Prima Buildwell Private Ltd. & ... vs Lost City Developments Llc & Ors.
2011 Latest Caselaw 3951 Del

*           THE HIGH COURT OF DELHI AT NEW DELHI
%                                  Judgment delivered on: 16.08.2011

                              OMP 614/2010

PRIMA BUILDWELL PRIVATE LTD. & ORS.          .... Petitioners
               Through: Mr. Rajiv Nayyar, Sr. Adv.Ms. Niti
                        Dixit with Mr. Palash Rajan Gupta &
                        Ms. Raunaq Mathur, Advs.

                                  versus

LOST CITY DEVELOPMENTS LLC & ORS.             ..... Respondents

Through: Dr. A.M. Singhvi, Sr. Adv. with Mr. Sharan Thakur, Mr. Sidhartha Barua & Mr. Manpreet Lamba, Advs. for R-1.

Mr. Amit Chadha, Sr. Adv. with Mr. Dhirender Negi & Mr. Ananya Kumar, Adv. for R-3.

CORAM:-

HON'BLE MR JUSTICE MANMOHAN SINGH

1. Whether Reporters of local papers may be allowed to see the judgment ?

     2.   To be referred to the Reporter or not ?                      Yes

     3.   Whether the judgment should be reported in Digest ?          Yes

MANMOHAN SINGH, J

1. By this order I shall propose to dispose of the present petition

filed under Section 9 of the Arbitration & Conciliation Act, 1996 seeking

an interim order inter alia restraining the Respondents, their officers,

employees, agents and representatives from : (i) appropriating the funds

in the bank account of Cavern Hotel & Resorts FZCO, the respondent

No.2, with HSBC Bank Middle East Limited ("HSBC") until conclusion

of the arbitration proceedings; (ii) taking any steps to seek additional

contribution from the petitioners; (iii) causing the respondent No.2 to

make any payments to AI Furjan LIC ("AI Furjan"), a subsidiary of

Nakheel PJSC ("Nakheel") and affiliate of respondent No.1, until

conclusion of the arbitration proceedings; and (iv) unilaterally operating

the bank account of the respondent No.2 with HSBC or any other bank

account of the respondent No.2.

2. There are three respondents namely Lost City Developments

LLC, Cavern Hotel & Resort FZCO and Dubai World. The case of the

petitioners is that in pursuance to the Joint Venture Agreement dated

15.02.2007 Nakheel and Bharat Hotels Limited, the petitioner No.3,

acting through their respective subsidiaries petitioner No.1 and petitioner

No.2 and respondent No.1, incorporated respondent No.2 in Dubai, as an

equal (50:50) joint venture for the purposes of designing, developing,

constructing, marketing and managing a five star luxury hotel and spa in

Dubai. The JV Agreement was executed among Lost City Developments

LLC, respondent No.1, and Prima Buildwell Private Limited and

Premium Holdings Limited, the petitioner No.1 and the petitioner No.2,

respectively. The JV Agreement provides that the parties shall be

governed by the terms of the JV Agreement and certain agreements

collectively referred to as the Hotel Agreements.

3. The JV Agreement provides that disputes between the parties

must be referred to arbitration. Further, the Articles of Association of the

respondent No.2 incorporates the dispute resolution clause of the JV

Agreement by reference.

4. The respondent No.1 is a wholly owned subsidiary

of Nakheel, and the petitioner No.1 is a subsidiary of Bharat

Hotels Limited. The petitioner No.2 is promoted by Bharat Hotels

Limited. The respondent No.3 is an entity owned by the Government of

Dubai.

5. The petitioner No.1 and the petitioner No.2 had jointly

capitalized respondent No.2 with an equity contribution of approximately

AED 300,000. In addition, they had provided shareholder loans in an

amount of AED 17.66 million to respondent No.2. While Nakheel was

required to provide the land upon which the proposed luxury hotel was

to be constructed and contribute its experience in the hospitality sector in

managing and operating luxury hotels and to contribute its brand name

"Bharat Hotels" to the property.

6. Accordingly, the respondent No.2 entered into a sale and

purchase agreement dated February 10, 2008 (the "Plot Sale

Agreement") with AI Furjan, a subsidiary of Nakheel, and affiliate of

respondent No.1, for the purchase of certain land for constructing the

hotel contemplated in the JV Agreement, and paid AED 16.5 million, or

30% of the purchase price, pursuant to the Plot Sale Agreement. This

payment was made from funds contributed by the joint venture partners.

7. The petitioners state that in view of the economic recession in

Dubai, the respondent No.3 and its subsidiaries (including Nakheel), are

admittedly in considerable financial difficulty since the year 2008, and

this has resulted in non-availability of financing for the hotel project an in

these circumstances his Excellency Sultan Ahmad Bin Sulayem, the

Executive Chairman of Dubai World and Nakheel (and, at that time, a

director on the board of directors of Cavern nominated by Lost City),

agreed that, in addition to changes in the payment schedule, the purchase

price under the Plot Sale Agreement will be reduced to reflect the fall in

value of real estate in Dubai.

8. It is also stated by the petitioners that in March 2010 the

parties agreed and understood that Al Furjan had not progressed the

development of the infrastructure works and the land required for the

hotel project in terms of the Plot Sale Agreement. The parties agreed

that Al Furjan would be unable to undertake the Al Furjan Development

within a reasonable period of time and the proposed hotel project would

have to be revisited when Dubai‟s economy had recovered from

recession.

9. However, the petitioners state that without any justification

notice of default dated 28.04.2010 was issued by Al Furjan to Cavern,

calling upon Cavern to pay an amount of AED 33,137,425 allegedly

overdue under the Plot Sale Agreement.

10. Warning notice dated 20.06.2010 was also issued to Cavern

which required Cavern to pay an amount of AED 35,930,027 including

fine on delayed payments and interest calculated from April 1, 2010

within 15 days of receipt of the warning.

11. The petitioners state that as such the dispute inter alia pertains

to the termination Joint Venture Agreement, refund of equity and loan

contributions made pursuant to the JV Agreement and termination of the

Hotel Agreements which have not been resolved till today despite of

number of discussion and communication exchanged between the parties.

Therefore, the petitioners are in the process of invoking the dispute

resolution procedure contemplated under the Joint Venture Agreement to

resolve the dispute between the parties. At the same time the petitioners

apprehend that the respondents may, in the meanwhile, appropriate the

funds available in the bank account of respondent No.2, operated by a

nominee of respondent No.1 and as such the petitioners have filed the

present petition to seek the intervention of this court to issue protective

orders to secure the amount in dispute and for an interim measures of

protection to secure the petitioners‟ final relief against the respondents.

In case the prayer sought made in the petition are not granted, the

petitioners‟ claims in the arbitration proceedings will be prejudiced.

12. The petition was first time listed on 19.10.2010 when the

notice was issued to the respondents. Time was granted to the

respondent to file the reply. However, the statement was made by the

learned counsel for the respondent No.1 and 3 that they do not intend to

file the reply to the petition as the respondents have raised the

preliminary objection with regard to the jurisdiction of this court.

Despite time granted by the court no reply was filed. The respondent

No.2 was proceeded ex parte due to non appearance despite of service

and the respondents again maintained the stand before the court not to

file the reply and who have raised the preliminary objection about the

territorial jurisdiction of this court. The matter was argued by learned

counsel for the parties and the order was reserved on 19.07.2011.

13. Dr. Abhishek Manu Singhvi, learned Senior Counsel on

behalf of respondent No.1 has argued that the petitioners are not entitled

for any relief sought and the petition is liable to be dismissed which is

devoid of any jurisdiction, therefore, the court on its own should not

exercise its discretion to grant any relief. In support of his submissions

he argues that the respondents are domiciled in the Emirates of Dubai and

do not carry on any business operations or own any assets in India nor

have any office or bank accounts, real property or other assets of any

kind in India. Even within the meaning of Section 20 of Code of Civil

Procedure, 1908 no cause of action whatsoever has arisen in India, the

dispute between the parties pertaining to a Joint Venture Agreement in

the Emirates of Dubai.

14. The other submission made by Mr. Singhvi is that the court

has no connection with the subject matter of the dispute as no cause of

action occurred within the jurisdiction of this court as none of the

respondents are domiciled in India. The petitioners have alternative

forum to seek the same relief and the appropriate and natural forum for

the petitioners to seek interim relief is the Dubai World Tribunal at

Dubai, where the obligations flowing from the JVA had to be ordinarily

performed and is also the place where the respondents are domiciled as

well as the situs of the funds which the petitioners are claiming are in a

bank account or at the alternative place where the Arbitral seat exists as

per the agreement which contain clause that the dispute shall be finally

and exclusively settled by Arbitration in London.

15. Mr. Amit Singh Chadha, learned Senior Counsel appearing on

behalf of respondent No.3 submits that it is the admitted case of the

petitioners that the respondent No.3 is not a party to the contract with the

petitioners. On the other hand, the petitioners‟ contention is that the

contract between the petitioners and respondent No.1 gets extended to

the respondent No.3 in view of the statement made in para 5 of the

petition. Mr. Chadha has referred the following judgments in support of

his submissions:

(i) K.K. Modi Investment and Financial Services Pvt. Ltd. vs. Apollo International Inc. and Ors.; 2009 (6) RAJ 587 (DEL);

(ii) Onyx Musicabsolute.com Pvt. Ltd. and Ors. vs. Yash Raj Films Pvt. Ltd. and Ors. 2008(6) Bom CR 418;

(iii) Indowind Energy Ltd. vs. Wescare (I) Ltd. and Anr. AIR 2010 SC 1793

16. The learned counsel for the petitioners has argued that this

court need not satisfy the requirements of territorial jurisdiction under

Section 20 of the Code of Civil Procedure, 1908 while entertaining a

Section 9 petition relating to an international commercial arbitration.

17. It is argued by the counsel appearing on behalf of the

petitioners that the JVA was negotiated in Delhi, and that the

investments in the form of equity contribution and shareholder loans were

made by the petitioners from Delhi. Further, the petitioners did

receive certain correspondences and demand notices at their address in

Delhi.

18. It is further submitted by the petitioners that in any

event the parties to the JVA had impliedly excluded the operation

of Part I of the Act. The learned counsel has referred the case

of Bhatia International v. Bulk Trading S.A. and Anr. 2002 (1)

RAJ 469 (SC), wherein the principle was first discussed by

the Supreme Court in the case, in which a three member Bench held that

"In cases of international commercial arbitration held outside India

provisions of Part I would apply unless the parties by agreement,

express or implied, exclude all or any of its provisions". So

it is argued by the counsel that the abovementioned decision

is directly applicable to the present case and thus this court

is competent to pass the interim order as prayed in the petition.

19. The other submission of the learned counsel for the

petitioners is that the Articles 23 of the ICC Rules provides that

any party can approach a „competent judicial authority‟ for interim or

conservatory measures. The counsel argued that this Court is a

„competent judicial authority‟ for the purposes of Article 23 of

the ICC Rules and on this ground alone they are entitled to get relief,

therefore, there is no bar to pass an interim order by exercising

its power and the petitioners, in fact, have rightly chosen

the jurisdiction to pass such relief. Counsel says that it is choice

of the petitioners to select the form to invoke the jurisdiction to

entertain the matter.

20. Before dealing with the rival submissions of the parties, there

are certain admitted facts between the parties. The same are:

(i) The present petition arises out of a joint venture agreement

(the „JVA‟) dated February 15, 2007 by the terms of which petitioner

No.1, petitioner No.2 and respondent No.2, as a joint venture

company in Dubai for the purpose of developing and construction of

a Hotel and the sale and leasing of apartments in connection with the

Hotel.

(ii) In accordance with the terms of the JVA the shareholding in

respondent No.2 i.e. the Joint Venture Company („JVC‟) was to be

held 50/50 between the petitioner No.1.

(iii) The JVA contains an arbitration clause according to which

any dispute shall be finally and exclusively settled by arbitration in

London under the rules of the ICC. The JVA is governed by the laws

of England and Wales.

(iv) The JVC entered into a Plot Sale Agreement dated

February 10, 2008 with Al Farjun for the sale and purchase of

plot. The said agreement contained a separate and distinct

arbitration clause. The petitioners were not a party to the Plot Sale

Agreement.

(v) The respondents (including the JVC) are admittedly in the

Emirates of Dubai and incorporated under the laws of the Emirates of

Dubai. The respondents do not have any office or establishment in

India nor to the fact that they do not carry out any business in India.

21. There is no doubt in my mind that if this Court does not also

have jurisdiction to entertain a suit on the facts and circumstances of the

case, then this court is also have no jurisdiction to entertain an

application under Section 9 of the Arbitration and Conciliation Act, 1996.

It is also not denied by the parties that the petition under Section 9 of the

Act has to be filed before a „Court‟ as defined in Section 2(1)(e) of the

Act, according to which a Court shall be such which is competent under

law to decide the questions forming the subject matter of the arbitration.

The provisions of Section 2(1)(e) of the Act would also be applicable to

international commercial arbitrations outside India, as it is evident from

Bhatia International v. Bulk Trading S.A. & Anr. (supra) where the

Supreme Court referring to the definition of the Court under Section

2(1)(e) observed that:

"a court is one which would otherwise have jurisdiction in respect of the subject matter"

22. Thus it is clear that while entertaining a Section 9 petition

relating to an international commercial arbitration, a court must have

territorial jurisdiction with regard to the subject matter of the arbitration

proceedings in a same way as determined in any suit.

23. While determining territorial jurisdiction, Courts have always

considered the location where the cause of action has substantially arisen.

In the similar circumstances, the Supreme Court in case of South East

Asia Shipping Co. Ltd. v. Nav Bharat Enterprises Pvt. Ltd., (1996) 3

SCC 443 held that the admitted position was that performance of the

obligations and liabilities under the contract was to be carried out in

Bombay. The Court found it wholly irrelevant that the subject Bank

Guarantee had been executed at Delhi and transmitted for performance at

Bombay an held that Delhi Courts did not possess jurisdiction to decide

the dispute.

23. The relevant clause 11.3 of the JVA in the present case

provides

"any Dispute that has not been resolved following the procedures set forth in Articles 11.1 and 11.2 shall be finally and exclusively settled by arbitration which shall be conducted in London."

The JVA also provides that the governing law shall be that of

England and Wales. Therefore, in the absence of any other agreement to

the contrary, the law governing the arbitration agreement where the

arbitration is agreed to be held that is the law of England and Wales.

24. It is also held by various courts that the law of the arbitration

agreement would be the same as the law governing the main contract

unless it is explicitly stated to be so. Some of the case on this proposition

are wherein similar finding arrived i.e. Shreejee Traco(I) Pvt. Ltd. v.

Paperline International Inc. (2003) 9 SCC 79 and National Thermal

Power Corporation v. Singer Company and Others (1992) 3 SCC 551.

25. Assuming in the present case the contract negotiations

occurred at Delhi, or that the funds for investment in the share capital of

the JVC were remitted from Delhi does not automatically confer any

jurisdiction on this court.

26. The similar question of jurisdiction was also considered in

detail in Oil and Natural Gas Commission v. Utpal Kumar Basu

(1994) 4 SCC 711 wherein it was held that merely because the writ

petitioner submitted the tender and made the representation from Calcutta

in response to an advertisement inviting tenders which were to be

considered at New Delhi and work was to be performed in Hazira

(Gujrat) and also receives replies to the fax messages at Calcutta, could

not constitute facts performing an integral part of the cause of action. It

was further held that the High Court could not assume jurisdiction on the

ground that the writ petitioner resides in or carries on business from a

registered office in State of West Bengal.

27. In the present case the parties by agreeing that arbitration was

to be conducted in London had agreed that the seat of arbitration was to

be London, and accordingly English courts will have supervisory

jurisdiction to grant any supportive measure to the arbitration

proceedings. The seat of the arbitration is specified in the arbitration

agreement by the selection of a particular place or country in which the

arbitration is to be held. In the absence of a clear indication to the

contrary, there is a presumption that the place where the arbitration is to

take place will constitute its seat of arbitration.

28. (i) In the case of Shashoua & Ors v. Sharma

("Sharma"), (2009) 2 Lloyd‟s Law Reports 376 where the English court

of Appeals had held that

"When.....there is an express designation of the arbitration venue as London and no designation of any alternative place as the seat, combined with a supranational body of rules governing the arbitration and no significant contrary indicia, the inexorable conclusion is... that London is that juridical seat and English law the curial law".

(ii) Also in the case of Dozco India Pvt. Ltd. v.

Doosan Infracore Co. Ltd. JT 2010 (12) SC 198 where the Supreme

Court has held that when parties agree that all dispute to be settled in

South Korea

"there is a prima facie impression that the seat of arbitration was only in Seoul, South Korea".

(iii) In the Halsbury‟s Laws of England (Volume 2

(2008) 5th Edition) referring to the approval of the classic statement by

the House of Lords in Whitworth Street Estates v James Miller (1970)

AC 583, or to quote the words of Lord Justice Kerr in Nav. Amazonica v

Cle.Internat. de Seguros (1998) 1 Lloyd‟s Rep. 116 ... in the absence of

some express and clear provision to the contrary, it must follow that an

agreement that the curial or procedural law of an arbitration is to be the

law of X has the consequence that X is also to be the „seat‟ of the

arbitration. The lex fori is then the law of X, and accordingly X is the

agreed forum of the arbitration. A further consequence is then that the

courts which are competent to control or assist the arbitration are the

Courts exercising jurisdiction at X.

29. In view of above, I feel that prima facie in the absence of

agreement otherwise, the selection of a place of seat for an arbitration

determines curial law or "lex fori" or "lex arbitri" By providing London

as the seat of the arbitration the parties had necessarily agreed that the

curial law or law which governed the arbitral proceedings was that of

England and Wales. Therefore, English Courts shall also have

jurisdiction to grant any interim measure in relation to the arbitration

proceedings.

30. It is correct that choosing a seat of arbitration is akin to

choosing an exclusive jurisdiction clause. Therefore, it is rightly held in

the case of A v B (2007) 1 All E.R. (Comm) 591 "an agreement as to the

seat of an arbitration is analogous to an exclusive jurisdiction clause.").

Looked I this light when the parties by express agreement have agreed

that the law juridically controlling the arbitration being English law, the

seat of arbitration to be in London and by all references agreeing that the

curial law or law which governed the arbitral proceedings that of England

and Wales, thus impliedly one can easily say that they have excluded

Part I of the Act. Although, it is not expressly excluded.

31. In Bhatia International, where the parties had agreed to

arbitrate under ICC Rules, the local court had the jurisdiction to grant

interim relief as a competent judicial authority. This was because the

local court was a court within the meaning of Section 2(1)(e) of the Act,

since in that case (unlike in the present Petition) the assets in question

and which were the subject matter of the dispute itself were situated

within the confines of its local jurisdiction. The situation in the present

case is different.

32. The answer to the contention of the petitioners about the

application of Bhatia International can be found in re Dozco where the

Supreme Court again considered the issue of exclusion of application of

Part I. in Dozco, the impugned arbitration clause in the distribution

agreement provided all disputes in connection with the Agreement to be

settled in Seoul, Korea, the governing law to be the law of the Republic

of Korea, and the procedural rules to be the International Chamber of

Commerce (ICC) Rules. The Supreme Court after considering the

language and terms contained in the distribution agreement held that the

language of the arbitration clause was clearly indicative of express

exclusion of application of Part I. The Hon‟ble Supreme Court in this

context stated that

"The language is a clear indicative of the express exclusion of part I of the Act....... a clear language of Articles 22 and 23 of the

Distributorship Agreement the parties spell out a clear agreement between the parties excluding Part I of the Act" (emphasis added).

33. An implied exclusion of Part I of the Act was considered by

the division Bench of this court in Max India Limited v. General

Binding Corporation 2009 (3) Arb. LR 162 (Delhi) (DB) ("Max India")

where this court held that choosing a foreign law substantively and

procedurally including the law governing the arbitration proceeding leads

to the exclusion of Part I of the Act. In such as situation the court held

that an application under Section 9 of the Act is not maintainable. The

court in para 40 stated that :

"Once it is accepted that the laws for interpretation of contract as well as arbitration proceedings which are to be applied are Singapore Laws which means the provisions of Singapore Arbitration Act are applicable, can there be a situation where the Indian Arbitration and Conciliation Act shall apply at the same time (even to the limited extent of Section 9 thereof) as is sought to be contended. Answer has to be negative."

34. In the very recent case decided by the Supreme Court

between Videocon Industries Limited v Union of India Civil Appeal

No.4269 of 2011 the finding of the Supreme Court as to an implied

exclusion of Part I of the Act was on the fact that the arbitration

agreement was governed by laws of England. The Supreme Court

referring to Bhatia International, Venture Global and another case of the

Gujarat High court Hardy Oil and Gas Limited v Hindustan Exploration

company Limited and Ors 2005(3) G.L.H. held that the parties by

agreeing that the arbitration agreement is to be governed by laws of

England and Wales had excluded the provisions of Part I. Therefore the

Delhi High court did not have the jurisdiction.

35. The submission of the learned counsel for the Petitioners is

also meritless that Part I of the Act would not be impliedly excluded. In

answering the above question the reliance of paragraph 31 has been

placed by the respondent in the decision of this itself between Bhushan

Steel Ltd v Singapore International Arbitration Centre 2010(3) Arb. LR

70 (Delhi) where this Court clearly stated the circumstances under which

Part I of the Act would not apply. This Court stated that Part I of the Act

would apply only if the parties have failed to do one or more of the

following:

                (a)        There must be no agreement as to
                what would be governing law of the contract,
                governing law being presumed to be law of the
                arbitration also;
                (b)        There must be no agreement as to the
                place of the arbitration; and/or
                (c)        It must be shown that if no interim

action is taken the parties will be remediless.

36. Thus, there is no force in the submission of the petitioners that

in the present case Part I was not impliedly excluded. The parties by

agreeing to arbitration in a particular place must normally be taken to

have expected the courts in that place to exercise supervisory jurisdiction

including granting interim relief in support of the arbitration and to apply

the law of that place in granting such interim relief.

37. In the present case, the parties have specifically agreed that

the law England and Wales shall be applicable and the place of

arbitration is London. I am of the view that the Petitioners have

alternative remedies in other jurisdictions (i.e. London as well as Dubai)

to press their claims as there is an implied exclusion of Part I of the Act

in the facts and circumstances of the matter in hand.

38. As regard the next submission of the petitioners that under

Article 23 of ICC Rules which proves any party can approach a

competent judicial authority and this court according to the counsel is a

competent court to pass such order.

39. No doubt, the ICC Rules empower an arbitral tribunal to

render conservatory and interim measures. Article 23.1, provision

concerning provisional remedies, provides in pertinent part:

"Unless the parties have otherwise agreed, as soon as the file has been transmitted to it, the Arbitral Tribunal may, at the request of a party, order any interim or conservatory measure it deems appropriate. The Arbitral Tribunal may make the granting of any such measure subject to appropriate security being furnished by the requesting party. Any such measure shall take the form of an order, giving reasons, or of an Award, as the Arbitral Tribunal considers appropriate".

40. In the similar circumstances as provided Article 23 of the ICC

Rules, the LCIA Arbitration Rules also provide that a party to LCIA

arbitration has the right to apply to any judicial authority for interim or

conservatory measures. The proposition of similar nature was examined

in the matter of Hardy Oil & Gas Limited v Hindustan Oil Exploration

Company Limited 2005(30G.L.H.135 which was upheld by the Supreme

Court in the matter of Videocon Supra.

41. The question of what constitutes a competent court was also

considered by a Division Bench of this court in re. Max India (supra),

where it was held that courts of the country whose substantive laws

govern the arbitration agreement are the competent court in respect of all

matters arising under the arbitration agreement.

42. It is also observed by author Michael W. Buhler and Thomas

H. Webster in the second edition of their authoritative book "Handbook

of ICC Arbitration" Commentary, Precedents, state that the relevant

national court for conservatory or interim measures under ICC Rules is

the court where the conservatory or interim measure is to be carried out.

In other words, a competent court under the ICC Rules is the court which

is closest to the subject matter of arbitration. However, in the present

case, there is hardly any indication or whisper in this regard.

43. The next submission of the petitioners is that the petitioners

may not be able to get interim relief from the Dubai World Tribunal in

view of the present financial position and circumstances in UAE. The

learned counsel appearing on behalf of the respondents has referred the

specimen order dated 14th December, 2009. His Highness Sheikh

Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister

of UAE, Ruler of Dubai issued Decree No. 57 of 2009, establishing a

Tribunal to decide the Disputes Related to the Settlement of the Financial

Position of Dubai World an it‟s Subsidiaries. The Decree was issued to

provide a comprehensive legal framework, consistent with international

standards, to govern any dispute with Dubai World and its subsidiaries

by establishing the Tribunal also known as the Dubai World Tribunal

(„Tribunal‟).

44. The respondents have also referred profile of three judges in

support of his submissions that the Tribunal comprises of three senior

international judges from the Dubai International Finance Centre

(„DIFC‟) Courts. Two of the judges, Sir Anthony Evans and Sir John

Chadwick are both former English Courts of Appeal Judges. Sir Anthony

Evans is the former Chief Justice of the Dubai International Financial

Centre Court. Sir John Chadwick is an insolvency specialist and has just

completed a high profile report into the collapse of Equitable Life, an

English mutual investment fund. The third member of the Tribunal is

Michael Hwang SC, an eminent Singaporian lawyer who is the current

Chief Justice of the DIFC.

45. Article 3 of the Decree states that the Tribunal shall have the

jurisdiction to hear and decide any demand or claim submitted against (a)

the Corporation (Corporation has been defined in the decree to include

Dubai World and its Subsidiaries), including hearing and deciding any

demand or dissolve or liquidate the Corporation; (b) any person related to

the settlement of the financial obligations of the Corporation, including

the Chairman and the members of the Board of Director, as well as all the

employees and workers of the Corporation.

46. All judgments and orders including interim relief granted by

the Tribunal can be executed and enforced by the competent courts in the

Emirate of Dubai as well as the courts of other emirates where applicable

(Article 6 of the Decree). The Tribunal is empowered to issue the interim

and interlocutory orders and decisions, including injunctions to any

person to act or not to act, or other order as the Tribunal considers

appropriate. Thus the arguments made by the petitioners are totally

meritless as the Tribunal has the jurisdiction and power to grant the

petitioner the interlocutory ad-interim relief sought by them.

47. It is also undisputed fact that under Section 44 of the English

Arbitration Act 1996 (the "English Act"), English courts have the power

to grant interim injunction in respect of arbitration proceedings. A broad

range of injunctions are available under Section 44 of the English Act, for

example, orders passed by an English court under Section 44 permit the

taking of evidence, the preservation of evidence and assets and the

granting an interim injunction. The English Act also authorizes orders

regarding property and assets at issue in order to support and aid English

arbitration proceedings.

48. For the aforesaid reasons, this Court is of the considered view

that this Court has no territorial jurisdiction to entertain the petition,

hence the same cannot be entertained.

49. As regard the objection raised by the respondent No.3 is

concerned, it shall be kept open and in case the petitioners will initiate

any steps before the appropriate forum for the similar relief, the

respondent No.3 is at liberty to re-agitate the same objection and same

has to be considered as per law.

50. Consequently, the present petition is dismissed with no order

as to costs.

MANMOHAN SINGH, J AUGUST 16, 2011 dp