INDUS BIOTECH PRIVATE LIMITED Vs. KOTAK INDIA VENTURE (OFFSHORE) FUND (EARLIER KNOWN AS KOTAK INDIA VENTURE LIMITED)

JUDGEMENT

(1.) Leave granted in Special Leave Petition.

(2.) The Arbitration Petition is filed by 'Indus Biotech Private Limited' under Section 11 (3) read with Sections 11 (4) (a) and 11(12) (a) of the Arbitration and Conciliation Act, 1996 ('Act, 1996' for short) seeking the appointment of an Arbitrator on behalf of the respondent Nos. 1 to 4 so as to constitute an Arbitral Tribunal to adjudicate upon the disputes that have arisen between the petitioner and the respondent Nos. 1 to 4 herein. The petition filed before this Court is due to the fact that the respondent No. 1 is a Mauritius based Company and the dispute qualifies as international arbitration. The respondents No. 2 to 4 though are Indian entities, they are the sister ventures of respondent No. 1. Further, according to the petitioner the subject matter involved is the same, though under different agreements, the arbitration could be conducted as a single process, by a single Arbitral Tribunal. Hence a common petition is filed before this Court, instead of bifurcating the causes of action and availing their remedy before the High Court in respect of similar disputes with respondents No.2 to 4.

(3.) The petition seeking constitution of the Arbitral Tribunal emanates from the Share Subscription and Shareholders' Agreements ('SS and SA' for short) dated 20.07.2007, 12.07.2007, 09.01.2008 and the Supplemental Agreements dated 22.03.2013 and 19.07.2017. Through the said agreements the respondent Nos. 1 to 4 subscribed to equity shares and Optionally Convertible Redeemable Preference Shares ('OCRPS' for short) in the company i.e. Indus Biotech Private Ltd. In the process of business, a decision was taken by the petitioner company to make a Qualified Initial Public Offering ('QIPO' for short). However, under Regulation 5(2) of Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements), Regulations 2018 ('SEBI Regulations' for short), a company which has any outstanding convertible securities or any other right which would entitle any person with an option to receive equity shares of the issuer is not entitled to make QIPO.