KANODIA INFRATECH LIMITED Vs. DALMIA CEMENT (BHARAT) LIMITED

JUDGEMENT

(1.) The present petition has been preferred by the petitioner challenging the Award dated 09.03.2021 passed by the learned Arbitrator in Case Ref. No. 3005/2018, titled as "M/s Dalmia Cement (Bharat) Limited Vs. M/s Kanodia Infratech Limited " on the ground that the learned Arbitrator lacked inherent jurisdiction to entertain and try the disputes being unilaterally appointed by the respondent, which is contrary to the settled proposition of law.

(2.) Petitioner- M/s Kanodia Infratech Limited, a company incorporated under the provisions of Companies Act, is involved in the business of producing, grinding, blending, manufacturing, finishing, packaging, repacking, mixing, grading, supply of Portland cement and Portland Pozzolona cement. Respondent- M/s Dalmia Cement (Bharat) Limited is also in the business of manufacturing and marketing of cement.

(3.) According to petitioner, the parties to the present petition entered into a Memorandum of Understanding dated 13.12.2016 for use of cement griding plant at village Kurari, Distt. Kaimur (Bhabhua), Bihar by the respondent for conversion of clinker into cement at an agreed rate of conversion and further purchase of the plant itself by the respondent through a Share Purchase Agreement, in terms enumerated in Clause-12 thereof. In furtherance thereto, detailed discussions between the parties took place with regard to legal, financial and technical aspects and after due diligence, respondent vide its email dated 15.02.2017 shared a draft of Share Purchase Agreement and thereby, parties were ad idem on the sale of the said plant through purchase of entire shareholding of the petitioner. Finally, respondent made an offer to take over the share holding of the petitioner in the said plant at a price of Rs.250 crores plus tax implications on the purchase, which is said to have been accepted by the petitioner. According to petitioner, in addition to above, the petitioner was also liable to release of VAT incentives offered by the State of Bihar, which were to accrue to the respondent upon eventual purchase of the plant. However, since the State Government took longer than expected to release the VAT incentives, the respondent deferred the execution of the proposed Share Purchase Agreement till the first instalment of VAT incentive was received. It was therefore agreed between the parties that the respondent shall operate the said plant till the time VAT incentives are released and thereafter, shall acquire the shareholding of the company and stationed its employees at the said plant from February, 2017.