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2015 Supreme(Del) 977
IN THE HIGH COURT OF DELHI AT NEW DELHI
MANMOHAN SINGH, J.
ALSTOM T AND D INDIA LTD. - Plaintiff
versus
SCHNEIDER ELECTRIC INFRASTRUCTURE LTD. - Defendant
I.A. Nos.7292/2014 & 24002/2014 in CS(OS) No.1121/2014
Decided on : 29.6.2015
Advocate Appeared:
For the Plaintiff : Mr.Sandeep Sethi, Sr. Adv. with Mr.Sunil Dalal, Mr.Sanjeev Narula & Ms.Sanjana Sharma, Advs.
For the Defendant : Mr.A.S. Chandhiok, Sr. Adv. with Mr.Rishi Kapoor, Adv. with Mr.Parijat Kishore, Ms.Harleen Singh, Mr.Ranjit Pandey and Mr.Parminder Singh, Advs.
The main legal point established in the judgment is that the dispute between the parties arose from the Scheme of Demerger and not the Consortium Agreement. The court also found that the alleged arbitration clause of the Consortium Agreement did not cover the subject matter of the dispute, and the defendant's plea to dismiss the suit based on the arbitration clause was devoid of merits.
Headnote:
Demerger - Scheme of Demerger - Companies Act, 1956 - Specific Relief Act, 1963
Fact of the Case:
The plaintiff filed a suit seeking declaration, recovery of Rs.3,87,18,000/- with interest and costs, and permanent injunction against the defendant. The plaintiff also filed an application under Order XXXIX Rule 1 and 2 CPC seeking to restrain the defendant from making any claim regarding the capability of manufacturing and servicing the products and systems operating on voltage above 52 KV, and from using any property of the plaintiff/erstwhile Areva T & D Ltd. in respect of 'Remaining Business' as per the scheme of Demerger.
Finding of the Court:
The court found that the dispute between the parties arose from the Scheme of Demerger and not the Consortium Agreement. The court held that the alleged arbitration clause of the Consortium Agreement did not cover the subject matter of the dispute, and the defendant's plea to dismiss the suit based on the arbitration clause was devoid of merits. The court also dismissed the defendant's application under Order 12 Rule 6 CPC, stating that it was not maintainable.
Issues: The main issue was whether the dispute between the parties should be referred to arbitration based on the alleged arbitration clause in the Consortium Agreement.
Ratio Decidendi: The court held that the dispute between the parties arose from the Scheme of Demerger and not the Consortium Agreement. The court also found that the alleged arbitration clause of the Consortium Agreement did not cover the subject matter of the dispute, and the defendant's plea to dismiss the suit based on the arbitration clause was devoid of merits. The court further dismissed the defendant's application under Order 12 Rule 6 CPC, stating that it was not maintainable.
Final Decision: The court dismissed the defendant's plea to refer the dispute to arbitration and also dismissed the defendant's application under Order 12 Rule 6 CPC, stating that it was not maintainable.
MANMOHAN SINGH, J.
1. The plaintiff has filed the above mentioned suit, inter alia, praying for declaration, decree of recovery of Rs.3,87,18,000/- along with interest and costs, and also a decree of permanent injunction against the defendant.
2. Along with the plaint the plaintiff has filed an application being I.A. No. 7292/2014 under Order XXXIX Rule 1 and 2 CPC read with Section 151 of the Code of Civil Procedure, 1908 praying, inter alia, for restraining the defendant from making any claim regarding the capability of manufacturing and servicing the products and systems including the SAS System which are operating on voltage above 52 KV, for the period prior to coming into effect of the scheme of demerger, i.e. the ‘appointed date’ (1st April, 2011) and also to restrain from using any property of the plaintiff/ erstwhile Areva T & D Ltd. in respect of “Remaining Business”, as per the scheme of Demerger, particularly the Performance Certificates in respect of the work done by Areva T & D India Ltd. with respect to the “Remaining Business”.
3. Brief facts of the case as per plaint are that: a) the plaintiff is a part of the ALSTOM group of companies, which is engaged in manufacturing of power transmission instruments business globally and the defendant is a part of the Schneider group of companies and is engaged in the electricity distribution business.
b) M/s Areva SA, a French public multinational industrial conglomerate, was involved in the business of transmission and distribution of electricity. Areva SA conducted a competitive open bidding process for the transfer of its global electricity transmission and distribution electrical business. For participating in the bid process, the ALSTOM and Schneider groups of companies entered into a consortium. The consortium agreement provided inter alia for the separation of the global business of Areva SA, such that the transmission business was to be allocated to the ALSTOM group and the distribution business was to be allocated to the Schneider group.
c) Consequent to the global acquisition pursuant to the consortium agreement and in line with agreement between the parties, an open offer was made to the public shareholders of the Areva T&D India Ltd. The open offer documents provided that transmission and distribution business of Areva T&D India Ltd., was to be separated such that the transmission business would be allocated to the ALSTOM group and the distribution business would be allocated to the Schneider group.
d) The plaintiff and the defendant created a special purpose vehicle (SPV) which was incorporated by the name of Alstom Sextant 5 for the purpose of acquisition of Areva SA globally, the terms and bindings of that vehicle are no longer in operation as alleged.
e) The demerger of the plaintiff was actually the distribution of the acquired business of the Areva T&D India Ltd. whereby the transmission business (system operating above 66 kv/52 kv) was allocated to the ALSTOM group and the distribution business (system operating below 66 kv/52 kv) was allocated to Schneider group. There was a clear cut demarcation of division of business between the Transferor and the Transferee.
f) A scheme of arrangement of demerger of Areva T&D India Ltd. was proposed. Under this scheme of arrangement of demerger, the distribution business of Areva T&D was given to the defendant, while the remaining business, i.e. the transmission business was given to the plaintiff.
g) It was agreed in the scheme of demerger under Clause 1.2.1 (c) and (d) that:
"(c) all permits, licenses, permissions, approvals, consents, benefits, registrations, rights, entitlements, certificates, allotments, quotas, no-objection certificates, exemptions, concessions, liberties and advantages including those relating to privileges, powers, facilities of every kind and description of whatsoever natur
