JUDGMENT :

V. Gopala Gowda J.

On 21st March, 2012, the appellant Chatterjee Petrochem (Mauritius) Company (hereinafter referred to as ‘CPMC’) filed a request for arbitration in International Chamber of Commerce (ICC), Paris in relation to an agreement of restructuring which was entered into between CPMC, Government of West Bengal, West Bengal Industrial Development Corporation (in short ‘WBIDC’) and Haldia Petrochemical Limited (in short ‘HPL’) on 12th January, 2002. As per the Agreement, the Government of West Bengal was to cause WBIDC to transfer existing shareholding to CPMC to ensure that CPMC holds 51% of the total paid up capital of HPL. Clause 15 of the Agreement provides for reference of all disputes, in any way relating to the said Agreement or to the business of or affair of HPL to the Rules of the ICC, Paris.

2. The respondent HPL on the other hand, claims that the Arbitration Agreement contained in clause 15 of the Agreement dated 12th January, 2002 is void and/ or unenforceable and/or has become inoperative and/or incapable of being performed.

3. A dispute arose between the parties regarding the allotment of shares and the appellant filed Company Petition No. 58 of 2009 before the Company Law Board (in short ‘CLB’)on the grounds of oppression and mismanagement. The appellant also sought transfer of 155 million shares in favour of Chatterjee Petrochem (India) Pvt. Ltd. (in short “the CPIL”), the Indian counterpart of CPMC as was decided in the Agreement.

4. The Company Petition was disposed of by the CLB by upholding the decision of the Company to allot 155 million shares by Indian Oil Corporation (in short ‘IOC’). The transfer of 155 million shares to CPIL by WBIDC was also confirmed. The CLB further directed the Government of West Bengal and WBIDC to transfer 520 million shares held by them in HPL to Chatterjee Groups.

5. The Government of West Bengal preferred an appeal against the said Order before the High Court of Judicature at Calcutta under the provisions of Section 10F of the Company’s Act, 1956. The High Court set aside the Order of the CLB on the ground that CPIL was not a member of HPL and the CLB could not have enforced its right under private contract entered into between CPIL and WBIDC for transfer of shares as the same could not be the subject matter of a petition under Section 397 of the Companies Act.

6. Aggrieved by the same, the appellant preferred appeal Nos. 5416-5419, 5420, 5437 and 5440 of 2008 before this Court. Vide judgment dated 30.09.2011, this Court held that the claim of the appellant transferring shares to IOC has changed the private character of the Company and was not an act of oppression on the part of the Company. According to this Court, the transfer of shares to IOC was a result of failure on the part of the appellant to infuse adequate funds into the Company by way of equity as promised and to participate in its rights issues. The Company was therefore, constraint to induct IOC as a member and the 155 million shares which was to be transferred to the appellant was instead transferred to the IOC. The relevant paragraph of the judgment reads as under:

“103. The failure of WBIDC and GoWB to register the 155 million shares transferred to CP(I)PL could not, strictly speaking, be taken to be failure on the part of the Company, but it was the failure of one of the parties to a private arrangement to abide by its commitments. The remedy in such a case was not under Section 397 of the Companies Act. It has been submitted by both Mr. Nariman and Mr. Sarkar that even if no acts of oppression had been made out against the Company, it would still be open to the learned Company Judge to grant suitable relief under Section 402 of the Act to iron out the differences that might appear from time to time in the running of the affairs of the Company. No doubt, in the Needle Industries case, this Court had observed that the behaviour and conduct complained of must be held to be harsh and wron