On Tuesday, in a legal win for actor Jackie Shroff, Bombay high court has set aside a November 2014 arbitration award that would have required him to pay $3.5 million (around Rs 26.5 crore) in liquidated damages to a former business partner.
Justice S C Gupte said in the judgement that the award and its conclusion, passed by Sole Arbitrator, “is not just plainly wrong but exhibits an unmitigated perversity and is shocking to the conscience of the court, to say the least.”
Justice Gupte said the award “is partly based on no evidence, partly on non-application of mind, and partly by a wholesale misapplication of law resulting in miscarriage of justice”.
The award against Shroff was based on a finding that a letter his wife Ayesha had written amounted to a breach of one of the dispute settlement terms. The term allegedly flouted was to not complain again about allegations Shroff had made in a criminal complaint against his former partner. The arbitrator found Ayesha had written a letter as his agent.
The HC said there was no evidence to indicate she was his “agent’’ and there was “no proof’’ that any loss was caused because of the letter.
Shroff and R S Iyer were shareholders in an Indian company and entered into a joint venture in 1995 with a broadcasting group to set up a television channel. In 2005-06, a dispute arose and in 2010, Shroff filed a complaint with the economic offences wing.
In 2011, a settlement deed was executed between the shareholders to withdraw the complaint and, on its withdrawal, $1.5 million was to be released to Shroff from an escrow account and an additional $2 million was to be kept in another escrow account to be released on completion of sale of the shares.
While Shroff’s counsel Arif Bookwalla and Shyam Dewani argued that the award be set aside, Iyer’s counsel Rahul Narichani and Ankita Singhania opposed his petition.
The HC stated that as far as culpability of the Petitioner in the communication made by his wife, assuming without admitting the same to be in breach of clause 3, there was indeed no material before the sole arbitrator to hold the Petitioner responsible for that communication. It said there is nothing on record to show either that the Petitioner had authorised his wife to make any complaint of forgery against the Respondent to any person or entity or that the emails were sent with knowledge, consent, authority, or on behalf, of the Petitioner.
It mentioned that the Petitioner, in his reply to the statement of claim, had denied that his wife was his authorized representative.
The judgement has been delivered by Justice S C Gupte on 19-05-2020.
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