Madras High Court
Jinneng Clean Energy Technology Ltd vs Sunedison Energy Holding (Singapore) … on 2 September, 2024
Author: C.Saravanan
Bench: C.Saravanan
Arb.O.P.(Com.Div.)No.186 of 2023
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Reserved On 28.03.2024
Pronounced On 02.09.2024
CORAM :
THE HONOURABLE MR.JUSTICE C.SARAVANAN
Arb.O.P.(Com. Div.)No.186 of 2023
and
E.P.No.143364 of 2022
Jinneng Clean Energy Technology Ltd. ... Petitioner
.vs.
1. SunEdison Energy Holding (Singapore) Pte.Ltd. (She)
2. SunEdison Solar Power India Pvt. Ltd. (SSPI)
3. SEI Adhavan Power Pvt. Ltd. (SEI Adhavan) ... Respondents
Prayer:
i. Arb.O.P.(Com.Div.)No.186 of 2023 has been filed under Sections
47 to 49 of the Arbitration and Conciliation Act, 1996 to:-
a) declare that the Final Arbitral Award dated 22nd February 2021 and
Addendum to Final Arbitral Award dated 8th March 2021 passed by
the Arbitral Tribunal appointed by the Singapore International
Arbitration Centre is enforceable under Part-1 Chapter-II of the
Arbitration & Conciliation Act, 1996;
______________
Page No 1 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
b) direct the Respondents to make payment of;
i. US$ 7,348,403.10 along with interest at the rate
of 5.33% per annum from 1 April 2016 upto the
date of payment;
ii. US$ 275,000.00 along with interest at the rate
of 5.33% per annum from 20 August 2018 upto
the date of payment; and
iii. S$ 796,000.00, S$36,986.01, US$ 21,543.20,
RMB 5,144.00 and USD 349,093.95 being the
legal costs, disbursements, cost of the
arbitration along with interest at the rate of
5.33% per annum from the date of payment in
terms of the Arbitral Award dated 22 February
2021 till the date of payment in terms of the
Arbitral Award dated 22 February 2021 till the
date of payment in terms of the Arbitral Award
dated 22 February 2021 and addendum to Final
Award dated 8 March 2021 made and published
by SIAC.
c) Direct the Respondents to pay the Petitioner the costs of this
Petition.
______________
Page No 2 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
ii. E.P.No.143364 of 2022 has been filed to execute the Final Arbitral
Award dated 22nd February 2021 and Addendum to Final Arbitral
Award dated 8th March 2021 passed by the Arbitral Tribunal
appointed by the Singapore International Arbitration Centre against
the Respondent.
For Petitioner : Mr.Rahul V.Narichania
Senior Counsel
Mr.Sunilkumar V
Neelambaran and Kannan P.T.
For Respondents :
For R1 : Mr.V.Ramakrishnan Viraraghavan
Senior Counsel
for Ms.Apporva vinjamur for
M/s.Dua Associates
For R3 : Mr.M.S.Krishnan
Senior Counsel
for M/s.Edward James
ORDER
The above Original Petition has been filed by the successful Award
Holder under Chapter I Part II of the Arbitration and Conciliation Act,
1996 to recognize the Final Award dated 22.02.2021 and the addendum to
the Final Award dated 08.03.2021.
______________
Page No 3 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
2. The respective legal contentions of the Petitioner (the claimant)
and the Award Debtor Respondent No.2 (the Engineering Company) and
the Award Debtor Respondent No.3 (the Project Company) shall be
adverted after narrating the facts of the case. I propose to narrate the facts
in two parts.
3. In Part I, I shall narrate the facts prior to initiation of the Arbitral
Proceedings. In Part II, I shall narrate the facts after the initiation of
Arbitral Proceedings up to the culmination of the Award dated 22.02.2021.
In Part III, I shall advert to the submission of the Petitioner, the
Respondent No.2 and the Respondent No.3 and thereafter proceed to give
my reasons followed by the conclusion in Part-IV.
4. The Petitioner has also filed EP.No.143364 of 2022
simultaneously on 10.02.2023 to execute the aforesaid Award. The
Respondent No.3 herein was in caveat. Initially, the Respondent No.1 was
not a party to the proceedings. Subsequently, the Respondent No.1 was
______________
Page No 4 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
impleaded as Respondent No.3. By an Order dated 30.01.2024, the ranks
of each of the Respondents were thereafter interchanged corresponding to
their ranks in the Arbitral proceedings before the Arbitral Tribunal.
5. By an Award dated 22.02.2021, the Arbitral Tribunal has awarded
the following amounts to the Petitioner herein (Award Holder) who was
the Claimant before the Arbitral Tribunal. Operative portion of the said
Award reads as under:-
XVIII. SUMMARY OF FINDINGS ON ISSUES
234. The findings of the Tribunal are as follows:-
a) The Claimant and the Respondents, jointly and
severally, entered into the PV Modules Delivery
Agreement, which includes NDU-3 on the terms
contained therein.
b) The Respondents are parties to NDU-3.
c) The Respondents are parties to the arbitration
agreement in Clause 9 of NDU-3.
d) NDU-3 is a negative pledge: it does not vest in
the Claimant any security interest in the NDU
Shares, and it does not create an express trust
or any trust by operation of law.
e) The Respondents were unjustly enriched by the
______________
Page No 5 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023delivery of the remaining PV Modules to enable
the Adhavan Project to be completed in time,
thereby increasing their economic value as a
“yieldco” under SunEdison Ine business model.
f) The Claimant has no equitable lien on the
Adhavan Project.
g) NDU-3 was not superseded by subsequent
events as alleged by the Respondents.
h) The Respondents were in breach of the PV
Modules Delivery Agreement and NDU-3 and
caused loss and damage to the Claimant for
which it was entitled to payment of the unpaid
invoices amounting to US$7,348,403.10.
i) The 2nd Respondent was in breach of NDU-3
by selling the NDU Shares to Greenko without
the consent of the Claimant, and the 3rd
Respondent was in breach of NDU-3 by
allowing the acquisition of the NDU Shares
by Greenko and thereby caused loss and
damage to the Claimant in the sum of
US$7,348,403.10.
j) The Claimant is entitled to claim as damages
against the 2nd and 3rd Respondents jointly
and severally its unrecovered costs in the
Indian proceedings amounting to
US$275,000,121“249. The cost of arbitration being the Tribunal’s fees and
expenses as well as SIAC’s administrative fees and
expenses as fixed by the Court of Arbitration of SIAC
below, shall be borne by the Respondents______________
Page No 6 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023Tribunal’s Fees & Expenses USD
Mr Chan Sek Keong SC 151,423.50
Expenses 226.35
GST N/A
Sub-Total 151,649.85Professor Lawrence Boo 75,711.75
Expenses 332.02
GST 5,323.06
Sub-total 81,366.83Mr.V.K.Rajah SC 75,711.75
Expenses Nil
GST N/A
Sub-total 75,711.75TOTAL ARBITRATOR’S FEES & EXPENSES 308,728.43
SIAC Fees & Expenses
Administration Fee 38,680.50
SIAC Expenses and Incidentals 320.00
GST – Respondent’s share only 1,365.02TOTAL SIAC ADMINISTRATION FEES & 40,365.52
EXPENSESTOTAL COSTS OF ARBITRATION 349,093.95
______________
Page No 7 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
6. Initially, the Registry had raised the following objections on
16.03.2023 after Arb.O.P.No.(Com.Div.)No.186 of 2023 was filed:-
1) On verification it is found that Court fee not
paid for enforcement of the Award under
Section 47 of the Arbitration and Conciliation
Act, 1996;
2) There is no provision to receive Court fee for
enforcement of Award in EP proceedings.
Hence, enforcement of Award should be filed
separately as OP with necessary Court fee.
3) EP could not entertained by the Registry before
an order of this Court in OP for enforcement of
Award u/s 47 of Arb.O.P. Hence, EP is returned
with above facts.
Facts in Brief:-
7. The Respondents are part of SunEdison Group of Companies.
SunEdison Products Singapore Pte. Ltd. (“Non-Party” to Arbitral
Proceeding) was the global procurement arm of the SunEdison Group of
Companies. The SunEdison Products Singapore Pte. Ltd. procured
material from international vendors such as the Petitioner through a ‘direct
delivery’ model for various projects of its subsidiaries.
______________
Page No 8 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
8. This meant that while the Non-Party negotiated the pricing and
terms of the procurement from vendors exclusively, the products were to
be delivered at the site of the relevant project. Special Purpose Vehicle
(hereinafter referred to as SPV) were set up for the project in India namely
Respondent No.2 namely M/s.Sun Edison Solar Power India Private
Limited (hereinafter also referred to as “the Engineering Company”) and
Respondent No.3 namely M/s.SEI Adhavan Power Private (hereinafter
also referred to as the “ the Project Company”).
9. 99.99% shares were held by the Respondent No.1 in both the
Respondent No.2 [the Engineering Company] and the Respondent No.3
[the Project Company] and the balance 0.1% were held by SunEdison
Energy Holding BV and SunEdison Products Singapore Pte. Ltd (Non-
Party) in these two Respondents respectively.
10. There is no dispute that the Respondent No.1 is the Holding
Company of both the Respondent No.2 (the Engineering Company) and
the Respondent No.3 (the Project Company).
______________
Page No 9 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
11. On 19.08.2015, the Petitioner entered into a Module Supply
Agreement (hereinafter referred to as “MSA”) with the Non- Party namely
SunEdison Products Singapore Pte.Ltd whereby the Petitioner agreed to
sell and supply, and the Non-Party agreed to purchase, certain
Photovoltaic Modules (hereinafter referred to as PV Modules), for use in
the 50MW solar power plant at Virudhnagar, Tamil Nadu (“Adhavan
Project”) for Respondent No.3 (the Project Company). MSA read with the
amendment thereto, specifically provided that the payment terms could not
be assigned.
12. Under the MSA, Purchase Orders were raised by the Non-Party
on the Petitioner. In turn Commercial Invoices were raised by the
Petitioner on the Non-Party. The Petitioner’s claim in the arbitration
proceedings arose on account of a few of the Commercial Invoices raised
by it on the Non-Party, under the MSA dated 19.08.2015 which were
remained outstanding and remained unpaid to the Petitioner. The only
company which had privity of contract with the Petitioner was the Non-
Party SunEdison Products Singapore Pte.Ltd.
______________
Page No 10 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
13. Respondent No. 3 (the Project Company) is a company duly
incorporated and registered under the Companies Act, 2013 and was
incorporated as an SPV which owned the Adhavan project, including its
assets and liabilities.
14. Respondent No. 3 (the Project Company) in turn engaged the
Respondent No. 2 (the Engineering Company) as the EPC Contractor for
its Project and entered inter alia into an Equipment and Material Supply
Agreement dated 02.03.2016 for the procurement of all material required
for the Adhavan Project. Respondent No. 3 (the Project Company) had a
contractual relationship only with the Respondent No. 2 (the Engineering
Company).
15. The Respondent No.3 (the Project Company) had its contractual
relationship with Respondent No.2 (the Engineering Company) under
Equipment and Material Supply Agreement dated 02.03.2016.
______________
Page No 11 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
16. Under the contract, the Respondent No.3 (the Project Company)
intended to develop, own and operate the PV Plant and therefore, required
design, engineering, procurement, manufacturing, supply, inspection,
testing and commissioning of the PV Plant.
17. Respondent No.2 (the Engineering Company) was obliged under
the contract to execute the project on a lump sum fixed fee on turnkey
basis inclusive of execution of all supplies as set out in Clause 2.2 in
accordance with Timelines, Executive Design, EHS Guidelines and other
terms and conditions as set out under the Equipment and Material Supply
Agreement dated 02.03.2016.
18. Since the Non-Party had failed to make payment for the supplies
already made for the project of the Respondent No.3 (the Project
Company), the Petitioner withheld further supply of PV Module for the
project of the Respondent No.3 (the Project Company) which was being
executed by the Respondent No.2 (the Engineering Company).
______________
Page No 12 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
19. The Non-Party as also the Respondent No.1 and SunEdison
Energy Holding BV (Non-Party No.2) and Respondent No.1 namely
SunEdison Energy Holding (Singapore) Pte. Ltd. are the subsidiary of
the ultimate holding Company namely Sun Edison Inc.
20. 99.9% of the shares in both Respondent No.2 (the Engineering
Company) and the Respondent No.3 (the Project Company) are held by
the Respondent No.1. 0.01% shares in the Respondent No.2 (the
Engineering Company) and 0.01% shares in the Respondent No.3 (the
Project Company) are held by SunEdison Energy Holdings BV (Non-
Party No.2) and by SunEdison Products Singapore Pte. Ltd (Non-Party)
respectively.
21. Respondent No.1 has remained absent. Meanwhile, bankruptcy
proceedings under Chapter-I were initiated against the Non-Party namely
SunEdison Products Singapore Pte.Ltd.
______________
Page No 13 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
22. At the time when the Petitioner suspended delivery of the
modules, the Non-Party namely SunEdison Products Singapore Pte. Ltd.,
approximately owed a sum of $29.40 Million (USD) to the Petitioner on
account of the supplies of PV Modules to the Respondent Nos.2 & 3 (the
Engineering Company) and the Project Company for the solar products
being implemented for the Respondent No.3 (the Project Company).
23. The aforesaid outstanding was reduced to $7.35 Million (USD)
from $29.40 Million (USD) due to certain transactions between the
Petitioner and the Non-Party namely SunEdison Products Singapore Pte.
Ltd. Since the PV Modules were urgently required for the project being
implemented by the Respondent No.2 (the Engineering Company) for the
Respondent No.3 (the Project Company), under Equipment and Material
Supply Agreement dated 02.03.2016, the Directors of the Respondent
No.1 namely Mr.Pashupathy Gopalan, and Mr.Ramesh Subbarao, the
Director of the Respondent No.2 held negotiations with the Directors of
the Petitioner.
______________
Page No 14 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
24. In the process, three rounds of Agreements namely Non-disposal
Undertaking [NDU] was prepared and deliberated upon. A consensus was
arrived at the stage of NDU-3. The drafts were signed by the Director of
the Respondent No.3 namely Mr.Vinay Bhatia as the authorized signatory
of the Respondent No.1.
25. The drafts of NDU-1, NDU-2 and NDU-3 also contained the
arbitration clause which led to the invocation of the arbitration clause by
the Petitioner as no payments were made to the Petitioner which ultimately
culminated in the Award which is sought to be enforced by the Petitioner
and stoutly opposed by the Respondent No.2 (the Engineering Company)
and the Respondent No.3 (the Project Company). During the interregnum,
Respondent No.1 sold its shares in Respondent No.3 (the Project
Company) to a third party which were offered as a security for payment by
Respondent No.2 (the Engineering Company).
26. The negotiations were initiated by the Respondent No.1
represented by its Director namely Mr.Pashupathy Gopalan between
______________
Page No 15 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
15.03.2016 and 18.03.2016 with the Petitioner to persuade the Petitioner
to deliver remaining PV Modules to complete the Adhavan Project of
Respondent No.3 (the Project Company) which was being implemented by
the Respondent No.2 (the Engineering Company) for the Respondent No.3
(the Project Company) under Equipment and Material Supply Agreement
dated 02.03.2016 on behalf of the SunEdison Group Companies.
27. While MSA dated 19.08.2015 was signed by Mr.David
A.Ranhoff, the President, Solar Materials of the Non-Party., NDU-1,
NDU-2 and NDU-3 were signed by Mr.Vinay Bhatia, the Director of the
Respondent No.3 (Project Company) on behalf of the Respondent No.1 for
a resumption of the delivery of the remaining PV Modules for
implementation of the project of Respondent No.3 (the Project Company).
28. Under NDU, the Respondent No.1 appointed the Respondent
No.3 (the Project Company) as its agent to receive and acknowledge on its
behalf for service of writ, summons, order, judgment, notice or other legal
process in connection with the undertaking.
______________
Page No 16 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
29. These Agreements also records that Respondent No.1 holds
99.99% of the aggregate equity capital in the Respondent No.3 (the
Project Company) and further records that certain invoices raised by the
Petitioner under the Sub-Contract Agreement were currently pending
payment from the Respondent No.2 (Client).
30. These Agreements provide a security for the Petitioner in respect
of NDU shares in Respondent No.3 (the Project Company) as in Section
2.1 of the said Agreement as mentioned above.
31. Respondent’s obligation under NDU-3 reads as under:-
“2. SUNEDISON’S UNDERTAKING
2.1 Save for as set out herein or specifically permitted
by the Contractor, SunEdison^ shall until the
complete discharge of the Payment Obligations by the
Client*, continue to legally and beneficially hold and
retain at least 24% (Twenty Four per cent) of the
equity in the Company# as more specifically
described in Annexure 2 (“NDU Shares”) free of any
Security Interest, and shall not, without prior
approval from the Contractor**, until the complete
and full discharge of the Payment Obligations, sell,
transfer, assign, dispose of, pledge, charge or create
any Security Interest on the NDU Shares in favoiur of______________
Page No 17 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023any person (including to TerraForm Global
(“GLBL”) or any of its affiliates pursuant).
2.2 Provided the limitation set out in this Clause 2
shall not prevent SunEdison or shall require
SunEdison from obtaining any consent from the
Contractor for creating any Security Interest over all
or a part of NDU Shares in favour of project finance
lender(s), and upon such creation, the undertaking set
out herein shall automatically get subordinated to the
newly created Security Interest in favour of the
project finance lenders.
2.3 All obligations under this Undertaking shall
automatically terminate upon receipt of the complete
payment of the Invoices by the Client or SunEdison.
5. MISCELLANEOUS
5.1 Binding Obligations
SunEdison confirms that its obligations under this
Undertaking shall be binding upon its successors and
permitted assigns.
5.2 Amendments and Waivers
No term, covenant, agreement or condition of this
Undertaking may be terminated, amended or
compliance therewith waived (either generally or in a
particular instance, retroactively or prospectively)
except by an instrument or instruments in writing
executed by SunEdison.
5.3 Severability of Provisions
Any provision of this Undertaking which is prohibited
or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of prohibition
or unenforceability but that shall not invalidate the______________
Page No 18 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023remaining provisions of this Undertaking or affect
such provision in any other jurisdiction”
Note:
SunEdison^ : Respondent No.1
Client* : Respondent No.2 (the Engineering
Company)
Contractor** : Petitioner/ClaimantCompany# : Respondent No.3 (the Project Company)
32. Thus, under NDU-3, an undertaking was given to not to sell or
transfer the shares in Respondent No.3 (the Project Company) by the
Respondent No.1 until all the payments due to the Petitioner by the
Respondent No.1 were made to the Petitioner. However, after NDU-3 was
signed by the Respondent No.1 represented by Mr.Vinay Bhatia, the
Director of the Respondent No.3 (the Project Company), a breach was
committed by the Respondent No.1 and the Respondent No.2 (the
Engineering Company) in making payments of $7.35 Million (USD) to the
Petitioner.
______________
Page No 19 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
33. The Respondent No.1 has post facto sold all its shares to
Greenko Power Projects (Mauritius) Limited in breach of clause 2 of
NDU-3.
34. Respondent No.1 sold all the shares in the Respondent No.3 (the
Project Company) to a third party during March 2017 in breach of Clause
2 of NDU-3. It appears that further transfers were made with which this
Court is not concerned with.
35. Under these Agreements, the Respondent No.1 also represented
that it had taken all necessary corporate actions/approvals to authorize
execution, delivery, and performance of the Undertaking and further
confirmed that save as set out in this Undertaking, the execution, delivery
and performance of the obligation under the Undertaking will not be
violated or conflict with:-
i. Its constitutional documents and corporate
authorizations / corporate resolutions;
ii. Any other deed or document to which it is a
party and by which it may be bound;
iii. Applicable Law in the jurisdiction of its
______________
Page No 20 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023incorporation;
iv. SunEdison confirms in respect of itself that the
execution or entering into and performance of
its obligations under this Undertaking by it will
constitute, private and commercial acts done
and performed for private and commercial
purposes;
v. SunEdison confirms that it is a duty
incorporated and validly existing company
under the laws of the Singapore;
vi. SunEdison represents and warrants that as on
the date of this Undertaking, it holds 99.99% of
issued and paid up Equity Share Capital in the
Company and NDU Shares form part of these
shares.
36. The Agreement also has an Arbitration Clause which reads as
under:-
“9. ARBITRATION
a) If one party to this Undertaking gives the other
party a notice stating that a dispute has arisen
(a “Dispute Notice”) and such parties are
unable to resolve the dispute amicably within
30 (thirty) days of service of the Dispute Notice
(or such longer period as the parties may
mutually agree), then the Dispute shall be
referred to arbitration at the end of such 30
(thirty) days period (“Arbitration Reference”)
in accordance with the terms set out in this______________
Page No 21 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023Section 9.
b) The arbitration proceedings shall be governed
by the provisions of Rules of Conciliation and
Arbitration of the International Chamber of
Commerce for the time being in force (“ICC
Rules”).
c) For the purpose of such arbitration, the
arbitral tribunal shall comprise 3 (three)
arbitrators. SunEdison, Company and Client
(acting together) shall appoint an arbitrator,
and the Contractor shall appoint one
arbitrator within 15 days of Arbitration
Reference. The two arbitrators so appointed
shall, in consultation with each other, appoint
the third presiding arbitrator within a period of
15 (fifteen) days thereafter.
d) The arbitration proceedings shall be held at
Singapore International Arbitration Centre.
The arbitration proceedings shall be in English
language. The award shall be substantiated in
writing. The arbitral tribunal shall also
determine and decide the cost of arbitration
proceedings. The award shall be binding on the
disputing parties subject to applicable Laws
and the award shall be enforceable in any
competent court of law. The provisions of this
Clause shall survive the termination of this
Agreement.”
______________
Page No 22 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
37. The Procurement Company (Non-Party) and the Respondent
No.1 had a direct interest in the successes of the project implemented at
the Respondent No.3 (the Project Company) out of the PV Modules
supplied by the Petitioner to the Respondent No.2 (the Engineering
Company) at the project site of the Respondent No.3 (the Project
Company).
38. Thus, under NDU-3 dated 17.03.2016, Respondent No.2 (the
Engineering Company) was to ensure payment to the Petitioner and
pending payment Respondent No.1 was to ensure 24% of its stake in
Respondent No.3 (the Project Company) shall not be sold, transferred,
assigned, disposed or pledged or changed or create any Security Interest
on the NDU shares in favoiur of any person (including to Terra Form
Global (“GLBL”) or any of its affiliates). All obligations under NDU-3
dated 17.03.2016 was to automatically terminate upon receipt of the
complete payment of the Invoices either by Respondent No.1 or
Respondent No.3 (the Project Company).
______________
Page No 23 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
39. The enforcement of the Award dated 22.02.2021 is resisted by
the Respondent No.2 (the Engineering Company) and the Respondent
No.3 (the Project Company) on the ground that the aforesaid Award dated
22.02.2021 is not a binding Award enforceable against them under
Chapter I of Part II of the Arbitration and Conciliation Act, 1996 and
further the Award does not satisfy the definition of “Foreign Award”
within the meaning of Section 44 of the Arbitration and Conciliation Act,
1996. Respondent No.1 has remained absent.
40. Specifically it is the common arguments of the respective
Respondents who are present in this proceeding that the “Foreign Award”
was not made in pursuance of any agreement in writing for an Award to
bind them as set forth in the First Schedule of the Arbitration and
Conciliation Act, 1996.
41. Specifically, it is stated that the Arbitral Proceedings did not
satisfy the requirement of Article II Rule 2 of the First Schedule which
defines expression “Agreement in Writing”. It is submitted that there was
______________
Page No 24 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
neither an Arbitral Clause in the Contract nor an Arbitration Agreement
signed between the parties or was contained in any exchange letters or
telegram as is contemplated in Article II Rule 2 of the First Schedule of
the Arbitration and Conciliation Act, 1996 and therefore the Award is
not binding either on the Respondent No.2 (the Engineering Company) or
the Respondent No.3 (the Project Company).
PART-I
(PRE-ARBITRATION-LITIGATION IN INDIA)
42. The Respondent No.3 (the Project Company) had earlier filed
C.S.No.502 of 2017 where the Petitioner was the Defendant No.1. The
Respondent No.1 was the Defendant No.2. Singapore International
Arbitration Centre was the Defendant No.3 in the said Suit.
43. C.S.No.502 of 2017 was filed for the following reliefs:-
i. a permanent injunction to restrain the
Petitioner herein (the 1st Defendant therein)
from proceeding further against the 3rd
Respondent herein in Arbitration Case No.094
of 2017 (ARB094/17/ARB) before the______________
Page No 25 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023Singapore International Arbitration Centre, the
3rd defendant therein;
ii. for a permanent injunction to restrain the said
Arbitration Centre from administering the
arbitration pursuant to request dated
11.04.2017 of the petitioner herein against the
3rd Respondent herein (Plaintiff therein) and
others (other Respondents herein) in
Arbitration Case No. 094 of 2017
(ARB094/17/ARB);
iii. for a permanent injunction to restrain the
petitioner herein or any person acting under it
from proceeding with and prosecuting with the
said arbitration proceeding or any other
proceeding against the 3rd Respondent
pursuant to a Non Disposal Undertaking
referred to as “NDU” dated 17.03.2016 signed
between the petitioner and the 1st respondent
herein viz., SunEdison Energy Holding
(Singapore) Pte. Ltd.
44. The Respondent No.3 (the Project Company) herein had also
filed applications for certain interim reliefs.
45. Similarly, C.S.No.12 of 2018 was also filed by the Respondent
No.2 (the Engineering Company) for similar relief.
______________
Page No 26 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
46. After hearing the parties hereto, this Court by a Common
Order dated 24.04.2018 dismissed the respective applications filed by
the Respondent No.2 (the Engineering Company) and the Respondent
No.3 (the Project Company) herein in C.S.No.502 of 2017 and in
C.S.No.12 of 2018 and the suit and allowed the application filed by the
Petitioner.
47. Details of the applications filed and disposed vide Order dated
24.04.2018 are as under:-
TABLE-I
Suit C.S.No.502 of 2017 C.S.No.12 of 2018
Application filed O.A.Nos.642, 643 and 644 of O.A.Nos.6 and 7 of 2018#
for Injuction of 2017#
Plaint by the
Petitioner
Application filed A.Nos.6461, 6462 and 6463 of A.Nos.477, 478 and 479 of 2018*
for Rejection of 2017*
Plaint by the
Petitioner
Result
Allowed A.Nos.6461, 6462 and 6463 of A.Nos.477, 478 and 479 of 2018*
2017*
Dismissed O.A.Nos.642, 643 and 644 of O.A.Nos.6 and 7 of 2018#
2017#______________
Page No 27 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023Note:
i. * Filed by the Petitioner
ii. # Filed by the respective Plaintiffs viz., R2 and R3 herein
48. This Court by a Common Order dated 24.04.2018 in
O.A.No.642 of 2017 and etc., held as under:-
“66. In the present case, Sei Adhavan#, SSPI* and
SunEdison are group Companies. The undertaking
signed by SunEdison binds both Sei Adhavan and
SSPI. The above discussion naturally brings the
Court to the conclusion that the reliefs sought for by
the Plaintiffs cannot be granted.
67. In the result, O.A.Nos.642, 643 and 644 of 2017
and O.A.Nos.6 and 7 of 2018 are dismissed.
A.Nos.6461, 6462 and 6463 of 2017 and A.Nos.477,
478 and 479 of 2018 are allowed. No costs.”
Note:
? : Respondent No.1
* : Respondent No.2 (the Engineering Company)
# : Respondent No.3 (the Project Company)
49. This decision was rendered when Courts recognized the Group
______________
Page No 28 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023of Companies Doctrine. Aggrieved by the Common Order dated
24.04.2018 in the above mentioned applications, the Respondent No.3 (the
Project Company) filed O.S.A.No.170-175 of 2018 while the Respondent
No.2 (the Engineering Company) filed O.S.A.No.206-210 of 2018.
50. Before the Hon’ble Division Bench in O.S.A.No.170-175 of
2018 and O.S.A.No.206-210 of 2018 also the Respondent No.1 herein
namely Sunedison Energy Holding (Singapore) Pte Ltd. was the
Respondent No.2 while the Singapore International Arbitration Centre was
the Respondent No.3 while the Petitioner was Respondent No.1.
51. The challenge before the Hon’ble Division Bench in
O.S.A.No.170-175 of 2018 and O.S.A.No.206-210 of 2018, was
influenced by the decision of the Hon’ble Supreme Court in Chloro
Controls India Private Limited vs. Severn Trent Water Purification
Inc. & Others, 2013 (1) SCC 641, which dealt with the Group of
Companies Doctrine. The above decision was rendered much prior to the
decision in Cox and Kings Limited vs. SAP India Pvt. Ltd and
______________
Page No 29 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023Another, (2023) SCC Online 1634.
52. The Hon’ble Supreme Court in Chloro Controls India Private
Limited vs. Severn Trent Water Purification Inc. & Others, 2013 (1)
SCC 641 had held as under:-
“105. We have already discussed that under the group
of companies doctrine, an arbitration agreement
entered into by a company within a group of
companies can bind its non-signatory affiliates, if the
circumstances demonstrate that the mutual intention
of the parties was to bind both the signatory as well
as the non-signatory parties.
106. The question of formal validity of the arbitration
agreement is independent of the nature of parties to
the agreement, which is a matter that belongs to the
merits and is not subject to substantive assessment.
Once it is determined that a valid arbitration
agreement exists, it is a different step to establish
which parties are bound by it. The third parties, who
are not explicitly mentioned in an arbitration
agreement made in writing, may enter into its
ratione personae scope. Furthermore, the
Convention does not prevent consent to arbitrate
from being provided by a person on behalf of
another, a notion which is at the root of the theory
of implied consent.
107. If one analyses the above cases and the authors’
views, it becomes abundantly clear that reference of
even non-signatory parties to an arbitration
agreement can be made. It may be the result of
______________
Page No 30 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
implied or specific consent or judicial determination.
Normally, the parties to the arbitration agreement
calling for arbitral reference should be the same as
those to the action. But this general concept is
subject to exceptions which are that when a third
party i.e. non-signatory party, is claiming or is sued
as being directly affected through a party to the
arbitration agreement and there are principal and
subsidiary agreements, and such third party is
signatory to a subsidiary agreement and not to the
mother or principal agreement which contains the
arbitration clause, then depending upon the facts
and circumstances of the given case, it may be
possible to say that even such third party can be
referred to arbitration.
108. In the present case, the corporate structure of
the respondent companies as well as that of the
appellant companies clearly demonstrates a legal
relationship which not only is inter-legal relationship
but also intra-legal relationship between the parties
to the lis or persons claiming under them. They have
contractual relationship which arises out of the
various contracts that spell out the terms, obligations
and roles of the respective parties which they were
expected to perform for attaining the object of
successful completion of the joint venture agreement.
This joint venture project was not dependent on any
single agreement but was capable of being achieved
only upon fulfilment of all these agreements. If one
floats a joint venture company, one must essentially
know how to manage it and what shall be the
methodology adopted for its management. If one
manages it well, one must know what goods the said
company is to produce and with what technical know-
how. Even if these requisites are satisfied, then also
______________
Page No 31 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
one is required to know how to create market,
distribute and export such goods. It is nothing but
one single chain consisting of different components.
The parties may choose to sign different agreements
to effectively implement various aforementioned
facets right from managing to making profits in a
joint venture company. A party may not be signatory
to an agreement but its execution may directly be
relatable to the main contract even though he claims
through or under one of the main parties to the
agreement. In such situations, the parties would aim
at achieving the object of making their bargain
successful by execution of various agreements like in
the present case.”
53. The Hon’ble Division Bench vide its detailed Order dated
23.07.2018 after considering the decision of the Hon’ble Supreme Court
in Chloro Controls India Private Limited referred to supra held as
under:-
“6.4. We are dealing with the better case than the one
dealt with by the Apex Court cited supra. The
undertaking does refer to the appellants and put them
in the same basket as that of respondent No.2.
Therefore, the appellants cannot contend that the
agreement is inoperative on the sole basis that they
are not signatories in a literal sense. This is an
unsustainable technical plea to avoid participation
before the Respondent No.3.
6.5. The purchase orders produced by the respondent
______________
Page No 32 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023No.1 in pursuant to the direction of the Court will not
help the case of the appellant. The purchase orders
have already been mentioned in the undertaking.
Invoices have also been defined therein. The
appellant No.2 did not deny the factum of supply. In
pursuant to the supply there is also no denial of
transfer made.”
54. The Hon’ble Division Bench of this Court in its Order dated
23.07.2018 ultimately concluded as under before dismissing the respective
appeals filed by the Respondent No.2 and the Respondent No.3 herein.
6.6. The decision relied upon by the appellants are not
cases in point. In Indowind Energy Ltd., vs. Wescare
India Ltd., and another ((2010) 5 Supreme Court Cases
306), the Apex Court was dealing with Section 11 of the
Act which comes under Part-I. Similarly in ECONOMIC
TRANSPORT ORGANISATION VS. CHARAN
ECONOMIC TRANSPORT ORGANISATION TION VS.
CHARAN SPINNING MILLS ((2010) 4 Supreme Court
Cases) 114) the Apex Court was dealing with the
Consumer Protection Act. The issue was on the
interpretation of Contract of Subrogation in a insurance
policy. So also the facts of the case in DURO FELGUERA
SA VS. GANGAVARAM PORT LTD., ((2017) 9 Supreme
Court Cases 729). Even here the Apex Court was
concerned with Section 11 of the Act, which comes under
Part I. In this connection, it is to be noted that the Apex
Court in AMEET LALCHAND SHAH AND OTHERS
VS. RISHABH ENTERPRISES AND OTHERS (CIVIL
APPEAL NO.4690 OF 2018 (Arising out of SLP ©
No.16789 of 2017) decided on 03.05.2018 reported in
______________
Page No 33 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
MANU/SC/0501/2018 was pleased to held that the
principle laid down in CHLORO CONTROLS INDIA
PRIVATE LIMITED cited supra can also be applied for
Section 8 of the Act as well. The following are the relevant
paragraphs.
“21…… What is evident from the facts and
intention of the parties is to facilitate
procurement of equipments; sale and
purchase of equipments. installation and
leasing out the equipments to Dante Energy.
The dispute between the parties to various
agreements could be resolved only by
referring all the four agreements and the
parties thereon to arbitration.
22. Parties to the agreements namely Rishabh
and Juwi India:- (i) Equipment and Material
Supply Agreement; and (ii) Engineering,
Installation and Commissioning Contract and
the parties to Sale and Purchase Agreement
between Rishabh and Astonfield are one and
the same as that of the parties in the main
agreement namely Equipment Lease
Agreement (14.03.2012). All the four
agreements are inter- connected. This is a
case where several parties are involved in a
single commercial project (Solar Plant at
Dongri) executed through several
agreements/contracts. In such a case, all the
parties can be covered by the arbitration
clause in the main agreement ie. Equipment
Lease Agreement (14.03.2012).
48. The basic principle which must guide
______________
Page No 34 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
judicial decision making is that
arbitration is essentially a voluntary
assumption of an obligation by
contracting parties to resolve their
disputes through a private tribunal. The
intent of the parties is expressed in the
terms of their agreement. Where
commercial entities and persons s of
business enter into such dealings, they
do so, with a knowledge of the efficacy of
the arbitral process. The commercial
understanding is reflected in the terms of
the agreement between the parties. The
duty of the court is to impart to that
commercial understanding a sense of
business efficacy.”
7. Section 45 of the Act 26 of 1996
Though the learned Senior Counsel appearing for the
respondent No.1 made submission on the maintainability
of the appeal qua an order allowing an application filed
under Section 45 of the Act, we do not propose to go into
the same for the reason that even assuming the same can
sustain in the eye of law, the appeals as against the other
applications are certainly maintainable. Secondly,
invoking Section 45 of the Act 26 of 1996 and the order
passed therein are consequential. To be noted, the
respondent No.1 has already initiated the process by
invoking clause 9 o the undertaking before the respondent
No.3. Thus, there is nothing wrong in directing the
appellants to participate in the proceedings before the
Respondent No.3. This is, even assuming that the
application under 45 is not maintainable. The learned
single Judge has rightly took into consideration of the
undertaking given and its effect on the appellants.
______________
Page No 35 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
8. Conclusion:
In fine, we do not find any merit in these original side
appeals. Accordingly, they are dismissed. No costs.
Consequently, connected C miscellaneous petitions are
also dismissed.”
55. Aggrieved by the aforesaid Order of the Hon’ble Division Bench
dated 23.07.2018, the Respondent No.3 (the Project Company) herein
filed Civil Appeal No.22483-22504 of 2018, while the Respondent No.2
(the Engineering Company) herein filed SLP.(C).No.22505 – 22526 of
2018.
56. The Hon’ble Supreme Court ultimately dismissed the
SLP.(C).No.22505 – 22526 of 2018 and Civil Appeal No.22483-22504 of
2018 holding that it found no merits in the Civil Appeal and the Special
Leave Petition filed by the Respondent No.2 (the Engineering Company)
and the Respondent No.3 (the Project Company) respectively.
PART-II
(POST ARBITRATION LITIGATION – IN SINGAPORE)
57. It is pursuant to the above, the Arbitral Tribunal proceeded
______________
Page No 36 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
under the aegis of the Singapore International Arbitration Centre (SIAC).
The Arbitral Tribunal has thus passed the Award in SIAC Arbitration
No.094 of 2017 (ARB094/17/ARB) on 22.02.2021 and later an addendum
to it on 08.03.2021.
58. After the Award was passed by the Arbitral Tribunal viz., the
Singapore International Arbitration Centre, the aforesaid Award was also
challenged before the High Court of the Republic of Singapore in
HC/Originating Summons No.482 of 2021 by the Respondent No.2 (the
Engineering Company). Similarly, the Respondent No.1 herein filed
HC/Originating Summons No.489 of 2021 while HC/Originating
Summons No.492 of 2021 was also filed by the Respondent No.3 (the
Project Company).
59. The said High Court of the Republic of Singapore dismissed
HC/Originating Summons No.482, 489 and 492 of 2021 in its detailed
Common Order dated 25.02.2022.
______________
Page No 37 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
60. The stand of the Respondents before the General Division of the
High Court of the Republic of Singapore was primarily on the ground that
there was neither a binding contract with the Respondent No.3 (the Project
Company) nor with the Respondent No.2 (the Engineering Company)
pursuant to Non-disposal Undertaking dated 17.03.2016 between the
petitioner and the Respondent No.1.
61. The Respondent No.2 (the Engineering Company) herein who
was the Respondent No.3 in HC/Originating Summons No.482 of 2021
and the Defendant No.2 in HC/Originating Summons No.489 of 2021 in
the said proceedings was also allowed to adduce and relied on affidavit
from a witness even though the witness had not given evidence before the
Arbitral Tribunal in the arbitral proceedings by referring to Article
34(2)(a)(i) of the Model Law.
62. Paragraph 108 of the Order of the High Court of the Republic of
______________
Page No 38 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
Singapore in Case.No.:HC/OS 482/2021 dealt with negotiations between
the parties. Relevant portion of the Order dated 25.02.2022 of the
Republic of Singapore in Case.No.:HC/OS 482/2021 reads as under:-
“108. NDU-3 contains the arbitration clause that the
claimant relied on to commence the arbitration. The
burden lies on the claimant to establish that this
arbitration clause binds each respondent. All of the
respondents accept that, if I find that the March
2016 negotiations gave rise to a contract, the
arbitration clause in NDU-3 is a term of that
contract.”
63. The above decision of the General Division of the High Court of
the Republic of Singapore dated 25.02.2022 in HC/Originating
Summons Nos.482, 489 and 492 of 2021 was appealed before the Court
of Appeal of Republic of Singapore by all the Respondents in Civil
Appeal Nos.12, 13 and 15 of 2022. These appeals filed by these
Respondents were also dismissed by the Court of Appeal of Singapore by
its Order dated 11.10.2023.
PART-III-A [SUBMISSIONS ON BEHALF OF THE PETITIONER]
64. The learned Senior Counsel for the Petitioner had narrated the
______________
Page No 39 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
background leading to the dispute from the date of signing of MSA dated
19.08.2015 between Non-Party and the Petitioner details of which have
been already captured.
65. The learned Senior Counsel for the Petitioner would submit that
the Award passed by the Arbitral Tribunal was enforceable in terms of
Part-II of the Arbitration and Conciliation Act, 1996.
66. In support of the plea for enforcement of the Award and for
execution of the Award, learned Senior Counsel for the Petitioner would
submit that the Award satisfies the definition of “Foreign Award” under
Section 44 of the Arbitration and Conciliation Act, 1996.
67. It is submitted that the “Foreign Award” was made in pursuance
of an Agreement in writing namely MSA dated 19.08.2015 and NDU’s
dated 17.03.2016 to which the convention set forth in the first schedule to
the Act applies namely convention on the recognition and enforcement of
Foreign Arbitral Awards applied.
______________
Page No 40 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
68. The learned Senior Counsel for the Petitioner also submits that
the said Foreign Award is enforceable in terms of Section 46 of the
Arbitration and Conciliation Act, 1996.
69. In support of the procedural requirement, the Original Award
and the certified copy of the Contract was produced. It is further submitted
that the Foreign Award satisfies all the conditions under Section 48 of the
Arbitration and Conciliation Act, 1996 for its enforcement.
70. It is further submitted that none of the conditions in Sub-
Section (2) to Section 48 of the Arbitration and Conciliation Act, 1996
are attracted in the facts of the case and therefore, the Award has to be
enforced against the Respondent No.2 and the Respondent No.3 who are
the subsidiaries of the Respondent No.1.
71. The learned Senior Counsel for the Petitioner highlighted that
the obligations in NDU was negotiated by the Respondent No.1
______________
Page No 41 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
represented by its Director namely Pashupathy Gopalan, the Respondent
No.2 (the Engineering Company) represented by its Director namely
Mr.Ramesh Subbarao and signed by Mr.Vinay Bhatia, the Director of
Respondent No.3 (the Project Company) as the authorized representative
of the Respondent No.1.
72. In this connection, learned Senior Counsel for the Petitioner
drew attention to the decisions of the Court in the following cases:-
i. Shree Chamundi Mopeds Ltd. vs. Church of
South India Trust Association CSI Cinod
Secretariat, Madras, (1992) 3 SCC 1;
ii. Pijush Kanti Chowdhury vs. State of West
Bengal and Ors., 2007 SCC OnLine Cal 267;
iii. Raffles Education Investment (India) Pte. Ltd.
and Another vs. Educomp Professional
Education Limited, 2023 SCC OnLine Del
3936;
iv. Vijay Karia and Others vs. Prysmian Cavi E
sistemi Srl and Others, (2020) 11 SCC 1;
v. Cruz City 1 Mauritius Holdings vs. Unitech
Limited, 2017 SCC OnLine Del 7810;
vi. State of Uttar Pradesh and Others vs.
Combined Chemicals Company Private
Limited, (2011) 2 SCC 151;
vii.Smita Conductors Ltd vs. Euro Alloys Ltd,
______________
Page No 42 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023(2001) 7 SCC 728;
viii.Jiangsu Overseas Group Co., Ltd. vs.
Concord Energy Pte. Ltd., [2016] SGHC 153;
ix. AQZ vs. ARA, [2015] SGHC 49;
x. Cox and Kings Ltd. vs. SAP India Pvt. Ltd.
and Another, 2023 SCC OnLine SC 1634;
xi. Austbulk Shipping SDN BHD vs. P.E.C.
Limited, 2005 SCC OnLine Del 202;
xii.PEC Limited vs. Austbulk Shipping SDN
BHD, (2019) 11 SCC 620;
xiii.Government of India vs. Vedanta Limited,
(2020) 10 SCC;
xiv.Gemini Bay Transcription Private Limited vs.
Integrated Sales Service Limited and Another,
(2022) 1 SCC 753;
xv.Shri Lal Mahal Limited vs. Progetto Grano
Spa, (2014) 2 SCC 433;
xvi.Fuerst Day Lawson Ltd. vs. Jindal Exports
Ltd., (2001) 6 SCC 356;
xvii.Tropic Shipping Co. vs. Kothari Global Ltd.,
2002 (2) Mh.L.J.;
xviii.Chloro Controls India Private Limited vs.
Severn Trent Water Purification Inc. and
Others, (2013) 1 SCC 641;
xix.Unissi (India) Private Limited vs. Post
Graduate Institute of Medical Education and
Research, (2009) 1 SCC 107;
xx. Powertech World Wide Limited vs. Delvin
International General Trading LLC, (2012) 1
______________
Page No 43 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
SCC 361.
73. It is submitted that the Foreign Award cannot be challenged on
merits as there is a bias for both Recognition and Enforcement of Foreign
Arbitral Awards under Part II of the Arbitration and Conciliation Act,
1996.
74. In this connection, a reference was made to the decision of the
Hon’ble Supreme Court in Vijay Karia and Others vs. Prysmian Cavi E
Sistemi Srl and Others, (2020) 11 SCC 1, referred to supra.
75. It is submitted that the Respondents are not in a position to
establish that in any the circumstances under Section 48(2) of the
Arbitration and Conciliation Act, 1996 are attracted.
76. It is submitted that enforcement of the Foreign Award would be
contrary to Public Policy of India as is contemplated under Explanation 1
(ii) to Section 48(2)(b) of the Arbitration and Conciliation Act, 1996
______________
Page No 44 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
only under exceptional circumstances. It should be demonstrated by the
party opposing enforcement of a Foreign Award as has been held by the
Hon’ble Supreme Court in Gemini Bay Transcription Private Limited
vs. Integrated Sales Service Limited and Another, (2022) 1 SCC 753
and by the Hon’ble Supreme Court in Ssangyong Engineering &
Construction Co. Ltd v. National Highway Authority of India (NHAI)
AIR 2019 SC 5041.
77. That apart, learned Senior Counsel for the Petitioner would
submit that the expression used in Section 48(2) of the Arbitration and
Conciliation Act, 1996 “may be refuse” and therefore, Court has to
evaluate the nature, extent in the light of the public policy involved and
adopt a course which is less pernicious.
78. It is further submitted that the width of the discretion is narrow
and limited and unless sufficient grounds are established, Court is not
precluded from enforcing an Award, rather bound to recognize and enforce
the Award.
______________
Page No 45 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
79. It is submitted that the expression made in Section 48 of the
Arbitration and Conciliation Act, 1996 can depending upon the context
mean “shall” or as connoting that a residual discretion remains in the court
to enforce a foreign award, despite grounds for its resistance having been
made out. What is clear is that the width of this discretion is limited to the
circumstances, in which case a balancing act may be performed by the
court enforcing a foreign award.
80. It is submitted that the objection to enforcement on the ground
of Public Policy must be such that it should offend the core values of a
member State’s National Policy and which it cannot be expected to be
compromised. It is submitted that the expression “Fundamental Policy of
Law” must be interpreted in that perspective and must mean only the
fundamental and Substratal Legislative Policy and not a provision of any
enactment.
______________
Page No 46 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
81. It is submitted that contravention in enactments even otherwise
is not to be concluded to contravention of Fundamental Policy in India.
82. It is further submitted that the Singapore High Court in
Paragraph 63 has clearly concluded that five senior executives of the
SunEdison Group entities that were responsible for its business in India
participated in the March 2016 negotiations are Mr.Ahmad Chatila,
Mr.Pashupathy Gopalan, Mr.Vinay Bhatia, Ramesh Subbarao and
Mr.Robin Yan (Non-Party).
83. It is submitted that the Singapore High Court has observed that
on March 2016 negotiations gave rise to a contract. Arbitration Clause in
NDU-3 is a term of that contract and all the Respondents accepted that if
the Court found March 2016 negotiations gave rise to a contract, the
Arbitration Clause in NDU-3 is the term of that contract.
84. It is submitted that the Arbitral Tribunal has accepted the
contention of the Petitioner that parties concluded a basic and essential
______________
Page No 47 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
terms of contract on 17.03.2016 and then on full terms on 18.03.2016 and
this conclusion made that there was an Valid Arbitration Agreement
between the parties and thus, concluded that Clause-9 of MDU-3 contains
an Agreement to arbitrate the dispute.
85. A reference was also made to paragraph 142 of the decision of
the Singapore High Court, wherein it has been observed as under:-
“142. It is clear on the face of NDU-3, of course, that
neither the second respondent nor the third
respondent are signatories to NDU-3. But I consider
that feature to be a point of form rather than a point
of substance. It is true that a person who signs a
contract containing an arbitration agreement is,
prima facie at least, a party to the arbitration
agreement (Gary B Born, International Commercial
Arbitration (Wolters Kluwer 2nd Ed, 2014) at pp
1521-1522). That is merely the application of a
general point of contract law to the specific case of
an arbitration agreement. But it does not follow that
a party who has not signed a contract containing an
arbitration agreement is not a party to an arbitration
agreement incorporated into that contract: The
sterile formality of a signature is not always
necessary in law to breathe life into contractual
undertakings” (Midlink Development Pte Ltd v. The
Stansfiled Group Pte Ltd [2004] 4 SLR(R) 258 at
[55]). More importantly, given my findings on the
parties’ contract, only part of the contract is found in______________
Page No 48 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023NUD-3. Accordingly, the fact that the second and
third respondents are not signatories to NDU-3 is
not conclusive as to whether they are parties to the
contract of which NDU-3 forms a part.
187. I make two observations. First, the notice of
arbitration was drawn widely. It referred to
arbitration a claim arising from or connected with a
contract contained in or evidenced by NDU-3. The
dispute which the claimant referred to arbitration
was not said to arise only out of NDU-3 as a
contract, but also out of a contract evidenced by
NDU-3. Further, the dispute which the claimant
referred to arbitration does not only arise from NDU-
3 but is also connected to NDU-3.
188. In my view, the claimant framed the dispute
which it referred to arbitration by its notice of
arbitration sufficiently widely to encompass a partly
oral and partly written contract arising out of the
March 2016s negotiations and connected to or
evidenced by NDU-3.”
86. Therefore, it is submitted that it is beyond doubt that there was
an Arbitral Agreement in writing signed by Mr.Vinay Bhatia, the Director
of Respondent No.3 (the Project Company) on behalf of the Respondent
No.1 binding of the parties to the Agreement not only to pay the amount
but also to agree for arbitration in agreement in any dispute.
______________
Page No 49 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
87. It is submitted that this view has also been accepted by the
Singapore Court of Appeal in its finding in Paragraph 52 to 54, 61, 67, 77
and 83 wherein Court has come to a conclusion that the exchange of
correspondence that the parties conduct during March 2006 negotiation
lead to the necessary inference that a valid contract was concluded
between the parties namely the Petitioner and the Respondents.
88. The learned Senior Counsel for the Petitioner also drew
attention to a copy of an e-mail dated 17.03.2017 of the Director of the
Respondent No.2 namely Mr.Ramesh Subbarao to Mr.Yang Daniel and
Robin Yan of the Petitioner attaching a copy of NDU-3.
89. It is submitted that although NDU-3 that was e-mailed by the
Director of the Respondent No.2 (the Engineering Company) namely
Mr.Ramesh Subbarao, it was signed on behalf of the Respondent No.1 by
Mr.Vinay Bhatia, the Director of Respondent No.3 (the Project Company)
as the authorized representative Respondent No.1. Content of NDU-3 was
objected by Mr.Yang Daniel of the Petitioner by reply e-mail dated
______________
Page No 50 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
18.03.2016 explained concerns over the Clauses in NDU-3 and that
Mr.Yang Daniel sent a revised copy of NDU-3 with certain corrections
which was not acted upon and therefore, parties had agreed for the terms
of NDU-3 sent by Mr.Ramesh Subaarao of the Respondent No.2 (the
Engineering Company) signed by Mr.Vinay Bhatia, the Director of
Respondent No.3 (the Project Company) as the authorized signatory of
Respondent No.1. A reference was also made to Paragraph 105 to 125 of
the Award which lead to the negotiations between the parties from NDU-1
to NDU-4.
90. It is submitted that since NDU-3 was initially rejected, it cannot
be revised orally and that NDU-3 must be revived in writing and that the
Petitioner never negotiated within writing and oral communication of
NDU-3 since NDU-4 was sent which was not signed by any of the party
containing the changes in NDU-3.
91. It cannot be said that oral acceptance of NDU-3 does not satisfy
the requirement of Section 44(1)(a) Part-II of the Arbitration and
______________
Page No 51 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
Conciliation Act, 1996 or the First Schedule to the Act namely New York
Convention of Enforcement of Foreign Award.
92. It is submitted that NDU-3 was not rejected by the Petitioner
and that the objection of the Respondents are ex-facie incorrect and
misleading because Arbitral Tribunal has also held that NDU-3 was not
rejected. A reference was made to the discussion in the Award with
reference to e-mail that were exchanged during 16.03.2016, 17.03.2016
and 18.03.2016 which has attained finality as not only the Singapore High
Court but also the Singapore Court of Appeal have given their seal of
approval.
93. It is submitted that although Court is not required to go into the
merits of the case, on 18.03.2016, Mr.Yang Daniel of the Petitioner sent an
E-Mail to Mr.Robin Yan, Senior Director of MEMC, a wholly owned
subsidiary of SPC (Non-Party) with the copy marked to Mr.Ramesh
Subbarao of the Respondent No.2 (the Engineering Company), Dr.Yang
Liyou of the Petitioner and M/s.Saraswathi, wherein copy of NDU-4 was
______________
Page No 52 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
attached.
94. It is submitted that the same submission was made before the
Arbitral Tribunal as is found from a reading of Paragraph 90 to 94.
95. It is submitted that the Arbitral Tribunal has given a clear
finding in Paragraph 115 that on 18.03.2016, Mr.Daniel Yang of the
Petitioner sent an e-mail to Mr.Robin Yan, Senior Director of MEMC, a
wholly owned subsidiary of SPC (Non-Party) to the Agreement.
96. It is submitted that the Tribunal has answered the issue in
Paragraph 116 and 118. A reference was made to Paragraph 116 and 118,
which reads as under:-
“116.Pertinently, there is no mention of any
‘rejection’ by the Claimant in this email. Why did
Daniel Yang (Petitioner) say that NDU-3 was not
what he and Robin Yan (Sr.Director of MEMC, a
wholly owned subsidiary of SPS) had agreed to
during their conversation? The Tribunal is of the
view that Daniel Yang’s (Petitioner) understanding______________
Page No 53 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023of what he had earlier discussed with Robin Yan
(Sr.Director of MEMC, a wholly owned subsidiary
of SPS) was not unreasonable, although he could
have been mistaken. When Robin Yan (Sr.Director of
MEMC, a wholly owned subsidiary of SPS) sent
Daniel Yang (Petitioner) the email of 17 March 2015,
3:38 PM, he referred only to the percentage of shares
to be pledged – only 24% was available, and did not
mention the other changes that Daniel Yang
(Petitioner) had inserted in NDU-2. When Daniel
Yang (Petitioner) replied at 5:10 PM on the same day,
he agreed to 24% and said that “the rest of revise
shall be accepted.” The statement could suggest that
during the discussion on the changes in NUD-2,
since Robin Yan (Sr.Director of MEMC, a wholly
owned subsidiary of SPS) had not said that they
were not acceptable. Daniel Yang (Petitioner)
thought they had been accepted. This was not an
unreasonable position to take.
119. Paragraph 34 of Robin Yan’s (Sr.Director of
MEMC, a wholly owned subsidiary of SPS) statement
above shows that Robin Yan (Sr.Director of MEMC, a
wholly owned subsidiary of SPS) and Daniel Yang
(Petitioner) were still discussing the amendments that
the latter wanted to make to NDU-3. They were not
intended to be a categorical or irrevocable rejection
of NDU-3. On 18 March 2016, 2.13 PM, Daniel
Yang (Petitioner) e-mailed Robin Yan (Sr.Director of
MEMC, a wholly owned subsidiary of SPS) (copied
to Ramesh, Dr Yang (Petitioner) and
Ms.Saraswathy) as follows:
“Kindly find the final version of NDU (“NDU-4”) per
we discussed just now. Please have this signed and
sealed ASAP”______________
Page No 54 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
97. The learned Senior Counsel for the Petitioner also drew
attention to Paragraph 125 to 132 of the Award and Paragraph 122 to 136
of the Order of the Singapore High Court. Similarly, a reference was also
made to few passages from the decision of the Court of Appeal from
Paragraph 66 to 68.
98. It is further submitted that the Hon’ble Supreme Court has also
clarified the position in Government of India vs. Vedanta Ltd and Ors.,
(2020) 10 SCC 1, that enforcement Court is not to correct the errors under
Section 48 and take review of the Award. The power that is conferred
under Section 48 is limited either to recognize/enforce or to refuse
enforcement if the grounds are made out.
99. It is submitted that the Respondent has not made out any ground
under Section 48(2) of the Arbitration and Conciliation Act, 1996 for
refusal of recognition of enforcement of the Award in this case on the issue
that the Award cannot be challenged on merits under Section 48(1) of the
______________
Page No 55 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
Arbitration and Conciliation Act, 1996.
100. It is submitted that PV Modules were delivered pursuant to
MDA and NDU-3 and not pursuant to any oral contract.
PART-III-B (SUBMISSION OF RESPONDENT NO.2)
101. The learned Senior Counsel for the Respondent No.2 would
submit that the The Award is not a “Foreign Award” under Section 44 of
the Arbitration and Conciliation Act, 1996 (“Arbitration Act”).
102. The primary issue is whether the Award dated 22.02.2021
(“Award”) is a foreign award as defined in section 44 of the Arbitration
Act. It is submitted that the Award is not a foreign award within the
meaning of section 44. Consequently, the Award cannot be enforced under
section 48 of the Arbitration Act.
103. It is submitted that there was no agreement in writing to bind
the Respondent No.2. Section 44 defines “foreign award” to mean “an
arbitral award made on or after the 11th day of October, 1960 in pursuance
______________
Page No 56 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
of an agreement in writing for arbitration to which the Convention set
forth in the First Schedule applies.
104. It is submitted that the First Schedule verbatim reproduces the
New York Convention (NYC). Article II (2) of the First Schedule defines
“agreement in writing” The arbitration agreement relied on by the
petitioner is NDU-3. It is submitted that NDU-3 is not an agreement in
writing falling within Article II (2) of the First Schedule of the New
York Convention (NYC). Consequently, the Award has not been made
pursuant to an agreement in writing for arbitration and is not a foreign
award.
105. It is submitted that the issue in para 1 arises for the first time
for consideration by this Hon’ble Court. The arbitration clause provides for
arbitration in Singapore and the applicable law is the law in force in
Singapore. The Arbitral Tribunal and the Singapore Courts (the High
Court and the Court of Appeal) considered the definition of “arbitration
______________
Page No 57 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
agreement” only under Section 2A of the Singapore International
Arbitration Act. Section 2A of the Singapore International
Arbitration Act is materially different from the definition under Article
II(2), First Schedule to the Arbitration and Conciliation Act, 1996.
106. Therefore, this Hon’ble Court must independently (i) consider
the facts relating to the formation of the arbitration agreement as found by
the arbitral tribunal (and by the Singapore Courts) and (ii) decide on the
basis of these facts, whether the arbitration agreement is an agreement in
writing as defined in analysis of Article II (2) by the Supreme Court in
Smita Conductors Ltd vs. Euro Alloys Ltd, (2001) 7 SCC 728.
107. It is submitted that the Supreme Court divided Article II (2)
into four parts:-
(1) a contract containing an arbitration clause
signed by the parties;
(2) an arbitration agreement signed by the parties;
(3) an arbitral clause in a contract contained in
exchange of letters and telegrams;
(4) an arbitral agreement contained in exchange of
letters or telegrams.
______________
Page No 58 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
108. It is therefore submitted that NDU-3 does not satisfy any of the
above requirements of Article II (2).
109. It is submitted that Clause 9 of NDU 3 contains the arbitration
clause. However, NDU 3 has not been signed either by Respondent No.2
(the Engineering Company) or by Respondent No.3 (the Project Company)
excepting Respondent No.1. Therefore, NDU-3 dated 17.03.2016 does not
satisfy the requirements of (1) and (2) above.
110. It is submitted that there are also exchange of letters, telegrams
or emails between the parties evidencing acceptance of NDU 3. NDU 3
was sent to the Petitioner by email on 17.03.2016 by Respondent No.1.
The Petitioner replied the very next day stating “Your returned NDU is
NOT what we both agreed on the phone today” It is therefore submitted
that the findings of the Arbitral Tribunal and the Singapore Courts on the
arbitration agreement are incorrect and in any event not binding on this
______________
Page No 59 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
Court.
111. The Arbitral Tribunal held that after the aforesaid email, the
Petitioner was persuaded to drop its objections to NDU-3 and accept NDU
3 as executed.
112. The learned Senior Counsel for the Respondent No.2 drew
attention to the Petitioner’s evidence extracted in the Award at para 124
(sub- para 54 of the award) where the witness states “I informed Robin
Yan that Jinergy accepted the executed NDU and would make
arrangements. In other words, it is submitted that the Petitioner’s
acceptance of NDU-3 was by words and conduct and not in writing. It is
submitted that the Petitioner did not record such change in its stance in
writing or over e-mail to the First Respondent, which was a signatory to
the NDU’s. It is submitted that same is surprising by the Petitioner,
considering the quantum involved and the fact that the rejection of NDU-3
was in writing.
______________
Page No 60 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
113. The learned Senior Counsel for the Respondent No.2 referred
to para 89, 95, 96-98, 119, 124 (sub- para 54), 127- 128, 130, 132, 163-
164 of the Award which were reiterated by the Singapore High Court and
by the Singapore Court of Appeal.
114. The three Singapore forums (the Arbitral Tribunal, the High
Court and the Court of Appeal) found that the Petitioner accepted NDU
orally and by conduct and not in writing.
115. In view of these findings, it is reiterated that there was no
exchange of letters etc in relation to NDU 3. Therefore, the third and
fourth parts of Article II(2) also are not satisfied. Consequently, it is
submitted that the arbitration agreement is not “an agreement in writing”
and the Award is not a foreign award.
116. It is further submitted that the Petitioner has also accepted in
para 5 of its petition “the present disputes arise out of an agreement
consisting of oral and written terms, and which includes a Non-Disposal
______________
Page No 61 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
Undertaking which dated 17th March 2016 (“NDU 3”) is referred to in the
Arbitral Award as the “PV modules delivery agreement.
117. It is further submitted that the Orders of the High Court both
Single Judge and Division Bench do not amount to res judicata.
118. It is submitted that the orders of the Hon’ble Madras High
Court (Single Judge and Division Bench) in C.S.No.502 of 2017 etc.
referring the parties to arbitration will not amount to res judicata.
119. It is submitted that the findings of the Court at that stage were
only prima facie views based on the evidence available before the Court.
This position is reiterated in Cox and Kings Ltd. vs. SAP India Pvt. Ltd.
and Another, 2023 SCC OnLine SC 1634, para 168.
120. Secondly, it is submitted that this High Court applied Indian
law which recognized the group of companies doctrine. The Arbitral
Tribunal applied Singapore law since that was the Governing Law. The
______________
Page No 62 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
Group of Companies Doctrine is not recognized in Singapore.
121. Thirdly, it is further submitted the Hon’ble Supreme Court in
Cox and Kings Ltd. vs. SAP India Pvt. Ltd. and Another, 2023 SCC
OnLine SC 1634 held that the approach in Chloro Controls India Private
Limited vs. Severn Trent Water Purification Inc. and Others, (2013) 1
SCC 641 was erroneous. It is submitted that since the orders of this Court
were based on Chloro Controls case, these decisions cannot be held to
have a binding force of law any longer.
122. For the above reasons, the findings of this Court in the Suit
will not amount to res-judicata and will not preclude Respondent No.2
(the Engineering Company) from contending that the Arbitral Award is not
a foreign award under section 44.
123. It is submitted that the Hon’ble Supreme Court in Smita
Conductors Ltd vs. Euro Alloys Ltd, (2001) 7 SCC 728 interpreted
Article II(2) and laid down the requirements of Article II (2) vide page
______________
Page No 63 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
735 placitum. The Hon’ble Supreme Court in Cox and Kings Ltd.
explained Smita Conductors Ltd in para 188.
124. It is submitted that in Smita Conductors Case, the Hon’ble
Supreme Court has held that in the absence of a signature, the consent to
arbitrate can be gathered from written correspondence that shows its
conduct pursuant to the contract containing the Arbitration Agreement. It
is submitted that even these requirements were not satisfied in the present
case.
125. It is submitted that the learned Single Judge of the Delhi High
Court in Virgoz Oil held that Article II (2) requires an exchange of either
“letters” or “telegrams” vide paragraphs 18-23 of the judgment. This was
also confirmed by the Division Bench of the Delhi High Court vide para
16.19.30 and the case is pending before the Supreme Court on further
appeal.
126. Distinguishing the citations given by the learned Senior
______________
Page No 64 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
Counsel for the Petitioner in AQZ vs. ARA, (2015) SGHC 49 and Jiangsu
Overseas Group Co Ltd vs. Concord Energy Pte Limited [2016] SGHC
153. It is submitted that these judgments are not relevant. They are
judgments of the Singapore High Court and do not discuss Article II (2).
127. It is further submitted that the following citations relied on by
the petitioner are not relevant since they do not discuss Article II (2).
i. Campos Bros Farms vs. Matru Bhumi Supply
Chain Private Limited, 2019 SCC Online
Delhi 8350;
ii. Duro Felguera vs. Gangavaram Port Ltd,
(2017) 9 SCC 729;
iii. Fuerst Day Lawson Ltd Vs. General Exports
Ltd (2001) 6 SCC 356;
iv. Germany Bay Transcription Private Limited
Vs. Integrated Sales Service Ltd (2022) 1 SCC
753;
v. Inox Wind Ltd Vs. The More Cables Ltd,
(2018) 2 SCC 519;
vi. MR Engineers and Contractors Private
Limited vs. Som Datt Builders Ltd (2009) 7
SCC 696;
vii. Vijay Karia (2020) 11 SCC 1;
viii.Shri Lal Mahal Ltd (2014) 2 SCC 433;
ix. Government of India vs. Vedanta Ltd (2020)
10 SCC 1
______________
Page No 65 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
128. It is submitted that Chloro Controls India Private Limited
case is distinguishable on facts. It is a case of exchange of letters. The
contractors submitted a bid and the bid was accepted on behalf of the
Governor of Uttar Pradesh vide para 17 of the judgment.
129. It is submitted that Austbulk Shipping case is distinguishable
as there was an exchange of letters and documents as is indicated in vide
paragraphs 26, 30 and 31 of the judgment. on facts. It is a case where there
Jaldhi Overseas is distinguishable on facts. There, the Calcutta High Court
recorded the exchange of correspondence in para 4, 16, 18 and 20. The
matter is pending before the Supreme Court.
130. It is submitted that in Cruz City case, there was no dispute that
the award was a foreign award vide paragraph 17 of the order.
131. The learned Senior Counsel for the Respondent No.2 adopted
the arguments of the learned Senior Counsel for the Respondent No.3 on
the merits of the Award Evidence pertaining to payments made by Second
______________
Page No 66 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
Respondent has not been considered.
132. Without prejudice to the above, it is submitted that the
Respondent No.2 (the Engineering Company) is not bound by the terms of
NDU-3. The Original Module Supply Agreement was between the
Petitioner and SPS a “Non-Party”. SPS is not a party to the present
proceedings. The Petitioner submitted during oral arguments that SPS was
Respondent No 1, which is incorrect. SPS, being the company that entered
into the original agreement under which the supplies were made, was a
necessary party to the arbitration.
133. It is further submitted that there is no privity of contract,
evidenced in writing, between the Respondent No.2 (the Engineering
Company) and the Petitioner.
134. Moreover, the Respondent No.2 (the Engineering Company)
has already discharged its payment obligations towards the invoices raised
for the modules procured from Non-Party, the procurement company, by
______________
Page No 67 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
making payments directly to Non-Party.
135. An auditor’s certificate evidencing that payments were made by
the Respondent No.2 (the Engineering Company) towards the invoices
raised by Non-Party was filed in the present proceedings. It is submitted
that the Respondent No.2 (the Engineering Company) cannot be held
liable for the dues to the Petitioner. It is submitted that the Respondent
No.2 cannot be burdened with double payment.
136. In fact, the Petitioner has admitted that the Second Respondent
had paid a large portion of the dues from Non-Party. A reference was made
to page 568 of the Petitioner’s Addl. Compilation of documents.
137. In light of the above, it is submitted that the Award is not a
foreign award under section 44 and therefore the same is not recognizable
and enforceable in India. It is humbly prayed that the present petition be
dismissed with costs.
PART-III- C (SUBMISSION OF RESPONDENT NO.3)
______________
Page No 68 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
138. The Award is not a ‘Foreign Award’ under section 44 of the
Arbitration and Conciliation Act, 1996 (“Arbitration Act”).
139. While enforcing an award under Chapter I, Part II of the
Arbitration Act, the enforcing court must first be satisfied that the Award is
indeed a foreign award, as defined and is enforceable against persons who
are bound by the award.
140. It is submitted that for an award to be designated as a ‘Foreign
Award’ under Section 44 of the Arbitration Act (of which enforcement may
be sought in India under Chapter 1, Part II of the Arbitration Act) the
following four ingredients are not only necessary but should be satisfied:-
a) the dispute must be considered to be a
commercial dispute under the law in force in
India;
b) it must be made in pursuance of an agreement
in writing for arbitration;
c) it must be disputes that arise between
“persons” (without regard to their nationality,
residence, or domicile);
d) the arbitration must be conducted in a country
which is a signatory to the New York______________
Page No 69 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023Convention. (emphasis supplied).
141. The learned Senior Counsel for the Respondent No.3 submits
that the Award is not a “Foreign Award” since it is not in pursuance of an
“Agreement in Writing” for arbitration to which the New York Convention
applies.
142. It is submitted that under Article II (1) of the New York
Convention, India, is a signatory to the New York Convention. It is
submitted that Courts in India are bound to recognize arbitration
agreements that are in writing. In this case there was no agreement in
writing.
143. It is submitted that under Article II (2) of the New York
Convention, the term “Agreement in Writing” is defined to include
Arbitration Clause in contract or Arbitration Agreement signed by the
parties or contained in an exchange of letter or telegram.
144. In the present case, the Arbitration Agreement pursuant to
which the Award has been passed is stated to be contained in an agreement
______________
Page No 70 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
called the NDU-3 which has neither been signed by any of the
Respondents. It is submitted that the Respondent No.2 (the Engineering
Company) and the Respondent No.3 (the Project Company) are in any
event not a party to the agreement. In fact, it is the Petitioners’ case that
Respondent No.3 (the Project Company) is said to be a signatory and a
party to the agreement since Mr. Pashupathy Gopalan of Respondent No.1
and Mr. Vinay Bhatia of Respondent No.3 (the Project Company) had
negotiated and signed NDU-3, respectively. The said submission has been
accepted by the Tribunal on the basis of evidence produced before it. It
was however submitted that there is no material whatsoever to arrive at the
said finding, and the said finding was perverse and illegal.
145. It is submitted that the onus and burden to prove that the Award
was a “Foreign Award” was on the Petitioner under Section 47(1)(c) of the
Arbitration Act, which the Petitioner has not satisfied.
146. It is submitted that this Hon’ble Court’s jurisdiction to assess
whether the Award is a “Foreign Award” or not and is not circumscribed
______________
Page No 71 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
by any limitations, either under the statute or under any case law
including. A reference was made to the decision of the Court in
Renusagar Power Cp. Ltd. v. General Electric Co. (1994 Supp (1) SCC
644), and Shri Lal Mahal Ltd. v. Proteggo Grano SpA ((2014) 2 SCC
433), etc.
147. Further, it is submitted that under Section 47 of the Arbitration
Act, before putting its imprimatur or seal of approval on the Award, this
Court has to come to a judicial finding after assessing material placed
before it, that the Award is a “Foreign Award” and has been rendered
pursuant to an agreement in writing.
148. The Arbitral Tribunal has concluded that Respondent No. 3
(the Project Company) is party to the NDU-3, as an appendage to the
Modules Delivery Agreement, and consequently, the arbitration clause
contained therein. It is submitted that the said findings of the Arbitral
Tribunal are not based on any cogent evidence or material. It is based on
only conjectures and surmises drawn by the Arbitral tribunal, unsupported
by material on record. A reference was invited to paragraphs 131-132
______________
Page No 72 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
(@pg. 112-113), 141, 144 146 (@pg. 114-115), 163- 164 (@pg 118-119)
of the Award-Petitioner’s List of Documents).
III. Award is unenforceable under Section 48(2)(b)(ii) of the
Arbitration Act –
149. It is further submitted that the enforcement of the Award would
be in contrary to the public policy of India for being in contravention with
the fundamental position of Indian law and the most basic notions of
justice. A reference was made to Paragraph 34 of the decision of the
Hon’ble Supreme Court in Ssangyong Engg. & Construction Co. Ltd. v.
NHAI, (2019) 15 SCC. Wherein it wasa held that;
“34. What is clear, therefore, is that the expression
“public policy of India”, whether contained in Section
34 or in Section 48, would now mean the
“fundamental policy of Indian law” as explained in
paras 18 and 27 of Associate Builders [Associate
Builders v. DDA, (2015) 3 SCC 49: (2015) 2 SCC
(Civ) 2041 ie, the fundamental policy of Indian law
would be relegated to “Renusagar” understanding of
this expression.”
150. A reference was also made to Paragraph 18 and 27 from
______________
Page No 73 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
Ssangyong Engg. & Construction Co. Ltd. v. NHAI, (2019) 15 SCC,
wherein a reference was made to Associate Builders v. DDA, (2015) 3
SCC 49. Relevant Paragraph from Ssangyong Engg. & Construction Co.
Ltd. vs. NHAI, (2019) 15 SCC reads as under:-
“18. In Remusagar Power Co Lid. v. General Electric
Co. [Renusagar Power Co. Lid. v. General Electric
Co., 1994 Supp (1) SCC 644],In construing the expression “public policy” in the
context of a foreign award, the Court held that an
award contrary to (i) The fundamental policy of
Indian law, (ii) The interest of India, (iii) Justice or
morality, would be set aside on the ground that it
would be contrary to the public policy of India. It
went on further to hold that a contravention of the
provisions of the Foreign Exchange Regulation Act
would be contrary to the public policy of India in that
the statute is enacted for the national economic
interest to ensure that the nation does not lose foreign
exchange which is essential for the economic survival
of the nation (see SCC p. 685, para 75). Equally,
disregarding orders passed by the superior courts in
India could also be a contravention of the
fundamental policy of Indian law, but the recovery of
compound interest on interest, being contrary to
statute only, would not contravene any fundamental
policy of Indian law (see SCC pp. 689 & 693, paras
85 & 95).
27. Coming to each of the heads contained in Saw
______________
Page No 74 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023Pipes [(2003) 5 SCC 705: AIR 2003 SC 2629]
judgment, we will first deal with the head
“fundamental policy of Indian law”. It has already
been seen from Renusagar judgment that violation of
the Foreign Exchange Act and disregarding orders of
superior courts in India would be regarded as being
contrary to the fundamental policy of Indian law. To
this it could be added that the binding effect of the
judgment of a superior court being disregarded
would be equally violative of the fundamental policy
of Indian law.”
151. Further, the Hon’ble Supreme Court in Para 76 of Ssangyong
Engg. & Construction Co. Ltd. vs. NHAI, (2019) 15 SCC held that:-
“76. However, when it comes to the public policy of
India, argument based upon “most basic notions of
justice”, it is clear that this ground can be attracted
only in very exceptional circumstances when the
conscience of the Court is shocked by infraction of
fundamental notions or principles of justice. This
being the case, a fundamental principle of justice has
been breached, namely, that a unilateral addition or
alteration of a contract can never be foisted upon an
unwilling party, nor can a party to entered into with
the other party, the agreement be liable to perform a
bargain not Clearly, such a course of conduct would
be contrary to fundamental principles of justice as
followed in this country, and shocks the conscience of
this Court. However, we repeat that this ground is
available only in very exceptional circumstances,
such as the fact situation in the present case. Under
no circumstance can any court interfere with an
arbitral award on the ground that justice has not
been done in the opinion of the Court. That would be______________
Page No 75 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023an entry into the merits of the dispute which, as we
have seen, is contrary to the ethos of Section 34 of the
1996 Act, as has been noted earlier in this judgment.”
152. It was submitted that to enforce the Award against Respondent
No.3 (the Project Company), which never entered into the PV Modules
Delivery Agreement/Modules Delivery Agreement or NDU-3 or the
Arbitration Agreement contained therein, would tantamount to holding
Respondent No. 3 liable to perform a bargain which they never entered
into, which would amount to the breach of a fundamental principle of
justice.
153. In the facts of the present case, it is submitted that two aspects
are to be considered as being violative of the fundamental policy of Indian
law and for violating the most basic notions of justice under Section
48(2)(b) read with Clause (ii) to Explanation I of the Arbitration Act.
154. It is submitted that the Award was passed in violation of the
requirements specified under Section 21 of the Companies Act, which
______________
Page No 76 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
governs Respondent No. 3 (the Project Company); and the Award was
passed on the basis of the ‘single economic entity’ doctrine.
IV. Violation of requirements specified under Section 21 of the
Companies Act, 2013.
155. Both Respondent No.2 (the Engineering Company) and the
Respondent No.3 (the Project Company) are a juristic person and can enter
into or can be bound by contracts only in accordance with the statute
which governs that as juristic personality/ existence viz. the Companies
Act.
156. Respondent No. 2 (the Engineering Company) and the
Respondent No.3 (the Project Company) are a private limited Indian
company conferred with juristic existence under the Companies Act. As
such, the provisions of the Companies Act are applicable to, and govern
Respondent No. 2 (the Engineering Company) and the Respondent No.3
(the Project Company) and their functioning. Further, their ability to enter
into contracts is strictly governed by its parent statute, ie, the Companies
Act, 2013 and its constitutional documents, being their Memorandum of
______________
Page No 77 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
Association and Articles of Association.
157. For a contract to be valid and binding on a company governed
under the Companies Act, it must be in (ii) writing; (ii) signed by its key
manager personnel or an officer of the Company or employee; (ii) who is
authorised by the board of directors of the company to sign the agreement.
158. It is submitted that this requirement codifies the public policy
of India in furtherance of good corporate governance against the public
policy of India to hold that a company governed by the Companies Act is
bound by an oral agreement or any agreement which is in part oral.
159. It is submitted that fastening of liability on the Respondent No.
2 (the Engineering Company) and the Respondent No.3 (the Project
Company), is thus in violation of the requirements specified in Section 21
of the Companies Act which embodies the fundamental policy of Indian
law.
______________
Page No 78 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
160. It is submitted that Section 21 of the Companies Act, 2013
marks a deliberate departure from the earlier legal regime under the
Companies Act, 1956 insofar as it requires that for an agreement to be
binding on the company, it (i) has to be in writing; and (ii) signed by a key
managerial personnel duly authorized by the board of directors of the
company in this behalf. This is in contradiction to Section 46 of the
Companies Act, 1956, which envisaged oral agreements entered into on
behalf of the company.
161. It is submitted that the stricter requirements under the
Companies Act, 2013 viz., Agreement in Writing signed by a key
managerial personnel specifically authorized by the Board have been
brought in deliberately to augment transparency and better Corporate
Governance. It is submitted that Enhanced level of Transparency and
Corporate Governance are an integral part underlying the basic policy of
the Companies Act, 2016. As such, making the Respondent No. 2 (the
Engineering Company) and the Respondent No.3 (the Project Company)
liable under a contract which does not adhere to the requirements of
______________
Page No 79 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
Section 21 of the Companies Act, 2013 would violate the fundamental
policy of Indian law and most basic notions of justice.
162. It is submitted that the Arbitral Tribunal could not have ignored
this fundamental requirement under Indian company law and policy before
fastening liability on the Respondent No. 3 (the Project Company). It is
submitted that the doctrine of indoor management has no application in
the present case, since the Petitioner itself has insisted on procuring
corporate authorizations insofar as the signatory to NDU-3 is concerned.
Similarly, the Petitioner was well aware that this issue would be governed
by the law in the jurisdiction of the Respondent No.3 (the Project
Company).
163. Thus, it is respectfully submitted that a company cannot be
bound by a contract signed by a director unsupported by a Board
resolution authorizing the said director to sign the agreement. A reference
was made to Narne Estates Pvt. Lud and Another v. Gomedha Estates
Pvt. Ltd., 2020 SCC Online TS 3426 @ para 7-12, followed by Hon’ble
______________
Page No 80 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
Calcutta High Court in Jaishree Steels Private Limited
MANU/WB/0019/2023 @ pg. 6 & 14) Shivan Dhatu Udyog Pvt. Ltd.
164. It is submitted that an admitted position that there was no
Board resolution in favour of Mr. Vinay Bhatia authorising later to sign
the agreement of behalf of Respondent No. 3 (the Project Company).
Therefore it is submitted that Respondent No. 3 can never be considered to
have signed or a party to NDU-3. Further, there is no evidence to suggest
that Respondent No. 3 (the Project Company) was party to any oral/
written agreement to pay unpaid dues to the Petitioner for supplies to be
made by it under the MSA.
165. It is submitted that the Respondent No. 3 was neither a party
nor a signatory to NDU-3. It was never agreed between the parties that
Respondent No. 3 was to be made a party to the contract with the
Petitioner or for it to be bound by any such contract. Accordingly, no
agreement in writing to resolve disputes through arbitration exists between
Respondent No.2 and 3 with the Petitioner. A reference was made to
______________
Page No 81 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
Indowind Energy Limited vs. Wescare (India) Limited and Another,
(2010) 5 SCC 306 @Pr. 17-20; Dale and Carrington Invt. (P) Ltd and
Ors vs. P.K Prathapan and Ors., AIR 2005 SC 1624 @para 12).
166. In fact, it was not even the Petitioner’s case in the Arbitration
Proceedings that the Respondent No.3 had passed any Board Resolution
which authorized Mr. Vinay Bhatia or any of its key managerial personnel
or officer or employee to sign NDU-3. It is further submitted that it is not
disputed that Mr. Pashupathy Gopalan, Mr. Ramesh Subbarao and/or Mr.
Vinay Bhatia were not authorized by the Board of Directors of Respondent
No. 3 to enter into NDU-3. On the contrary, NDU-3 was expressly stated
to have been signed by Mr.Vinay Bhatia only in his capacity “as
authorised representative of [Respondent No.1] (—) [i.e. SHE] authorised
pursuant to a Resolution of its Board of Directors passed on the 17 th day of
March, 2016”.
167. It is thus humbly submitted that both Respondent No.2 and 3
are separate and distinct legal entity from SunEdison Inc., the Non-Party,
______________
Page No 82 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
Respondent No.1 and/or Respondent No. 2 and/or its other shareholders or
officers or directors. The factum of Mr. Pashupathy Gopalan being the
President of SunEdison Inc.’s Asia-Pacific operations or Mr. Vinay Bhatia
being SunEdison India’s General Counsel and also a Director on the Board
of the 3rd Respondent, does not dilute the separate existence or entity of
3rd Respondent, and can in no manner lead to a conclusion that the 3 rd
Respondent would be bound by a contract signed by Respondent No. 1 or
obligations undertaken by it. Recognizing and enforcing an award which
has been passed on the basis of the ‘single economic entity’ doctrine would
violate the fundamental policy of Indian law and the most basic notions of
justice.
168. It is submitted that although, the stated position of the Arbitral
Tribunal that it has not based its conclusion on the functioning/business
model of the SunEdision group entities as one unit, the crucial findings of
the Arbitral Tribunal are based on its findings on the business model and
the alleged intention of Mr. Pashupathy Gopalan to treat the Respondents
as ‘Single Economic Unit (SEU) for the purpose of implementing its
______________
Page No 83 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
business model in relation to the Adhavan project. (Refer Paras-167 to 174
of the Award @pg. 119, 120 of Petitioner’s LOD).
169. It is submitted that the Tribunal has decided the issue on the
basis of the partly oral and partly written contract purportedly entered into
by the Petitioner with the Respondents, after deciding that the persons
involved in the negotiations had the authority to bind the Respondents to
such a contract, while seemingly treating the SunEdison Group Companies
as a Single Economic Entity’ (SEE), although categorically stating that it is
not relying on the group of companies doctrine’. The Court of Appeal of
the Republic of Singapore ignored this finding of the Tribunal by holding
that the Tribunal’s reference to the ‘group of companies’ doctrine was
merely to reflect the commercial reality of the situation. (Refer Paras-75 &
76 of the Judgement @pg. 559 of Petitioner’s Addl. LOD).
170. It is submitted that enforcing the Award against the Respondent
No.2 and 3 would amount to making the Respondent No.2 and 3 party to
an arbitration agreement, to which they had not consented and fastening
______________
Page No 84 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
liability upon them on the basis of the ‘Single Economic Entity’ (SEE)
doctrine, which employs tools such as alter ego and piercing of corporate
veil in order to negate the separate legal entity of a company.
171. It is submitted that the ‘Single Economic Entity’ (SEE) doctrine
no longer finds a place pursuant to the judgement of the Constitution
Bench of the Hon’ble Supreme Court of India in Cox & Kings Limited v.
SAP India Pvt. Ltd. and Another (2023 SCC OnLine 1634). The said
judgment, in paragraphs 172 and 231, has clearly held that the principle of
alter ego or piercing the corporate veil cannot be the basis for application
of the group of companies’ doctrine to bind non-signatories to an
arbitration agreement. Thus, in other words, the Hon’ble Supreme Court
has expressly held that the ‘single economic entity doctrine cannot be
recognized and given effect to as a fundamental policy of Indian law.
172. It is submitted that it is relevant to refer to Para 57 of the Cox
and Kings judgement – In Manuchar Steel Hong Kong Limited v. Star
Pacific Line Pte Ltd. [2014] SGHC 181, the Singapore High Court has
______________
Page No 85 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
expressly rejected the group of companies doctrine to bind non-signatories
to arbitration agreement. The High Court reasoned that the group of
companies doctrine was: first, anathema to the logic of consensual basis of
an agreement to arbitrate, and second, ordering of companies within a
broader group did not mean position dispense with legal entity. The
Singapore High Court relied on position of law taken in peterson Farms
INC (supra) to observe that enforceable obligations cannot be imposed on
“strangers” to an arbitration agreement.
173. It is submitted that notably, the Tribunal has gone against the
Singapore law as recognized in the Cox and Kings judgment. Hence, the
Award passed by the Tribunal is bad in law as it evidently ignores the law
of Singapore.
174. It is further submitted that the test for deciding whether a
company, within a group of companies, which is not a signatory to the
arbitration agreement, can be held to be bound by it, has been provided by
the Hon’ble Supreme Court of India in ONGC v. Discovery Enterprises
______________
Page No 86 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
Pvt. Ltd and Anr. ((2022) 8 SCC 42, @ para 40).
175. Thus, it is submitted that recognizing and enforcing an award
which has been passed on the basis of the ‘single economic entity’ doctrine
would violate the fundamental policy of Indian law and the most basic
notions of justice.
176. It is further submitted that Respondent No.3 was not a signatory
or party to NDU-3, it did not undertake any payment obligations there under
and it did not consent to be bound by the arbitration agreement contained
therein. There was no consensus ad idem, in relation to PV modules delivery
or to resolve disputes by arbitration. The burden is on the Petitioner to estab-
lish that 3rd Respondent intended to consent to arbitration and/or be bound by
it. Reckitt Benckiser (India) Pvt. Ltd. v. Reynders Label Printing India
Pvt. Ltd. & Anr. (2019) 7 SCC 62.
177. It is further submitted that under Section 44 of the Arbitration
Act, a foreign award is required to meet specified criteria, including for it to
______________
Page No 87 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
be made in pursuance of an agreement in writing for arbitration. There are no
limitations on the Hon’ble Court’s jurisdiction to assess whether an arbitral
award is a foreign award. Renusagar Power Cp. Ltd. v. General Electric
Co. 1994 Supp (1) SCC 644, Shri Lal Mahal Ltd. v. Proteggo Grano SpA
(2014) 2 SCC 433.
178. It is submitted that the Award is unenforceable under Section
48(2)(b) of the Arbitration Act, and enforcement thereof would be contrary to
the fundamental policy of Indian law and most basic notions of justice.
Ssangyong Engg. & Construction Co. Ltd. v. NHAI (2019) 15 SCC 131,
Associate Builders v. DDA (2015) 3 SCC 49.
179. It is submitted that the Award is passed in violation of require-
ments specified under Section 21 of the Companies Act, which requires that
for a contract to be binding on a company, it should be in writing, signed by
its KMP or officer or employee who is authorized by the board sign the
agreement Narne Estates Pvt. Ltd. and Another v. Gomedha Estates Pvt.
Ltd. 2020, SCCOnline TS 3426, followed by Hon’ble Clerv Gomedha Es-
______________
Page No 88 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
tat Saishree Steels Private Limited v. Shivan Dhatu Udyog Pvt. Ltd,
MANU/WB/0019/2023.
180. It is submitted that there is no agreement in writing, to resolve
disputes through arbitration, entered into by 3rd Respondent with the Peti-
tioner. Indowind Energy Limited v. Wescare (India) Limited and Anoth-
er (2010) 5 SCC 306, Dale and Carrington Invt. (P) Ltd and Ors vs. P.K
Prathapan and Ors. AIR 2005 SC 1624.
181. In view of the aforesaid submissions, it is prayed that this
Hon’ble Court may be pleased to dismiss the above Arbitration OP (Commer-
cial Division) No.186 of 2023, with exemplary costs, in the interest of justice
and equity.
PART-III-D (Petitioner’s Response to Respondent No.3’s Submissions)
182. It is submitted that Respondent No.3 in its brief written
submissions dated 14th May 2024 referred to a case law/judgement in the
matter of Reckitt Benckiser (India) Pvt. Ltd. v Reynders Label Printing
India Pvt. Ltd. to contend that the burden is on the Petitioner to establish
______________
Page No 89 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
that Respondent No.3 intended to consent to arbitration and/or be bound
by it.
183. It is submitted that Respondent No.3 at this juncture cannot
rely upon this judgment as they had not cited this judgment during the
final hearing/arguments. Hence, this objection may kindly be upheld by
this Hon’ble Court.
184. It is submitted that in any event, without prejudice to what is
stated above, the Petitioner will deal with the case law/judgement relied
upon by the Respondent No.3:-
(a) Reckitt Benckiser deals with Section 11
arbitration application pursuant to an arbitration
agreement entered into between two Indian
parties i.e. the Applicant and Respondent No.1;
(b) Applicant sought to implead Respondent No.2,
a Belgium based company, in the proposed
arbitration proceedings despite it being a non-
signatory to the agreement;
(c) The Applicant invoked the jurisdiction of the
Hon’ble Supreme Court on the premise that it is
an international commercial arbitration;
(d) The Hon’ble Supreme Court dismissed the
arbitration application as against Respondent
No.2, however in the interest of justice and
with the consent of Applicant and Respondent______________
Page No 90 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023No.1, the Hon’ble Supreme Court appointed an
arbitrator to conduct domestic commercial
arbitration at New Delhi between the Applicant
and Respondent No. 1. In this context the
Hon’ble Supreme Court, without dilating on
other contentions, has held that the burden is on
the Applicant to establish that Respondent No.2
had an intention to consent to the arbitration
agreement and be party thereto.
185. It is submitted that in the facts of the present case, the Learned
Arbitrators (SIAC, Singapore) have found that there is a binding
arbitration agreement between all the three Respondents.
186. It is submitted that the reasoning of the Arbitral Tribunal has
also been upheld by the High Court of the Republic of Singapore and
further affirmed by 3-Judges of the Singapore Court of Appeal. It is
further submitted that the findings of fact by the Arbitral Tribunal which
was upheld all the way by the Singapore Court of Appeal, cannot be
interfered with as per law cited by the Petitioner during the hearing.
PART-IV (DISCUSSION AND CONCLUSION)
______________
Page No 91 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
187. I have considered the arguments advanced by the learned Senior
Counsel for the Petitioner and the learned Senior Counsel for the Respon-
dents. I have also perused the written submissions and the case laws submit-
ted by the learned Senior Counsel for the Petitioner and the learned Senior
Counsel for the Respondents. I have also perused the Award. I have also
perused the decision of the High Court of Singapore and the decision of the
Court of Appeal.
188. The issue that arises for consideration in the present cases is
whether the Final Award dated 22.02.2021 and the addendum to the aforesaid
Final Award dated 08.03.2021 are to be recognized and enforced under
Part-II of the Arbitration and Conciliation Act, 1996 read with First Schedule
to the said Act.
189. The Petitioner’s claims in the arbitration proceedings arise in the
background of certain outstanding payments in respect of invoices raised by
it on SunEdison Products Singapore Pte. Ltd., the Non-Party under the
Module Supply Agreement (MSA) dated 19.08.2015, and due to defaults
committed by the aforesaid Non-Party in releasing payments towards the
outstanding dues.
______________
Page No 92 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
190. To secure the release of the PV Modules, the Petitioner thus
decided to withhold further deliveries of PV Modules which were to be used
in the Adhavan Project of the Respondent No.3 (the Project Company) until
payment was released by the Non-party. Thus, negotiations took place
during the period between March 15, 2016 and March 18, 2016, between
the representatives of the Petitioner and representatives of SunEdison Group
entities namely the Respondents herein. Thus, invoices, defaults and claims
which were subject matter of the Module Supply Agreement (MSA) dated
19.08.2015 between the Petitioner and the Non-Party was reduced in writing
in the form of Non Disposal Undertaking (NDU) dated 17.03.2016.
191. Non Disposal Undertaking (NDU) dated 17.03.2016 was in the
form of an appendage to Module Supply Agreement (MSA) dated 19.08.2015
between the petitioner and the said Non-Party namely SunEdison Products
Singapore Pte. Ltd.
192. Both Respondent No.2 (the Engineering Company) and Respon-
dent No.3 (the Project Company) are signatory to NDU-3 dated 17.03.2016.
______________
Page No 93 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
They have not explicitly signed NDU-3 dated 17.03.2016. Independently,
they are party to an Equipment and Material Supply Agreement dated
02.03.2016 between them.
193. To provide comfort to the Petitioner for payment, drafts of Non-
Disposal Undertakings (“NDUs”) (creating a negative pledge regarding the
transfer of a percentage of Respondent No.1’s shareholding in Respondent
No.3) (the Project Company) as security were exchanged between March 15,
2016 to March 18, 2016.
194. Under NDU-3 dated 17.03.2016, Respondent No.2 (the
Engineering Company) along with Respondent No.1 undertook to pay the
petitioner. NDU-3 dated 17.03.2016 was signed by Mr.Vinay Bhatia, the
Director of the Respondent No.3 (the Project Company) on behalf of
Respondent No. 1, as an authorised representative of Respondent No. 1.
NDU-3 dated 17.03.2016 was pursuant to a resolution of Board of Directors
of Respondent No. 1.
______________
Page No 94 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
195. There are no Board resolution passed by Respondent No. 3 which
authorised Mr. Bhatia, the Director of the Respondent No.3 (the Project
Company) to sign any version of the NDUS, including NDU-3 for
Respondent No.1 binding later to the obligation therein.
196. Mr.Vinay Bhatia, the Director of Respondent No.3 (the Project
Company), incidentally is the General Counsel, India of both Respondent
No.2 (the Engineering Company) and Respondent No.3 (the Project
Company). NDU-4 also dated 17.03.2016 was subsequently shared by the
Petitioner with further amendments to NDU-3 dated 17.03.2016 with the
respondents and was emailed to the respondents. NDU-4 was, however
neither signed nor acted upon. Therefore, under NDU-3 dated 17.03.2016, a
concluded contract was reached and acted upon by the Petitioner and thus
further supplies were made by the petitioner to Respondent No.2 (the
Engineering Company) / Respondent No.3 (the Project Company) for the
latter’s project.
197. Thus, the point for consideration before this Court is whether
Respondent No. 2 (the Engineering Company) and Respondent No. 3 (the
______________
Page No 95 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
Project Company) who were made signatory to NDU-3, dated 17.03.2016,
can be bound by the Arbitration Clause in NDU-3 dated 17.03.2016.
198. The burden is on the Petitioner to establish that Respondent No. 3
(the Project Company) and Respondent No. 2 (the Engineering Company)
had an intention to consent for arbitration under NDU-3 dated 17.03.2016
and be bound by it as held in Reckitt Benckiser (India) Pvt. Ltd. v.
Reynders Label Printing India Pvt. Ltd & Anr. (2019) 7 SCC 62, (para
12-14).
199. NDU-3 dated 17.03.2016 itself suggests that Respondent No. 3
(the Project Company) was appointed as the agent of Respondent No.1 to
receive notice on behalf of Respondent No.2. In this connection clause 4,
particularly clause 4.1, 4.2, 4.4 and 4.8 of NDU-3 dated 17.03.2016 are
relevant. They read as under:-
Clause 4.1 Clause 4.2 Clause 4.4 Clause 4.8
Except as All such notices The contact Without prejudice
otherwise and details of the to any other
expressly communications Company*** are mode of service
provided herein shall be effective as follows:- allowed under
or in any of the only on actual any relevant law,______________
Page No 96 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023Clause 4.1 Clause 4.2 Clause 4.4 Clause 4.8
Agreements, all receipt by the Kind Attention: SunEdison ***:-
notices and other officer of the General Counsel (a) irrevocably
communications Client#, the India. appoints the
provided for Contractor*, the Company as
hereunder or Company** or its agent to
there under shall SunEdison*** as Address: receive and
be (i) in writing the case may be SEI Adhavan acknowledge
(including telex for whose Power Private on its behalf
and telecopier attention the Limited** service of any
except as noted notice or th writ,
10 Floor,
below) and (ii) communication summons,
telexed, has been expressly Menon Eternity, order
telecopied or sent marked. Old No.110, New judgment,
by a Person, No.165, notice or
overnight other legal
courier (if for St. Marys Road,
process in
inland delivery) Alwarpet, connection
or with this
Chennai – 600
international Undertaking;
018,
courier (if for and
overseas Tamil Nadu.
delivery) to a (b) agrees that the
Party hereto at its failure by a
address and process agent
contact number to notify
specified below, SunEdison of
or at such other the process
address and will not
contact number invalidate the
as is designated proceedings
by such party in a concerned.
written notice to
the other parties
hereto.
______________
Page No 97 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
# Respondent No.2 (the Engineering Company)
* The Petitioner
** Respondent No.3 (the Project Company)
*** Respondent No.1
200. Respondent No. 3 is named in NDU-3, and the Notices clause
provides its contact details. Payment obligations are defined in Clause 1 of
NDU-3 dated 17.03.2016 to mean “the payment obligations of the Client
Respondent No. 2 namely (the Engineering Company) pursuant to the In-
voices”.
201. Clause 2 of NDU-3 dated 17.03.2016 sets out Respondent No.
1’s undertaking to not to alienate its shareholding in Respondent No. 3 (to
the extent of 24%) till payment obligations were discharged on the
supplies made and to be made. Although, Respondent No. 3 (the Project
Company) has not undertaken any payment obligations under NDU-3
dated 17.03.2016, though it is the beneficiary of NDU-3 dated 17.03.2016.
______________
Page No 98 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
202. As per clause 2.3 all obligations under the NDU-3 dated
17.03.2015 shall automatically terminate upon receipt of the complete
payment of the Invoices by the Respondent No.1 and Respondent No.2
(the Engineering Company).
203. As far as Respondent No.1, the obligation is in clause 2.1
which reads as under:-
2.1 Save for as set out herein or specifically permitted by the
Contractor, SunEdison shall until the complete
discharge of the Payment Obligations by the Client,
continue to legally and beneficially hold and retain at
least 24% (Twenty Four per cent) of the equity in the
Company as more specifically described in Annexure 2
(“NDU Shares”) free of any Security Interest, and shall
not, without prior approval from the Contractor, until
the complete and full discharge of the Payment
Obligations, sell, transfer, assign, dispose of, pledge,
charge or create any Security Interest on the NDU
Shares in favour of any person (including to TerraForm
Global (“GLBI.”) or any of its affiliates pursuant)
204. The definition of parties in NDU-3 refers to Petitioner and
Respondent No. 1. NDU-3 deals with Respondent No. 1’s obligation to not
to dispose of its shareholding in Respondent No. 3 (the Project Company).
______________
Page No 99 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
205. Clause 3 lists the representations and warranties of Respondent
No.1 alone. There are no representations and warranties of Respondent
No.3.
206. Although Respondent No. 3 (the Project Company) has not
expressly bound itself to any obligation in NDU-3, the fact remains that
Mr.Vinay Bhatia, the Director of the Respondent No.3 (the Project
Company)’s Director signed NDU-3 dated NDU-3 dated 17.03.2016 and
agreed to receive notice to resolve any disputes by way of Arbitration that
may be raised by the Petitioner regarding payment.
207. As per clause 4.2 of NDU-3 dated 17.03.2016, Mr.Vinay Bha-
tia, the Director of the Respondent No.3 as the General Counsel, India of
Respondents agreed to receive notice not only on behalf of Respondent
No.2 (the Engineering Company) and Respondent No.3 (the Project
Company) but also on behalf of Respondent No.1. It is a very clear
drafting of agreement by the Respondents. Even if the doctrine of Contra-
______________
Page No 100 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
Proferentem is applied, it has to be construed that all the respondents
agreed to be bound by NDU-3 dated 17.03.2016.
208. Thus, under NDU-3 dated 17.03.2016 signed by Mr. Vinay
Bhatia, the Director of the Respondent No.3 (the Project Company) as the
Authorized representative of Respondent No.1 received notice on behalf
of Respondent No.1 and Respondent No.2 (the Engineering Company).
Thus, all the parties were involved in negotiations which led to signing of
NDU-3 dated 17.03.2016.
209. Thus, Notice was to be served on Mr.Vinay Bhatia, the Director
of the Respondent No.3 (the Project Company), for both Respondent No.2
(the Engineering Company) and Respondent No.3 (the Project Company)
and Sun Edison Group.
210. Under Clause 5.1 Respondent No. 1 has undertaken a binding
obligation upon itself and its successors. Same is also reflected in Clause 6
of NDU-3 which clearly sets out the term of the Undertaking. It states that
______________
Page No 101 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
“the obligations of SunEdison (Respondent No.1) under this Undertaking
shall be automatically and released conditionally upon the discharge of
the Payment Obligations as defined here”.
211. Consensus ad idem stands demonstrated both in relation to: (i)
Module Delivery; (ii) NDU-3 dated 17.03.2016; and (iii) to resolve
disputes by arbitration. This is why the Tribunal has considered these
aspects separately.
212. Thus, NDU-3 dated 17.03.3016 manifests a clear intention of
all the respondents to be bound by it. Therefore, on facts it is clear that the
parties agreed for the Arbitration Clause in NDU-3 dated 17.03.2016.
213. That apart, entire equity shareholding of Respondent No. 1 in
Respondent No.3 (the Project Company) was sold to Greenko Group
entity even before dues were settled to Petitioner contrary to the
undertaking/representation in NDU-3 dated 17.03.2016. Thus, the
Petitioner termed this act as a breach of NDU-3 dated 17.03.2016 and
______________
Page No 102 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
issued a notice of addressing of dispute dated 11.11.2016 (and thereafter
invoked arbitration) against the Respondents under NDU-3.
214. The primary defense of the Respondent No.2 & Respondent
No.3 is that the law that is applicable in Singapore should be applied for
enforcing an award in terms of Section 48(1) (a) of Arbitration and
Conciliation Act, 1996. It is submitted that the Courts in Singapore had
not recognized the concept of Group of Companies. They have relied upon
the decision of Singapore High Court in Manuchar Steel Hong Kong
Ltd. v. Star Pacific Line Pte Ltd., 2014 SGHC 181, to reiterate the
proposition that Group of Companies Doctrine/Single Economic Entity
concept is not recognised in Singapore and hence, the award cannot be
enforced.
215. In this regard, the factual differences should be noted and not
missed. In Manuchar Steel Hong Kong Ltd. v. Star Pacific Line Pte
Ltd., 2014 SGHC 181 heavily relied on by the respondents, enforcement
of Award was sought against a non-party to the Arbitral proceedings on the
______________
Page No 103 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
ground that the said non-party was a part of Single Economic Entity of the
Award Debtor against whom the award was sought to be enforced.
216. There, an application was thus filed to ascertain the same. It
was a pre-action discovery from Star Pacific Line Pte Ltd (“Star Pacific”)
of all documents relating to the hire, use or operation of a vessel, Fusion 1,
by Star Pacific or its servants or agents. In that context, the Singapore
High Court in Manuchar Steel Hong Kong Ltd. v. Star Pacific Line Pte
Ltd., 2014 SGHC 181 held that the Group of Companies Doctrine under
the Arbitration law was not acceptable. The Court there followed its views
in Lew Syn Pau and Win Line (UK) Ltd v. Masterpart (Singapore) Pte
Ltd and another [1999] 2 SLR(R) 24 (“Win Line”) wherein the
concession by both parties’ counsel that the separate corporate legal
personality principle presented a considerable obstacle to a finding that the
act of Compart Mauritius was to be taken as an act of BIGL.
217. Lew Syn Pau and Win Line (UK) Ltd v Masterpart
(Singapore) Pte Ltd and another [1999] 2 SLR(R) 24 (“Win Line”)
______________
Page No 104 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
was a case of piercing the corporate veil because what was sought to be
done was to attribute the act of a company to its controller. There was no
argument or discussion to the effect that because Compart Mauritius and
BIGL, together with other entities, operated as a single economic entity or
each belonged to that single economic entity with the consequence that the
acts and liabilities of each of the companies in that entity may be
attributed to the other.
218. There, the Court in Lew Syn Pau and Win Line (UK) Ltd v
Masterpart (Singapore) Pte Ltd and another [1999] 2 SLR(R) 24
(“Win Line”) was dealing with a situation whether BIGL, had committed
an offence by giving prohibited financial assistance to a purchaser for the
acquisition its shares. There, a company which was the target of an
intended acquisition was prohibited, subject to certain statutory
exceptions, from directly or indirectly giving any financial assistance for
the purposes of or in connection with the acquisition. The financial
assistance was taken in the form of a loan by one of BIGL’s subsidiaries,
namely Compart Mauritius. The Court thus held that Single Economic
______________
Page No 105 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
Entity was not applicable. This view was followed by the Singapore High
Court in Manuchar Steel Hong Kong Ltd. v. Star Pacific Line Pte Ltd.,
2014 SGHC 181 in the case of One Ship Company.
219. Further, in Manuchar Steel Hong Kong Ltd. v. Star Pacific
Line Pte Ltd., 2014 SGHC 181, the Singapore High Court was concerned
with the issue as to why a single economic entity concept has no place in
Singapore law in the context of one-ship companies.
220. There the Court in Manuchar Steel Hong Kong Ltd. v. Star
Pacific Line Pte Ltd., 2014 SGHC 181 held that if the single economic
entity concept were accepted, all such one-ship companies would be
considered as part of the same Single Economic Entity with the corollary
that the liability of a one-ship company may be visited on several (or all)
of its other sister companies and mere existence of a group structure; the
piercing of the corporate veil exception would not even be needed.
______________
Page No 106 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
221. In short, it held that there would be no place for the survival of
the one-ship companies practice and doctrine which has long existed and
recognised as a legitimate tool for limiting liability. Therefore, the Court
concluded that the Single Economic Entity concept had very little traction
in International Arbitration Community, especially outside jurisdictional
issues (such as whether a company was within the group or is part of the
group for the purposes of jurisdiction).
222. However, in the present case, the Arbtiral Tribunal was not
involved with a situation from the perspective of Single Economic Entity
to award the amounts to the Petitioner, although under Indian Law, all the
Respondents will certainly come within the Group Company
Doctrine/Single Economic Entity. The, Arbitral Tribunal has given a
factual finding that all the respondents were party to the agreement,
although it was signed by the Respondent No.1 which was signed by the
Director of Respondent No.3 binding Respondent No.2.
______________
Page No 107 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
223. In this case, after examining the facts and evidence, in response
to Issue No.1, the Arbitral Tribunal observed as under:-
E.ANALYSIS AND FINDINGS ON FRAMED ISSUES
Issue 1 as framed by the Claimant (As to whether there is a
contract beween the parties and what the terms are)
129. When Ringhofer was asked by the Tribunal as to
when the Respondents first communicated to the
Claimant that they did not consider NDU-3 to be valid
or binding, he was unable to point to any such
communication. Ringhofer was also unable to identify
any documentary evidence to support his claim that
SunEdison at all times internally considered NDU-3 to
be invalid he confirmed that there are no internal
documents between the SunEdison entities to show that
any of them considered NDU-3 not to be binding. It
bears mention that none of the Respondents
responded to Claimant’s Notices of Dispute in relation
to NDU-3, which were served on them on 11
November 2016″ and 8 January 2017, to deny its
existence or validity, The very first time that any of the
Respondents denied the existence or validity of NDU-
3 was after the commencement of this arbitration in
April 2017.
….
131. For the above reasons, the Tribunal finds the
Respondents’ arguments that NDU-3 constituted entire
contract between the Parties, that it was rejected by the
Claimant, that the terms therein are uncertain, and/or
that NDU-3 is not workable, are wholly without merit
on the facts and the law, The evidence shows (a) that
______________
Page No 108 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
Pashupathy was head of the Asia operations of
SunEdison Inc represented the SunEdison group’s
interests in India, (b) that Vinay Bhatia was a director
of the 3rd Respondent when he signed NDU-3 as
authorised representative of the Ist Respondent, and
was also General Counsel of SunEdison’s group
operations in India, and (c) that Ramesh was the Chief
Operating Officer of SEEI and a director of the 2nd
Respondent at the material time. Pashupathy, together
with Vinay Bhatia and Ramesh negotiated the terms of
NDU-3 from 15-18 March 2016. The Tribunal finds
that Pashupathy had authority to represent the
Respondents, which he did, 100 in agreeing to pay the
Claimant’s unpaid invoices for PV Modules delivered
for the Adhavan Project in consideration of the
Claimant delivering the remaining shipments of PV
Modules to enable the Adhavan Project to be completed
in time on the terms set out in the PV Modules Delivery
Agreement. In this connection, we do not accept
Ringhofer’s testimony that Pashupathy had no legal
authority to represent the 3rd Respondent in
negotiating the terms of NDU-3 for the reasons set out
at [42] above. He also had no personal knowledge of
the events that led to the execution of NDU-3
Finding on Issue 1
132. The Tribunal finds that the Claimant and the
Respondents, jointly and severally, entered into the PV
Modules Delivery Agreement, which includes NDU-3
on the terms contained therein.
______________
Page No 109 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
224. In response to Issue No.2- whether Respondents were parties
to NDU-3, the Arbitral Tribunal observed as under:-
D. Claimant’s case
138. The Claimant’s case is that although the 1″
Respondent signed NDU-3 and is therefore a party to
the NDU, the 2nd and 3rd Respondents are bound by
the terms of NDU-3 as they are parties to the PV
Modules Delivery Agreement which includes the terms
of NDU-3 to regulate the security provided by the 1st
Respondent.
E. Tribunal’s analysis
…..
143. Not only did Pashupathy agree to provide
“security” for the payment of the unpaid invoices, he
also promised that “we will pay as soon as we
drawdown the loan”, i.e., under the Facility Agreement
dated 4 November 2015 which provided financing for
the Adhavan Project of up to Rs 317 crores on the
projected cost of Rs 514.5 crores. Similarly, Robin Yan
also emailed Daniel Yang that “We will pay 9M next
week before the last 9MW arrived. Risk exposure for
Jinergy is only 7.5M USD.”
144. By using the expressions “we” and “SunEdison”,
and involving the 2 ^ (nd) and 3 ^ 4 Respondents as
well, Pashupathy was understood by Dr Yang to
warrant that the Respondents would jointly and
severally undertake to pay Jinergy’s unpaid invoices,
instead of SPS pursuant to the MSA. As far as Dr Yang
was concerned, SPS ceased to be a relevant party in the
delivery of the remaining PV Modules to the 2 ^ (sd)
______________
Page No 110 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
Respondent. The 1″ Respondent, as the 99.99% owner
of the 2 ^ (nd) and 3rd Respondents, assumed the
responsibility for itself and its 99.99% subsidiaries, to
agree to pay the Claimant for all unpaid invoices in
order to persuade Dr Yang to agree to deliver the last
shipments of PV Modules, without which the Adhavan
Project could not be completed in time to enjoy a
higher price for the supply of electricity under the
terms of the ESA. Pashupathy had promised that the
unpaid invoices would be paid from the drawdowns
from the Facility Agreement, that is to say, by the 3 ^ w
Respondent, who was the borrower.
145. Finally, the Tribunal is of the view that Clause
9(c) of NDU-3 which provides that for the purpose of
arbitrating a dispute arising thereunder, the
Respondents must act together to appoint an arbitrator
implies that the Respondents are a unified party to
NDU-3. Since neither the 2nd Respondent nor the 3rd
Respondent provided the security in the form of the
NDU Shares, their joint obligation or right to appoint
an arbitrator implies they had a common interest in the
dispute, which in the present case, is not only the loss
suffered by the Claimant by the wrongful disposal of
the NDU Shares but also the claim for payment of the
unpaid invoices for PV Modules delivered at the
request of the Respondents. Clause 9(c) assumes that
the Respondents are parties to the main or primary
agreement, i.e, the PV Modules Delivery Agreement.
F. Finding of Tribunal
146. For the above reasons, the Tribunal accepts the
submissions of the Claimant that the Respondents are
parties to NDU-3.”
______________
Page No 111 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
225. Similarly for Issue No.3 as to whether the Respondents were
parties to the arbitration agreement in clause 9 in NDU-3, the Arbitral
Tribunal observed as under:-
E. Findings of Tribunal on Issue 3
162. The 1″ Respondent having failed to show that the
NDU-3 was rejected, has no other basis to say that it is
not a party to the arbitration agreement. The Tribunal
finds that the arguments of the 2nd and 3 Respondents
that they are not parties to NDU-3 have no merit since
they are based on the premise that there was no
concluded contract between the Parties since NDU-3
was rejected, or that there was no agreement reached
on the terms of the contract and/or NDU-3 was
incomplete and not workable because the unpaid
invoices in respect of which the Claimant is claiming
were not included in NDU-3.
163. The Tribunal accepts the Claimant’s submissions
that on the evidence the Parties had entered into a
broader agreement in the form of the PV Modules
Delivery Agreement, of which NDU-3 was an
appendage. There was an agreement by the
Respondents to pay the unpaid invoices in
consideration of the release of the remaining PV
Modules by the Claimant. There was a separate
document, viz., NDU-3, which set out the terms of the
“security” that Pashupathy had offered the Claimant______________
Page No 112 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023after Dr Yang did not agree to release the remaining
shipment of PV Modules for the Adhavan Project
simply on the words of Pashupathy.
164. The Tribunal has found that Pashupathy, Ramesh
and Robin Yan had authority to negotiate the terms of
the release on behalf of the Respondents who, together,
owned the Adhavan Project. The 1″ Respondent in
effect owned and constructed the Adhavan Project
using two SPVs, viz., the 2nd and 3rd Respondents to
do so, in line with the SunEdison business model
described above. The Respondents were collectively
parties to the PV Modules Delivery Agreement, with
NDU-3 as an appendage, even though only the 1st
Respondent was the signatory to NDU-3. Accordingly,
the Respondents were parties to the arbitration
agreement, and the Tribunal has jurisdiction to
determine the claims of the Claimant against the
Respondents under the PV Modules Delivery
Agreement.
Was the PV Modules Agreement a guarantee for the
liabilities of the 3* Respondent?
165. The 3rd Respondent has argued at [3]-[4] of it
Reply Closing Submissions as follows:
3. However, the Claimant’s reliance on terms
outside of the four walls of the NDU is
fundamentally defective. Section 6(b) of the Civil
Law Act (Cap. 43) (“CLA”) provides:
No action shall be brought against any defendant
upon any special promise to answer for the debt,
default or miscarriage of another person unless
the promise or agreement upon which such action______________
Page No 113 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023is brought, or some memorandum or note thereof,
is in writing and signed by the party to be charged
therewith or some other person lawfully
authorised by him.
4. The Claimant had raised the Invoices on SPS
pursuant to the MSA, and it was SPS that was
obliged to pay for these Invoices. Even assuming
arguendo that the 3rd Respondent had promised to
directly pay (or ensure payment of) the Invoices on
behalf of SPS, such a promise must be in writing
and signed by the 3rd Respondent before any action
can be commenced against the 3rd Respondent.
Section 6(b) of the CLA is an absolute bar against
the Claimant’s claim for breach of its alleged
obligation to directly pay (or ensure payment of)
the Invoices. The Claimant’s claim against the 3rd
Respondent for breach of contract vis-à-vis non-
payment of the sum of US$7,348,403.10 must fail in
limine.
166. The Tribunal does not agree with this argument.
10% The short answer is that the PV Modules Delivery
Agreement constitutes new obligations by the
Respondents to pay the unpaid invoices, in substitution
for the obligations of the 1ª Respondent. Pashupathy
did not suggest to Dr Yang that “we” will guarantee
payment of the unpaid invoices by SPS under the MSA,
but that “we” will pay all unpaid invoices issued
pursuant to Purchase Orders. At this time, all the
Purchase Orders for modules needed for the Adhavan
Project had been made under the ESA. The role of SPS
as a conduit in the procurement of PV Modules for the
Adhavan Project came to an end.
______________
Page No 114 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
Does the “group of companies” or “single economic
entity” doctrine apply in Singapore?
167. The 3rd Respondent has submitted that it is
indisputable that under Singapore law, the “group of
companies” or “single economic entity” doctrine is not
recognized, citing as authority for this proposition,
Manuchar Steel Hong Kong Ltd v Star Pacific Line Pte.
Ltd. [2014] 4 SLR 832 (“Manuchar”). The Tribunal
does not agree with this submission. There is no reason
in principle why the doctrine does not apply if a party
to a contract intended to contract in that manner. If, as
in the present case, SunEdison Inc (under the authority
of Pashupathy in India) intended to treat the
Respondents as a single entity for the purpose of
obtaining delivery of the remaining PV Modules from
the Claimant, and offered to pay the unpaid invoices
and also to provide security for their obligations, and
the Claimant accepted those terms,there is no principle
of law that prevents the court / arbitral tribunal from
giving effect to such an agreement. Indeed, it is the
court’s duty to give effect to the contractual intention of
the parties, unless the terms are contrary to public
policy. That is a basic principle of contract.
168. Manuchar is distinguishable on the facts and in
the realm of shipping practice. That case concerned an
application for pre-action discovery for documents on
the basis that the defendant was part of a single
economic entity. The High Court dismissed the
application on the ground that pre-discovery was not
necessary. The court also said that the single economic
entity concept has not been recognised in the case law
from Singapore and other common law jurisdictions,
and that it was not even a clearly established concept
______________
Page No 115 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
in international arbitration. 107 Those statements were
obiter, in so far as they purported to apply to
commercial transactions other than those in the case of
one-ship companies.
169. In the shipping industry, the use of one-ship
companies by shipping enterprises are an established
feature of the business for the purposes, inter alia, of
preventing claimants or creditors from arresting sister
ships. All ships so owned are operationally
independent, having their own captains and crews. The
common owner of such companies treats them as
independent economic units under the law for
financial, operational and third-party liability reasons.
So do the courts in recognition of their economic
function. Manuchar is not an authority for the 3rd
Respondent’s proposition. In comparison, the evidence
in this arbitration shows that the Respondents were
indeed a single economic unit and were intended to be
so by the ultimate owner, SunEdison Inc, in accordance
with its business model. None of the Respondents had
management and operational staff to carry out the
functions of the Respondents. They were performed by
other entities within the SunEdison group of global
entities. When the solar power plant developed as the
Adhavan Project was sold in SunEdison Inc’s Chapter
11 proceedings, the proceeds of sale were not paid to
the Respondents, but to SunEdison’s creditors. There
was no question that the Respondents were treated and
managed as a single economic unit that would
eventually result in the creation of a yieldco for the sole
benefit of SunEdison Inc, and not for the Respondents
as separate and independent economic units.
______________
Page No 116 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
170. None of the authorities referred to in Manuchar
are directly on point in relation to the facts in this
arbitration. The strongest judgment the court relied to
opine that the single economic entity doctrine does not
apply in Singapore is the judgment of Slade LJ in
Adams v Cape Industries plc [1990] Ch 433 (“Adams”)
at 536), which was based on the judgment of Roskill LJ
in Albacruz (Cargo Owners) v Albazero (Owners) (The
Albazero) [1977] AC 774 at 807. Adams was cited with
approval in PP v Lew Syn Pau [2006] 4 SLR(R) 210
(“Lew Syn Pau”) at [193]) and Win Line (UK) Ltd v
Masterpart (Singapore) Pie Lid [1999] 2 SLR(R) 24.
None of these cases were really concerned with a real
case of a single economic entity. Indeed, Professor
Gower was far, far ahead of his time when he wrote in
Modern Company Law, 3rd ed (1969), p 216 that:
“there is evidence of a general tendency to ignore
the separate legal entities of various companies
within a group, and to look instead at the
economic entity of the whole group.”
171. The High Court’s statement in Manuchar that,
apart from the Dow Chemical arbitration case, the
single economic entity concept has very little traction
in the international arbitration community, especially
outside jurisdictional issues (such as whether a
company within the group is part of the group for the
purposes of jurisdiction). This may be so. It all depends
on the facts. If a global company like SunEdison Inc
organizes its business worldwide in such a
recognizable way that certain groups of entities within
the group are treated as a single economie entity vis-à-
vis suppliers of services and materials to that single
entity, there is no principle of law that debars a court
______________
Page No 117 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
from recognizing that entity as a single entity as a
matter of law. After all, it is an established principle
that the courts should give effect to commercial
arrangements or realities, whenever it is not contrary
to law or public policy.
172. The editors of Vol 6 of Halsbury’s Laws of
Singapore on Company Law (2010 Reissue) write:
“The important point about the cases in which a
group was treated as one entity is that there was a
functional unity among the companies within the
group. It is suggested that there are two aspects to
this: unity of ownership and unity of control. If
this functional unity is not present, there will be no
justification to treat the group. The court will
decline to lift the corporate veil of incorporation.
If. on the other hand, it can be shown that the
group is managed as a functional whole, a lifting
of the veil may occur.
The Tribunal would approve of this statement with
reference to the Respondents who, together,
constituted a single economic unit with functional
unity.
173. Having said that, the Tribunal would also say that
in the present case, it is not necessary for the Tribunal
to rely on the single economic unit doctrine, although
the SunEdison business model and the evidence in this
case supports the intention of Pashupathy to treat the
Respondents as a single economic unit for the purpose
of implementing its business model in relation to the
Adhavan Project. The Tribunal has found as a fact that
Pashupathy, in his capacity of President, SunEdison
______________
Page No 118 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
India, with responsibility for all SunEdison Inc’s Asia-
Pacific operations, had corporate authority to
represent the Respondents jointly and severally in
concluding the broader agreement, including NDU-3,
with the Claimant.
174. In this connection, it may be mentioned that the
Indian Supreme Court of India has recognized the
group of companies or single economic entity. Indeed,
in dismissing the appeals by the 1 and 2nd Respondents
against the decision of a single judge of the Madras
High Court on 23 July 2018, the Madras High Court
(Appellate Jurisdiction) referred to the decision of the
Supreme Court in Choloro Controls India Pte Lid v
Severn Trent Water Purification Inc & Ors (2013) 1
SCC 641 which upheld the “group companies
doctrine”, and read it into section 45 of Act 26 of 1996
(i.e. the (Indian) Arbitration and Conciliation Act,
1996). The Court explained that what was important
was the intention of the parties and held that the instant
case was even “better” than the Choloro decision.
NDU-3 referred to the two appellants, viz., the 2nd and
3rd Respondents, and can be put in the same basket as
that of respondent No 2, viz., the 1™ Respondent. The
same thing can be said of the present case. It is clearer
and stronger on the facts than the facts in Choloro
because, here, Pashupathy had the authority to agree,
and did agree, on behalf of the Respondents jointly and
severally to pay the unpaid invoices in consideration of
the Claimant agreeing to release the remaining PV
Modules so that the Adhavan Project could be
completed in time to qualify for a higher price for
electricity to be supplied under the ESA. Accordingly,
the Tribunal finds that the Respondents collectively
______________
Page No 119 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
entered into the PV Modules Delivery Agreement with
NDU-3 as an appendage.
226. The appeal against the Award passed by the Arbitral Tribunal
before the Higher Court of Singapore was also decided against the
respondents vide its order dated 25.02.2022. Relevant portion of the
Order of the High Court of Singapore reads as under:-
“143. Indeed, in the course of oral submissions before me,
counsel for the third respondent candidly conceded that if
I were to find that Aragon (Mr.Pashupathy Gopalan)*
had the authority, actual or apparent, to represent the
third respondent (Adhavan)* in the March 2016
negotiations with the claimant (Jinneng)*, and to find that
a contract arose out of those negotiations, then the third
respondent (Adhavan)* would be bound by the contract
despite not being a signatory to NDU-3. This must be
correct in principle. Although counsel for the second
respondent (SSPI)* did not expressly make the same
concession, it must be equally correct for the second
respondent (SSPI)*.
……
149.Returning to the facts of this case, I accept that
Boromir (Mr.Vinay Bhatia)* and Frodo (Mr.Ramesh
Subbarao)* had implied actual authority from the second
respondent (SSPI)* and the third respondent (Adhavan)*
respectively to participate in the March 2016 negotiations
and to bind those companies to the contract. Boromir______________
Page No 120 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023(Mr.Vinay Bhatia)* was a director of the third respondent
(Adhavan)* in March 2016 in addition to being a director
of the first respondent (SEEH)*. Further, Frodo
(Mr.Ramesh Subbarao)* was a director of the second
respondent (SSPI)* in March 2016. He was also a senior
employee of the second respondent (SSPI)*.
150.I also find that Aragon (Mr.Pashupathy
Gopalan)* also had authority to bind the second
respondent (SSPI)* and the third respondent (Adhavan)*,
even though he was not a director of either company in
March, 2016. The second respondent (SSPI)* and the
third respondent (Adhavan)* argue that Aragon (Mr.-
Pashupathy Gopalan)* lacked any authority to bind either
the second respondent (SSPI)* or the third respondent
(Adhavan)* because neither company had passed a
directors’ resolution specifically authorising Aragon
(Mr.Pashupathy Gopalan)* to represent it in the March
2016 negotiations. I do not accept this submission. The
lack of a directors’ resolution establishes only that Aragon
(Mr.Pashupathy Gopalan)* did not have actual express
authority from either the second respondent (SSPI)* or the
third respondent (Adhavan)* to participate in the March
2016 negotiations on their behalf and to bind them to the
contract which resulted.
151.The absence of a directors’ resolution confer-
ring express actual authority on Aragon (Mr.Pashupathy
Gopalan)* does not address Aragon’s (Mr.Pashupathy
Gopalan)* implied actual authority. I find that Aragon
(Mr.Pashupathy Gopalan)* had implied actual authority
to participate in the March 2016 negotiations on behalf of
______________
Page No 121 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
the second respondent (SSPI)* and the third respondent
(Adhavan)* and to bind each of them to the contract it
gave rise to. I say this for two reasons. First, Boromir
(Mr.Vinay Bhatia)* and Frodo (Mr.Ramesh Subbarao)*,
as directors of the second respondent (SSPI)* and the
third respondent (Adhavan)* respectively, participated in
the March 2016 negotiations and remained silent while
Aragon (Mr.Pashupathy Gopalan)* took the lead in these
negotiations speaking for both the second respondent
(SSPI)* and the third respondent (Adhavan)*. Second,
Aragon (Mr.Pashupathy Gopalan)* held a senior position
in the Rohan Group (SunEdison Group)* as a result of
which both the second respondent (SSPI)* and the third
respondent (Adhavan)* conferred implied authority on
Aragon (Mr.Pashupathy Gopalan)*.
152.The starting point in the analysis is to
appreciate Aragon’s (Mr.Pashupathy Gopalan)* position
within the Rohan Group (SunEdison Group)*. His
position is telling as to the ambit of his authority. He was
hired to establish the Rohan Group’s (SunEdison Group)*
business operations in Gondor (India)* and was given the
title of “President” of the Rohan Group’s (SunEdison
Group)* operations in Gondor (India)*. His senior
managerial role meant that Aragon (Mr.Pashupathy
Gopalan)* had overall responsibility for supervising the
Rohan Group’s (SunEdison Group)* activities in Gondor
(India)*. This extended to overall responsibility for the
second respondent (SSPI)* and the third respondent
(Adhavan)*. Indeed, a member of the Rohan Group’s
(SunEdison Group)* in-house legal team accepts in his
______________
Page No 122 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
affidavit that Aragon (Mr.Pashupathy Gopalan)* was a
“senior leader” who was “near the top of the chain of
command”. Aragon (Mr.Pashupathy Gopalan)* was
therefore the person to whom most employees in the Rohan
Group’s (SunEdison Group)* business in Gondor
(India)* reported by virtue of his position.”
153.Aragon’s (Mr.Pashupathy Gopalan)* role and
designation in the Rohan Group’s (SunEdison Group)*
operations in Gondor (India)* also meant that he had
overall responsibility for the Project. Indeed, this was
something which Aragon (Mr.Pashupathy Gopalan)*
himself pointed out to Legolas (Dr.Yang Liyou)* when
they spoke on 15 March 2016. That was when Aragon
(Mr.Pashupathy Gopalan)* assured Legolas (Dr.Yang
Liyou)* that the second respondent (SSPI)* would pay the
claimant (Jinneng)* once the third respondent
(Adhavan)* managed to draw down the loans from the
project financers (see [84(c)] above). The successful
completion of the Project, on time and within budget, was
Aragon’s (Mr.Pashupathy Gopalan)* responsibility. This
must extend to resolving difficulties standing in the way of
completing the Project on time and within budget, such as
the claimant’s (Jinneng)* suspension of delivery of
Modules for the Project. I am satisfied that the second
respondent (SSPI)* and the third respondent (Adhavan)*
gave Aragon (Mr.Pashupathy Gopalan)* their implied ex-
press authority to move each of them in directions that he
thought were in the best interests of the Rohan Group
(SunEdison Group)* in order to complete the Project on
time and within budget. I therefore conclude that Aragon
______________
Page No 123 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
(Mr.Pashupathy Gopalan)* had the implied actual
authority to participate in the March 2016 negotiations on
behalf of the second respondent (SSPI)* and the third
respondent (Adhavan)*, and to bind them to the contract
which resulted.
154.Having reached this conclusion, it is not
necessary for me to consider the parties’ submissions on
apparent authority.
Conclusion on the validity of the arbitration agreement
155. For all these reasons, I find that there is a valid
arbitration agreement between the claimant (Jinneng)*
and each of the respondents. The tribunal accordingly had
jurisdiction over the dispute which the claimant (Jin-
neng)* referred to arbitration. The respondents’ challenge
to the award on this ground fails.”
Note-* For easy reference as the High Court has substituted
the names for the sake of hiding the identity
227. Thus, the facts of the present case are clearly distinguishable
from the Singapore High Court in Manuchar Steel Hong Kong Ltd. v.
Star Pacific Line Pte Ltd., 2014 SGHC 181, as the respondents herein
were party to the arbitration proceedings and on facts, the findings in the
award were that they were not strangers to the Arbitration Agreement in
NDU-3 dated 17.03.2015.
______________
Page No 124 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
228. Since, the Award was not decided on the basis of Group of
Companies doctrine/Single Economic Entity, the arguments of the
respondent that the Arbitral Tribunal decided the case by involving Group
of Companies doctrine/Single Economic Entity are to be rejected.
229. I shall delve further in my discussion to Part II of the
Arbitration and Conciliation Act, 1996 which deals with enforcement of
certain Foreign Awards. Chapter I of Part II which encompasses Sections
44 to 52 of Arbitration and Conciliation Act, 1996 deals with New York
Convention Awards.
230. Section 44(a) of the Arbitration & Conciliation Act, 1996
which defines the expression “foreign award”, is extracted hereunder for
reference.
“44. Definition. — In this Chapter, unless the context
otherwise requires, “foreign award” means an arbitral
award on differences between persons arising out of legal
relationships, whether contractual or not, considered as
______________
Page No 125 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
commercial under the law in force in India, made on or
after the 11th day of October, 1960—
(a) in pursuance of an agreement in writing for
arbitration to which the Convention set forth in the First
Schedule applies, and
(b) in one of such territories as the Central Government,
being satisfied that reciprocal provisions have been made
may, by notification in the Official Gazette, declare to be
territories to which the said Convention applies.”
231. Section 44 of the Arbitration and Conciliation Act, 1996
merely states that “foreign award” means an arbitral award on differences
between persons arising out of legal relationships, whether contractual or
not, considered as commercial under the law in force in India, made on or
after the 11th day of October, 1960 –
a) In pursuance of an agreement in writing for arbitration to which
the Convention set forth in the First Schedule applies, and
b) In one of such territories as the Central Government, being
satisfied that reciprocal provisions have been made may, by
notification in the Official Gazette, declare to be territories to
which the said Convention applies.
232. If the Award satisfies the definition of a “foreign award”, it is
enforceable under Chapter I of Part II to the Arbitration and Conciliation
______________
Page No 126 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
Act, 1996. It shall be treated as binding for all purpose on all the persons
as between whom it was made and may accordingly be relied on by any of
those persons by way of defense, set-off or otherwise in any legal proceed-
ings in India and any references in this Chapter to enforcing a “foreign
award” shall be construed as including references to relying on an award.
233. All that is required to be satisfied by a successful Award Holder
is to demonstrate that the Award was made in pursuance of an agreement
in writing to which New York Convention applies. The Petitioner is
required to satisfy that the award which is sought to be enforced satisfies the
definition of “Foreign Award” in Section 44 (a) of the Arbitration and
Conciliation Act, 1996.
234. There is no dispute that parties hereto are governed by the New
York Conventions Award in terms of Chapter I of Part II of the Arbitration
and Conciliation Act, 1996 read with First Schedule to the Act which deals in
Convention for both Recognition and Enforcement of Foreign Arbitral
Award. There is no dispute that NDU-3 dated 17.03.2016 is an agreement
______________
Page No 127 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
which has been treated as an appendage to the Main Module Supply
Agreement dated 19.08.2015 between the petitioner and Non-Party.
235. As per Section 44(a) of the Arbitration and Conciliation Act,
1996, unless the context otherwise requires a “Foreign Award” is an Award
made in pursuance of an agreement in writing for arbitration to which the
Convention set forth in the First Schedule to the Act applies and in one of
such territories as the Central Government, being satisfied that reciprocal
provisions have been made may, by notification in the Official Gazette,
declare to the territories to which the said Convention applies.
236. It has to be remembered that this Court, while dealing with
recognition and enforcement of a “foreign award” under Chapter I of Part
II of the Arbitration & Conciliation Act, 1996, is not an appellate court to
examine question of facts of whether there existed an arbitration
agreement or not, as that decision has been given by the Arbitral Tribunal.
Chapter of I of Part II of the Arbitration & Conciliation Act, 1996 is
modeled on the NY Convention.
______________
Page No 128 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
237. All that is required to be seen is whether the “foreign award”
was made between the parties based on an underlying “agreement in
writing” and the said “agreement in writing” contained an arbitration
clause to resolve the dispute through Arbitration.
238. Therefore, the respondents cannot question the existence of
“agreement in writing” for arbitration under section 44 (a) of the
Arbitration and Conciliation Act, 1996 at the stage of the enforcement of a
“foreign award”.
239. The Hon’ble Supreme Court in PASL Wind Solutions (P) Ltd.
v. GE Power Conversion (India) (P) Ltd., (2021) 7 SCC 1, held that
Section 44 of the Arbitration Act is modelled on Articles I and II of the
New York Convention.
240. As per clause 2 to Article II of New York Convention, the
expression “Agreement in Writing” includes the arbitral clause in a
______________
Page No 129 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
contract or the arbitration agreement, signed by the parties or contained in
an exchange of letters or telegrams.
241. In para 30 of Gemini Bay Transcription (P) Ltd. v.
Integrated Sales Service Ltd., (2022) 1 SCC 753, the Hon’ble Supreme
Court, while interpreting Section 44 of the Arbitration and Conciliation
Act, 1996, recognised the following six ingredients for an award to be
termed as “foreign award” under Section 44 of the Arbitration and
Conciliation Act, 1996, namely:-
i. It must be an arbitral award on differences between persons
arising out of legal relationships.
ii. These differences may be in contract or outside of contract,
for example, in tort.
iii. The legal relationship so spoken of ought to be considered
“commercial” under the law in India.
iv. The award must be made on or after the 11th day of
October, 1960.
v. The award must be a New York Convention award — in
short it must be in pursuance of an “agreement in writing”
to which the New York Convention applies and be in one of
such territories.
______________
Page No 130 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023vi. It must be made in one of such territories which the Central
Government by notification declares to be territories to
which the New York Convention applies.
242. Para 30 of Gemini Bay Transcription (P) Ltd. v. Integrated
Sales Service Ltd., (2022) 1 SCC 753 is extracted as under:-
“30. A reading of Section 44 of the Arbitration and
Conciliation Act, 1996 would show that there are six
ingredients to an award being a foreign award under the
said section. First, it must be an arbitral award on
differences between persons arising out of legal
relationships. Second, these differences may be in contract
or outside of contract, for example, in tort. Third, the legal
relationship so spoken of ought to be considered
“commercial” under the law in India. Fourth, the award
must be made on or after the 11th day of October, 1960.
Fifth, the award must be a New York Convention award —
in short it must be in pursuance of an agreement in writing
to which the New York Convention applies and be in one of
such territories. And sixth, it must be made in one of such
territories which the Central Government by notification
declares to be territories to which the New York
Convention applies.”______________
Page No 131 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
243. Although the First Schedule to the Arbitration and Conciliation
Act, 1996 is titled as “Convention on the Recognition and Enforcement
of Foreign Arbitral Awards”, Article II to the first schedule is clearly
intended to implement the requirements of Section 45 of the Arbitration
and Conciliation Act, 1996.
244. The definition of the expression “agreement in writing” in
Clause-2 to Article-II of the New York Convention in the First Schedule to
the Arbitration and Conciliation Act, 1994 is intended for the purpose of
Section 45 of the Arbitration and Conciliation Act, 1996. The definition
of the expression “agreement in writing” in Clause-2 to Article-II is really
not intended for an enquiry as to whether an agreement exists or not at the
stage of Recognition and Enforcement of an International Award in Part-II
of the Arbitration and Conciliation Act, 1996.
245. For easy reference, Article I and II of the New York
Convention 1958, as in the First Schedule to Arbitration and Conciliation
Act, 1996 are extracted as under:-
______________
Page No 132 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023Article 1 Article II
1. This Convention shall apply to 1. Each Contracting State shall
the recognition and recognize an agreement in
enforcement of arbitral awards writing under which the
made in the territory of a parties undertake to submit to
State other than the State arbitration all or any
where the recognition and differences which have arisen
enforcement of such awards or which may arise between
are sought, and arising out of them in respect of a defined
differences between persons, legal relationship, whether
whether physical or legal. It contractual or not,
shall also apply to arbitral concerning a subject matter
awards not considered as capable of settlement by
domestic awards in the State arbitration.
where their recognition and 2. The term “agreement in
enforcement are sought. writing” shall include an
2. The term “arbitral awards” arbitration clause in a
shall include not only awards contract or an arbitration
made by arbitrators appointed agreement, signed by the
for each case but also those parties or contained in an
made by permanent arbitral exchange of letters or
bodies to which the parties telegrams.
have submitted. 3. The court of a Contracting
3. When signing, ratifying or State, when seized of an
acceding to this Convention, or action in a matter in respect
notifying extension under of which the parties have
article X hereof, any State may made an agreement within
on the basis of reciprocity the meaning of this article,
declare that it will apply the shall, at the request of one of
Convention to the recognition the parties, refer the parties to
and enforcement of awards arbitration, unless it finds
made only in the territory of that the said agreement is null
another Contracting State. It and void, inoperative or
may also declare that it will incapable of being
______________
Page No 133 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
Article 1 Article II
apply the Convention only to performed.
differences arising out of legal
relationships, whether
contractual or not, which are
considered as commercial
under the national law of the
State making such
declaration.
246. Further, the expression “agreement in writing” in Article II
Clause-2 is an inclusive definition. It includes an arbitration clause in a
contract or the Arbitration Agreement, signed by the parties or contained
in an exchange of letters or telegrams.
247. The expression “agreement in writing” as in Clause-2 to
Article-II is of wide purport. The argument that the Final Award dated
22.02.2021 and the addendum to the Final Award dated 08.03.2021 were
not made in pursuance of an “Agreement in Writing” for arbitration as
required by the Convention set forth in the first schedule of the Arbitration
and Conciliation Act, 1996, namely New York Convention cannot be
countenanced as the expression termed “agreement in writing” as in
______________
Page No 134 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
Clause-2 to Article-II includes an arbitration clause in a Contract or an
Arbitration Agreement signed by the parties or contained in an exchange
of letters or telegrams.
248. Since the definition of “agreement in writing” in Clause 2 of
Article II of the New York Convention is inclusive, covering
correspondence through the exchange of letters or telegrams, the
application of the ejusdem generis would also encompass exchanges of
emails between the parties to the contract. The facts indicate that all
parties were involved in negotiations from 15.03.2016 to 17.03.2016,
culminating in NDU-3 dated 17.03.2016.
249. It was at that stage, the officers of the respondents, who had
dual role both in the group companies as also in the respondents
Companies, swung into action and negotiated with the petitioner for
supply of the remaining solar modules, which were urgently required for
______________
Page No 135 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
completion of the projects of the third respondent (the Project Company)
by the second respondent (the Engineering Company).
250. That apart, none of the respondents are strangers to the
negotiation which culminated in NDU-3 dated 17.03.2016, which is an
appendage to Module Supply Agreement (MSA) dated 19.08.2015
between the petitioner and the non-party.
251. If the requirement of Sub Clause (3) of Article II of New York
Convention is fulfilled, a “foreign award” is binding under section 46 of
the Arbitration and Conciliation Act, 1996, between the parties.
252. The requirements of an “agreement in writing” under Article
II(2) of the New York Convention has been explained in the case of Smita
Conductors v. Euro Alloys Ltd., (2001) 7 SCC 728 by the Hon’ble
Supreme Court as follows:-
“6. What needs to be understood in this context is that
the agreement to submit to arbitration must be in
writing. What is an agreement in writing is explained by
para (2) of Article II. If we break down para (2) into______________
Page No 136 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023elementary parts, it consists of four aspects. It includes
an arbitral clause
(1) in a contract containing an arbitration clause signed
by the parties,
(2) an arbitration agreement signed by the parties,
(3) an arbitral clause in a contract contained in
exchange of letters or telegrams, and
(4) an arbitral agreement contained in exchange of
letters or telegrams.
If an arbitration clause falls in any one of these four
categories, it must be treated as an agreement in
writing.”
253. A reading of Article II of the New York Convention,
particularly clause (1) to (3), indicates that it gets triggered at the stage of
institution of arbitral proceedings, although Article II is grouped in
Chapter I of Part II of the Arbitration and Conciliation Act, 1996 for the
Recognition and Enforcement of foreign award.
254. This is similar to Section 8 of the Arbitration and Conciliation
Act, 1996 in the matter of domestic Arbitration in India and Section 6 of
Singapore International Arbitration Act, 1994. Both provisions are
inspired from Clause 3 of Article II of the New York Convention, 1958. A
______________
Page No 137 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
comparison of Clause (3) to Article II of New York Convention in the First
Schedule of the Arbitration and Conciliation Act, 1996, Section 8 and
Section 45 of the Arbitration and Conciliation Act, 1996 and Section 6 of
Singapore International Arbitration Act, 1994 clearly illustrates this.
These provisions are extracted below:-
Article II of the Section 8 of the Section 45 of the Section 6 of the
New York Arbitration and Arbitration and International
Convention Conciliation Act, Conciliation Act, Arbitration
1958 1996 1996 Act, 1994
8. Power to refer 45. Power of Enforcement of
parties to judicial authority international
arbitration where to refer parties to arbitration
there is an arbitration.- agreement.-
arbitration
agreement.-
(2) The term (1) A judicial Notwithstanding (1) Despite
“agreement in authority, before anything Article 8 of the
writing” shall which an action is contained in Part Model Law,
include an brought in a I or in the Code where any party
arbitral clause in matter which is of Civil to an arbitration
a contract or an the subject of an Procedure, 1908 agreement to
arbitration arbitration (5 of 1908), a which this Act
agreement, agreement shall, judicial authority, applies institutes
signed by the if a party to the when seized of an any proceedings
parties or arbitration action in a matter in any court
contained in an agreement or any in respect of against any other
exchange of person claiming which the parties party to the
letters or through or under have made an agreement in
telegrams. him, so applies not agreement respect of any
______________
Page No 138 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
Article II of the Section 8 of the Section 45 of the Section 6 of the
New York Arbitration and Arbitration and International
Convention Conciliation Act, Conciliation Act, Arbitration
1958 1996 1996 Act, 1994
(3) The court of later than the date referred to in matter which is
a Contracting of submitting his section 44, shall, the subject of
State, when first statement on at the request of the agreement,
seized of an the substance of one of the parties any party to the
action in a the dispute, then, or any person agreement may,
matter in notwithstanding claiming through at any time after
respect of any judgment, or under him, filing and
which the decree or order of refer the parties serving a notice
parties have the Supreme Court to arbitration, of intention to
made an or any Court, refer [unless it prima contest or not
agreement the parties to facie finds] [Sub- contest and
within the arbitration unless it stituted ‘unless it before
meaning of this finds that prima finds’ by Act delivering any
article, shall, at facie no valid No.33 of 2019, pleading (other
the request of arbitration dated 9.8.2019.] than a pleading
one of the agreement exists. that the said asserting that the
parties, refer agreement is null court does not
(2) The application
the parties to and void, have jurisdiction
referred to in
arbitration, inoperative or in the
sub-section (1)
unless it finds incapable of proceedings) or
shall not be
that the said being performed. taking any other
entertained unless
agreement is step in the
it is accompanied
null and void, proceedings,
by the original
inoperative or apply to that
arbitration
incapable of court to stay the
agreement or a
being proceedings so
duly certified copy
performed. far as the
thereof:
proceedings
Provided that relate to that
where the original matter.
arbitration
agreement or a (2) The court to
certified copy which an
thereof is not application has
______________
Page No 139 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
Article II of the Section 8 of the Section 45 of the Section 6 of the
New York Arbitration and Arbitration and International
Convention Conciliation Act, Conciliation Act, Arbitration
1958 1996 1996 Act, 1994
available with the been made in
party applying for accordance with
reference to subsection (1) is
arbitration under to make an
sub-section (1), order, upon such
and the said terms or
agreement or conditions as the
certified copy is court thinks fit,
retained by the staying the
other party to that proceedings so
agreement, then, far as the
the party so proceedings
applying shall file relate to the
such application matter, unless it
along with a copy is satisfied that
of the arbitration the arbitration
agreement and a agreement is
petition praying null and void,
the Court to call inoperative or
upon the other incapable of
party to produce being
the original performed.
arbitration (3) Where a
agreement or its court makes an
duly certified copy order under
before that Court. subsection (2),
(3) Notwithstand- the court may,
ing that an for the purpose
application has of preserving the
been made under rights of parties,
sub-section (1) and make any
that the issue is interim or
pending before the supplementary
______________
Page No 140 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
Article II of the Section 8 of the Section 45 of the Section 6 of the
New York Arbitration and Arbitration and International
Convention Conciliation Act, Conciliation Act, Arbitration
1958 1996 1996 Act, 1994
judicial authority, order that the
an arbitration may court thinks fit
be commenced and in relation to any
an arbitral award property which
made. is the subject of
the dispute to
which the order
under that
subsection
relates.
(4) Where no
party to the
proceedings has
taken any further
step in the
proceedings for
a period of at
least 2 years
after an order
staying the
proceedings has
been made, the
court may, on
its own motion,
make an order
discontinuing
the proceedings
without
prejudice to the
right of any of
the parties to
apply for the
discontinued
______________
Page No 141 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
Article II of the Section 8 of the Section 45 of the Section 6 of the
New York Arbitration and Arbitration and International
Convention Conciliation Act, Conciliation Act, Arbitration
1958 1996 1996 Act, 1994
proceedings to
be reinstated.
(5) For the
purposes of this
section and
sections 7 and
11A-
(a) a reference to
a party
includes a
reference to
any person
claiming
through or
under such
party;
(b) “court' means
the General
Division of
the High
Court,
District
Court,
Magistrate's
Court or any
other Court
in which
proceedings
are instituted.
______________
Page No 142 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
255. The Preamble to Singapore International Arbitration Act, 1994
also makes it clear that International Arbitration Act, 1994 is intended to
make provision for the conduct of international commercial arbitrations
based on the UNCITRAL Model Law on International Commercial
Arbitration adopted by the United Nations Commission on International
Trade Law and conciliation proceedings and to give effect to the New
York Convention on the Recognition and Enforcement of Foreign Arbitral
Awards and for matters connected therewith.
256. Thus, when a Court of a Contracting State is seized of an
action in a matter in respect of which the parties have made an agreement
within the meaning of Article-II, the said Court has to, at the request of
one of the parties, refer the parties to arbitration, unless it finds that the
said agreement is null and void, inoperative or incapable of being
performed.
257. Thus, it is clear that it is at the stage of reference, under section
45 of Arbitration and Conciliation Act, 1996, the question whether an
______________
Page No 143 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023“arbitration agreement” as is required under Section 44 exists or not is to
be examined. In this case, whether there existed an “arbitration
agreement” in writing for reference under section 45 was already
considered against the respondents in their anti-arbitration injunction suits
in C.S.No.12 of 2018 and C.S.No.502 of 2017 vide order dated
24.04.2018.
258. In fact, in response to CS.No.12 of 2018 and C.S.No.502 of
2017 filed by respondent Nos.2 and 3 respectively, the petitioner had filed
applications praying that the Court refer the parties to the above suits,
which includes all the parties herein to Arbitration, in terms of the Clause
9 of the NDU-3 dated 17.03.2016 in accordance with Section 45 of the
Arbitration and Conciliation Act, 1996 which was answered against the
respondents No.2 &3. Therefore, prima-facie It cannot be said that the
Award was not made in pursuance of an “agreement in writing” as is
contemplated under Arbitration and Conciliation Act, 1996 and New York
Convention 1958.
______________
Page No 144 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
259. The decision of the Court in C.S.No.12 of 2018 and
C.S.No.502 of 2017 was affirmed by the Hon’ble Division Bench of this
Court in its Order dated 23.07.2018 in Sei Adhavan Power Private
Limited Vs. Jinneng Clean Energy Technology Limited and Ors in
Order in O.S.A.170 to 175 of 2018.
260. The Hon’ble Division Bench, after considering the facts of the
case, also referred the dispute for arbitration under section 45 of the Act,
1996. Thus, in this case, it was prima facie established immediately after
the commencement of the arbitration proceedings in accordance with
Article 21 of the UNCITRAL Model Law, there existed an arbitration
agreement for resolution of dispute under Arbitration. Section 21 of
Arbitration and Conciliation Act, 1996 is identical with Article 21 of
UNCITRAL Model Law.
261. After the Courts in India recognized the existence of an
“agreement in writing” whether the agreement was valid or not for the
______________
Page No 145 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
purpose of arbitration was to be considered by the Arbitral Tribunal itself
while exercising its power under Section 10 (2) of the Singapore
International Arbitration Act, 1994. Section 10 (2) of the Singapore
International Arbitration Act, 1994 is similar to Section 16 of the
Arbitration and Conciliation Act, 1996. Both are based on the doctrine of
Kompetenz-kompetenz which are incorporated in Article 16 of the
UNCITRAL Model Law which implies it is for the Arbitral Tribunal to
determine whether it has jurisdiction to proceed with the case or not.
262. The Arbitration & Conciliation Act, 1996 also incorporates the
separability presumption in Section 16(1) along the lines of the
UNICITRAL Model Law. Section 3 of Arbitration Act, 2001 of
Singapore, makes it clear that the said Act applies to any arbitration where
the place of arbitration is Singapore and where Part 2 of the International
Arbitration Act, 1994 does not apply to that arbitration. Since Part 2 of
the International Arbitration Act 1994 applied, the Award was passed by
the Arbitral Tribunal under the provision of the the International
Arbitration Act, 1994. Section 16(1) of the Arbitration & Conciliation
______________
Page No 146 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
Act, 1996, Section 10(2) of the Singapore International Arbitration
Act,1994 and Article 16 of UNICITRAL Model Law reads as follows:-
Section 16(1) of the Section 10(2) of the Article 16 of
Arbitration & Singapore UNICITRAL Model
International Law
Conciliation Act,
1996 Arbitration Act, 1994Competence of Appeal on ruling of Competence of
Arbitral Tribunal to jurisdiction- arbitral tribunal to
rule on its (1) This section has rule on its
jurisdiction. – effect despite jurisdiction
(1) The Arbitral Article 16(3) of the (1) The arbitral
Tribunal may rule Model Law. tribunal may rule
on its own (2) An arbitral on its own
jurisdiction, tribunal may rule jurisdiction,
including ruling on including any
on a plea that it
any objections objections with
has no
with respect to the respect to the
jurisdiction at any
existence or existence or
stage of the
validity of the validity of the
arbitral
arbitration arbitration
proceedings.
agreement, and for agreement. For that
that purpose, purpose, an
(a) an arbitration arbitration clause
agreement which which forms part of
forms part of a a contract shall be
contract shall be treated as an
treated as an agreement
agreement independent of the
independent of other terms of the
the other terms of contract. A
the contract; and decision by the
arbitral tribunal that
______________
Page No 147 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
Section 16(1) of the Section 10(2) of the Article 16 of
Arbitration & Singapore UNICITRAL Model
International Law
Conciliation Act,
1996 Arbitration Act, 1994
(b) a decision by the the contract is null
Arbitral Tribunal and void shall not
that the contract entail ipso jure the
is null and void invalidity of the
shall not entail arbitration clause.
ipso jure the (2) A plea that the
invalidity of the arbitral tribunal
arbitration clause. does not have
jurisdiction shall be
raised not later than
the submission of
the statement of
defence. A party is
not precluded
from raising such a
plea by the fact that
he has appointed,
or participated in
the appointment of,
an arbitrator. A
plea that the arbitral
tribunal is
exceeding the
scope of its
authority shall be
raised as soon as
the matter alleged
to be beyond the
scope of its
authority raised
______________
Page No 148 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
Section 16(1) of the Section 10(2) of the Article 16 of
Arbitration & Singapore UNICITRAL Model
International Law
Conciliation Act,
1996 Arbitration Act, 1994
during the arbitral
proceedings. The
arbitral tribunal,
may, in either case,
admit a later plea if
it considers the
delay justified.
(3) The arbitral
tribunal may rule
on a plea referred
to in paragraph (2)
of this Article either
as a preliminary
question or in an
award on the
merits. If the
arbitral tribunal
rules as a
preliminary
question that it has
jurisdiction, any
party may request,
within thirty days
after having
received notice of
that ruling, the
court specified in
Article 6 to decide
the matter, which
decision shall be
______________
Page No 149 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
Section 16(1) of the Section 10(2) of the Article 16 of
Arbitration & Singapore UNICITRAL Model
International Law
Conciliation Act,
1996 Arbitration Act, 1994
subject to no
appeal; while such
a request is
pending, the
arbitral tribunal
may continue the
arbitral proceedings
and make an award.
263. The Arbitral Tribunal as also the Singapore High Court and the
Court of Appeals, Singapore have clearly concluded that the Arbitration
Clause in NDU-3 dated 17.03.2016 indeed contained an Arbitration
Clause signed by the parties owing to the nature of communications that
took place at the time when the petitioner decided to withhold further
supply of PU modules for the third respondent’s (the Project Company)
project.
______________
Page No 150 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
264. In Interplay Between Arbitration Agreements under A&C
Act, 1996 & Stamp Act, 1899, In re, (2024) 6 SCC 1 at page 69, the
Constitution Bench of the Hon’ble Supreme Court referred to Article 16
of the Model Law and observed that the Arbitral Tribunal’s jurisdiction
will be affected only when the defect causing invalidity is directed at the
arbitration agreement.
265. The Hon’ble Supreme Court further observed that the
invalidity of the underlying contract will not necessarily entail the
invalidity of an arbitration agreement contained in the contract. Paragraph
No.110 and &112 of the said judgment reads as under:-
“110. Article 16 of the Model Law deals with the
competence of an Arbitral Tribunal to rule on its own
jurisdiction. Article 16(1) provides:
“16. Competence of arbitral tribunal to rule on
its jurisdiction.—The Arbitral Tribunal may rule
on its own jurisdiction, including any objections
with respect to the existence or validity of the
arbitration agreement. For that purpose, an
arbitration clause which forms part of a contract
shall be treated as an agreement independent of
the other terms of the contract. A decision by the
Arbitral Tribunal that the contract is null and______________
Page No 151 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023void shall not entail ipso jure the invalidity of the
arbitration clause.” (emphasis supplied)******
112. According to the UNCITRAL Working Group, the
separability presumption is incorporated under Article
16(1) to complement the principle of competence-
competence. The separability presumption further ensures
that the invalidity of the underlying contract does not
affect the jurisdiction of the Arbitral Tribunal to decide on
the nullity of the contract or any other issues submitted to
its jurisdiction by the parties “unless it finds that the defect
which causes the nullity of the contract affects also the
arbitration clause itself.” [“Analytical Commentary on
Draft Text of a Model Law on International Commercial
Arbitration”, A/CN.9/264 (25-3-1985) 38.] The last
sentence of Article 16(1) (extracted above) states the
general principle of contractual validity of arbitration
clauses. [Gary Born, International Arbitration Law and
Practice (3rd Edn., 2021) 403.] It connotes that the
invalidity of the underlying contract will not necessarily
entail the invalidity of an arbitration agreement contained
in the contract. Accordingly, the Arbitral Tribunal’s
jurisdiction will be affected only when the defect causing
invalidity is directed at the arbitration agreement. [Digest
of Case Law on the Model Law on International
Commercial Arbitration (2012) 76.]”
266. Further in Interplay Between Arbitration Agreements under
A&C Act, 1996 & Stamp Act, 1899, In re, (2024) 6 SCC 1, the Hon’ble
Supreme Court further observed that the ability of an Arbitral Tribunal to
______________
Page No 152 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
determine its own jurisdiction is an important facet of arbitration
jurisprudence because it gives effect to the separability presumption. The
separability presumption insulates the arbitration agreement from the
defects of the underlying contract, and thereby ensures the sustenance of
the tribunal’s jurisdiction over the substantive rights and obligations of the
parties under the underlying contract even after such a contract is put to an
end. In fact, in paragraph No.127, the Hon’ble Supreme Court observed
that under Singaporean law, Article 21(1) of the Arbitration Act, 2001
incorporates the doctrine of competence-competence insofar as domestic
arbitration is concerned. It further observed that Article 21(1) of the
Arbitration Act, 2001 provides that an Arbitral Tribunal may rule on its
own jurisdiction, including a plea that it has no jurisdiction and any
objections to the existence or validity of the arbitration agreement at any
stage of the arbitral proceedings. It further observed that the conduct of
international commercial arbitrations in Singapore is governed by the
International Arbitration Act, 1994 (IIA) and that Section 3 of the IIA
states that the Model Law has the force of law in Singapore.
______________
Page No 153 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
267. Relevant paragraphs from the said Judgment are extracted as
under:-
G. The doctrine of competence-competence
123. The doctrine of kompetenz-kompetenz (also known
as competence-competence), as originally developed in
Germany, was traditionally understood to imply that
arbitrators are empowered to make a final ruling on
their own jurisdiction, with no subsequent judicial
review of the decision by any court. [ Fouchard,
Gaillard, Goldman on International Commercial
Arbitration, Emmanuel Gaillard and John Savage (Eds.),
(1999) 396.] However, many jurisdictions allow an
Arbitral Tribunal to render a decision on its jurisdiction,
subject to substantive judicial review. [ Gary Born,
International Arbitration Law and Practice (3rd Edn.,
2021) 1143.]
124. It is a well-recognised principle of public
international law that a legal authority possessing
adjudicatory powers has the right to decide its own
jurisdiction. [Interpretation of the Greco-Turkish
Agreement of December 1st, 1926, In re, 1928 SCC
OnLine PCIJ 5] Similarly, it is a general rule of
international arbitration law that an Arbitral Tribunal
has the power to determine its own jurisdiction. The
ability of an Arbitral Tribunal to determine its own
jurisdiction is an important facet of arbitration
jurisprudence because it gives effect to the separability
presumption. The separability presumption insulates the
arbitration agreement from the defects of the underlying
contract, and thereby ensures the sustenance of the
tribunal’s jurisdiction over the substantive rights and
obligations of the parties under the underlying contract
even after such a contract is put to an end. The doctrine______________
Page No 154 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023of competence-competence allows the tribunal to decide
on all substantive issues arising out of the underlying
contract, including the existence and validity of the
arbitration agreement.
(i) Comparative analysis
125. The doctrine of competence-competence is now a
part of all major jurisdictions. Section 30 of the UK
Arbitration Act provides that the Arbitral Tribunal may
rule on its own substantive jurisdiction with respect to :
first, whether there is a valid arbitration agreement;
second, whether the tribunal is properly constituted; and
third, what matters have been submitted to arbitration in
accordance with the arbitration agreement. The basis for
the jurisdictional competence of an Arbitral Tribunal can
be evinced from the following observation of Lord
Hoffman in Fili Shipping Co. [Fili Shipping Co. Ltd. v.
Premium Nafta Products Ltd., 2007 Bus LR 1719 (HL) :
2007 UKHL 40] : (Bus p. 1725, para 13)
“13. In my opinion the construction of an arbitration
clause should start from the assumption that the parties,
as rational businessmen, are likely to have intended any
dispute arising out of the relationship into which they
have entered or purported to enter to be decided by the
same tribunal.”
In Dallah Real Estate & Tourism Holding Co. v. Ministry
of Religious Affairs of the Government of Pakistan
[Dallah Real Estate & Tourism Holding Co. v. Ministry
of Religious Affairs of the Government of Pakistan,
(2011) 1 AC 763 : (2010) 3 WLR 1472 : 2011 Bus LR 158
(SC) : 2010 UKSC 46] the United Kingdom Supreme
Court held that the tribunal’s own view of its jurisdiction
has no legal or evidential value when the issue pertains
to the exercise of legitimate authority by the tribunal.
Thus, the UK position is that although the Arbitral
Tribunal is empowered to consider whether it has
______________
Page No 155 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
jurisdiction, its determination is subject to the
examination of the Courts.
126. The Courts in the United States have considered the
principle of competence-competence to be intertwined
with the separability presumption. In Prima Paint
[Prima Paint Corpn. v. Flood & Conklin Mfg. Co., 1967
SCC OnLine US SC 160 : 18 L Ed 2d 1270 : 388 US 395
(1967)] , the United States Supreme Court held that if a
claim is made to the effect that the underlying contract
was induced fraudulently, then the issue should be
determined by the Courts. The Supreme Court concluded
that all the other issues should be left for the
determination of the Arbitral Tribunal to
“not only honor the plain meaning of the statute but also
the unmistakably clear congressional purpose that the
arbitration procedure, when selected by the parties to a
contract, be speedy and not subject to delay and
obstruction in the Courts. (Prima Paint case [Prima
Paint Corpn. v. Flood & Conklin Mfg. Co., 1967 SCC
OnLine US SC 160 : 18 L Ed 2d 1270 : 388 US 395
(1967)] , SCC OnLine US SC para 10)”
In Buckeye Check Cashing [Buckeye Check Cashing Inc.
v. Cardegna, 2006 SCC OnLine US SC 14 : 546 US 440,
444 (2006)] , the United States Supreme Court reiterated
Prima Paint [Prima Paint Corpn. v. Flood & Conklin
Mfg. Co., 1967 SCC OnLine US SC 160 : 18 L Ed 2d
1270 : 388 US 395 (1967)] by holding that the Arbitral
Tribunal should consider the issue of the validity of
underlying contract in the first instance. Thus, the
position in the US is that the Courts should only check if
any invalidity is directed at the arbitration agreement,
leaving all the other issues, including that of the validity
of the underlying contract, to the Arbitral Tribunal.
______________
Page No 156 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
127. Under Singaporean law, Article 21(1) of the
Arbitration Act, 2001 incorporates the doctrine of
competence-competence insofar as domestic arbitration
is concerned. It provides that an Arbitral Tribunal may
rule on its own jurisdiction, including a plea that it has
no jurisdiction and any objections to the existence or
validity of the arbitration agreement at any stage of the
arbitral proceedings. The conduct of international
commercial arbitrations in Singapore is governed by
the International Arbitration Act, 1994 (IIA). Section 3
of the IIA states that the Model Law has the force of
law in Singapore.
128. In Malini Ventura v. Knight Capital Pte. Ltd.
[Malini Ventura v. Knight Capital Pte. Ltd., 2015 SGHC
225 (Singapore)], the issue before the Singapore High
Court was whether the Arbitral Tribunal has primacy to
determine the existence of an arbitration agreement in
the context of international commercial arbitration. The
Court analysed the scope and purpose of Article 16(1) of
the Model Law to hold that an Arbitral Tribunal has first
priority in determining whether an arbitration
agreement exists and the Court’s consideration must
come after the tribunal’s own examination of the issue. It
was further observed that:
“the tribunal’s powers in relation to the issue are
wide because it can consider not only validity but
also the very existence of the arbitration
agreement.”
(ii) India
129. Under the previous arbitration regime in India, that
is the 1940 Act, the issue of determining the existence or
validity of arbitration agreement was exclusively within
the domain of the Courts. To that effect, Section 33 of the
1940 Act allowed any party to the arbitration agreement______________
Page No 157 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023to file an application before the Courts challenging the
existence or validity of an arbitration agreement. In view
of this, this Court consistently held that the question as
to the existence or validity of an arbitration agreement
was to be decided only by application to courts and not
by the Arbitral Tribunal. [DhanrajamalGobindram v.
Shamji Kalidas & Co., 1961 SCC OnLine SC 28;
Khardah Co. Ltd. v. Raymon & Co. (India) (P) Ltd., 1962
SCC OnLine SC 28.]
130. This position has now undergone a complete
metamorphosis in the present legislation. Section 16 of
the Arbitration Act, which is based on Article 16 of the
Model Law, recognises the doctrine of competence-
competence in Indian arbitration law.
********
135. In Uttarakhand Purv Sainik Kalyan Nigam Ltd. v.
Northern Coal Field Ltd., (2020) 2 SCC 455, the issue
before this Court was whether a Referral Court at the
stage of appointment of arbitrators would be required to
decide the issue of limitation or leave it to the Arbitral
Tribunal. A Bench of two Judges of this Court held that
the doctrine of competence-competence is “intended to
minimise judicial intervention, so that the arbitral
process is not thwarted at the threshold, when a
preliminary objection is raised by one of the parties.”
Moreover, this Court held that Section 16 is an inclusive
provision of very wide ambit : (SCC p. 462, para 7)
“7. … 7.13. In view of the provisions of Section 16, and
the legislative policy to restrict judicial intervention at
the pre-reference stage, the issue of limitation would
require to be decided by the arbitrator. Sub-section (1) of
Section 16 provides that the Arbitral Tribunal may rule
on its own jurisdiction, “including any objections” with
respect to the existence or validity of the arbitration
agreement. Section 16 is an inclusive provision, which
______________
Page No 158 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
would comprehend all preliminary issues touching upon
the jurisdiction of the Arbitral Tribunal. The issue of
limitation is a jurisdictional issue, which would be
required to be decided by the arbitrator under Section
16, and not the High Court at the pre-reference stage
under Section 11 of the Act. Once the existence of the
arbitration agreement is not disputed, all issues,
including jurisdictional objections are to be decided by
the arbitrator.”
(emphasis in original and supplied)
268. Thus, the doctrine of competence-competence [doctrine of
kompetenz-kompetenz] has been given full recognition under Singapore
International Arbitration Act, 1994. Since the Arbitral Tribunal gets the
first priority to determine issues with respect to the very existence of an
“agreement in writing”, the jurisdiction of the Courts are limited to a
prima facie determination under Section 8 or 45 of the Arbitration and
Conciliation Act,1996 as the case may be.
269. As far as enforcement of foreign Award in India is concerned, it
is Section 49 of the Arbitration and Conciliation Act, 1996, which is
______________
Page No 159 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
relevant. It is similar to Section 19 of International Arbitration Act, 1994.
They read as under:-
Section 19 of International Section 49 of Arbitration and
Arbitration Act, 1994 Conciliation Act, 1996
19. Enforcement of awards – 49. Enforcement of foreign
award –
An award on an arbitration (1) Where the Court is satisfied
agreement may, by permission of that the foreign award is
the General Division of the High enforceable under this
Court, be enforced in the same Chapter, the award shall be
manner as a judgment or an order deemed to be a decree of that
to the same effect and, where Court.
permission is so given, judgment
may be entered in terms of the
award.
270. Section 5 (1) in Part 2 of of Singapore International Act, 1994,
further makes it clear that the said Act applies to International Arbitration,
unless the parties agree in writing that Part 2 or The Model Law
(Unilateral Model Law ) is not to apply to that Arbitration. Section 5 (1)
of the Singapore International Act, 1994, reads as under:-
“Section-5.Application of this Part-
(1) This Part and the Model Law do not apply to an
arbitration which is not an international arbitration
unless the parties agree in writing that this Part or the
Model Law is to apply to that arbitration.”______________
Page No 160 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
271. As per Section 5(2) of Singapore International Arbitration Act,
1994, despite Article-1(3) of the Model Law, an Arbitration is
International, if:-
(a) least one of the parties to an arbitration agreement, at
the time of the conclusion of the agreement, has its
place of business in any State other than Singapore;
(b) one of the following places is situated outside the State
in which the parties have their places of business:
i. the place of arbitration if determined in,
or pursuant to, the arbitration agreement;
ii. any place where a substantial part of the
obligations of the commercial relationship
is to be performed or the place with which
the subject matter of the dispute is most
closely connected; or
(c) the parties have expressly agreed that the subject matter
of the arbitration agreement relates to more than one
country.
272. Thus, question of arbitrability of a dispute could have been
raised and decided before the Court in Singapore if the respondent had
filed an anti-arbitration suit in Singapore instead of Chennai, in India.
______________
Page No 161 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
Thereafter, the only option that was available for the respondents was
before the Arbitral Tribunal as per the doctrine of Kompetenz –
Kompetenz, which was raised by the respondent and answered against
them, which decision was not only affirmed by the Singapore High Court,
but also Court of Appeal of Singapore. Thus, it is not open for the
respondents to question either the Arbitrability of the dispute at the stage
of Recognition and Enforcement of the International Award passed by the
Arbitral Tribunal.
273. The fact that in response to petitioner’s Notices of Dispute in
relation to NDU-3 dated 17.03.2016, which was served on the respondents
on 11 November 2016 and 8 January 2017, the respondents did not deny
the existence of NDU-3 dated 17.03.2016. It shows they also did not
question the existence of the Agreement in NDU-3 dated 17.03.2016.
274. Only after commencement of the Arbitration proceedings in
April 2017, the respondent No.2 & 3 disputed the binding Nature of
NDU-3 dated 17.03.2016 on them.
______________
Page No 162 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
275. Section 47 of the Act deals with the obligation of the person
applying for the enforcement of a foreign award. The person applying for
the enforcement of a foreign award shall at the time of the application,
produce before the Court the original award or a copy thereof duly
authenticated in the manner required by the law of the country in which it
was made and the original agreement for arbitration or a duly certified
copy thereof and such evidence as may be necessary to prove that the
award is a foreign award.
276. In this regard, it is pertinent to note the interpretation of section
47 of the Hon’ble Supreme Court in the case of Gemini Bay
Transcription (P) Ltd. v. Integrated Sales Service Ltd., (2022) 1 SCC
753. The Hon’ble Supreme Court held that Section 47(1) of the Arbitration
and Conciliation Act,1994 was procedural in nature, the object being that
the enforcing court must first be satisfied that it is indeed a foreign award,
______________
Page No 163 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
as defined, and that it is enforceable against persons who are bound by the
award. The Supreme Court held as under:-
“38. From this, is clear that all the requirements of
sub-section (1) are procedural in nature, the object
being that the enforcing court must first be satisfied
that it is indeed a foreign award, as defined, and that it
is enforceable against persons who are bound by the
award.”
277. The Hon’ble Supreme Court further observed as under:-
“As a matter of fact, Section 47(1)(c) speaks of only
evidence as may be necessary to prove that the award is a
foreign award. This section only has reference to the six
ingredients of a foreign award that have been outlined
hereinabove, which are contained in the definition section,
namely, Section 44. Ingredients 1 to 4 can easily be made
out from the foreign award itself as the award would
narrate facts which would show the legal relationship
between the “persons” bound by the award (who need
not necessarily be parties to the arbitration agreement),
and as to whether the award deals with matters that can be
considered commercial under the law in force in India.
Equally, the date of the foreign award would appear on the
face of the foreign award itself. Thus, Section 47(1)(c)
would apply to adduce evidence as to whether the
arbitration agreement is a New York Convention
agreement. Also, the requisite Central Government
notification can be produced under Section 47(1)(c), so
that Section 44(b) gets satisfied. To argue that the burden
of proof is on the person enforcing the award and that
this burden can only be discharged by such person
leading evidence to affirmatively show that a non-
______________
Page No 164 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023signatory to an arbitration agreement can be bound by a
foreign award is outside Section 47(1)(c).”
(emphasis supplied)
278. Section 48 of the Arbitration and Conciliation Act, 1996
stipulates the conditions for enforcement of foreign awards. There are two
parts to Section 48 of the Arbitration and Conciliation Act, 1996. For the
sake of clarity, sub-clause (1) and sub-clause (2) are shown in a table
below:-
Section 48 – Conditions for Enforcement of Foreign Awards
(1) Enforcement of a foreign (2) Enforcement of an arbitral
award may be refused, at the award may also be refused if the
request of the party against whom Court finds that-
it is invoked, only if that party
furnishes to the Court proof that-
(a) The parties to the agreement (a) The subject-matter of the dif-
referred to in Section 44 were, ference is not capable of set-
under the law applicable to tlement by arbitration under
them, under some incapacity, the law of India; or
or the said agreement is not (b) The enforcement of the award
valid under the law to which would be contrary to the pub-
the parties have subjected it lic policy of India.
or, failing any indication
thereon, under the law of the Explanation-1: For the avoid-
Country where the award was ance of any doubt, it is clari-
made; fied that an award is in con-
______________
Page No 165 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
Section 48 – Conditions for Enforcement of Foreign Awards
(b) The party against whom the flict with the public property
award is invoked was not of India, only if-
given proper notice of the i. The making of the award
appointment of the arbitrator was induced or affected
or of the arbitral proceedings by fraud or corruption or
or was otherwise unable to was in violation of Sec-
present his case; tion 75 or Section 81;
(c) The award deals with a ii. It is in contravention with
difference not contemplated the fundamental policy of
by or not falling within the Indian Law;
terms of the submission to
arbitration, or it contains
decisions on matters beyond Explanation-2: For the avoid-
the scope of submission to ance of any doubt, the test as
arbitration; to whether there is a contra-
Provided that, if the decisions vention with the fundamental
on matters submitted to policy of Indian Law shall not
arbitration can be separated entail a review on the merits
from those not so submitted, of the dispute.
that part of the award which
contains decisions on matters
submitted to arbitration may
be enforced;
(d) The composition of the
arbitral authority or the
arbitral procedure was not in
accordance with the
agreement of the parties, or,
failing such agreement, was
not in accordance with the law
of the Country where the
arbitration took place;
______________
Page No 166 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
Section 48 – Conditions for Enforcement of Foreign Awards
(e) The award has not yet become
binding on the parties, or has
been set aside or suspended by
a competent authority of the
Country in which, or under the
law of which, that award was
made.
(3) If an application for the setting aside or suspension of the award
has been made to a competent authority referred to in clause (e) of
sub-section (1), the Court may, if it considers it proper, adjourn the
decision on the enforcement of the award and may also, on the
application of the party claiming enforcement of the award, order the
other party to give suitable security.
279. None of the grounds under Section 48(1) of the Arbitration and
Conciliation Act, 1996 are discernible in the facts of the present case for
this Court to refuse enforcement of the award. It cannot be said that the
agreement was neither valid under the law to which the parties have
subjected themselves namely the substantive law prevailing in Singapore,
nor can it be said that enforcement would be contrary to public policy of
India under the circumstances shown in Explanation-II to Section 48(2)
of the Arbitration and Conciliation Act, 1996.
______________
Page No 167 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
280. The Supreme Court in Shri Lal Mahal Ltd. v. Progetto
Grano SpA, (2014) 2 SCC 433, took a view that was followed in Vijay
Karia v. Prysmian Cavi E Sistemi SRL, (2020) 11 SCC 1, held that:-
“45. Moreover, Section 48 of the 1996 Act does not give
an opportunity to have a “second look” at the foreign
award in the award enforcement stage. The scope of
inquiry under Section 48 does not permit review of the
foreign award on merits. Procedural defects (like taking
into consideration inadmissible evidence or
ignoring/rejecting the evidence which may be of binding
nature) in the course of foreign arbitration do not lead
necessarily to excuse an award from enforcement on the
ground of public policy.”
281. The contention of the respondents that the award was passed in
contravention with the fundamental policy of Indian law as provided
under Explanation I (ii) to section 48(2) of the Arbitration and
Conciliation Act, 1996, based on the decision of the Constitution Bench of
Supreme Court in Cox & Kings Ltd. v. SAP India (P) Ltd., (2024) 4
SCC 1 on the ground that “Single Economic Entity” is not recognised in
Singapore cannot be countenanced. Neither the “Single Economic
Entity” was involved nor the “Group of Companies” doctrine was
involved by the Arbitral Tribunal while passing the award. Therefore, the
______________
Page No 168 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
argument that the “Single Economic Entity” doctrine is not recognised in
Singapore, the enforcement of the Award would be in breach of the
fundamental policy of Indian law cannot be countenanced. As mentioned
in Para 208 of this Order, the decision of the Singapore High Court in
Manuchar Steel Hong Kong Ltd. v. Star Pacific Line Pte Ltd., 2014
SGHC 181 cannot be applied as that was a case where at the stage of
enforcement, the Court frowned upon the invocation of Single Economic
Entity doctrine holding that it had limited traction in the International
Arbitration community, especially outside jurisdictional issues. Whereas,
the Arbitral Tribunal, the High Court of Singapore and Court of Appeal of
Singapore in the present case have uniformly not invoked either the
“Group Company Doctrine” or “Single Economy Entity Doctrine”to fasten
the liability on the respondents. In Manuchar Steel Hong Kong
Ltd. v. Star Pacific Line Pte Ltd., 2014 SGHC 181, the Court was
dealing with the liability of a One-Ship Company.
282. Further, Explanation I (ii) of section 48(2) of the Arbitration
and Conciliation Act, 1996 has to be read with Explanation 2 of the same,
______________
Page No 169 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
which clearly states that for the avoidance of doubt, the test as to whether
there is a contravention with the fundamental policy of Indian law shall
not entail a review on the merits of the dispute.
283. Secondly, the phrase “fundamental policy of Indian Law” was
discussed in detail and interpreted as under in SsangyongEngg. &
Construction Co. Ltd. v. NHAI, (2019) 15 SCC 131, which held as
under:-
34. What is clear, therefore, is that the expression
“public policy of India”, whether contained in Section
34 or in Section 48, would now mean the
“fundamental policy of Indian law” as explained in
paras 18 and 27 of Associate Builders [Associate
Builders v. DDA, (2015) 3 SCC 49] i.e. the
fundamental policy of Indian law would be relegated
to “Renusagar” (Renusagar Power Co. Ltd. v.
General Electric Co., 1994 Supp (1) SCC 644)
understanding of this expression. This would
necessarily mean that Western Geco [ONGC v.
Western GecoInternational Ltd., (2014) 9 SCC 263]
expansion has been done away with. In short, Western
Geco, as explained in paras 28 and 29 of Associate
Builders [Associate Builders v. DDA, (2015) 3 SCC
49], would no longer obtain, as under the guise of
interfering with an award on the ground that the
arbitrator has not adopted a judicial approach, the
Court’s intervention would be on the merits of the
award, which cannot be permitted post amendment. …
*****
______________
Page No 170 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
37. Insofar as domestic awards made in India are
concerned, an additional ground is now available
under sub-section (2-A), added by the Amendment Act,
2015, to Section 34. Here, there must be patent
illegality appearing on the face of the award, which
refers to such illegality as goes to the root of the
matter but which does not amount to mere erroneous
application of the law. In short, what is not subsumed
within “the fundamental policy of Indian law”,
namely, the contravention of a statute not linked to
public policy or public interest, cannot be brought in
by the backdoor when it comes to setting aside an
award on the ground of patent illegality.
284. In fact, the objection of the Respondent No.2 (the Engineering
Company) and Respondent No.3 (the Project Company) is indeed an
veiled attempt to review the Arbitral Tribunal decision, which has
crystallized the liability against the Respondents which stands affirmed
thrice: first by the Arbitral Tribunal, second by the High Court of
Singapore, third by the Court of Appeal of Singapore.
285. Thirdly, the respondents have limited their reference to the
decision of the Constitution Bench of the Hon’ble Supreme Court in Cox
& Kings Ltd. v. SAP India (P) Ltd., (2024) 4 SCC 1 to submit that
______________
Page No 171 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
proposition that “Single Economic Entity” cannot be used as a sole basis
to invoke the Group of Companies doctrine. In reality, the Constitution
Bench of the Hon’ble Supreme Court in Cox & Kings Ltd. v. SAP India
(P) Ltd., (2024) 4 SCC 1 clarified in para 119 as under:-
119. ……………..We accordingly clarify that the
principle of “single economic entity” cannot be used as
a sole basis to invoke the Group of Companies doctrine.
286. On the other hand, a detailed reading of the decision of the
Constitution Bench of the Hon’ble Supreme Court in Cox & Kings Ltd. v.
SAP India (P) Ltd., (2024) 4 SCC 1 reveals that, the Hon’ble Supreme
Court expanded the interpretation of Group of Companies Doctrine. It
held that Group of Companies Doctrine is not merely the principle of alter
ego or piercing of corporate veil, but also a fact based doctrine wherein
the consent of the non-signatories, whether implied or expressed, is
determined in formation of the arbitration agreement. The relevant portion
at page 65 of the decision is extracted as under:-
(ii) Adopting a pragmatic approach to consent
95. In the context of arbitration law, the intention of the
parties has to be derived from the words used in the
arbitration agreement. While construing the arbitration______________
Page No 172 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023agreement, it is the duty of the Court to not delve deep
into the intricacies of the human mind, but only consider
the expressed intentions of the parties. [Kamla Devi v.
Takhatmal, AIR 1964 SC 859; Bangalore Electricity
Supply Co. Ltd. v. E.S. Solar Power (P) Ltd., (2021) 6
SCC 718] The words used in the contract reflect the
commercial understanding between the parties. The
intention of the parties has to be ascertained from the
words used in the contract, considered in light of the
surrounding circumstances and the object of such
contract. [Bank of India v. K. Mohandas, (2009) 5 SCC
313;M. Dayanand Reddy v. A.P. Industrial Infrastructure
Corpn. Ltd., (1993) 3 SCC 137.]
96. An arbitration agreement encapsulates the
commercial understanding of business entities as
regards to the mode and manner of settlement of
disputes that may arise between them in respect of their
legal relationship. In most situations, the language of the
contract is only suggestive of the intention of the
signatories to such contract and not the non-signatories.
However, there may arise situations where a person or
entity may not sign an arbitration agreement, yet give
the appearance of being a veritable party to such
arbitration agreement due to their legal relationship
with the signatory parties and involvement in the
performance of the underlying contract. Especially in
cases involving complex transactions involving
multiple parties and contracts, a non-signatory may be
substantially involved in the negotiation or
performance of the contractual obligations without
formally consenting to be bound by the ensuing
burdens, including arbitration.
______________
Page No 173 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
287. The Constitution Bench of the Hon’ble Supreme Court in Cox
& Kings Ltd. v. SAP India (P) Ltd., (2024) 4 SCC 1, ultimately
answered the reference as under:-
H. Conclusions
170. In view of the discussion above, we arrive at the
following conclusions:
170.1. The definition of “parties” under Section 2(1)(h)
read with Section 7 of the Arbitration Act includes both
the signatory as well as non-signatory parties;
170.2. Conduct of the non-signatory parties could be
an indicator of their consent to be bound by the
arbitration agreement;
170.3. The requirement of a written arbitration
agreement under Section 7 does not exclude the
possibility of binding non-signatory parties;
170.4. Under the Arbitration Act, the concept of a
“party” is distinct and different from the concept of
“persons claiming through or under” a party to the
arbitration agreement;
170.5. The underlying basis for the application of the
Group of Companies doctrine rests on maintaining the
corporate separateness of the group companies while
determining the common intention of the parties to bind
the non-signatory party to the arbitration agreement;
______________
Page No 174 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
170.6. The principle of alter ego or piercing the
corporate veil cannot be the basis for the application of
the Group of Companies doctrine;
170.7. The Group of Companies doctrine has an
independent existence as a principle of law which
stems from a harmonious reading of Section 2(1)(h)
along with Section 7 of the Arbitration Act;
170.8. To apply the Group of Companies doctrine, the
Courts or tribunals, as the case may be, have to consider
all the cumulative factors laid down in Discovery
Enterprises [ONGC Ltd. v. Discovery Enterprises (P)
Ltd., (2022) 8 SCC 42]. Resultantly, the principle of
single economic unit cannot be the sole basis for
invoking the Group of Companies doctrine;
170.9. The persons “claiming through or under” can
only assert a right in a derivative capacity;
170.10. The approach of this Court in Chloro Controls
[Chloro Controls India (P) Ltd. v. Severn Trent Water
Purification Inc., (2013) 1 SCC 641] to the extent that it
traced the Group of Companies doctrine to the phrase
“claiming through or under” is erroneous and against
the well-established principles of contract law and
corporate law;
170.11. The Group of Companies doctrine should be
retained in the Indian arbitration jurisprudence
considering its utility in determining the intention of
the parties in the context of complex transactions
involving multiple parties and multiple agreements;
______________
Page No 175 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
170.12. At the referral stage, the referral court should
leave it for the Arbitral Tribunal to decide whether the
non-signatory is bound by the arbitration agreement;
and
170.13. In the course of this judgment, any authoritative
determination given by this Court pertaining to the
Group of Companies doctrine should not be interpreted
to exclude the application of other doctrines and
principles for binding non-signatories to the arbitration
agreement.
288. On the basis of the above proposition laid down by the
Supreme Court in Cox & Kings Ltd. v. SAP India Ltd., (2024) 4 SCC 1,
the contention of the respondents that the award contravenes the
fundamental policy of Indian law also cannot be countenanced.
289. The Constitution Bench in Cox & Kings Ltd. v. SAP India
(P) Ltd., (2024) 4 SCC 1, while considering whether the signature of the
party to the arbitration agreement was mandatory or not, held as under:-
101. A formalistic construction of an arbitration
agreement would suggest that the decision of a party to
not sign an arbitration agreement should be construed
to mean that the mutual intention of the parties was to
exclude that party from the ambit of the arbitration______________
Page No 176 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023agreement. Indeed, corporate entities have the
commercial and contractual freedom to structure their
businesses in a manner to limit their liability. However,
there have been situations where a corporate entity
deliberately made an effort to be not bound by the
underlying contract containing the arbitration
agreement, but was actively involved in the negotiation
and performance of the contract. The level of the non-
signatory party’s involvement was to the extent of
making the other party believe that it was a veritable
party to the contract, and the arbitration agreement
contained under it. Therefore, the Group of Companies
doctrine is applied to ascertain the intentions of the
parties by analysing the factual circumstances
surrounding the contractual arrangements. [ Gary
Born, International Arbitration Law and Practice, (3rd
Edn., 2021) at p. 1568.]
102. Increasingly, multinational groups often adopt new
and sophisticated corporate structures for execution and
delivery of complex commercial transactions such as
construction contracts, concession contracts, licence
agreements, long-term supply contracts, banking and
financial transactions, and maritime contracts. For the
execution of such contracts, corporate structures may
take the form of groups based on equity, joint ventures,
and informal alliances. [ Stavros Brekoulakis, “Parties
in International Arbitration : Consent v. Commercial
Reality” in Stavros Brekoulakis, Julian DM Lew, et al.
(Eds.) in The Evolution and Future of International
Arbitration (2016) 119, 120.] A multi-corporate
structure helps a group in adopting commercially
effective models of operation as different companies
can get involved at different stages of a single
transaction. Often, persons or entities, who are not
signatories to the underlying contract containing the
______________
Page No 177 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
arbitration agreement, are involved in the negotiation,
performance, or termination of the contract. In the
context of arbitration law, the challenge arises when
only one member of the group signs the arbitration
agreement, to the exclusion of other members. Should
the non-signatories be excluded from the arbitration
proceedings, even though they were implicated in the
dispute which forms the subject-matter of arbitration?
As a response to this challenge, arbitration law has
developed and adopted the Group of Companies
doctrine, to allow or compel a non-signatory party to
be bound by an arbitration agreement.
290. That apart, the Hon’ble Supreme Court in para 83 of Vijay
Karia v. Prysmian Cavi E Sistemi SRL, (2020) 11 SCC 1 held that a
foreign award must be read as a whole, fairly, and without nit-picking. If
read as a whole, the said award has addressed the basic issues raised by
the parties and has, in substance, decided the claims and counterclaims of
the parties; enforcement must follow. Para 83 is reproduced below:-
83. Having said this, however, if a foreign award fails to
determine a material issue which goes to the root of the
matter or fails to decide a claim or counterclaim in its
entirety, the award may shock the conscience of the
Court and may not be enforced, as was done by the
Delhi High Court in Campos Bros. Farms v. Matru
Bhumi Supply Chain (P) Ltd., 2019 SCC OnLine Del
8350 on the ground of violation of the public policy of
India, in that it would then offend a most basic notion of
______________
Page No 178 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023justice in this country [ In SsangyongEngg. &
Construction Co. Ltd. v. NHAI, (2019) 15 SCC 131 this
Court cautioned that this ground would only be attracted
with the following caveat : (SCC pp. 199-200, para
76)“76. However, when it comes to the public policy of
India argument based upon “most basic notions of
justice”, it is clear that this ground can be attracted only
in very exceptional circumstances when the conscience
of the Court is shocked by infraction of fundamental
notions or principles of justice. … However, we repeat
that this ground is available only in very exceptional
circumstances, such as the fact situation in the present
case. Under no circumstance can any court interfere
with an arbitral award on the ground that justice has not
been done in the opinion of the Court. That would be an
entry into the merits of the dispute which, as we have
seen, is contrary to the ethos of Section 34 of the 1996
Act, as has been noted earlier in this judgment.”] . It
must always be remembered that poor reasoning, by
which a material issue or claim is rejected, can never
fall in this class of cases. Also, issues that the Tribunal
considered essential and has addressed must be given
their due weight — it often happens that the Tribunal
considers a particular issue as essential and answers it,
which by implication would mean that the other issue
or issues raised have been implicitly rejected. For
example, two parties may both allege that the other is in
breach. A finding that one party is in breach, without
expressly stating that the other party is not in breach,
would amount to a decision on both a claim and a
counterclaim, as to which party is in breach. Similarly,
after hearing the parties, a certain sum may be awarded
as damages and an issue as to interest may not be
answered at all. This again may, on the facts of a given
case, amount to an implied rejection of the claim for
interest. The important point to be considered is that
______________
Page No 179 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023the foreign award must be read as a whole, fairly, and
without nit-picking. If read as a whole, the said award
has addressed the basic issues raised by the parties and
has, in substance, decided the claims and
counterclaims of the parties, enforcement must follow.
291. The contention of the respondents that the Group of
Companies Doctrine was not recognised in Singapore and therefore, was
bad in law as it ignored the law of Singapore is irrelevant. This contention
that the award was bad in law of the State in which the award was passed
is also not an argument available to the respondents at the enforcement
stage in a different Jurisdiction especially after losing the Case all way.
That apart, as mentioned above, the Arbitral Tribunal has not invoked
either the “Group of Companies” doctrine or “Single Economic Entity”
doctrine while passing the Award.
292. The award in fact, was not based on the Group of Companies
doctrine or Single Economic Entity, and NDU-3 dated 17.03.2016 was not
a standalone contract but part of the original contract which encompassed
the arbitration agreement.
______________
Page No 180 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
293. The Arbitral Tribunal has discussed the factual matrix, relied
on evidence, and thereafter confirmed that NDU-3 dated 17.03.2016 was
part of the original contract which encompassed arbitration agreement.
The award was also confirmed on appeal before the Court of Appeal of the
Singapore. The respondents stand that the Group of Companies
Doctrine/Single Economic Entity Doctrine are not recognized in
Singapore and therefore cannot be enforced, cannot be countenanced as
the Award was not based on these two Doctrines.
294. Hence, it is not open to the respondents to ask this Court to
interpret the findings and reasonings of the Arbitral Tribunal at the stage
of enforcement of the Award.
295. If the Court is satisfied that the Foreign Award is enforceable
under Chapter I to Part II of the Arbitration and Conciliation Act, 1996,
the Award shall be deemed to a decree of the Court as per Section 49 of
the Act.
______________
Page No 181 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
296. Having lost the case all the way before the forums in
Singapore i.e., before the Arbitral Tribunal, Singapore, before the
Singapore High Court and the Court of Appeal in Singapore, it is not open
either for the second respondent (the Engineering Company) and/or the
third respondent (the Project Company) to scuttle the enforcement on a
skewed reading of both facts and the provisions of the Arbitration and
Conciliation Act, 1996 by invoking either Section 48(1) or Section 48(2)
of the Arbitration and Conciliation Act, 1996.
297. In the result, Arb.O.P.(Com.Div.)No.186 of 2023 filed to
recognize the Award dated 22.02.2021 passed by the Arbitral Tribunal
along with the addendum to the Final Award dated 08.03.2021 constituted
under the aegis of the Singapore International Arbitration Centre in SIAC
Arbitration No.094 of 2017 (ARB094/17/ARB) is allowed.
298. The Petitioner is permitted to proceed with E.P.No.143364 of
2022.
02.09.2024
Index : Yes/No
Internet : Yes/No
Speaking Order/Non-Speaking Order
______________
Page No 182 of 184
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Com.Div.)No.186 of 2023
Neutral Citation : Yes/No
rgm
C.SARAVANAN, J.
rgm
Arb.O.P.(Com.Div.)No.186 of 2023
and
E.P.No.143364 of 2022
______________
Page No 183 of 184
https://www.mhc.tn.gov.in/judis