The main legal point established in the judgment is that the Arbitral Tribunal has the authority to extend the time period for arbitration as per Article 4.7 of the LCIA India Rules, which is an integral part of the arbitration agreement.

MANMOHAN SINGH, J.

1. The present petition has been filed by the petitioner under Section 14 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the “Act”) praying that the mandate of the Arbitral Tribunal be terminated on account of the Tribunal becoming de jure and de facto unable to perform its functions, mainly, on the reasons; firstly, the mandatory time period of three months prescribed under the arbitration agreements for passing the award has come to an end; and secondly, the respondents No. 1 and 2 have levelled allegations of fraud against the petitioner and his wife who is respondent No. 3 in its statement of claim. Thus, the allegations can only be tried by the Civil Court.

2. The petitioner and respondent No. 3 herein are the respondents in the arbitration proceedings. The respondents No. 1 and 2 are the claimants. The said proceedings are continuing despite of filing of the present petition. Notice in the petition has not yet been issued, rather two times, it was clarified by my learned Predecessor two Benches that the arbitration proceedings should continue.

3. The respondents No. 1 and 2 submit that they are subsidiaries of the Qatar Investment Authority (a Government of Qatar entity). The Qatar Investment Authority is one of the largest investors in the world. In March 2013, they were wrongfully induced into making a large investment in an Indian Company called Bush Foods Overseas Private Limited (in short, called “Bush Foods”), promoted and incorporated by the petitioner and respondent No. 3 in 2005. As part of the transaction, the respondents No. 1 and 2 invested a total of US$ 120.35 million and acquired 69.5% shareholding in the Company. Besides this, the respondent No. 2 furnished a Corporate Guarantee to a Bank consortium securitising 70% of the loans availed of by Bush Foods.

It is alleged that at the time of the transaction, Bush Foods was represented to be a financially healthy company. In reality however Bush Foods was a near bankrupt company and the respondents No. 1 and 2 have lost the entirety of their US$ 120.35 million investment and suffered a further loss of Rs. 441.68 crores plus US$ 8.14 million on account of invocation of the Corporate Guarantee furnished to the Bank consortium.

4. In view of the disputes arisen, the present ongoing arbitration under the LCIA India Rules, through a three member Tribunal, comprising of Hon'ble Mrs. Justice Sujata V. Manohar, Hon'ble Mr. Justice B.P. Singh (both former Judges of the Supreme Court) and Mr. William Jentes, nominated by the LCIA Court as the Presiding Arbitrator.

5. When the representation for Arbitration was filed on 23rd September, 2013, the petitioner and respondent No. 3 filed their response on 21st October, 2014 and raised certain Preliminary Objections viz., alleged non-arbitrability of fraud, expiry period of three months period of Arbitration proceedings as prescribed in the agreement.

6. The LCIA Court by an order dated 12th January, 2015 decided that there was prima facie jurisdiction to constitute a Tribunal in this Arbitration and any unresolved issue pertaining to jurisdiction would be a matter for determination by the Tribunal.

7. The arbitration clauses are reproduced herein below:

“10.14.2 Arbitration

(a) Any and all disputes or differences arising out of or in connection with this Agreement or any breach thereof (the "Dispute”) which cannot be settled by friendly negotiation and agreement between the Parties shall be referred to arbitration in terms of Clause 10. 14.2(b) to Clause 10. 14.2(e).

(b) If after 30 days of consultation (or such shorter period if a Party wishes to apply for interim relief), the Parties have failed to reach an amicable settlement of a Dispute, the Dispute shall be submitted to arbitration at the request of either Party upon written notice to that effect to the other Party and such arbitration shall be conducted in accordance with the LCIA India Arbitration Rules in force