Chinta Investments Private Limited v. Strategic Port Investment Kpc Ltd. & Ors

RAJIV SAHAI ENDLAW, J. SEPTEMBER 1, 2014 kks

* IN THE HIGH COURT OF DELHI AT NEW DELHI Reserved on:29.05.2014 Pronounced on: 01.09.2014 + FAO (OS) No.203/2014 C.V. RAO & ORS. ....Appellants. Versus STRATEGIC PORT INVESTMENTS KPC LTD. & ORS. .... Respondents. + FAO (OS) No.204/2014 KRISHANAPATNAM PORT COMPANY LIMITED ....Appellants. Versus STRATEGIC PORT INVESTMENTS KPC LTD. & ANR. .... Respondents. + FAO (OS) No.205/2014 CHINTA INVESTMENTS PRIVATE LTD. ....Appellant Versus STRATEGIC PORT INVESTMENTS KPC LTD. & ORS. .... Respondents. CORAM: HON'BLE THE CHIEF JUSTICE HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW Counsel for the Appellant: Mr. A.S. Chandhiok, Sr. Adv. along with Mr. Ritesh Kumar, Mr. Dhruv Dewan, Mr. Sulabh Kenoria, Mr. Arjun Pall, Ms. Mallika Ahluwalia, Mr. Mayank Bamniyal and Ms. Ishita, Advs. Mr. Akhil Sibal,Adv. along with Mr. Guntur Pramod Kumar and Ms. Prerna Singh, Advs. in FAO(OS)205/2014. Counsel for the respondent: Mr. Rajiv Nayyar, Sr. Adv. along with Mr. Shankh Sengupta, Mr. Udit Mendiratta and Ms. Srishti Jain, Advocate for R-1. Mr. Arvind Nigam, Sr. Adv. along with Mr. S. Rewari and Mr. Arjun Pall, Advs. in FAO(OS) 203/2014. COMMON J U D G M E N T : Ms.G.ROHINI, CHIEF JUSTICE 1. Aggrieved by the common order dated 31.03.2014 passed by the learned Single Judge in I.A.Nos.4493 and 4494 of 2014 in OMP No.218/2014, all these appeals are preferred under Section 37 of the Arbitration and Conciliation Act, 1996 (for short "the Act"). 2. Strategic Port Investments KPC Ltd., which is arrayed as respondent No.1 in all the appeals, is the petitioner in OMP No.218/2014 filed under Section 9 of the Act seeking various directions to the respondents therein pending resolution of disputes through arbitration. 3. By the order under appeal, the learned Single Judge issued certain directions and aggrieved by the same, the present appeals are filed. 4. The appellants in FAO (OS) 203/2014 are Mr.C.V.Rao and 8 others who are arrayed as respondents No.2 to 5 and 7 to 11 in OMP No.218/2014. 5. The appellant in FAO (OS) 204/2014 is the respondent No.1 in OMP No.218/2014. 6. The appellant in FAO (OS) 205/2014 is the respondent No.6 in OMP No.218/2014. 7. The facts in brief are as under:- 8. The appellant in FAO (OS) 204/2014, is a company by name Krishnapatnam Port Company Ltd. (hereinafter referred to as "KPCL"). It is a Public Limited Company registered under the Companies Act, which owns and operates Krishnapatnam Port, a port located on the East Coast and is spread over a vast land bank of approximately 6,900 acres. The appellant No.1 in FAO (OS) 203/2014 - Mr.C.V.Rao - is the Chairman of KPCL whereas the other appellants in the said appeal as well as the appellant in FAO(OS) 205/2014 are the promoters and shareholders of KPCL who are holding 86.45% of the issued Capital Equity of the company. According to the appellants, 4.07% of the issued capital shares of KPCL are owned by corporate entities affiliated to Mr.C.V.Rao. 9. Coming to the respondent No.1 in all the appeals, i.e., the petitioner in OMP No.218/2014, it is a company incorporated under the laws of the Republic of Mauritius. It is pleaded that the said company is owned by 3i India Infrastructure Fund, US$ 1.2 billion fund managed by the 3i group, investing in a diversified portfolio of investments in India, focussing on the port, airport, road and power sectors. 10. On 19.02.2009 an Investment Agreement was entered into between KPCL, its promoters & shareholders and the respondent No.1 under which it was agreed by the respondent No.1 to subscribe to 6,978,260 (Six Million Nine Hundred and Seventy Eight Thousand Two hundred and sixty) equity shares at a subscription price of Rs.148.32 per share for an aggregate consideration of Rs.1,03,50,00,000/-. Respondent No.1 had also agreed to subscribe to 70,00,00,000 compulsorily convertible cumulative participatory preference shares of a face value of Rs.10/- each at a time subscription price of Rs.10/- per preference share for an aggregate consideration of Rs.700,00,00