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2018 Supreme(Del) 1574

IN THE HIGH COURT OF DELHI AT NEW DELHI
RAJIV SAHAI ENDLAW, J.
BHARTI TELE-VENTURES LTD. & ORS - Plaintiffs
Versus
DSS ENTERPRISES PVT LTD & ORS - Defendants
CS(OS) No.1769 of 2003
Decided on : 03-07-2018

Advocates:
Advocate Appeared:
For the Plaintiffs : Mr. Gopal Jain, Sr. Adv. with Mr. Tejveer Bhatia, Ms. Kriti Pujari and Mr. Rohan Swarup, Advs.
For the Defendant : Mr. Vineet Jhanji and Mr. Imran Maulaey, Advs.

Headnote:

Arbitration Agreement - International Commercial Arbitration - Arbitration & Conciliation Act, 1996 - Section 45, Section 5 - Suit for declaration that there is no arbitration agreement between the parties and for injunction restraining commencement or continuation of arbitral proceedings - Suit held to be not maintainable - Court dismissed the suit as not maintainable - Court refrained from answering the remaining issues as the suit was held to be not maintainable

Fact of the Case:

The plaintiff, Bharti Tele-Ventures Ltd. (BTVL), filed a suit seeking declaration that the request for arbitration made by defendant DSS Enterprises Pvt. Ltd. (DSS) is illegal and invalid, and for permanent injunctions against ICC and DSS. BTVL claimed that DSS is estopped from invoking arbitration of ICC due to previous legal actions.

Finding of the Court:

The court held that the suit for declaration and injunction was not maintainable and dismissed the suit. The court refrained from answering the remaining issues as the suit was held to be not maintainable.

Issues: The issues framed in the suit were whether the suit is barred by any provisions of the Arbitration & Conciliation Act, 1996, and whether the defendant no.1 has waived, repudiated and / or abandoned the Arbitration agreement by filing a previous suit.

Ratio Decidendi: The court held that the suit for declaration and injunction was not maintainable as per the provisions of the Arbitration & Conciliation Act, 1996. The court also refrained from answering the remaining issues as the suit was held to be not maintainable.

Final Decision: The court dismissed the suit as not maintainable and ordered BTVL to pay costs of Rs.15 lacs to DSS.

JUDGMENT :

1. The plaintiff no.1 Bharti Tele-Ventures Ltd. (BTVL) instituted this suit, for (i) declaration that the request dated 22nd August, 2003 submitted by defendant no.1 DSS Enterprises Pvt. Ltd. (DSS) to defendant no.6 ICC International Court of Arbitration (ICC) is illegal and invalid and that the communication dated 28th August, 2003 issued by ICC pursuant thereto is illegal and invalid; (ii) permanent injunction prohibiting ICC from acting upon or commencing any proceeding pursuant to the request dated 22nd August, 2003 of DSS for arbitration; and, (iii) permanent injunction restraining DSS from seeking to make reference and / or commencing arbitration proceeding on the basis of Arbitration Agreement contained in the Joint Venture Agreement (JVA) dated 12th August, 1992.

2. It was inter alia the case of BTVL in the plaint that:

(a) on 3rd March, 1992, Skycell Communications Ltd. (Skycell) was incorporated;

(b) on 12th August, 1992, a JVA was entered into between DSS, defendant no.2 Crompton Greaves Ltd. (CGL), defendant no.3 BellSouth International (Asia/Pacific) Inc., USA (BellSouth) and defendant no.4 Millicom International Cellular S.A., Luxembourg (Millicom), to subscribe to equity shares in the capital of Skycell and in pursuance whereto CGL, BellSouth and Millicom acquired 40.5%, 24.5% and 24.5% shares respectively of SkyCell; the remaining 10.5% shares of Skycell were held by DSS;

(c) CGL, BellSouth and Millicom, being parties to JVA, sold their respective shareholding in Skycell to BTVL which thus acquired 89.5% shareholding of Skycell;

(d) Skycell has since merged into defendant no.5 Bharti Cellular Ltd. (BCL);

(e) DSS, at the time of filing of this suit, was having shareholding of 0.34% only in BCL;

(f) from the request for arbitration made by DSS to ICC it is evident that the cause of action thereof is the JVA and DSS claims that it has been denied its rights, protection and benefits as a shareholder under the JVA;

(g) DSS is estopped from invoking arbitration of ICC, because:

(i) DSS filed Suit No.2089/2001 in this Court impleading BTVL, BellSouth, Millicom and Skycell as defendants thereto, making the same averments as made in the request for arbitration to ICC and seeking to restrain Skycell and Millicom from effecting any changes in the Board of Directors of Skycell and in the capital of Skycell;

(ii) DSS, by filing such a suit clearly acknowledged that there is no Arbitration Agreement in force and existence;

(iii) even if there were such an agreement, DSS having submitted to the jurisdiction of this Court, ought to be held to have waived, repudiated or abandoned the Arbitration Agreement;

(iv) BTVL had also filed Suit No.2202/2000 impleading DSS, CGL, BellSouth and Millicom as defendants thereto; the said defendants filed applications under Section 45 of the Arbitration & Conciliation Act, 1996 (Arbitration Act) and sought to have the matter referred to arbitration on the basis of Arbitration Agreement contained in the JVA; the said applications were rejected vide order dated 15th May, 2001 holding that unless the party applying for arbitration (under Section 45 of the Arbitration Act) accepts each of the other parties, as parties to the Arbitration Agreement, there can be no reference to arbitration under Section 45 of the Arbitration Act; DSS was not accepting BTVL as party to the Arbitration Agreement contending that BTVL was a stranger to the Arbitration Agreement; the said order dated 15th May, 2001 has become final and binding on the parties and as a result thereof, DSS cannot enforce the Arbitration Agreement against the BTVL;

(v) DSS also filed Suit No.115/2000 before the District Court, Delhi impugning the transfer of shares held by CGL in Skycell without the consent of DSS; though BellSouth and Millicom being defendants to the said suit applied for reference of disputes to arbitration but the applications filed in this respect were not pressed; the Suit No.115/2000 also had since been dismissed though a














































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