Judgment :

GANGULY, J.

1. Leave granted.

2. The judgment and order dated 19th February, 2010 of the Division Bench of the High Court of Andhra Pradesh in Civil Revision No.5712/2009 has been impugned in this appeal.

3. The material facts which are required to be considered to resolve the controversy in this appeal, are as follows.

4. The appellant, Venture Global Engineering, having its principal office in Michigan, USA, entered into a Shareholders Agreement and a Joint Venture Agreement on 20th October, 1999 with the first respondent, for establishing a company called Satyam Venture Engineering Services (hereinafter, "the second respondent"). As per the terms of the agreement, the appellant and the first respondent each held 50 per cent shareholding in the second respondent.

5. Article VIII of the Shareholders Agreement contemplates certain `events of default', and in the event of default, non-defaulting shareholder has the option to purchase the defaulter's shares at book value or cause immediate dissolution and liquidation of the second respondent.

6. In the year 2000, the second respondent entered into an agreement with TRW, a manufacturer and supplier of automotive equipments, to provide engineering and IT services. They agreed to sub-contract the automotive engineering works to the second respondent. The first respondent levied US $3 an hour towards administrative charges. According to first respondent, they retained US $859,899 from the TRW receipts. The appellant disputed the same and alleged that Satyam retained a total of US $2,188,000, and also alleged concealment and dereliction of duty as a joint venture partner. Thus, disputes cropped-up and were referred to arbitration.

7. The sole arbitrator gave his award on 3rd April, 2006 whereby the appellant is to transfer its entire shareholding in the second respondent to the first respondent. The first respondent filed a petition for the recognition and enforcement of the award before the U.S. District Court, Eastern District Court of Michigan.

8. On 28th April, 2006, the appellant filed a suit (O.S. No. 80/2006) seeking a declaration to set aside the award and also prayed for a permanent injunction against the transfer of shares under the arbitral award, in the Court of Ist Additional Chief Judge, City Civil Court, Secundrabad. The Trial Court dismissed the suit of the appellant on the ground that a foreign award could not be challenged under Section 34 of the Arbitration & Conciliation Act, 1996 (herein after, ABC, 1996).

9. The appellant appealed against the order of the Trial Court before the High Court of Andhra Pradesh at Hyderabad, and the said appeal was also dismissed on 27th February, 2007.

10. Thereafter, the appellant filed a special leave petition before this Court and this Court, vide its order dated 15th May, 2007, issued notice to the respondents and passed an interim order restraining the transfer of shares pending the disposal of the special leave petition.

11. This Court then finally heard the matter and allowed the special leave petition vide its Judgment and Order in Venture Global Engineering vs. Satyam Computer Services Ltd. and another (2008) 4 SCC 190 and held that a foreign award could be challenged under Section 34 of ABC, 1996. In the light of this finding, this Court remanded the case to the trial court and directed that the parties were to maintain status quo with respect to transfer of shares. Thus, the case of the appellant was transferred to the IInd Additional Chief Judge, City Civil Court, Hyderabad.

12. Meanwhile, on 7th January, 2009, Mr. Ramalinga Raju, Chairman and founder of the first respondent confessed that the balance sheets of the first respondent had been fraudulently inflated to the tune of Rs.7,080/-crores. As a result, Price Waterhouse Cooper (PWC), auditors of the first respondent, declared that the financial statements could no longer be considered accurate or reliable.

13. In the light of these developments regarding th