Case Note & Summary
The petition was filed under Section 11 of the Arbitration and Conciliation Act, 1996, by the petitioners seeking the appointment of an arbitrator due to disputes with the respondent. The first petitioner, Sirajuddin Kasim, is a director and shareholder of the second petitioner, a company incorporated in Singapore, while the respondent is a company from Mauritius involved in investment activities. The petitioners claimed that the respondent was to procure farm-out transactions for oil and gas blocks for the second petitioner but failed to do so, leading to disputes. A Settlement Agreement was executed on April 23, 2008, but the petitioners alleged that the respondent was delaying necessary actions and making unauthorized presentations to potential buyers. The petitioners invoked the arbitration clause in the Shareholders' Agreement on April 15, 2009, prior to the respondent filing a suit in Singapore claiming damages. The respondent contended that the Settlement Agreement lacked an arbitration clause and that the petitioners' rights under the arbitration agreement had lapsed. The court analyzed the situation, referencing previous case law, and concluded that the arbitration clause was still valid and that the disputes were arbitrable. Consequently, the court appointed a former judge as the sole arbitrator and directed that the arbitration proceedings be conducted expeditiously. The petition for the appointment of an arbitrator was allowed without costs.
Headnote
A) Arbitration Law - Survival of Arbitration Clause - Arbitration clause in Shareholders' Agreement remains operative despite Settlement Agreement - Arbitration and Conciliation Act, 1996, Section 11 - The court held that the arbitration clause in the Shareholders' Agreement was not superseded by the Settlement Agreement, allowing for the appointment of an arbitrator to resolve disputes. (Paras 18-27)
Issue of Consideration
Whether the arbitration clause in the Shareholders' Agreement survives despite the execution of the Settlement Agreement.
Final Decision
The court appointed Justice S.B. Sinha as the sole arbitrator to resolve the disputes between the parties, directing that the arbitration proceedings be conducted expeditiously and preferably within four months.
Law Points
- Arbitration agreement
- appointment of arbitrator
- economic duress
- jurisdiction of courts
- validity of settlement agreement
