UNIVERSAL PETRO CHEMICALS LTD Vs. B. P. PLC

JUDGEMENT

(1.) The Appellant - Universal Petro-Chemicals Ltd. in Civil Appeal No.3127 of 2009 (for the sake of convenience, hereinafter referred to as 'the Appellant ') filed a suit for specific performance of a collaboration agreement dtd. 1/11/1994 as modified by the supplementary agreements dtd. 1/3/1995 and 27/12/2002. The Plaintiff further prayed for a declaration of perpetual injunction. The learned Single Judge of the High Court of Calcutta refused to grant a decree of specific performance of the agreement. However, a decree of injunction as prayed for was granted. Aggrieved thereby, the Appellant had filed an appeal questioning the judgment of the learned Single Judge to the extent that no relief was granted. The Appeal was dismissed by a Division Bench of the High Court of Calcutta by a judgment dtd. 18/2/2008 which is impugned in the Civil Appeal No.3127 of 2009. Respondent No.3 - Aral Aktiengesellschaft in Civil Appeal No.3127 of 2009 has also filed an appeal against the judgment of the Division Bench questioning the judgment relating to the perpetual injunction granted in favour of the Appellant.

(2.) The Appellant entered into a collaboration agreement with Respondent No.3, which is a German company, on 1/11/1994 by which the Appellant had to manufacture lubricants using the formulation of Aral and market the same in India (hereinafter referred to as the "Collaboration Agreement "). By the Collaboration Agreement the Appellant was given exclusive licence regarding the distribution, blending, rebranding and marketing of Aral lubricants in India. Subsequent to the Collaboration Agreement, necessary approvals were obtained from the Reserve Bank of India under the Foreign Exchange Management Act, 1973 on 25/11/1994 which was incorporated in the Collaboration Agreement vide a supplementary agreement dtd. 3/1/1995.

(3.) In the year 2002, Veba Oil, the holding company of Respondent No. 3 was acquired by the Respondent No. 1 - BP Plc., a UK entity, who was also the holding company for Respondent No. 2 - Castrol India Ltd. As the approval granted by the Reserve Bank of India was lapsing, the Appellant applied to the Ministry of Commerce and Industry, Government of India for approval with respect to the royalty, extension of duration of the contract etc. On 13/11/2002, the Government approved the request of the Appellant and extended the approval of the Reserve Bank of India dtd. 25/11/1994. However, in the letter dtd. 13/11/2002, it was specified that the royalty was payable from 1/1/2003 to 31/12/2009 and that the duration of the extended Collaboration Agreement would be from 1/1/2003 to 31/12/2009. This approval dtd. 13/11/2002 was also made an integral part of the Collaboration Agreement by execution of yet another supplementary agreement dtd. 27/12/2002 (hereinafter referred to as the "Supplementary Agreement ").