- I of Arbitration Act to

foreign seated arbitration, on the contrary the said judgment

kept the issue of applicability of Part-I of Arbitration Act in

cases of foreign seated arbitration, expressly open.

E. Fourth, there can be no dispute that the grant of relief under

Section 9 of the Arbitration Act is a discretionary relief and is to

be exercised keeping in mind the well settled principles for the

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grant of such interim relief. However, equally, the object and

intention of Section 9 of the Arbitration Act is to support Arbi-

tration and not defeat and/or permit parties to detract from the

very process of arbitration. Therefore, party autonomy being

the bedrock of arbitration, this would necessarily apply from

the agreement to the rendering of the final arbitral award. In

the present case, the Parties having agreed to arbitration under

the SIAC Rules, and procedure contemplated thereunder would

therefore be bound by the EA Decision. Crucially no dispute

and/or grievance has been raised by the Respondent in the Re-

ply filed qua either the EA Decision and/or the fairness of pro-

cedure of the Emergency Arbitrator. The only ground taken in

the Affidavit in Reply to oppose the present Petition is main-

tainability .

F. Fifth, I have perused the EA Decision, which is well reasoned,

detailed and rendered after an extensive hearing given to Par-

ties. The Respondents have not so much has attempted raise

any grievance qua the merits of the EA Decision before me.

Hence, I find no reason not to accept the findings as recorded

in the EA Decision. I find that it is such an approach that will

support arbitration and ensure its effectiveness. I am fortified

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in my view by the judgement of the Hon'ble Supreme Court in

the case of Amazon.com NV Investment Holdings LLC (supra)

wherein the Hon'ble Supreme Court specifically held that once

a party agrees to institutional rules, such as the SIAC Rules, and

participates in an emergency arbitration proceeding, it cannot

later claim that the Emergency Arbitrator's ruling is non-bind-

ing or invalid. The party is bound by the Emergency Arbit-

rator's award and must comply with it immediately, as they

have explicitly agreed to its binding nature and the obligation

to carry out the interim Order without delay.

G. Sixth, I find that in the facts of the present case, even without

placing reliance upon the EA Decision the Petitioners have

made out a very strong case for the grant of interim reliefs

given the obstructionist stand/conduct of the Respondents

which is clearly only to defeat and/or delay the enforcement of

the orders passed in the arbitration. I say so because, viz.:

i) Both the First Award and the Cost Award have attained

finality. The Respondents liability and/or obligation to

purchase the Petitioner's shares in Respondent No.4 at

the Enhanced Call price, is thus today final and binding

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upon the Respondents. Crucially, the Respondents did

not oppose the Petitions for enforcement of the First

Award and the Cost Award filed in the Delhi High

Court.

ii) It is not in dispute that PwC is infact one of the

Independent Valuer prescribed under Clause 1.1 of the

SHA to determine the Enhanced Call Price, thus even on

merits I find that the opposition to the valuation by PwC

on the ground of independence or otherwise is plainly

untenable and is clearly an argument of desperation.

iii) Further, the Respondents have even post the EA

Decision represented that they intended to abide and/or

comply with the same.

iv) That the Respondents infact informed the Petitioners

vide email dated 6th April 2024 that they were

precluded from furnishing a bank guarantee, since

their assets were attached by the Orders passed by the

Delhi High Court in the enforcement Petitions filed by

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the Petitioner for enforcement of the First Award and

the Costs Award.

v) The Respondents have by their conduct accepted the EA

Decision to secure the Petitioners' claim since the

Respondents infact moved the Arbitral Tribunal not

against any finding and/or observation of the

Emergency Arbitrator in the EA Decision but only

sought substitution of the bank guarantee with other

means which would cause less prejudice to the

Respondents. The request for substituting bank

guarantee were rejected as shares offered instead of

bank guarantee would not have been easily marketable

and were susceptible to diminution in value.

vi) The Respondents then filed the application for

modification of Status Quo Order before the Delhi High

Court to vacate the interim Order dated 19 th January,

2024 by which the Respondents were restrained from

dealing with their assets.

Though the Respondents have placed reliance upon the judgment of the

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Delhi High Court in the case of Skypower Solar India Pvt. Ltd. I find

that the same would have no application in the facts of the present case

for two reasons (i) since the Hon'ble Supreme Court has in the case of

Essar House Private Limited Vs. Arcellor Mittal Nippon Steel India Ltd. .11

has expressly held that in exercise of the powers to grant interim relief

under Section 9 of the Arbitration Act, a Court was not strictly bound

by the provisions of the Code of Civil Procedure Code, 1908 and (ii) this

Court has also in the case of J.P. Parekh And Another vs. Naseem

Qureshi and Others12 after placing reliance upon the judgement of the