The Court's decision emphasized the importance of considering the existence of a prima facie case, balance of convenience, and irreversible hardship in granting interim reliefs under Section 9 of the Arbitration and Conciliation Act.

ORDER

1. By this petition under Section 9 of the Arbitration and Conciliation Act, 1996 (‘Act’), CPI India I Limited (‘CPI’), a company organized under the laws of Mauritius and having its registered office address at Ebene in Mauritius, has sought interim reliefs against BPTP Ltd. (‘BPTP’) (Respondent No. 1), an Indian company , and twenty-four other Respondents in relation to the disputes that have arisen between CPI and the Respondents from the Share Subscription Agreement (‘SSA’) dated 10th August 2007; Shareholders’ Agreement (‘SHA’) dated 10th August 2007 as further amended by the Amendment Agreement dated 9th July 2008 (‘Agreement’) and a Memorandum of Understanding (‘MoU’) dated 19th December 2009 entered into between CPI and the Respondents.

2. The background to the present petition is that the Respondents 2 and 3 are the Promoters of BPTP, Respondent No. 1. An SSA was entered into between CPI, Respondents 2 and 3 (referred to as ‘Promoters’), BPTP (referred to as the “Company”) as well as other existing shareholders of BPTP whose names were listed out in Schedule-I to the Agreement (and who are arrayed as Respondents 4 to 25 in this petition). In the SSA, CPI was described as “a property investor desirous of making investments in the Indian real estate sector.” The recitals to the SSA stated that the Promoters who are engaged in the business of real estate construction and development, along with the other existing shareholders, collectively held 100% of the issued share capital of BPTP, “a real estate development company engaged in residential and commercial real estate development projects”. The current real estate projects of BPTP were set out in Schedule-II of the SSA.

3. The SSA stated that the Promoters as well as BPTP represented to CPI that BPTP would make its best efforts to complete the listing of its shares under qualified and initial public offer (‘QIPO’) within twenty-four months of the Closing Date as defined in Clause 5.1 of the SSA, i.e., 18th August 2007. CPI subscribed to 13,551,971 Equity Shares for the sum of Rs. 300 crores and 22,500,000 Preference Shares for a total amount of Rs. 22.50 crores.

4. In terms of Clause 4.2 of the SHA executed on the same date, it was agreed that the proceeds of CPI’s subscription of shares would be utilized by BPTP only for foreign direct investment (‘FDI’) compliant real estate projects, hotels, hospitals and special economic zones, and to fund capital expenditures and/or land acquisitions for the purpose of expanding the business of BPTP in relation to such FDI compliant real estate projects etc. Under Clause 4.8 of the SHA, the parties acknowledged their intent to pursue a QIPO to be closed within twenty four months after the Closing Date.

5. Clause 4.10 of the SHA provided for “Swap Option”. Inter alia, it was stated that in the event BPTP failed to achieve a QIPO within twenty-four months following the Closing Date, CPI, shall within six months from the expiry of the said twenty four months period, have the option (the ‘Swap Option’) to require upon demand that:

“(i) the Company (or the Promoters) establish one or more special purpose project companies (each, a “Project Company” and, collectively, the “Project Companies”) as set out in Clauses 4.10.4 and 4.10.5 below,

(ii) the Project Company(s) issue to the Investor a number of Shares in the Project Company(ies) as per the shareholding set out in Clause 4.10.4,

(iii) the Company transfer assets to the Project Company(s) in accordance with Clause 4.10.4, with any cost of such transfers (including stamp duty, if any) to be borne solely by the Project Company(s) (provided that the Company shall be responsible for capital gains taxes, if any, involved in connection with such transfer of assets) and

(iv) the Company or the Promoter (or a Promoter SPV) shall buy back the Investor Shares in the Company pursuant to Clause 4.10.7. Notwithstanding the forgoing, the Investor shall be entitled to exercise the Sw