Case Note & Summary
The petitioner, Ratnam Sudesh Iyer, a Singaporean citizen and shareholder of Atlas Equifin Pvt. Ltd., filed an arbitration petition under Section 9 of the Arbitration and Conciliation Act, 1996, seeking interim relief against the respondent, Jackie K. Shroff, an Indian citizen. The dispute arose from a shareholding in Multi Screen Media Pvt. Ltd. (MSM Ltd.), formerly Sony Entertainment Television. The petitioner and respondent were shareholders of Atlas Equifin, which held shares in MSM Ltd. In 2005, a placement instruction was signed authorizing Standard Chartered Bank as escrow agent to find a purchaser for the shares. In 2010, the respondent lodged a complaint with the Economic Offences Wing disputing his signature on the placement instructions. Subsequently, the parties entered into a deed of settlement on 3.1.2011, wherein the respondent agreed not to make further complaints. The petitioner alleged that the respondent breached the settlement by making further complaints and claimed that the respondent was liable to pay Rs.8.49 crores. The petitioner sought an order directing the respondent to deposit this sum or furnish a bank guarantee, and an injunction restraining the respondent from utilizing proceeds from the sale of his shares in MSM Ltd. The court considered whether a prima facie case existed for interim relief. The court noted that the settlement deed did not contain any obligation on the respondent to pay the claimed amount. The respondent disputed the claim and argued that no proceeds had been received. The court held that the petitioner failed to establish a prima facie case, balance of convenience, or irreparable loss. The petition was dismissed, and the parties were left to pursue arbitration.
Headnote
A) Arbitration - Interim Measures - Section 9 of the Arbitration and Conciliation Act, 1996 - Prima Facie Case - The petitioner sought deposit of Rs.8.49 crores and bank guarantee alleging breach of settlement deed by respondent. Court held that petitioner failed to establish a prima facie case as the settlement deed did not create any obligation on respondent to pay the said sum. (Paras 1-10) B) Arbitration - Interim Measures - Section 9 of the Arbitration and Conciliation Act, 1996 - Balance of Convenience - Court found that balance of convenience was not in favor of granting injunction or deposit, as the respondent had not received any proceeds from share sale and the petitioner's claim was disputed. (Paras 11-15) C) Arbitration - Interim Measures - Section 9 of the Arbitration and Conciliation Act, 1996 - Irreparable Loss - Petitioner failed to show irreparable loss as the alleged amount was not quantified in the settlement deed and the dispute was subject to arbitration. (Paras 16-20)
Issue of Consideration
Whether the petitioner is entitled to interim relief under Section 9 of the Arbitration and Conciliation Act, 1996, directing the respondent to deposit Rs.8.49 crores or furnish a bank guarantee, pending arbitration.
Final Decision
The arbitration petition is dismissed. No order as to costs.
Law Points
- Section 9 of the Arbitration and Conciliation Act
- 1996
- Prima facie case
- Balance of convenience
- Irreparable loss
- Interim measures
- Settlement agreement
- Breach of contract
- Escrow agent
- Bank guarantee
