Bombay High Court
Subhkam Ventures (I) Pvt. Ltd. vs Milton Global Ltd. And 15 Ors. on 3 November, 2025
2025:BHC-OS:19901
J-ARBP.551.2018-Kathotia-Milton-F.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
ARBITRATION PETITION NO. 544 OF 2018
Rakesh S. Kathotia ...Petitioner
Versus
Milton Global Ltd. & Ors. ...Respondents
WITH
ARBITRATION PETITION NO. 545 OF 2018
Subhkam Ventures (I) Pvt. Ltd. ...Petitioner
Versus
Milton Global Ltd. & Ors. ...Respondents
WITH
ARBITRATION PETITION NO. 558 OF 2018
Milton Global Ltd. & Ors. ...Petitioners
Versus
Rakesh S. Kathotia & Ors. ...Respondents
WITH
ARBITRATION PETITION NO. 577 OF 2018
Hamilton Housewares Pvt. Ltd. & Ors. ...Petitioners
Versus
Rakesh S. Kathotia & Ors. ...Respondents
Mr. Nikhil Sakhardande, Senior Advocate, a/w Ashish
Venugopal, Ravichandra Hegde, Mitravinda Chunduru, Vinit
Udernani, i/b RHP Partners, for the Petitioner in
ARBP/544/2018 & ARBP/545/2018 & for Respondent Nos.1 &
2 in ARBP/558 OF 2018 & ARBP/577/2018.
Mr. Dinyar Madan, Senior Counsel, i/b Law Charter, for
Respondent Nos.2 & 10 to 15 in ARBP/544/2018.
Digitally signed
by AARTI
AARTI GAJANAN
PALKAR
Page 1 of 30
GAJANAN Date: NOVEMBER 3, 2025
PALKAR 2025.11.03
12:44:03 Aarti Palkar
+0530
::: Uploaded on - 03/11/2025 ::: Downloaded on - 03/11/2025 21:21:48 :::
J-ARBP.551.2018-Kathotia-Milton-F.doc
Mr. Sharan Jagtiani, Senior Counsel, a/w Rashmin Khandekar,
Apurva Manwani, Mahendra Ghelani, i/b Parikshit Desai, for
Respondent Nos.1, 3 to 5, 7 to 9 in ARBP/544/2018.
Mr. Mikhail Behl, i/b Law Charter, for Respondent Nos.2 & 10
to 15 in ARBP/545/2018.
Mr. Parikshit Desai, for Respondent Nos.1, 3 to 5, 7 to 9 in
ARBP/545/2018.
Mr. Sharan Jagtiani, Senior Counsel , a/w Apurva Manwani,
Mahendra Ghelani, i/b Parikshit Desai, for Petitioner in
ARBP/558/2018.
CORAM : SOMASEKHAR SUNDARESAN, J.
RESERVED ON : March 12, 2025
PRONOUNCED ON : November 3, 2025
JUDGEMENT:
Context and Factual Background:
1. The captioned proceedings are cross petitions filed under
Section 34 of the Arbitration and Conciliation Act 1996 (" the Act")
challenging an arbitral award dated December 23, 2017 and an
additional award dated February 16, 2018 (collectively, " Impugned
Award") passed by a Learned Arbitral Tribunal comprising a sole
arbitrator.
NOVEMBER 3, 2025
Aarti Palkar
J-ARBP.551.2018-Kathotia-Milton-F.doc
2. The Impugned Award is related to disputes and differences in
connection with an equally-owned joint venture between the claimants
in the arbitral proceedings, namely Rakesh S. Kathotia (" Kathotia") and
Subhkam Ventures (I) Pvt. Ltd. ("Subhkam") (Kathotia and Subhkam
are collectively referred to as the " Subhkam Group"); and the various
respondents other than Milton Global Ltd. ("Milton JV") in the arbitral
proceedings (collectively, the "Vaghani Group"). Milton JV is the 50:50
joint venture company in which each of the Subhkam Group and the
Vaghani Group hold equal ownership.
3. The aforesaid bipartite classification is not only convenient
but also appropriate for purposes of these proceedings. The Learned
Arbitral Tribunal has returned very detailed and well-reasoned findings
in the Impugned Award on how all the Respondents in the arbitral
proceedings were inter-related and one collective economic and family
unit with aligned interests, and how their initial defences of attempting
to indicate separability broke down.
4. The peculiar nature of the Impugned Award has both sides in
challenge under Section 34 of the Act.
5. The Subhkam Group is aggrieved by nothing in the Impugned
Award except for one vital facet. The Learned Arbitral Tribunal has
treated its rights in the joint venture agreement as obligations. Based
NOVEMBER 3, 2025
Aarti Palkar
J-ARBP.551.2018-Kathotia-Milton-F.doc
on that finding, the Learned Arbitral Tribunal held that the Subhkam
Group had not demonstrated its readiness and willingness to perform
such (perceived) obligations. On every other count and every single
allegation levelled by the Subhkam Group, the Learned Arbitral
Tribunal has found in favour of the Subhkam Group but solely on the
premise of the Subhkam Group not having been ready and willing to
perform its obligations, the Learned Arbitral Tribunal has ruled that
specific relief against violation of non-compete obligations by the
Vaghani Group could not be granted, and as a result, damages too
could not be granted.
6. The Vaghani Group is aggrieved by the Impugned Award
containing extensive findings of, among others, default, deceit,
breaches, violative conduct, and misleading conduct on the part of the
Vaghani Group. However, since the Impugned Award grants no relief
to the Subhkam Group on the premise of the Subhkam Group not
having been ready and willing to perform the joint venture agreement,
the Vaghani Group has sought a "partial setting aside" of what it terms
the aforesaid "would have been" observations that are not warranted,
when no relief is being granted.
NOVEMBER 3, 2025
Aarti Palkar
J-ARBP.551.2018-Kathotia-Milton-F.doc
7. Before analysing the record and the Impugned Award, a short
overview of the factual matrix would be appropriate and is set out
below:-
a) The Subhkam Group and the Vaghani Group hold
50% each in the equity share capital of the Milton JV.
Towards this end, the parties executed a joint venture
agreement on September 13, 2000 ("First JVA"), which was
later amended and restated by a joint venture agreement
dated July 14, 2001 ("JVA");
b) The Vaghani Group was in the business of
manufacturing, logistics, trading and sales of various
products in the nature of consumer durables and kitchenware
and this was the subject matter of the JVA for marketing in
the brand name 'Milton';
c) The Subhkam Group and the Vaghani Group
structured a commercial relationship and reduced it to
writing in the JVA, essentially to provide that the brands
Milton, MP and Milton Plastics would be licensed by the
Vaghani Group for exclusive exploitation by the Milton JV.
On the same date as the First JVA i.e. September 13, 2000, an
NOVEMBER 3, 2025
Aarti Palkar
J-ARBP.551.2018-Kathotia-Milton-F.doc
agreement was executed to provide for such brand licensing
("Brand Licensing Agreement");
d) One of the Vaghani Group companies, Milton
Plastics Ltd. ("Milton Plastics") was to manufacture the
goods, and the Subhkam Group was given a stake of 26% in
Milton Plastics - this equity interest is said to have been
allotted on May 6, 2002 for a consideration of Rs. 3.25 crores.
The Milton JV was to be the marketing company that would
book all the turnover of the business of the joint venture, with
a 50:50 ownership break-up between Subhkam Group and
Vaghani Group - this is said to have been allotted for a
consideration of Rs. 4 crores;
e) The JVA and the Brand Licensing Agreement
entailed non-compete obligations whereby the Vaghani
Group could not use the brands licensed to the Milton JV and
run the business that was exclusively meant to be run by the
Milton JV;
f) According to the Subhkam Group, the Vaghani
Group has systematically abused the relationship, by
diverting the business meant to be carried out exclusively by
the Milton JV to the Vaghani Group company Hamilton
Houseware Pvt. Ltd. ("Hamilton"). The business of Milton
NOVEMBER 3, 2025
Aarti Palkar
J-ARBP.551.2018-Kathotia-Milton-F.doc
JV is said to have been secreted out to Hamilton by the
Vaghani Group, significantly by 2005-06;
g) The Subhkam Group claimed to the Learned
Arbitral Tribunal that it learnt about the subterfuge only in
December 2011. On opening the website of the Milton JV
(www.milton.in), it was found that the website was being
redirected to Hamilton's website (www.hamiltonindia.in)
which was entirely the business of Hamilton and the Vaghani
Group and not the Milton JV;
h) This discovery is stated to have triggered an
investigation by the Subhkam Group, which led to the
discovery from multiple sources including the Registrar of
Companies that Hamilton was booking all the income and
revenues from business that was meant to be the exclusive
preserve of the Milton JV. The Milton brand name was being
used by Hamilton along with the Hamilton brand name for
the very same products that were meant to be marketed
solely by the Milton JV;
i) Therefore, the Subhkam Group's claim was that the
Vaghani Group had entirely cannibalised the business of the
Milton JV; violated the non-compete obligations; and had
contrived and devised a systematic violation of the Subhkam
NOVEMBER 3, 2025
Aarti Palkar
J-ARBP.551.2018-Kathotia-Milton-F.doc
Group's rights and interests in the joint venture. Based on
such investigation, the Subhkam Group claimed to have
realised that the turnover of Milton JV had systematically
eroded from Rs. 30.85 crores in 2004-05 to Rs. 71,000 in
2013-14. Over the same period, from a net profit of Rs. 9.53
lakhs, Milton JV posted a net loss of Rs 8.42 lakhs in 2013-14.
In parallel, Hamilton's sales turnover started with Rs. 119.51
crores in 2005-06 (when Milton JV's turnover fell to Rs. 3.20
crores) and rose to Rs. 595.29 crores, with net profit scaling
up from Rs. 6.76 crores to Rs. 38.46 crores over the same
timeframe;
j) The Subhkam Group sought a declaration that the
non-compete obligations subsisted; a prohibition against
further breach of the non-compete obligations; and damages
measured by the turnover and profits of Hamilton which was
claimed to be the business turnover that was rightfully meant
to be earned in the books of the Milton JV;
k) In response, the Vaghani Group did not contest that
Hamilton was doing business using the Milton brand name.
Its defence was variously that the Subhkam Group had
abandoned the JVA; it had acquiesced to the rights under the
JVA being given a go-by; and also that the Vaghani Group
NOVEMBER 3, 2025
Aarti Palkar
J-ARBP.551.2018-Kathotia-Milton-F.doc
had pre-existing business operations that were not meant to
be interdicted by the non-compete obligations contracted
with the Subhkam Group;
l) To begin with, certain constituents of the Vaghani
Group attempted to raise objections on the absence of privity
to the arbitration agreement contained in the JVA but the
Section 11 Court rejected these contentions. The Supreme
Court too dismissed the special leave petition seeking to
interfere with the appointment of the Learned Arbitral
Tribunal. An application under Section 16 was filed by the
same persons and the Learned Arbitral Tribunal was pleased
to dismiss it with costs of Rs. 2.5 lakhs;
m) These constituents of the Vaghani Group then
contended that the Brand Licensing Agreement could not
form part of the arbitral proceedings. The Learned Arbitral
Tribunal held that the proceedings were under the JVA and if
any query were raised about the non-enforceable nature of
the Brand Licensing Agreement, the Learned Arbitral
Tribunal would go into it;
n) The next attempt was to suggest that since fraud
had been alleged by the Subhkam Group, the disputes were
NOVEMBER 3, 2025
Aarti Palkar
J-ARBP.551.2018-Kathotia-Milton-F.doc
not arbitrable. This too came to naught in view of the law
declared in this regard by the Supreme Court;
o) The issue of limitation was then raised by claiming
that Subhkam Group could not have not known before
December 2011 and they slept on their rights. This was
rejected by the Learned Arbitral Tribunal on the ground that
every moment when the competing business was carried out
by the Vaghani Group, the continuing tort gave rise to a fresh
cause of action;
p) One of the constituents of the Vaghani Group, Mr.
Kanaiyalal Ishwarlal Vaghani, referred to throughout the
Impugned Award as "Respondent No. 6" took the stance that
he had cut off from his siblings, while his siblings took the
stance that they had no clue of his whereabouts and he had
not been served property. The Learned Arbitral Tribunal
firmly took a stance against this approach and then
Respondent No. 6 started attending the proceedings;
q) Issues were framed on the basis of the pleadings of
the parties (other than Respondent No. 6, who came in late).
In the Impugned Award, the Learned Arbitral Tribunal has
firmly held in favour of the Subhkam Group on every single
count. However, the Learned Arbitral Tribunal held that
NOVEMBER 3, 2025
Aarti Palkar
J-ARBP.551.2018-Kathotia-Milton-F.doc
Subhkam Group could not be said to have been ready and
willing to perform the JVA and therefore it was not entitled to
any relief;
r) The Subhkam Group contends that the Learned
Arbitral Tribunal has turned the provisions of the JVA on
their head - by treating its rights as its obligations. Despite
holding that the Subhkam Group's rights had been trampled
upon, and that the Subhkam Group had not abandoned the
JVA, the Learned Arbitral Tribunal has held that the
Subhkam Group was not entitled to any relief; and
s) The Vaghani Group contends that the Learned
Arbitral Tribunal has returned plausible findings and they
must be accepted. Hamilton contends that the findings on
issues were unnecessary when the Learned Arbitral Tribunal
had decided not to grant any relief in view of the Subhkam
Group not having been ready and willing to perform the JVA.
Therefore, it seeks a partial setting aside of what it terms as
"would have been" findings.
Analysis and Findings:
8. Against this backdrop, I have heard Learned Advocates for
the parties at length and perused the voluminous material on record
NOVEMBER 3, 2025
Aarti Palkar
J-ARBP.551.2018-Kathotia-Milton-F.doc
with the assistance of their verbal submissions and their well-
referenced written submissions.
9. The multiple cross-appeals may be summarised thus:
a) Arbitration Petition No. 544 of 2018 and
Arbitration Petition No. 545 of 2018 are challenges filed by
Kathotia and Subhkam respectively;
b) Arbitration Petition No. 558 of 2018 is a petition
filed by the Milton JV; and
c) Arbitration Petition No. 577 of 2018 is a petition
filed by Hamilton.
10. By consent of the parties, all four petitions were heard
together since they all pertain to the same Impugned Award. Upon a
specific query from this Court in the light of past representation of
affiliates of the Subhkam Group on unrelated issues, Learned
Advocates for all parties specifically confirmed that they have no
objection to this Bench taking up the hearing and disposal of the
captioned proceedings.
Scope of Review under Section 34:
11. Before engaging with the contents of the Impugned Award, a
word on the scope of review under Section 34 of the Act would be in
NOVEMBER 3, 2025
Aarti Palkar
J-ARBP.551.2018-Kathotia-Milton-F.doc
order. The scope of jurisdiction under Section 34 of the Act is well
covered in multiple judgements of the Supreme Court including Dyna
Technologies1, Associate Builders2, Ssyangyong3, Konkan Railway4 and
OPG Power5. Even implied reasons that are discernible, may be
inferred by the Section 34 Court, to support the just and fair outcome
arrived at in arbitral awards. To avoid prolixity, I do not think it
necessary to burden this judgement with quotations from these
judgements. Suffice it to say (to extract from just one of the foregoing),
in Dyna Technologies, the Supreme Court held thus:
"24. There is no dispute that Section 34 of the Arbitration Act limits a challenge to
an award only on the grounds provided therein or as interpreted by various courts.
We need to be cognizant of the fact that arbitral awards should not be interfered
with in a casual and cavalier manner, unless the court comes to a conclusion that
the perversity of the award goes to the root of the matter without there being a
possibility of alternative interpretation which may sustain the arbitral
award. Section 34 is different in its approach and cannot be equated with a normal
appellate jurisdiction. The mandate under Section 34 is to respect the finality of the
arbitral award and the party autonomy to get their dispute adjudicated by an
alternative forum as provided under the law. If the courts were to interfere with the
arbitral award in the usual course on factual aspects, then the commercial wisdom
behind opting for alternate dispute resolution would stand frustrated.
25. Moreover, umpteen number of judgments of this Court have categorically held
that the courts should not interfere with an award merely because an alternative
view on facts and interpretation of contract exists. The courts need to be cautious
and should defer to the view taken by the Arbitral Tribunal even if the reasoning
1 Dyna Technologies Private Limited v. Crompton Greaves Ltd - (2019) 20 SCC 1
2 Associate Builders vs. Delhi Development Authority - (2015) 3 SCC 49
3 Ssangyong Engineering & Construction Co. Ltd. v. National Highways Authority of India (NHAI) -
(2019) 7 SCR 522
4 Konkan Railways v. Chenab Bridge Project Undertaking - 2023 INSC 742
5 OPG Power vs. Enoxio - (2025) 2 SCC 417
NOVEMBER 3, 2025
Aarti Palkar
J-ARBP.551.2018-Kathotia-Milton-F.doc
provided in the award is implied unless such award portrays perversity
unpardonable under Section 34 of the Arbitration Act."
[Emphasis Supplied]
12. Equally, it is well settled that for a finding in an arbitral
award to be regarded as perverse, such finding has to be of a nature
that no reasonable person could have arrived at. Likewise, for a finding
in an arbitral award to be considered to be in conflict with most basic
notions of morality or justice, the finding has to shock the conscience of
the Court. It is in this context that I have attempted to analyse the
Impugned Award to consider the competing considerations presented
by the multiple Petitioners.
Findings in the Impugned Award:
13. A careful reading of the Impugned Award would indicate that
the Learned Arbitral Tribunal, the master of the evidence and the final
word on findings of fact, has done the following:-
a) Based on an extensive and expansive analysis of the
law and the facts, the Learned Arbitral Tribunal has returned
a clear finding that the JVA subsists;
b) The Learned Arbitral Tribunal has found that every
moment for which the competing business is being carried
NOVEMBER 3, 2025
Aarti Palkar
J-ARBP.551.2018-Kathotia-Milton-F.doc
out by the Vaghani Group is a continuing tort and a
continuing breach of the JVA;
c) Analysing every ingredient of Article 55 and Article
58 of the Limitation Act, 1963, the Learned Arbitral Tribunal
has found that the Subhkam Group's claim is not barred by
limitation;
d) The Learned Arbitral Tribunal has returned a firm
finding that the Vaghani Group has " miserably failed" to
prove that the Subhkam Group has abandoned the JVA,
which was also held to be an unbelievable contention;
e) The Learned Arbitral Tribunal also ruled that the
contention that abandonment was synonymous with
acquiescence is untenable. No party can be presumed to have
acquiesced against his own interests. That apart, the
pleadings of the Vaghani Group was solely based on
abandonment and therefore submissions on acquiescence
could not be countenanced;
f) Neither group has terminated the JVA and both
groups continue to be shareholders in the Milton JV. The
JVA prohibits holding of any interest in a competitor and the
Learned Arbitral Tribunal holds the Vaghani Group to be in
breach of this vital obligation;
NOVEMBER 3, 2025
Aarti Palkar
J-ARBP.551.2018-Kathotia-Milton-F.doc
g) The contention that the Brand Licensing
Agreement permits Hamilton to conduct competing business
has been firmly repelled by the Learned Arbitral Tribunal
with a detailed analysis. The Learned Arbitral Tribunal found
that the Vaghani Group has "brazenly lied on oath" that they
were always permitted to carry out competing business using
the brand names in question;
h) The Learned Arbitral Tribunal has found that there
was no distribution network of Hamilton before 2003-04 and
it had no existing business, and in any case, Hamilton made
no effort to even prove that it had any existing business
before the JVA;
i) The Vaghani Group have dishonestly started a
competing business and have been dishonest with the
Learned Arbitral Tribunal as well. They tried to pretend that
a statement they made to the Learned Arbitral Tribunal was
never made;
j) The Vaghani Group had claimed that the amounts
due from the Subhkam Group had not been fully paid.
Towards this end, the Learned Arbitral Tribunal found the
Vaghani Group to have prepared "got up" letters to indicate
follow up for payment. The Vaghani Group " adopted the
NOVEMBER 3, 2025
Aarti Palkar
J-ARBP.551.2018-Kathotia-Milton-F.doc
ruse" that such letters had been sent to the Subhkam Group.
However, its advocates did not refer to or rely on these letters
during submissions and did not put these letters to the
witnesses of the Subhkam Group;
k) It was after the Learned Arbitral Tribunal made it
clear that it was not willing to believe that Respondent No. 6
had no connection with his siblings that he started appearing
in the proceedings from April 2016;
l) The Learned Arbitral Tribunal returned a finding
that "both Mr. Ajay Vaghani and Mr. Chiranjiv Vaghani have
not hesitated to tell falsehood in evidence. They have been
caught out on a number of occasions. The instances are too
many to enumerate"; and
m) In the teeth of such clear, firm, well-reasoned and
logical findings of utter disregard for the rule of law on the
part of the Vaghani Group, the Learned Arbitral Tribunal was
persuaded to grant no relief to the Subhkam Group on one
sole ground - that the Subhkam Group " did not comply" with
the JVA "at least after 2004". Interpreting the provisions of
the JVA that entitled Subhkam Group to participate in the
management and governance of the JVA as "an obligation to
participate in the management", the Learned Arbitral
NOVEMBER 3, 2025
Aarti Palkar
J-ARBP.551.2018-Kathotia-Milton-F.doc
Tribunal held that the Subhkam Group could not be regarded
as a "passive investor" and if it " left the Vaghani Group in
control the Claimants have only themselves to be blamed".
14. I have attempted to reconcile the last finding in the summary
above, with the preceding findings. To begin with, the last finding i.e.
that the Subhkam Group has not been ready and willing to comply with
the JVA has to be examined for perversity on its own. If that finding, in
itself, were to be a reasonable view, then too the scope for intervention
would get eroded.
Treating Rights as Obligations:
15. In this regard, the Learned Arbitral Tribunal has copiously
extracted the provisions of contract regulating the governance of the
Milton JV. The Recital of the JVA that indicates the desire of jointly
operating and managing the Milton JV has been extracted. Then,
Clause 6.3 which declares that the Milton JV is a quasi-partnership
where the two groups "shall have equal say in the management " has
been extracted. Clause 6.4, which deals with the composition of the
Board of Directors to provide for equal representation is extracted.
Clause 6.5 which provides for a right to nominate and remove directors
is extracted. The obligation of the Milton JV to appoint the person
nominated by the respective joint venture partner in Clause 6.6 has
NOVEMBER 3, 2025
Aarti Palkar
J-ARBP.551.2018-Kathotia-Milton-F.doc
been extracted. Clause 6.7 which provides for Milton JV to have one
Chairman (a director appointed by the Vaghani Group) and one Vice
Chairman (a director appointed by the Subhkam Group) has been
noticed. Clause 6.8 which obliges each group to exercise its voting
rights in a manner as to ensure such appointments are indeed made to
the Board, has been noticed. Clause 6.9, which requires the Milton JV
to provide an annual budget and Clause 6.10 which obliges the Milton
JV to provide such reports and information as desired by the Subhkam
Group, after certification by the Managing Director, has been noticed.
16. Kathotia's statements in the evidence that he got appointed
to the Board of Directors and attended two to three Board Meetings
between 2001 and 2003 and that he did not visit Milton JV's office
after 2004 have been held as a breach of the JVA by the Subhkam
Group. The contention by the Subhkam Group's counsel that these
were rights to participate in the management and not obligations, was
negatived.
17. The Learned Arbitral Tribunal could not accept the concept
of a "passive investor". Kathotia had deposed that the knowledge of the
business was with the Vaghani Group and he trusted that they would
perform on their promises after the Subhkam Group bailed them out of
financial distress and utilise the Subhkam Group's skill sets. This was
NOVEMBER 3, 2025
Aarti Palkar
J-ARBP.551.2018-Kathotia-Milton-F.doc
not accepted by the Learned Arbitral Tribunal, on the strength of the
rights contracted by the Subhkam Group in the JVA. That when the
Milton JV was formed, the Kathotia Group also intended to participate
in the management was held to belie the premise of being a passive
investor. Exchange of financial information and business plan prior to
2004 was noticed. Exchange of correspondence from the Subhkam
Group complaining that the Vaghani Group was not taking advantage
of its skills and the Vaghani Group's grievance that it expected greater
participation and unconditional support from the Subhkam Group was
noticed. All of this led to the Learned Arbitral Tribunal repeatedly
asserting that the Subhkam Group had failed to fulfil its obligations and
was not ready and willing to perform its obligations and therefore was
disentitled from pursuing specific performance of the JVA.
18. In the same breath, the Learned Arbitral Tribunal also
repelled the Vaghani Group's contentions that the Subhkam Group
failed to bring in more investment into the Milton JV. It has been
firmly held that there was nothing to prove that there was any
commitment on the part of the Subhkam Group to bring in more
monies. No issue of additional shares was proposed by the Milton JV
and no calls for fresh subscription to shares were made.
NOVEMBER 3, 2025
Aarti Palkar
J-ARBP.551.2018-Kathotia-Milton-F.doc
19. I am afraid the view that every right of an investor to
participate in the management and governance of a joint venture
company being converted into an obligation to participate is ex facie
unreasonable. When an investor invests in a company, he contracts
certain rights. These are his rights and it is for him to enforce or to
waive. The Learned Arbitral Tribunal has firmly held with detailed
reasons that the Vaghani Group has "miserably failed" to show
abandonment of the JVA by the Subhkam Group. The Learned Arbitral
Tribunal has ruled that acquiescence is neither pleaded nor
synonymous with abandonment. In the same breath, the Learned
Arbitral Tribunal has equated the contractual rights of the Subhkam
Group with contractual obligations of the Subhkam Group. This is an
untenable and an implausible view.
20. With the greatest respect to the Learned Arbitral Tribunal, it
appears to me that the Learned Arbitral Tribunal has imported a public
law concept of "power coupled with duty" into the domain of private
contract. In matters of public law, when a legislation provides for a
discretionary action on the part of a public authority, it is with a certain
legislative objective in mind. In such a situation the use of the word
"may" could be read as "shall" since the very reason for conferment of
such power on a public authority is to have such an authority exercise it
to further the legislative objective. This is why a writ of mandamus
NOVEMBER 3, 2025
Aarti Palkar
J-ARBP.551.2018-Kathotia-Milton-F.doc
may lie to direct the public authority to positively take a certain action
within its power. On the other hand, in a matter of private contract, the
rights and obligations have no wider public interest considerations and
the parties are presumed to contract rights in their own enlightened
self-interest. It is the contracting party's sovereign and autonomous
power to act upon a right or to trust the counterparty by not insisting
on enforcing the right.
21. This is precisely why in my opinion, the Impugned Award is
riddled with inherent contradictions. The Learned Arbitral Tribunal
has returned a firm view that the case of the Subhkam Group having
abandoned the JVA has miserably failed. The Learned Arbitral
Tribunal has also stated that the JVA is subsisting and every moment of
the Vaghani Group carrying on competing business is a continuing
breach of the JVA. If that were so, there can be no question of the
Subhkam Group's rights capable of being enforced, also being treated
as obligations that the Subhkam Group is meant to perform.
22. Even assuming for the sake of argument, that the Learned
Arbitral Tribunal is given a greater play in the joints to interpret the
JVA and its treatment of rights as obligations were somehow
acceptable, such a finding would not sit with the collateral finding that
there has been no abandonment of the JVA. The Learned Arbitral
NOVEMBER 3, 2025
Aarti Palkar
J-ARBP.551.2018-Kathotia-Milton-F.doc
Tribunal has held that the Subhkam Group has itself to blame for the
Vaghani Group's continuing breach of the JVA.
23. To my mind, even holding the provisions of the JVA invoked
by the Learned Arbitral Tribunal to be obligations is totally
unreasonable, and a finding that no reasonable person interpreting a
commercial contract with application of commercial sense, would
return. What we have on hand is a case of firm findings that the
Vaghani Group blatantly diverted business away from the Milton JV to
Hamilton, wrongly seeking to justify it on the ground of abandonment;
and even raising the objection of limitation, all of which were firmly put
down by the Learned Arbitral Tribunal. Yet, the Learned Arbitral
Tribunal would victimise the victim by holding that the party whose
rights have been breached, has itself to blame; and that too when
adjudicating a cause of action seeking intervention for that very breach.
It is a case of holding that there is indeed a breach leading to a cause of
action, and yet holding that there is no actionable breach - both of
which are in the nature of firm findings that are mutually and
inherently contradictory.
24. That these findings, namely, of failure to prove
abandonment; of inability to allege acquiescence; of every moment of
conducting competing business being a continuing tort; and yet holding
NOVEMBER 3, 2025
Aarti Palkar
J-ARBP.551.2018-Kathotia-Milton-F.doc
that the tort is not an actionable tort because the party at the receiving
end of the tort had purportedly not complied with an obligation, in the
teeth of such "obligation" actually being a "right", are mutually
destructive, is writ large on the face of the Impugned Award.
Justice Delivery Subversion turns out Irrelevant:
25. The Learned Arbitral Tribunal has also been pleased to find
that the Vaghani Group has lied on oath and has demonstrated a lack of
integrity in its participation in justice delivery. The Learned Arbitral
Tribunal has had occasion to impose costs on the Vaghani Group for
raising an issue of absence of privity of contract despite the Supreme
Court not entertaining a challenge to a ruling that certain constituents
are parties (veritable or otherwise) to the JVA. The Learned Arbitral
Tribunal has returned firm and credible findings on the wanton breach
on the part of the Vaghani Group. Yet, by returning an implausible
finding that a right is an obligation, specific relief has been held to be
impossible to grant. On the ground that specific relief cannot be
granted, damages too have been denied. The Impugned Award denying
relief in the teeth of the other findings, would shock the conscience of
any reasonable person applying commercial common sense. A party
firmly found to have indulged in abject contumacious conduct appears
to have been allowed to get away with no consequences whatsoever.
NOVEMBER 3, 2025
Aarti Palkar
J-ARBP.551.2018-Kathotia-Milton-F.doc
26. The Impugned Award, regrettably falls in the realm of being
in conflict with the most basic notions of justice and morality, apart
from being perverse by reason of being riddled with inherent
contradictions, leading to an implausible outcome. By treating a right
as an obligation, the Impugned Award is also contrary to the contract.
This is exacerbated by the finding that the JVA indeed subsists, and has
not been abandoned.
27. In OPG Power, the law on the subject is well summarised,
citing from antecedent case law, in Paragraphs 57 to 63 ( Justice);
Paragraph 64 (Morality); Paragraph 65 to 68 (Patent Illegality) and
Paragraphs 69 to 73 (Perversity). To avoid prolixity, I am not keen to
reproduce the same here extensively.
Summary of Conclusions:
28. Suffice it to say, applying the standards to the facts of the
case, I have to conclude that:-
a) The findings contained in the Impugned Award on
the absence of abandonment by the Subhkam Group cannot
be reconciled with the finding that the Subhkam Group had
only itself to blame for the JVA being violated by the
NOVEMBER 3, 2025
Aarti Palkar
J-ARBP.551.2018-Kathotia-Milton-F.doc
Vaghani Group when the Subhkam Group failed to actively
participate in the management of the Milton JV;
b) The finding that the Vaghani Group continues to
breach the subsisting JVA, and that too at every moment of
Hamilton's engagement in competing business, cannot be
reconciled with the finding that such continuing breach of a
subsisting JVA has no consequence whatsoever on the
premise that the Subhkam Group was not ready and willing
to perform the JVA;
c) In an investment, the obligation of the investor is
typically to make an investment. In consideration of such
investment, the investor gets a bundle of rights. Even if the
Subhkam Group were not to be treated as a mere financial
investor but as a joint venture partner, it was necessary to
spell out which obligation was subject matter of the
unwillingness or the non-readiness to perform. The
provisions of the JVA referred to by the Learned Arbitral
Tribunal are all provisions conferring rights and not
provisions fastening obligations on the Subhkam Group.
Indeed it must not be forgotten that the Learned Arbitral
Tribunal held that the Subhkam Group did not abandon the
JVA;
NOVEMBER 3, 2025
Aarti Palkar
J-ARBP.551.2018-Kathotia-Milton-F.doc
d) The finding that the right of the Subhkam Group to
participate in the governance and management of the
Milton JV are obligations to be discharged by the Subhkam
Group to the Vaghani Group, even while holding that there
is no abandonment of the JVA by the Subhkam Group is
perverse inasmuch as such a finding gives a license for
continuing with conduct that is actually adjudicated to be
violative, thanks to the declaration that no consequence for
the violation can be visited upon the Vaghani Group;
e) The outcome of the Impugned Award is that the
conduct of the Vaghani Group, despite deprecation in the
Impugned Award, is totally irrelevant. That the misconduct
found in the Impugned Award has not resulted even in
consideration of costs in a commercial dispute, leave alone
denial of specific performance, with damages too being
denied on that premise, would shock the conscience of the
Court; and
f) In summary, a finding of a breach of the JVA with
impunity, with lies being stated on oath in the arbitral
proceedings, the Learned Arbitral Tribunal finding that it
was actively misled, all amount to nothing. This has been
the case only because a contractual right is treated as a
NOVEMBER 3, 2025
Aarti Palkar
J-ARBP.551.2018-Kathotia-Milton-F.doc
contractual duty, perhaps with the thinking that they are
powers coupled with duty. In the same breath, the
Impugned Award holding that there was no abandonment of
the rights in the JVA, has resulted in the Impugned Award
being regarded as perverse.
Partial Setting Aside Impossible:
29. Before parting with the judgement, I must also state that I
have done my best to see if the portion of the Impugned Award that is
vulnerable can be excised and partially set aside to save the Impugned
Award, particularly due to the strong, reasonable and conceivable
findings returned on the facet of absence of abandonment and
continuing breach. However, considering that no relief has at all been
granted, even setting aside of the portion of the Impugned Award that
led to the denial of relief would be of no consequence since it is not
open to this Court to positively grant any relief. Therefore, even in
such a situation, the parties would need to arbitrate again.
30. That apart, the finding on abandonment does not sit well
with the finding of not being ready and willing to perform. If the rights
held to be obligations had indeed been held to be rights, it would be
hard to reconcile that position with the findings on abandonment. In
NOVEMBER 3, 2025
Aarti Palkar
J-ARBP.551.2018-Kathotia-Milton-F.doc
other words, the findings in the Impugned Award are inextricably
interwoven and therefore, excising one element of the Impugned Award
would not lead to the others remaining unaffected. The inherent
contradictions do not lend themselves to any surgical excision to save
the Impugned Award.
31. Hamilton's plea to partially set aside all adverse findings
since they are in the realm of "would have been" findings is also
unacceptable. This is a self-serving and cynical prayer in the teeth of
plausible adverse findings being arrived at against the Vaghani Group.
Indeed, the Vaghani Group would like such adverse findings to be
wiped out only because the Learned Arbitral Tribunal has held the right
to participate in management and governance of the joint venture to be
an obligation to do so. I have already explained why I find the
conversion of a contractual right into a contractual obligation to be
untenable and contrary to contract. Therefore, the very basis of
Hamilton's prayer stands undermined in my assessment. The relief for
partial setting aside of adverse findings against the Vaghani Group also
cannot be granted.
32. For the aforesaid reasons, I am constrained to set aside the
Impugned Award in exercise of the jurisdiction under Section 34 of the
Act. The arbitration agreement subsisting, it is open to the parties to
NOVEMBER 3, 2025
Aarti Palkar
J-ARBP.551.2018-Kathotia-Milton-F.doc
agitate their disputes afresh. All the Petitions and any interim
applications made in them, are finally disposed of in the aforesaid
terms.
33. It is made clear that the parties shall be at liberty to present
the costs for this round of litigation and the earlier round of arbitral
proceedings, for consideration by the arbitral tribunal that would be
constituted, if the parties pursue arbitration. Since the Impugned
Award is being set aside for its own inherent contradictions, I am
refraining from imposing costs, but deferring the consideration to the
next round of arbitration.
34. All actions required to be taken pursuant to this order shall
be taken upon receipt of a downloaded copy as available on this Court's
website.
[SOMASEKHAR SUNDARESAN, J.]
NOVEMBER 3, 2025
Aarti Palkar
