Manmohan Singh, J.

1. By this order I shall propose to dispose of the present petition filed under Section 9 of the Arbitration & Conciliation Act, 1996 seeking an interim order inter alia restraining the Respondents, their officers, employees, agents and representatives from: (i) appropriating the funds in the bank account of Cavern Hotel & Resorts FZCO, the Respondent No. 2, with HSBC Bank Middle East Limited ("HSBC") until conclusion of the arbitration proceedings; (ii) taking any steps to seek additional contribution from the Petitioners; (iii) causing the Respondent No. 2 to make any payments to AI Furjan LIC ("AI Furjan"), a subsidiary of Nakheel PJSC ("Nakheel") and affiliate of Respondent No. 1, until conclusion of the arbitration proceedings; and (iv) unilaterally operating the bank account of the Respondent No. 2 with HSBC or any other bank account of the Respondent No. 2.

2. There are three Respondents namely Lost City Developments LLC, Cavern Hotel & Resort FZCO and Dubai World. The case of the Petitioners is that in pursuance to the Joint Venture Agreement dated 15.02.2007 Nakheel and Bharat Hotels Limited, the Petitioner No. 3, acting through their respective subsidiaries Petitioner No. 1 and Petitioner No. 2 and Respondent No. 1, incorporated Respondent No. 2 in Dubai, as an equal (50:50) joint venture for the purposes of designing, developing, constructing, marketing and managing a five star luxury hotel and spa in Dubai. The JV Agreement was executed among Lost City Developments LLC, Respondent No. 1, and Prima Buildwell Private Limited and Premium Holdings Limited, the Petitioner No. 1 and the Petitioner No. 2, respectively. The JV Agreement provides that the parties shall be governed by the terms of the JV Agreement and certain agreements collectively referred to as the Hotel Agreements.

3. The JV Agreement provides that disputes between the parties must be referred to arbitration. Further, the Articles of Association of the Respondent No. 2 incorporates the dispute resolution clause of the JV Agreement by reference.

4. The Respondent No. 1 is a wholly owned subsidiary of Nakheel, and the Petitioner No. 1 is a subsidiary of Bharat Hotels Limited. The Petitioner No. 2 is promoted by Bharat Hotels Limited. The Respondent No. 3 is an entity owned by the Government of Dubai.

5. The Petitioner No. 1 and the Petitioner No. 2 had jointly capitalized Respondent No. 2 with an equity contribution of approximately AED 300,000. In addition, they had provided shareholder loans in an amount of AED 17.66 million to Respondent No. 2. While Nakheel was required to provide the land upon which the proposed luxury hotel was to be constructed and contribute its experience in the hospitality sector in managing and operating luxury hotels and to contribute its brand name "Bharat Hotels" to the property.

6. Accordingly, the Respondent No. 2 entered into a sale and purchase agreement dated February 10, 2008 (the "Plot Sale Agreement") with AI Furjan, a subsidiary of Nakheel, and affiliate of Respondent No. 1, for the purchase of certain land for constructing the hotel contemplated in the JV Agreement, and paid AED 16.5 million, or 30% of the purchase price, pursuant to the Plot Sale Agreement. This payment was made from funds contributed by the joint venture partners.

7. The Petitioners state that in view of the economic recession in Dubai, the Respondent No. 3 and its subsidiaries (including Nakheel), are admittedly in considerable financial difficulty since the year 2008, and this has resulted in non-availability of financing for the hotel project an in these circumstances his Excellency Sultan Ahmad Bin Sulayem, the Executive Chairman of Dubai World and Nakheel (and, at that time, a director on the board of directors of Cavern nominated by Lost City), agreed that, in addition to changes in the payment schedule, the purchase price under the Plot Sale Agreement will be reduced to reflect the fall in value of real estate in Dubai.

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