CLEARWATER CAPITAL PARTNERS LIMITED Vs. SATYAJIT SINGH MAJITHIA

JUDGEMENT

(1.) OMP No. 951 of 2011 under Section 9 of the Arbitration and Conciliation Act, 1996 ( Act ) and CS (OS) No. 277 of 2012 arise out of the same set of facts and are being disposed of by this common judgment. Background facts

(2.) The Petitioner in OMP No. 951 of 2011, Clearwater Capital Partners (Cyprus) Limited ( CCPCL ), is a company incorporated in Cyprus. It entered into a Share Subscription Agreement ( SSA ) and a Shareholder s Agreement ( SHA ), both dated 11 th December 2005, with Respondent Nos. 1 to 6, all residents of New Delhi and promoters and shareholders of Saraya Industries Limited ( SIL ), a company incorporated in India under the Companies Act, 1956 ( CA ). Respondent Nos. 1 to 6 own 72.5% of total issued equity share capital of SIL and are in control of its management and day-to-day affairs. By virtue of the SSA and SHA CCPCL was issued 11,13,800 shares of SIL resulting in the CCPCL holding 26% of the total issued equity share capital of SIL. However, the management and day-today affairs of SIL continued to be with Respondents 1 to 6.

(3.) Clause 17.8 of the SHA states that the SHA will be interpreted and governed in all respects by the laws of India. Under Clause 17.9 the disputes arising out of the SHA between the parties are to be resolved by arbitration. Under Clause 17.9.2 the parties are to mutually appoint a sole Arbitrator to resolve their differences or disputes. The venue of the arbitration proceedings would be Singapore. Clause 9.6 of the SHA gave CCPCL a Put Option in terms of which if the initial public offer or the listing of shares of SIL did not happen by 30 th June 2009, CCPCL could require Respondents 1 to 6 to purchase 10% of the shares of SIL held by CCPCL at any time within a 30 day period commencing 31 st December 2009 at a price computed on the basis of 25% per annum Internal Rate of Return on investment ( IRR ).