MEIDEN T&D INDIA LIMITED Vs. PCI LIMITED

JUDGEMENT

(1.) This petition has been filed under Sec. 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the '1996 Act') on behalf of the Petitioner, laying a challenge to the arbitral award dtd. 11/7/2022 and additional award dtd. 31/8/2022 passed by the learned Sole Arbitrator whereby an amount of Rs.1,95,48,107.00 has been awarded in favour of the Respondent including pendente lite interest till the date of filing of the instant petition on 28/11/2022. Petitioner herein was the Respondent and Respondent herein was the Claimant before the Arbitrator and parties are hereinafter referred to by their litigating status before this Court for the sake of convenience.

(2.) Factual matrix to the extent relevant for adjudication of this petition is that Petitioner was incorporated on 9/9/2008 under the Companies Act, 1956 in the name of 'Prime Electric Limited' by Mr. Surinder Mehta and Mr. Rohan Mehta as a subsidiary of the Respondent Company and a part of the Prime Group. Both were also appointed as Directors on the Board of the then Petitioner Company. The name 'Prime Electric Limited' was later changed to 'Prime Meiden Limited' on 22/5/2014 and since June, 2016, major shareholding was owned and controlled by Meidensha Corporation, Japan ('Meidensha'). The two main business verticals of the Petitioner were manufacturing high-quality power transformers and managing Engineering, Procurement and Construction projects for electrical substations etc. Respondent Company was incorporated under the Companies Act, 2013 and forms part of the Prime Group of Companies, primarily established by Mr. Surinder Mehta and subsequently joined by Mr. Rohan Mehta and is also the lawful owner of the Prime Tower.

(3.) In the year 2013, on account of seeing the potential and superior technology of the Petitioner, Meidensha, a Company incorporated under the laws of Japan, approached the Petitioner and the Respondent with a proposal to invest in the Petitioner. Pursuant to negotiations, an Investment Agreement dtd. 31/3/2014 was executed with the Petitioner and other shareholders of the Petitioner, by virtue of which Meidensha paid Rs.144,99,99,988.15 to the Petitioner for subscribing to 2,80,74,115 equity shares of Rs.10.00 each constituting 23 per cent of the paid-up equity share capital of the Petitioner and acquiring one compulsorily convertible debenture with a face value of Rs.95.00 crores. Meidensha also entered into a Technical Transfer Agreement dtd. 31/3/2014 with the Petitioner, in terms of which Meidensha inter alia provided proprietary technical information and license to the Petitioner relating to design, manufacture, assembling, testing and sale of oil immersed power transformers for Railway facilities.