HONASA CONSUMER LIMITED Vs. RSM GENERAL TRADING LLC

JUDGEMENT

(1.) This is one of the worst instances of abuse of the legal process, in commercial litigation, that this Court has had the misfortune of encountering.

(2.) The petitioner and respondent entered into an Authorized Distributorship Agreement[1], whereunder the respondent was to distribute the petitioner's products in the Middle East and Africa. The contract specifically envisaged resolution of disputes by arbitration, to be governed by the Arbitration and Conciliation Act, 1996[2], with New Delhi as the arbitral venue. The contract separately contained a clause conferring exclusive jurisdiction, in respect of all matters relating to the contract, on courts in New Delhi. The contract also specified that it was to be interpreted in accordance with Indian law which was, therefore, both the governing and the curial law.

(3.) The respondent, in clear and mala fide breach of all these covenants, filed a suit in the Court of First Instance, Dubai[3], alleging breach of the ADA by the petitioner, and is now the holder of a decree by the Dubai Court which, applying Dubai law to the dispute, has found the petitioner guilty of breach of the ADA and mulcted the petitioner with damages of AED 25,071,991, equivalent to Rs.57,17,65,947.00 (at the conversion rate of Rs.22.80 to 1 AED as applicable today).