Shakti Nath & Ors vs Alpha Tiger Cyprus Investment No.3 Ltd. & Ors

,

Leave Granted.,

The present Appeal has been filed to challenge an award passed in an ICC arbitration with its seat in New Delhi.,

The Appellant has challenged the judgment dated 08.05.2017 passed under Section 37 of the Arbitration and Conciliation Act, 1996 (“Actâ€),",

whereby a division bench of the Delhi High Court rejected the Appeal.,

The factual background in which the present Appeal has been filed is as follows : -,

2.1. The Appellant-Promoters entered into a Shareholders Agreement (“SHAâ€) and a Share Subscription and Purchase Agreement,

(“SSPAâ€) with Respondents No.1 and 2 both dated 21.03.2008 to acquire 50% shareholding in Respondent No. 3 for the development of a,

Special Economic Zone for Information Technology and Information Technology Enabled Services. The project was to be developed on a plot of land,

admeasuring approx. 45,202 sq. mts. in NOIDA (“Project Landâ€) which was allotted to one M/s Sarv Mangal Real Tech Pvt. Ltd. (“M/s Sarv",

Mangalâ€​). The Project Land was sub-leased by M/s Sarv Mangal to Respondent No. 3.,

2.2. The SHA and SSPA were terminated. The parties entered into a Restated Shareholders Agreement (“RSHAâ€) and a Restated Share,

Subscription and Purchase Agreement (“RSSPAâ€​) both dated 02.07.2009.,

As per Clause 3.3 and 3.4 of the RSSPA, Respondents No. 1 and 2 were required to contribute Rs.45 crore to purchase and subscribe the shares in",

Respondent No.3, which was brought in by 17.12.2009.",

2.3. The Appellants terminated both the agreements on 17.12.2009. The Respondents No. 1 and 2 invoked arbitration, and submitted the Request for",

Arbitration to the ICC Court under the RSHA and RSSPA.,

2.4. The Tribunal vide its award (2:1) dated 20.01.2015 allowed the claim of Respondents No. 1 and 2, and awarded the following : -",

a) payment of Rs.45,00,27,747/- together with Simple Interest @ 18% p.a. from 31.10.2011 to the date of the award;",

b) payment of Simple Interest @ 15% p.a. on all sums awarded to the claimants in the award, till the date of payment;",

c) the Appellants were not entitled to repayment of lease rental paid to NOIDA from Respondents No. 1 and 2, and the Respondent-Claimants were",

under no obligation to share future lease rental;,

d) the Appellant-Promoters were directed to pay costs of the arbitration comprising of:,

i. fees and expenses of the arbitral tribunal and the ICC administrative expenses fixed by the ICC Court for the total amount of USD 900,000;",

ii. Rs.2,39,08,082/- towards the legal fees of the Respondent-Claimants;",

iii. costs of the hearing venue in the amount of Rs.6,57,635/-;",

iv. a sum of Rs.1,274,931/- in respect of other costs and expenses of the Respondent - Claimants.",

2.5. The Appellants filed objections under S. 34 of the 1996 Act before the Delhi High Court. The learned Single Judge vide Order dated 09.02.2017,

rejected the challenge on merits, and held that it was an undisputed fact that Respondents No. 1 and 2 had brought in a sum of Rs.45,00,27,747/- for",

the project. The Appellants had terminated the RSHA and RSPA soon after the funds were brought in by Respondents No. 1 and 2. The Court found,

the findings of the arbitral tribunal to be consistent with the terms of the agreement.,

2.6. Aggrieved, the Appellants preferred an Appeal under S. 37 of the Act before the Division Bench of the Delhi High Court. The Division Bench",

vide judgment and order dated 08.05.2017 rejected the Appeal as being devoid of any merit.,

The Appellants have challenged the Order passed under S. 37 of the 1996 Act by way of the present Special Leave Petition.,

3.1. This Court vide interim Order dated 15.09.2017 directed the Appellants to deposit an amount of Rs.20,00,00,000/- (rupees twenty crore) in the",

Registry of this Court, which was directed to be invested in a short-term fixed deposit account with a nationalised bank. The Appellants were",

injuncted from alienating the Project Land, so that in the ultimate eventuality, if the award was sustained by this Court, it could be realised from the",

sale of the Project Land.,

3.2. By a subsequent Order dated 01.05.2018, Respondent No.1 was permitted to withdraw an amount of Rs.10 crore unconditionally, from the",

amount lying deposited in this Court.,

3.3. By a further Order dated 14.11.2019, the Senior Counsel for the Appellants requested for time to find a suitable buyer for the Project Land. It",

was made clear that the sale would be under the auspices of a public authority or a court officer, and the entire sale consideration would be deposited",

in the Registry of this Court.,

It was further directed that the balance amount of Rs.10 crore along with the accrued interest, which was lying been deposited in the Registry of this",

Court, would be released to Respondent No.1.",

The counsel for the Appellants made a request to join NOIDA as a party to the present proceedings since the Project Land was leased out by,

NOIDA. Consequently, Notice was issued to implead NOIDA in the proceedings.",

3.4. The Appellants filed an affidavit dated 05.12.2019 stating that the Project Land was free from any and all encumbrances, and was not subject to",

any pre-existing mortgage or charge.,

It was further submitted that the Appellants were able to identify a party which was interested to acquire the sub-lease of the Project Land, viz. M/s.",

Good Living Infrastructure Pvt. Ltd. (“Bhutani groupâ€). The Bhutani group had submitted their Expression of Interest to acquire the sub-lease of,

(i) Pending Instalment amounts with Simple Interes

@ 14% p.a.","tRs.23,21,00,000

(ii) Lease Rent dues with Simple Interest @ 14%

p.a.","Rs.11,93,00,000

(iii)Time Extension charges,"Rs.6,57,38,900

(iv)Additional amount payable to land â€" owners as

compensation @ 64.7%","Rs.93,36,577

TOTAL,"Rs.42,64,75,477

Rs. 10,00,00,000/-","Upfront deposit to be made with the Court within 10 days of the signing of the Share

Purchase Agreement between all the Parties, which shall also be deposited in the

custody of the Hon’ble Court.

Rs. 46,79,79,523/-","To be deposited within a period of four months with an additional grace period of

two months after the passing of the final order by the Hon’ble Court.