Madras High Court

Phoenix Solar Pte Ltd vs Zynergy Solar Projects & Services ... on 5 March, 2021

                                                                              OP.No.484 of 2017

                                 IN THE HIGH COURT OF JUDICATURE AT MADRAS

                                                 DATED: 05.03.2021

                                                        CORAM

                                     THE HONOURABLE Ms. JUSTICE P.T. ASHA


                                               O.P.No.484 of 2017
                      Phoenix Solar Pte Ltd,
                      209, Syed Alwi Road,
                      Singapore- 207742,
                      Represented by,
                      Mr. Eric Thomas Fleckten, Director,
                                                                                 ...Petitioner
                                                          Vs

                      Zynergy Solar Projects & Services Pvt Ltd,
                      3rd Floor, Block A, Bannari Amman Towers,
                      No.29, Dr.Radhakrishnan Road,
                      Mylapore, Chennai - 600004,
                      Tamil Nadu, India
                      Represented by Mr.Rohit Rabindranath, Director.

                                                                                  ...
                      Respondent



                      Prayer : Petition filed under Sections 47-49 of the Arbitration and

                      Conciliation Act, 1996 with the following prayer:

                          a) That the Award dated 31.01.2017, be deemed to be a decree of this

                      Court;


                      1/17



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                                                                                  OP.No.484 of 2017

                             b) That this court pronounce judgment according to the Award dated

                      31.01.2017, made and published by the Singapore International Arbitration

                      Centre and direct the respondent to pay to the petitioner a sum of USD $

                      626,254.07/- along with interest at the rate of 9 % per annum, as more

                      particularly set out in paragraph 25 of this petition and

                             c. That the respondent be ordered and decreed to pay the petitioner

                      the costs of this petition.


                             For Petitioner            :    Mr. Thriyambak Kannan

                             For Respondent                : Mr. Akhil Bhansali



                                                           ORDER

This petition has been filed under Sections 47 to 49 of the Arbitration

and Conciliation Act 1996 for the following reliefs:

a) That the Award dated 31.01.2017, be

deemed to be a decree of this Court;

b) That this court pronounce judgment

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according to the Award dated 31.01.2017, made

and published by the Singapore International

Arbitration Centre and direct the respondent to

pay to the petitioner a sum of USD $ 626,254.07/-

along with interest at the rate of 9 % per annum,

as more particularly set out in paragraph 25 of

this petition and

c. That the respondent be ordered and

decreed to pay the petitioner the costs of this

petition.

2. Mr. Thriyambak Kannan, learned counsel appearing on behalf of

the petitioner would submit that the Award dated 31.01.2017 has been

passed after due contest by the parties and the Appeal filed by the

respondent before the High Court of the Republic of Singapore in HC/OS

209 of 2017 had also ended in dismissal.

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3. He would therefore submit that the Award should be deemed to be

a decree of this Court and should be enforced as such.

4. Mr. Akhil Bhansali, learned counsel appearing on behalf of the

respondent would submit that this application cannot be enforced in the

light of Section 48 (1) (b) and (d) of the Act.

5. He would draw the attention of the Court to the arbitration rules of

the Singapore International arbitration centre (hereinafter referred to as the

SIAC Rules) and would point out to Rule 5 which deals with Expedited

Procedure.

6. He would submit that the arbitrator in contravention of Rule 1 of

SIAC Rules had proceeded to conduct the arbitration in a summary and

hasty manner adopting the Expedited Procedure and not had given an

opportunity to the respondent to put across their case.

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7. He would submit that Rule 5.1 contemplates the conduct of the

arbitral proceedings through an Expedited Procedure on the satisfaction of

the following criteria:

5.1. a) the amount in dispute does not exceed the

equivalent amount of S$5,000,000, representing

the aggregate of the claim, counter claim and any

set-off defence.

b) the parties so agree; or

c) in cases of exceptional urgency.

It is the contention of the counsel that none of these criteria applies to the

instant case.

8. He would further contend that the entire arbitral proceedings is hit

by the provisions of 48(1)(b) in as much as the respondent was not able to

put across his contention. The witness was not able to approach the arbitral

tribunal on account of his surgery and on account of the death of the former

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Chief Minister of the State which had brought normal life to a stand still in

the State. Therefore, he would submit that without giving the respondent an

opportunity of being heard the award has been passed. In response to this

contention, Mr. Thriyambak Kannan, learned counsel would draw the

attention of this Court to paragraph Nos. 61 to 65 of the Award of the sole

arbitrator which is extracted hereinbelow:

"61. On 2 December 2016, the respondent

filed its "Skeletal Submissions" and the Claimant

filed its "Bundle of Legal Exhibits" for use during

the evidential hearing. The claimant also

provided the sole Arbitrator with clean "Bundle of

Pleadings and Witness Statements" and "Bundle

of Factual Exhibits" for use at the hearing in hard

copy.

62. By email of the same date, the sole

arbitrator acknowledged receipt of the parties'

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submission.

63. By email of 5 December 2016, the

respondent informed the Sole Arbitrator that his

witness, Mr. Rabindernath, was unable to come to

Singapore and attend the hearing due to his

medical condition. The respondent attached a

medical certificate to its email. The respondent

further indicated that it had asked the Claimant's

counsel whether its witness was able to attend the

hearing on 6 December 2016 (instead of 7

December 2016)

64. By email of the same date, the Sole

Arbitrator took note of the fact that Mr.

Rabindernath would not be examined at the

hearing of 6 December 2016 and invited the

parties to liaise and propose an updated schedule

for the hearing. The Sole Arbitrator also invited

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the respondent to indicate that he be examined at

a later date.

65. On the same date, the respondent

replied that it no longer requested the

examination of Mr.Rabindernath."

9. He would submit that the respondents have given up their right to

be examined and having done so the respondent cannot now contend that he

has not been given an opportunity to make his submissions. The counsel

would further submit that all these allegations that are now made have

already been considered in great detail by the SIAC and this Court cannot

now reappreciate the evidence. Therefore, this Court may please pass a

judgment in terms of the Award dated 31.01.2017 passed by SIAC and

direct the respondent to pay the amount awarded.

10. Heard the counsels and perused the papers.

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11. The limited issue which is placed for my consideration is whether

there has been violation of the provisions Section 48 (1) (b) and (d) of the

Act, by reason of which, the Award passed by the Arbitrator constituted

under the SIAC Rule cannot be deemed to be a decree and enforced as such.

12. The respondent's contention is that they have not been given an

opportunity of being heard and their evidence has not been taken on record,

for which, the respondent would rely on a trail of emails starting from

04.10.2016.

13. A perusal of the same would clearly indicate that it was the

respondent herein who had sought to have the hearing postponed to 5th and

6th of December 2016, since the witness was to undergo a surgery in

middle of November, 2016 by email dated 06.10.2016. The learned counsel

for the respondent has informed the Arbitrator that the respondent required

an evidentiary hearing and that the hearing could take place on 5 th and 6th of

December, 2016.

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14. Though the said request was objected to by the claimant, as

evident from the email dated 06.10.2016, the Arbitrator had however fixed

the hearing date on 5th and 6th of December, 2016. There also appears to

be a letter addressed by the respondent's counsel to the respondent

informing him that the respondent has to consider submitting himself for

cross examination through video -conferencing and had informed him as

follows:

“Please confirm in line with your decision on

non-attendance, that you do not wish to participate

further in the Hearing or make yourself available

for cross-examination

The consequence is that Tribunal may

exclude your witness statement and dispense with

your presence and rule accordingly. "

15. On receipt of this letter from his counsel, the respondent has sent

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a reply stating as follows:

" Dear Dennis,

Tamilnadu is going through a terrible

political crisis and all offices are shut. I m afraid

that a video conference will not be possible."

16. The letter does not touch upon the query regarding the decision

on non-attendance and further participating in the hearing or making

himself available for cross examination. In fact, the arbitrator in her Mail

dated 05.12.2016, after receiving the mail from the counsel for the

respondent, had kept the issue of cross examination of the witness open till

the next date at the arbitral hearing. Another point that has been taken note

of is that in the Appeal filed by the respondent before the High Court of

Singapore the respondent has not raised this as a ground at all. On the

contrary, the respondent's contention is extracted in paragraph 150 of the

Award which reads as follows:

"150. In any event, whether the parties to

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the Supply Contract and the Letter of

Undertaking fully performed their obligations is

not for the Sole Arbitrator to decide as she is not

seized of a dispute under those contracts and the

parties do not allege that this question has any

consequence on the claimant's claim based on the

Settlement Agreement. Finally, while the

respondent submits that the negotiations for the

Supply Contract were conducted by the

representatives of the respondent, there is no

mention of the respondent in the Supply Contract

or the Letter of Undertaking and there is no

contemporary evidence supporting this fact."

The High Court of Singapore has considered this argument and

rejected the same.

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17. A perusal of paragraph 150 would indicate that the learned

Arbitrator has concluded that she would not be able to consider whether the

parties to the Supply Contract and the Letter of Undertaking had performed

this obligations since those issues were not the subject matter of dispute

before her. The parties who had originally entered into the Supply Contract

had on 01.08.2013 entered into a Debt Settlement Agreement wherein they

had acknowledged that they owed USD 1,405,794.00 to the claimant is the

subject matter of the dispute before the Arbitral Tribunal. Therefore the

earlier agreement had been novated into this Debt Settlement Agreement.

18. A reading of the Debt Settlement Agreement would clearly show

that the respondent had undertaken to repay the sum of Rs. 3.03 crores as

final settlement of the obligations under the terms of the Debt Settlement

Agreement . The amounts which were due from Zynergy Solar Projeects &

Services Private Limited to the tune of Rs.303 crores to the petitioner was

transferred to the respondent which was under the obligation to pay the said

sum to the petitioner. Since the payments had not been made the arbitral

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proceedings had been initiated. The Arbitrator has also dealt with the same

in paragraph No.155 of the Award, which reads as follows:

"155. The Sole Arbitrator also finds that

the respondent did not prove that the claimant

made any oral promise or that the respondent's

payment was conditioned to the Performance of

such promise. To the contrary, as has been

demonstrated by the claimant, at the time of the

conclusion of the Settlement Agreement, the

Respondent had never mentioned the defects, let

alone conditioned the conclusion of the

Settlement Agreement to the claimant's

undertaking to resolve-or assist in revolving- the

alleged defects to the Power Plant. Mr.

Robindernath's written statement to the contrary,

which is the only evidence brought by the

respondent to that effect, is not sufficient in light

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of the clear terms of the Settlement Agreement

and the high standard of proof required to prove

fraudulent misrepresentation. As a result, the

Sole Arbitrator find that the claimant did not

make any "express representation" as regards

the defects upon which the respondent relied

when entering into the Settlement Agreement."