Astonfield Renewables Pvt. Ltd. & Anr v. Ravinder Raina

judgment.

¶32The judgment in Duro Felguera S.A.(supra) cannot be of much assistance to the petitioners as it was dealing with a case under Section 11 of the Act and was decided taking into account the amendment to the Act by way of incorporation of Section 11(6A) to the Act. Paragraph 22 of the judgment is important to note this distinction: "22. On behalf of GPL, it was repeatedly urged that the works are intrinsically connected, inseparable, integrated, interlinked and that they are one composite contract and that they were split up only on the request and representations given by Duro Felguera and FGI. As discussed earlier, as per amended provision Section 11 (6A), the power of the Supreme Court or the High Court is only to examine the

Page 17

existence of an arbitration agreement. From the record, all that we could see are five separate Letters of Award; five separate Contracts; separate subject matters; separate and distinct work; each containing separate arbitration clause signed by the respective parties to the contract."

¶33The Supreme Court had further distinguished the case of Chloro Controls India (P)Ltd. (supra) as under:

"42. The learned Senior Counsel for GPL relied upon Chloro Controls India (P) Ltd. (supra), to contend that where various agreements constitute a composite transaction, court can refer disputes to arbitration if all ancillary agreements are relatable to principal agreement and performance of one agreement is so intrinsically interlinked with other agreements. Even though Chloro Controls has considered the doctrine of "composite reference", "composite performance" etc., ratio of Chloro Controls may not be applicable to the case in hand. In Chloro Controls, the arbitration clause in the principal agreement i.e. clause (30) required that any dispute or difference arising under or in connection with the principal (mother) agreement, which could not be settled by friendly negotiation and agreement between the parties, would be finally settled by arbitration conducted in accordance with Rules of ICC. The words thereon "under and in connection with" in the principal agreement was very wide to make it more comprehensive. In that background, the performance of all other agreements by respective parties including third parties/non-signatories had to fall in line with the principal agreement. In such factual background, it was held that all agreements pertaining to the entire disputes are to be settled by a "composite reference". The case in hand stands entirely on different footing. As discussed earlier, all five different Packages as well as the Corporate Guarantee have separate arbitration clauses

Page 18

and they do not depend on the terms and conditions of the Original Package No.4 TD nor on the MoU, which is intended to have clarity in execution of the work."

¶34In the present case, however, the judgment of Supreme Court in Chloro Controls India (P) Ltd (supra) will squarely apply.

¶35It is also worth noting that even in Duro Felguera (supra), as far as the package 6,7,8 and 9 were concerned, Supreme Court appointed the Arbitral Tribunal consisting of same arbitrators, though, these were ordered to be separately constituted domestic Arbitral Tribunals. The present is a case where the parties have travelled beyond Section 11 of the Act. The Arbitrator has also considered the effect of the two different agreements and the two different Arbitration Agreements and has concluded that a common arbitration shall lie. It is not even the case of the petitioners that any prejudice was caused to them due to a common arbitration. I find no infirmity in the said finding of the Arbitrator and therefore, the objection against the Award on this issue is rejected.

¶36As far as the application of laws of Malta in relation to the SIA is concerned, it is not shown by the petitioners how the application of the said laws of Malta would, in any manner, make the Impugned Award in conflict with the said laws. The objection in this regard is, therefore, fallacious and is rejected.

¶37Learned senior counsel for the petitioners next contended that the arbitration proceedings themselves were not properly initiated/ invoked. He submitted that no notice invoking arbitration agreement had been received by the petitioners.

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¶38I find no merit in the said objection. It is not disputed before me that before appointment of an Arbitrator, a notice was duly served by the Indian Council of Arbitration on the petitioners. The Arbitration clause, in either of the two above mentioned agreements, does not provide for any pre-condition of notice being served by the party claiming arbitration on the other before a reference for appointment of an arbitrator is made to the Indian Council of Arbitration. The existence of disputes between the parties is not denied by the petitioners. It is also rightly contended by the learned counsel for the respondent that before the Arbitrator the only objection of jurisdiction taken was with respect to the common arbitration in relation to the two agreements and not with respect to non receipt of notice of invocation of arbitration by the petitioners. Non-receipt of the notice is a question of fact and cannot be allowed to be raised for the first time in a petition under Section 34 of the Act. Though, there is no merit in the objection raised by the petitioners, even otherwise, Section 4 of the Act would operate as a waiver of said objection on the part of the petitioners. Section 4 of the Act is reproduced herein below: Section 4 of the Act "4. Waiver of right to object.—A party who knows that—

(a) any provision of this Part from which the parties may derogate, or

(b) any requirement under the arbitration agreement, has not been complied with and yet proceeds with the arbitration without stating his objection to such non-compliance without undue delay or, if a time limit is provided for stating that objection, within that period of time, shall be deemed to have waived his right to so object."

Page 20

¶39The next contention raised by learned senior counsel for the petitioners is that the arbitrator has erred in finding the respondent not guilty of breach of Clause 4 of the Appointment Agreement. Reliance in this regard was made to the emails dated 22.01.2010, 02.05.2012,

13.07.2012, 31.07.2012 and 31.10.2012.

¶40Clause 4 of the Appointment Agreement is reproduced herein below: "Clause 4. Duties

Subject to overall superintendence, control and directions of the Board of Director, you shall devote all your working time, attention and abilities to the business of the Company, confirm to and comply with the directions given by the Board of Directors, work faithfully and diligently in the best interests of the Company and use best endeavors to promote the interest of the Company. You shall have the duties, responsibilities and authority customarily accorded to the president of an organization, including running the day to day operations of the Company subject always to the authority of the Board of Directors. You shall be responsible for the following matters relating to the Company and shall report to Ameet Shah, Sourabh Sen and/or Aparna Doshi or other person(s) as per the Board of Directors of the Company; In addition you shall be responsible for such duties as may be assigned to you in or in relation to the Affiliates of the Company operating in India (namely, subsidiary/ SPV of the Company's parent company; (Astonfield Renewable. Resources Limited.)

I. GENERAL ROLES AND RESPONSIBILITIES A. BE A LEADER

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Develop Aston field Renewable Resources Limited into the leading Indian renewable energy company and establish a dominant market share in South Asia -Advise the Board -Advocate and promote the Company's mission to develop renewable energy projects · Support and motivate employees to build a world class organization B. BE A VISIONARY AND PROVIOE INFORMATION

. Ensure that the staff and Board have sufficient and up-to-date information · Look to the future for change opportunities and leverage your experience of 25 years in the power industry. · Serve as the interface between the Board and employees ·Serve as the interfaces between the Company and community

C. BE A DECISION MAKER

· Formulate policies, strategic plans, establish operating plans, implement processes for project management and implementation of power projects and submit these recommendations to the Board Decide or guide courses of action In operations by staff

D. BE A MANAGER

· Oversee operations of the Company in India · Implement plans approved by the Executive Committee · Manage human resources of the Company · Manage financial and physical resources

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E. ASSIST IN BOARD DEVELOPMENT

· Assist in the selection and evaluation of potential board members · Makes recommendation and support the Board during orientation and self-evaluation

II. SPECIFIC RESPONSIBILITIES·

In addition to any· specific duties assigned to you by the Board from time to time, you shall also have the following responsibilities: A. Leverage your relationships and experience with Investors and lenders alike to secure financing for ARRL's projects in India.- You have been thoroughly debriefed on the financing strategy for ARRL and it will require significant Input from you as the Head of the Company's operations In India. You will oversee the operations of the company's' projects from accounting, financial tax and compliance point· of view and working with the core corporate finance team to achieve departmental and organizational goals. You will coordinate with banking institutions on various matters to. Include project financing, creating, reviewing and updating business models.

B. Project Development, Implementation and Commissioning Oversee business development on a nationwide basis, expand technical partnerships, implement project management capabilities and ensure timely delivery and commissioning of power project.

C. Financial, Tax, Risk and Facilities Management-Recommend yearly budget for Board approval and prudently manage the Company's resources within

Page 23

those budget guidelines according to current laws and regulations

D. Human Resource Management-Effectively manage the human resources of the Company according to authorized personnel policies and procedures that fully conform to current laws and regulations. Develop the core management team for the Company to oversee its power projects in first 6 months of tenure as discussed with Executive Committee. You will run the day-to-day operations of the Company, implementing the business plan and hire the support team.

E. Raise Market Capitalization of the Company through successful execution of its operating plan to develop 300MW's of renewable energy projects in 3-4 years. Build a sustainable and profitable business model that will lead to wealth creation for all stakeholders, employees, shareholders and founders.

F. Community and Public Relations Assure the Company and its mission, programs, products and services are consistently presented in strong, positive image to relevant stakeholders.

G. Any other duty which may be assigned to him from the Board of Directors from time to time."

¶41The Arbitrator has examined the above mentioned emails and has concluded as under:

"2.16 The Respondents' contention regarding non performance centres on the Claimant's alleged inability to

Page 24

deliver on this target, resulting in reduced income streams and alleged losses for them which are the basis of their counter claim. In support of this contention, the Respondents cite email correspondence from Shri Ameet Shah to the Claimant on 22 January 2010 (Annexure"C" in Documents referred to in Respondents' Written Submissions), 2 May 2012 (Annexure "D"), 13 July 2012 (Annexure "E"), 31 July 2012 (Annexure "F") to buttress their claim that they were dissatisfied with the Claimant's performance. While an examination of this correspondence reflects· the unsatisfactory performance of the Company, it cannot be said to unequivocally demonstrate that the Claimant was solely or directly responsible for this. On the contrary a paragraph of the email dated 22 January 2010 cited above appears to support the Claimant's contention that the entitlement to shares under Clause 2(a) was not linked to performance. The paragraph reads:

"Your put option to the Company for 100 shares at USD275K needs to be linked to a minimum of 50 MW of capacity being commissioned in the Company. As it stands - the Company is liable to pay you a cash fee of USD, 753 per day amounting to USD 275K for the year 2010. This is simply not a viable option for the Company for 2010 and a source for cash savings for the Company this year which is being demanded by the investors. This restructure does not mean the put option is being taken away, it simply aligns it with the Company's operations generating cash."

xxxx

2.20 Taken together, these elements do not in any way establish the Respondents' contentions that the Claimant was guilty of poor performance. On the contrary, the fact that the Respondents were still considering a role for Claimant subsequent to his resignation would seem to

Page 25

suggest that they valued his services. The reference to "your shareholding" in Shri Shah's message quoted above also points to an acknowledgement of the Claimant's entitlements. The Respondents have argued that the above correspondence took place before the Claimant's alleged violations of Clauses 9 and 11 of the Employment Agreement came to their notice. Be that as it may, that cannot wash away the fact that there was neither a suggestion of poor performance nor of any lack of entitlement to the shares under Clause 2(a) of the SIA in the contemporaneous correspondence.

xxxx

3.9 The Employment Agreement does not contain any penal provisions for non achievement of any of the deliverables in Clause 4.II. Moreover, it is the burden of the Respondents to establish that the non-achievement of the above target was due to the lapses of the Claimant. The Respondents have cited the correspondence listed in paragraph 2.16 above to show that the Claimant was repeatedly cautioned about his poor performance. However, none of these messages invokes or refers to the contractual provisions of Clause 4. None of these messages reflects the Respondents' view that the poor performance was solely or substantially due to the lapses of the Claimant. xxxxxxx

Conclusion-It is not for the undersigned to conduct a forensic examination of the causes of non-achievement of targets by the Company. The brief question which is required to be answered here is whether the Respondents have demonstrated a clear nexus between the contractual responsibilities of the Claimant and the performance of the Company. In view of the factual and evidentiary Matrix laid out above, the only conclusion which can be drawn is

Page 26

that the Respondents have not demonstrated such a nexus. Therefore, it is concluded that the Respondents have not established their counter claim."

¶42The Arbitrator having examined the emails and come to the conclusion, which is neither found to be arbitrary nor unreasonable, cannot be interfered with in exercise of limited jurisdiction of this Court under Section 34 of the Act.

¶43It is further contended by the learned senior counsel for the petitioners that the Arbitrator having found the respondent guilty of violation of Clause 11 of the Appointment Agreement, he could not have proceeded to grant pro-rata shares in favour of the respondent. He submits that in terms of Clause 2(a) of SIA, future allotment of shares in favour of the respondent was subject to his fulfillment of the representation and warranty under the Appointment Agreement. Once the respondent was held to be in breach of the agreement, he was disentitled to any future allotment of shares. It is contended that the Arbitrator, while awarding the pro-rata shares in favour of the respondent, has travelled beyond the terms of the contract.

¶44I am unable to accept the above submission of learned senior counsel for the petitioner.

¶45Clause 2(a) of the SIA has been reproduced above. It specifically states that where the Employment Agreement is terminated "for any reason whatsoever prior to the aforesaid periods" i.e. two years, three years, four years and five years respectively from the Employment Date, the respondent shall be entitled to fractional value of the shares on the basis of number of days of completed service. The Employment

Page 27

Agreement was terminated only on 02.01.2013 on the acceptance of resignation letter, therefore, the respondent may have been entitled to pro-rata shares till that date. The Arbitrator has, however, held respondent entitled to pro-rata shares only till 07.5.2012 i.e. the date on which the respondent committed breach of Clause 11 of the Appointment Agreement as per the Sole Arbitrator.

¶46In any case, the Arbitrator interpreted Clause 2(a) of SIA, in my opinion little more favourable of the petitioners as under:

"2.13 It is clear that Clause 2(a) could have been drafted with greater clarity. While on the one hand it would be unusual for the issue of performance linkage to figure in both Clause 2(a) as well as 2(b), it would be equally anomalous for the proviso in the second sentence of Clause 2(a) to completely override the stipulations in the first sentence.

Conclusion -After having examined the text of Clause 2(a) and considered the arguments of the Parties, the undersigned is of the view that the stipulations in the first part of the first sentence of Clause 2(a)(" Subject to and in reliance upon the representations, warranties, terms and conditions of this Agreement and the Employment Agreement, the Company agrees to issue to you, ....... ") are a precondition for the Claimant's entitlement of shares ·and cannot be overridden by the proviso in the second sentence."

¶47The Arbitrator further discusses the impact of breach of Clause 11 of the Appointment & Employment Agreement on the rights of the respondent as under:

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"2.35 The key issue to be decided is whether on satisfaction of the stipulations in the first sentence of Clause 2(a), the shares vested in the Claimant or whether his entitlements were further subject to the procedural requirements listed in Clauses 3, 4 and 8(b)(vi) of the SIA.

2.36 It is important to distinguish the substantive from the procedural issues. The substantive issue is that on satisfaction of the stipulations in Clause 2(a), an entitlement or interest was created in favour of the Claimant.(How the violation of Clause 9 of the Employment Agreement by the Claimant affects this entitlement is dealt with separately). Whether or not the shares were delivered physically is a subsidiary issue which does not detract from the fact that the entitlement was created. An examination of the correspondence referred to by the Claimant makes it clear that this interest or entitlement in favour of the Claimant was not disputed by the Respondents at that time.

Conclusion-Whether or not the events envisaged in Clauses 3, 4 and 8 of the SIA took place is not relevant for determining whether an interest was created in favour of the Claimant by the provisions of Clause 2(a). The creation of the interest was subject to the provisions of Clause 2(a) alone. Once the interest was created, the Claimant was entitled to the repurchase option under Clause 7 of the SIA.

¶48A reading of the above would show that the present is not a case where the Arbitrator has acted in ignorance of the terms of the Agreement, but is a case where the Arbitrator has interpreted the terms of the Agreement to reach a particular conclusion. This distinction is very relevant as construction of the terms of the contract is primarily for an

Page 29

Arbitrator to decide unless the Arbitrator construed the contract in such a way that it could be said to be something that no fair minded or reasonable person could do.

¶49In this regard, the Supreme Court in the case of Associate Builders v. Delhi Development Authority, (2015) 3 SCC 49 reiterated as under:

"42.3. (c) Equally, the third subhead of patent illegality is really a contravention of Section 28(3) of the Arbitration Act, which reads as under:

"28.Rules applicable to substance of dispute.—(1)-

(2)***

(3) In all cases, the Arbitral Tribunal shall decide in accordance with the terms of the contract and shall take into account the usages of the trade applicable to the transaction."

This last contravention must be understood with a caveat. An Arbitral Tribunal must decide in accordance with the terms of the contract, but if an arbitrator construes a term of the contract in a reasonable manner, it will not mean that the award can be set aside on this ground. Construction of the terms of a contract is primarily for an arbitrator to decide unless the arbitrator construes the contract in such a way that it could be said to be something that no fair-minded or reasonable person could do.

¶43In McDermott International Inc. v. Burn Standard Co. Ltd. [McDermott International Inc. v. Burn Standard Co.

Page 30

Ltd., (2006) 11 SCC 181] , this Court held as under: (SCC pp. 225-26, paras 112-13) "112. It is trite that the terms of the contract can be express or implied. The conduct of the parties would also be a relevant factor in the matter of construction of a contract. The construction of the contract agreement is within the jurisdiction of the arbitrators having regard to the wide nature, scope and ambit of the arbitration agreement and they cannot be said to have misdirected themselves in passing the award by taking into consideration the conduct of the parties. It is also trite that correspondences exchanged by the parties are required to be taken into consideration for the purpose of construction of a contract. Interpretation of a contract is a matter for the arbitrator to determine, even if it gives rise to determination of a question of law.

¶113Once, thus, it is held that the arbitrator had the jurisdiction, no further question shall be raised and the court will not exercise its jurisdiction unless it is found that there exists any bar on the face of the award."

¶44In MSK Projects

(I)

(JV) Ltd. v. State of Rajasthan [(2011) 10 SCC 573 (SCC pp. 581-82, para 17)

"17. If the arbitrator commits an error in the construction of the contract, that is an error within his jurisdiction. But if he wanders outside the contract and deals with matters not allotted to him, he commits a jurisdictional error. Extrinsic evidence is admissible in such cases because the dispute is not something which arises under or in relation to the contract or dependent on the construction of the contract or to be determined within the award. The ambiguity of the award

Page 31

can, in such cases, be resolved by admitting extrinsic evidence. The rationale of this rule is that the nature of the dispute is something which has to be determined outside and independent of what appears in the award. Such a jurisdictional error needs to be proved by evidence extrinsic to the award."

¶45In Rashtriya Ispat Nigam Ltd. v. Dewan Chand Ram Saran [(2012) 5 SCC 306], the Court held: (SCC pp. 320-21, paras 43-45)

"43. In any case, assuming that Clause 9.3 was capable of two interpretations, the view taken by the arbitrator was clearly a possible if not a plausible one. It is not possible to say that the arbitrator had travelled outside his jurisdiction, or that the view taken by him was against the terms of contract. That being the position, the High Court had no reason to interfere with the award and substitute its view in place of the interpretation accepted by the arbitrator.

¶44The legal position in this behalf has been summarised in para 18 of the judgment of this Court in SAIL v. Gupta Brother Steel Tubes Ltd.(2009) 10 SCC 63 and which has been referred to above. Similar view has been taken later in Sumitomo Heavy Industries Ltd. v. ONGC Ltd.(2010) 11 SCC 296 to which one of us (Gokhale, J.) was a party. The observations in para 43 thereof are instructive in this behalf.

¶45This para 43 reads as follows: (Sumitomo case [(2010) 11 SCC 296, SCC p. 313)

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'43. … The umpire has considered the fact situation and placed a construction on the clauses of the agreement which according to him was the correct one. One may at the highest say that one would have preferred another construction of Clause 17.3 but that cannot make the award in any way perverse. Nor can one substitute one's own view in such a situation, in place of the one taken by the umpire, which would amount to sitting in appeal. As held by this Court in Kwality Mfg. Corpn. v. Central Warehousing Corpn. (2009) 5 SCC 142 the Court while considering challenge to arbitral award does not sit in appeal over the findings and decision of the arbitrator, which is what the High Court has practically done in this matter. The umpire is legitimately entitled to take the view which he holds to be the correct one after considering the material before him and after interpreting the provisions of the agreement. If he does so, the decision of the umpire has to be accepted as final and binding."

¶50In the present case, the interpretation given to the Clause 2(a) of the Appointment Agreement is most reasonable and cannot be faulted.

¶51It is then contended by learned senior counsel for the petitioners that the Arbitrator has proceeded to award in excess of even what was claimed by the respondent. In this regard he drew my attention to the prayer made by the respondent in its Statement of Claim wherein the respondent had claimed only the value of 1.08 shares. He submits that the Arbitrator, in the Impugned Award, granted 2.43 shares in favour of the respondent i.e. much beyond the claim made by the respondent himself.

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¶52Prayer A in the Statement of Claim filed by the respondent is reproduced herein below:

"A. USD 1,144,000 being the value of the 1.08 Shares to which Claimant is entitled and in respect of which payment must be made by the Respondents to the Claimant. The total amount receivable by the Claimant, under this head as per the current exchange rate amounts to Rs.6,87,65,840/- (Rs.Six Crores, Eighty Seven Lakhs, Sixty Five Thousand, Eight Hundred and Forty Only)."

¶53On the other hand, learned counsel for the respondent, in my opinion rightly so, submits that the plea taken by the petitioners is not only fallacious but is also mala fide as the petitioners are trying to take advantage of an inadvertent typographical error in the prayer clause of the Statement of Claim. In this regard he draws my attention to paragraph 8 of the Statement of Claim which clearly shows that the respondent had claimed an amount of Rs.6,87,65,842/- as the current value of 3.08 shares, which is the same amount being claimed in prayer A quoted above. Learned counsel for the respondent further draws attention of this Court to the issues framed by the Arbitrator wherein the first issue is as to "whether the claimant is entitled to recover from the respondents, the value of 3.08 shares, as claimed".

¶54From the above, it is clear that the objection raised by the petitioners is merely trying to take advantage of a typographical error in the Statement of Claim, which caused no prejudice to the petitioners inasmuch as the petitioners were at all time aware that the respondent's claim was to 3.08 shares and not 1.08 shares.

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¶55It is then contended by the learned senior counsel for the petitioners that the Arbitrator has wrongly valued the shares in the Impugned Award. It is submitted that while the respondent had failed to give fair value of the shares, the petitioners had tendered in evidence the valuation thereof in form of a certificate from Chartered Accountant, which showed the value of the shares as only USD 24.68 as on

31.03.2013. He therefore, submits that the Arbitrator has wrongly applied the value of USD 275,000 per share to the 0.43 shares to which the respondent was held entitled to in the Award.

¶56On the other hand, learned counsel for the respondent submits that the alleged certificate issued by the Chartered Accountant had not been proved on record by the petitioners as the author of the said certificate was not produced as a witness. He further submits that the fair value of the shares was within the knowledge of the petitioners and could have been derived only from the books of account of the petitioner no.2; the same were not produced before the Arbitrator. He further submits that on the other hand, the respondent had led evidence of one Mr.Sunil M.Buckshee (CW-1), Chartered Accountant and Cost Accountant, who had deposed that in his opinion the value of the shares would be higher than the base value of USD 275,000. Learned counsel for the respondent submits that though 47 questions were put to the said witness, there was no question put to him challenging his opinion on the valuation of the shares. It is lastly contended by learned counsel for the respondent that a reading of the email dated 01.02.2013 from Co-Chairman and Director of the petitioners would show that even the petitioners were of the opinion that the valuation of the shares would be much more than USD 275,000.

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¶57I have considered the submissions made by the counsels for the parties. Clause 7 of the SIA provides that the pre-agreed value of the first and second share was USD 275,000 per share. Therefore, there can be no dispute on the same. The value of the subsequent shares was to be determined on the fair market value. In the present case, the Arbitrator has taken the fair market value to be USD 275,000. He has held as under: III: The parties have not produced any basis for calculating the "fair market value" of the share entitlement beyond the first 2 shares as required under Clause 2(a) of the SIA. It is therefore decided that the value of these shares will be the same as for the first 2 shares, i.e. US$275,000 per share. The value of 0.43 shares therefore works out to US$119,041 (one lakh nineteen thousand and forty one).

In absence of evidence, the arbitrator has taken the value of the first two shares to be also applicable for the next 0.43 shares. The same is a reasonable approach and I do not find any infirmity with the same.

¶58It is next contended by the learned senior counsel for the petitioners that the Arbitrator has erred in granting interest @ 12% p.a. in favour of the respondent. I find no merit in the said submission. Grant of interest @ 12% p.a. cannot be said to be so unreasonable so as to warrant interference by this Court in exercise of its power under Section 34 of the Act. Award of interest is at the discretion of the Arbitrator and until and unless it is shown that said discretion is exercised in a perverse manner, the same cannot be interfered with by the Court in exercise of its power under Section 34 of the Act. Section 31(8) of the Act, prior to its amendment in 2015, in fact, prescribed that unless the award otherwise

Page 36

directed, the sum awarded by the arbitrator shall carry interest @18% p.a. Therefore, challenge to award of interest @12% p.a. cannot be sustained.

¶59It is lastly submitted by learned senior counsel for the petitioners that the Impugned Award makes both the petitioners jointly and severely liable for the payment of the awarded amount where this liability could only have been of petitioner no.2, who was the party of the SIA. It is seen from the correspondence that the petitioners were dealing jointly with the respondent in connection with the employment. The Arbitrator has also held that the two agreements form part of the same transaction. The petitioner no.2 is the parent company of petitioner no.1. In my view, therefore, the petitioners cannot take benefit of corporate veil to deny their joint and several liability under the Award.

¶60In view of the above, I find no merit in the present petition and same is accordingly dismissed with cost, quantified at Rs.50,000/-.

NAVIN CHAWLA, J JANUARY 15, 2018/Arya

Page 1 * IN THE HIGH COURT OF DELHI AT NEW DELHI + OMP 388/2015 Reserved on: 5th December, 2017 Date of decision:15thJanuary, 2018 ASTONFIELD RENEWABLES PVT. LTD. & ANR...... Petitioner Through: Mr.Atul Chitale, Sr. Adv. with Ms. Raveena Rai, Mr. Akash Jindal, Ms.Tanvi and Mr.Gurjyot Sethi, Advs. versus RAVINDER RAINA ..... Respondent Through: Mr. Samar Singh with Mr. Amit Sharma, Advs. CORAM: HON'BLE MR. JUSTICE NAVIN CHAWLA 1. The present petition has been filed under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the 'Act') challenging the award dated 16.03.2015 passed by the Sole Arbitrator appointed by the Indian Council of Arbitration. 2. The disputes between the parties arise out of two agreements, the first one is Appointment & Employment Agreement (hereinafter referred to as the 'Appointment Agreement') dated 17.09.2008 and the second one being Stock Issuance Agreement (hereinafter referred to as the 'SIA') dated 01.12.2008. 3. The respondent was appointed as the President of Petitioner No.1 Company under Letter of Appointment & Employment dated 17.09.2008. The letter inter-alia provided as under: Page 2 "The terms and conditions of the said employment are annexed hereto and also in the accompanying Stock Issuance Agreement to be entered between you and our parent company Astonfield Renewable Resources Limited." It is important to note here that the so-called 'Appointment Agreement' was, in fact, an Annexure to this letter. 4. Clause 1.4 of the Appointment Agreement further provides that the respondent shall be eligible to participate in the Employee Stock Auction Plan/Scheme of the petitioner no.1 or its parent company i.e. petitioner no.2. 5. Clause 7 of the Agreement provides for termination of the employment and is reproduced herein below: "7. Termination of Employment 7.1 Either you or the Company may terminate your employment without cause, upon written notice to the other Party. The termination would be effective after 3 (three) months from the date of the receipt (by the other Party) of such notice (hereinafter referred to as the 'Notice Period'). Alternatively, the Company may terminate your employment with immediate effect, upon giving you three month's remuneration as per Clause 1 of this agreement in lieu of notice or pro-rated remuneration for the balance Notice Period in case you have been permitted to work during the Notice Period. 7.2 The Company may terminate this employment agreement for Cause (hereinafter defined) with immediate effect without any severance pay, provided that notice of Cause has been served by the Company and you do not rectify, where capable of rectification, the breach/problem within 30 (thirty) days from receipt of the notice: provided, however, that no notice or thirty day Page 3 cure period shall be required with respect to matters set forth in sub (ii) of the definition of Cause below. For the purposes of this clause "Cause"shall mean (i) the negligence or misconduct by you in complying with your duties, responsibilities, obligations and/or covenants or undertakings, which are either incapable of remedy or otherwise not remedied by you within 30 (thirty) days of a written notice being serviced on you by the Company stating the breach or (ii) your gross misconduct, theft from the Company, commission of any crime or breach of the Company's confidence." 6. Clause 11 of the Appointment Agreement restrained the respondent from engaging in any other employment or business activity during the term of the employment. The same is reproduced herein below: "11. Conflicting Employment You will devote your full time to the Company. During the term of your employment with the Company, you shall not engage in any other employment, occupation, consulting or other business activity, nor will you engage in any other activities that conflict with your obligations to the Company." 7. Clause 23 of the Appointment Agreement provides for dispute resolution throu