Delhi High Court
Union Of India vs Vodafone Group Plc & Anr on 8 December, 2020
$~9&10
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ RFA(OS) 38/2018 & CMs No.23348/2018 (for stay) & 14469/2020
(for directions)
UNION OF INDIA ..... Appellant
Through: Mr. Chetan Sharma, ASG with Mr.
Kirtiman Singh, Mr. Ashutosh
Kumar, Mr. Prateek Dhanda, Mr.
Waize Ali Noor, Mr. Rohan Anand,
Mr. Taha Yasin and Mr. Akshay
Gadeock, Advs.
Versus
VODAFONE GROUP PLC & ANR. ..... Respondents
Through: Ms. Anuradha Dutt, Ms. Fereshte
Sethna, Ms. Ekta Kapil, Ms. Gayatri
Goswami, Mr. Haaris, Fazili, Mr.
Kunal Dutt and Mr. Shobhit Ahuja,
Advs.
AND
+ RFA(OS) 45/2018
VODAFONE GROUP PLC UNITED KINGDOM
& ANR. ..... Appellants
Through: Ms. Anuradha Dutt, Ms. Fereshte
Sethna, Ms. Ekta Kapil, Ms. Gayatri
Goswami, Mr. Haaris, Fazili, Mr.
Kunal Dutt and Mr. Shobhit Ahuja,
Advs.
Versus
UNION OF INDIA ..... Respondent
Through: Mr. Chetan Sharma, ASG with Mr.
Kirtiman Singh, Mr. Ashutosh
Kumar, Mr. Prateek Dhanda, Mr.
Waize Ali Noor, Mr. Rohan Anand,
Mr. Taha Yasin and Mr. Akshay
Gadeock, Advs.
RFA(OS) 38/2018 & RFA(OS) 45/2018 Page 1 of 8
CORAM:
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
HON'BLE MS. JUSTICE ASHA MENON
ORDER
% 08.12.2020
[VIA VIDEO CONFERENCING]
1. Both appeals arise from the judgment dated 7th May, 2018 of a Single
Judge of this Court in CS(OS) No.383/2017 filed by Union of India (UOI)
against (A) Vodafone Group PLC United Kingdom; and, (B) Vodafone
Consolidated Holdings Limited United Kingdom (both collectively called as
'Vodafone'), seeking (i) declaration that Notice of Dispute dated 15th June,
2015 and Notice of Arbitration dated 24th January, 2017 issued by Vodafone
to UOI; and, the proceedings initiated by Vodafone in pursuance to the said
notices under the India-United Kingdom (UK) Bilateral Investment
Promotion and Protection Agreement (BIPA) are an abuse of process and
null and void; and, (ii) permanent injunction restraining Vodafone from
taking any action in furtherance of the notices aforesaid and from initiating
arbitration proceedings under the India-UK BIPA or continuing with it as
regards the disputes mentioned in the notices.
2. Considering the nature of the disputes, the parties did not wish to lead
any evidence and the Single Judge heard the counsels finally, treating all
documents filed by the parties as admitted documents.
3. We may notice/record that the plea inter alia of UOI in the suit from
which these appeals arise was, (a) that Vodafone having invoked arbitration
against UOI under the India-Netherlands BIPA, was not entitled to also
invoke arbitration under the India-UK BIPA on the same cause of action and
for the same relief; and, (b) that Vodafone had resorted to invoke arbitration
under the India-UK BIPA owing to the plea of UOI before the Arbitral
Tribunal under the India-Netherlands BIPA, that the dispute and claim
raised by Vodafone before the Arbitral Tribunal, fell in the category of
disputes which could not be raised under the India-Netherlands BIPA and
that continuation by Vodafone, of arbitration proceedings against UOI,
under India-Netherlands BIPA as well as India-UK BIPA, was vexatious.
We may further notice that Vodafone inter alia objected to the jurisdiction
of this Court over the subject matter of the dispute. We may yet further
notice that during the pendency of the suit before the Single Judge, vide
order dated 26th October, 2017, as modified by order dated 14th December,
2017 of the Supreme Court in SLP(C) No.33885/2017, without prejudice to
the rights and contentions of the parties, constitution of Arbitral Tribunal
under the India-UK BIPA was permitted but the Tribunal so constituted was
not to commence hearing.
4. Vide the impugned judgment, it was held (i) that this Court has
jurisdiction over Vodafone in personam and over the subject matter of the
dispute; (ii) that an agreement to arbitrate between an investor and a host
State is contractual, inasmuch as it is not itself a treaty but flows from the
treaty provisions, and is justiciable in accordance with the principles of
international law and there is no threshold bar or inherent lack of jurisdiction
in the Court to deal with BIPA arbitrations; (iii) that a National Court would
generally not exercise jurisdiction where the subject matter of the dispute
would be governed by an investment treaty having its own dispute resolution
mechanism, except if there are compelling circumstances and the Court has
been approached in good faith and there is no alternative efficacious remedy
available; (iv) that the entire scheme of BIPA is contractual and it is clear
that UOI consented to the international investment arbitration under
principles of international law, as the method of dispute resolution under the
BIPA, and in view of Vodafone's undertaking/offer before the Court, to
consolidate the arbitration under the India-UK BIPA with the arbitration
under the India-Netherlands BIPA, the likelihood that the Arbitral Tribunal
would make an order that would afford Vodafone double relief or impose a
double jeopardy on UOI or pass conflicting awards, was remote; (v) that
UOI had not wilfully indulged in suppression and its conduct was not
vitiated by malice; (vi) that with the constitution of Arbitral Tribunal under
the India-UK BIPA, the suit had become infructuous; (vii) that under the
principle of 'kompetenz-kompetenz', India-UK BIPA Arbitral Tribunal would
be better placed to assess the scope of the two BIPA arbitration proceedings
and the likelihood of parallel proceedings and abuse of process; (viii) that
UOI, after having elected its remedy of agitating the issue of abuse of
process before the Netherlands-India BIPA Arbitration Tribunal, could not
have approached the National Court on the same ground and that too,
without waiting for the award being rendered by the India-Netherlands
BIPA Tribunal; and, (ix) that the suit could not be an appeal against the
India-Netherlands BIPA Tribunal. Resultantly, the suit was dismissed with
liberty to UOI to raise the issue of abuse of process before the Arbitral
Tribunal, under the India-UK BIPA, which stood constituted; the said
Tribunal, while deciding the said issue to take into account Vodafone's
undertaking to the Court that if UOI consented, Vodafone would agree to
consolidation of the two BIPA arbitration proceedings, before the India-UK
BIPA Tribunal.
5. RFA(OS) No.38/2018 came up first before the Court on 31st May,
2018, when the same was admitted for hearing and an oral statement was
made on behalf of Vodafone, to keep the arbitration proceedings under the
India-UK BIPA in abeyance, till the decision of the appeal. Thereafter,
RFA(OS) No.45/2018, by way of cross-objections, was filed by Vodafone,
with respect to the finding of the Single Judge holding this Court to have
jurisdiction to entertain the suit. Thereafter, the matters were adjourned
from time to time. CM No.49319/2019 in RFA(OS) No.38/2018 was filed
by Vodafone inter alia praying for withdrawal of oral statement given on
behalf of Vodafone on 31st May, 2018 to the effect that they were agreeable
to keep in abeyance, steps in furtherance to the arbitration proceedings under
the India-UK BIPA, during the pendency of these appeals. The said
application came up for hearing on 20th November, 2019, when reply
therefor was called. Vide subsequent order dated 15th January, 2020, it was
directed that Vodafone shall remain bound by the statement made on 31st
May, 2018. Vide subsequent order dated 11th February, 2020, CM
No.49319/2019 in RFA(OS) No.38/2018 was dismissed and Vodafone was
held to be bound by the statement made on 31st May, 2018.
6. Vodafone, during the prevalent pandemic, filed CM No.14469/2020
in RFA(OS) No.38/2018, for early hearing and in the alternative to be
relieved of the undertaking for interim arrangement and which application
came up before us on 9th July, 2020. After hearing the counsels, the appeals
were ordered to be listed for final hearing via video conferencing.
7. The Additional Solicitor General (ASG) for UOI and the senior
counsel for Vodafone were heard on 14th August, 2020, 1st September, 2020,
7th September, 2020 and 14th September, 2020.
8. We may at this stage further notice, that during the pendency of these
appeals, the Arbitral Tribunal constituted under the India-Netherlands BIPA
concluded the hearing and in February, 2019 reserved award and it was the
repeated contention of the ASG before us that since the Arbitral Tribunal
under the India-Netherlands BIPA had reserved award and which was to be
pronounced at any time, there was no need for Vodafone to proceed with the
arbitration of the same claim and relief before the Arbitral Tribunal under
the India-UK BIPA.
9. After the hearing of these appeals on 14th September, 2020, we read in
the newspapers that the arbitral award under the India-Netherlands BIPA
had been published and was against the UOI. Therefrom it appeared that the
Arbitral Tribunal under the India-Netherlands BIPA had not accepted the
plea of UOI before it, that the relief claimed by Vodafone fell in the
category of disputes which could not be raised under the India-Netherlands
BIPA. Therefrom it also appeared that the reason for which Vodafone had
invoked the arbitration under the India-UK BIPA, had disappeared. Thus,
on 7th October, 2020, when the appeals next came up before us, we enquired,
whether not in view of the said developments, the suit from which these
appeals arise, had become infructuous.
10. The counsel for UOI, on 7th October, 2020 stated that Vodafone
should make a statement that in view of arbitral award pronounced since
then, Vodafone would not be pursuing the arbitration under the India-UK
BIPA. On the contrary, the senior counsel for Vodafone stated that it is the
UOI which should inform whether it intended to be bound by the arbitral
award already published under the India-Netherlands BIPA or intends to
take up further proceedings with respect thereto.
11. Thereafter, on 17th November, 2020, the ASG stated that his
instructions were still awaited as the decision was to be taken by the Inter-
Ministerial Committee/Group of the Cabinet which had not met till then. On
17th November, 2020, the senior counsel for Vodafone, under instructions
stated that Vodafone shall proceed with the arbitration commenced under
the India-UK BIPA, only if the award already published under the India-
Netherlands BIPA, was set aside. Expressing our view, that recording the
said statement on behalf of Vodafone, the appeals could be disposed of, on
request of ASG for time to consider, the matters were adjourned to today.
12. Today, the ASG states that no decision has been taken by the Inter-
Ministerial Committee/Group as yet on challenging the award under the
India-Netherlands BIPA.
13. The counsel for Vodafone however affirms the statement made on
17th November, 2020 and as recorded in the order of that date, that Vodafone
shall proceed with the arbitration commenced under the India-UK BIPA,
only if the award under the India-Netherlands BIPA already published, was
set aside.
14. In view of the statement aforesaid on behalf of Vodafone, there is no
need to keep these appeals pending. The grievance of UOI in the suit from
which these appeals arise as well as in these appeals, was of Vodafone
making the same claim under two separate BIPAs i.e. under the India-
Netherlands BIPA, first invoked, and also under the India-UK BIPA,
subsequently invoked and which was labelled as vexatious. On the contrary,
it was inter alia the plea of Vodafone that in view of objection taken by UOI
before the Arbitral Tribunal under the India-Netherlands BIPA, it had
become incumbent on Vodafone to, without wasting time, by way of
abundant caution, invoke India-UK BIPA also for the same claim. Now, on
publication of the award under the India-Netherlands BIPA, the said
objection of UOI has not been sustained and the claims of Vodafone have
been allowed. Further, now in view of the statement made on 17th
November, 2020 and reiterated today on behalf of Vodafone, there is no
occasion for arbitration under the India-UK BIPA proceeding, unless the
award under the India-Netherlands BIPA, is set aside.
15. Hearing of these appeals has already consumed sufficient time of
different Benches of this Court. Though it was the contention of the senior
counsel for Vodafone that Vodafone was entitled, in law, to by way of
abundant caution, invoke arbitration under India-UK BIPA also and that
Vodafone still remains so entitled, till the arbitral award under the India-
Netherlands BIPA is complied with by UOI, but in view of subsequent
developments aforesaid, need is not felt for this Court to spend any more
time on these appeals.
16. The appeals are disposed of as infructuous, for the time being, in view
of aforesaid developments and binding Vodafone to the statement made on
17th November, 2020 and today and with liberty to the parties to apply for
revival of these appeals, if and when the cause of action arises/again arises
and at which stage, all pleas available in law, shall remain open to the
parties.
No costs.
RAJIV SAHAI ENDLAW, J.
ASHA MENON, J.
DECEMBER 8, 2020/'bs'
