Ernst and Young Private Limited v. Ministry of Youth Affairs and Sports, Government of India & Anr

NAVIN CHAWLA, J MARCH 20, 2018 RN

Page 1 * IN THE HIGH COURT OF DELHI AT NEW DELHI + OMP (COMM) 71/2018 Reserved on: 13th February, 2018 Date of decision: 20th March, 2018 ERNST AND YOUNG PRIVATE LIMITED ..... Petitioner Through: Mr.A.K.Thakur, Mr.R.K.Mishra, Mr.Rishi Raj, Ms.Kavita Singh, Advs. versus MINISTRY OF YOUTH AFFAIRS AND SPORTS, GOVERNMENT OF INDIA & ANR. ..... Respondents Through: Mr. Neeraj Choudhary, Adv. for R-1 CORAM: HON'BLE MR. JUSTICE NAVIN CHAWLA 1. This petition under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the 'Act') has been filed by the petitioner challenging the Arbitral Award dated 11th December, 2017 passed by the Arbitral Tribunal allowing the claims of the respondent no.1. 2. The Organizing Committee Common Wealth Games 2010 (OC CWG), was a society registered under the Societies Registration Act, 1860 and was entrusted by the Indian Olympic Association (IOA) to organize the Common Wealth Games, 2010 in the National Capital Region of Delhi. OC CWG stands dissolved and all the assets and liabilities thereof stand transferred to the Ministry of Youth Affairs and Sports, Government of India (MYAS), respondent no.1 herein. Page 2 3. On 4th and 5th May 2007, the OC CWG issued a global notice inviting Expression of Interest (EOI) from experienced global consultancy firms with proven track record for games planning and project management and for work-force services. 4. Pursuant to the said notice, vendors including the petitioner herein, submitted their respective EOI. On 8th November, 2007, OC CWG issued the Request for Proposal (RFP), clause 17.2 whereof permitted the tenderer to form a consortium to enhance its work experience and expertise. In view of the said clause, the petitioner and M/s Event Knowledge Services, Switzerland formed a consortium, with the petitioner as prime/lead tenderer. 5. Pursuant to the selection of the consortium, an agreement dated 24th March, 2008 was executed between OC CWG and the consortium comprising of the petitioner and EKS Switzerland collectively called the 'Consultant'. 6. On 1st June, 2009, EKS, Switzerland by a Deed of Assignment transferred all its rights, duties and obligations in the aforesaid agreement to EKS, Mauritius, which was incorporated under the laws of Republic of Mauritius with its registered office at Port Louis (hereinafter referred to as 'EKS'). 7. The respondent No.1, inter alia claiming that it had paid/deposited tax on behalf of EKS, filed its claim before the Arbitral Tribunal seeking reimbursement of the same. The Arbitral Tribunal by its Impugned Award has held that the petitioner and EKS are liable to pay such amount to the respondent no.1. Page 3 8. At the outset, it may be noticed that EKS did not choose to appear before the Arbitral Tribunal and only transmitted its reply to the Statement of Claim and Counter Claim to the Arbitral Tribunal. 9. Counsel for the petitioner submits that the Impugned Award contains contradictory findings and is liable to be set aside on this ground. He submits that the Arbitral Tribunal, in para 73 of the Impugned Award, has held that the assessment of tax is within the exclusive domain of the Income Tax Authorities and beyond the jurisdiction of the Arbitral Tribunal, however, at the same time has gone ahead to hold that EKS was indeed liable to pay the tax. 10. I am unable to appreciate the above argument of the counsel for the petitioner. Though on one hand, the petitioner has contended that the question whether EKS was liable to pay tax is outside the jurisdiction of the Arbitral Tribunal, on the other hand, extensive arguments were advanced not only before the Arbitral Tribunal but also before me to contend that EKS was not liable to pay any tax in India. I find that even the Arbitral Tribunal was faced with similar arguments and, therefore, perforce had to go into the question whether EKS was liable to pay any tax in India or not. Having forced the Arbitral Tribunal to go into this question, t