GOYAL MG GASES LIMITED Vs. GRIESHEIM GMBH

JUDGEMENT

(1.) This order shall dispose of the application filed by the plaintiff under Order 39 Rules 1 & 2 of the Code of Civil Procedure praying for grant of ad interim injunction restraining the defendant from taking any step in pursuance of the Share Purchase Agreement Dated 26.3.1997 and also in pursuance of the letter of offer dated 6.8.1998 to acquire shares of M/s. Bombay Oxygen Corporation Ltd. (hereinafter referred to for short as BOCL). The plaintiff No.2 and the defendant entered into a commercial agreement on 12.5.1995 under the title "Share Purchase and Co-operation Agreement". A copy of the said agreement has been placed on record. Some of the relevant clauses which shall have some bearing with the context of the present application are extracted below:

(2.) Subsequently, however, the defendant wrote a letter to plaintiff No.1 on 7.5.1998 stating that the promoters of BOCL had taken a stand that they would only sell their shares to the defendant and not jointly to plaintiff No.1 and the defendant. The defendant further stated that therefore, it was not possible to implement the agreement dated 8.11.1997 and the same had become void. Accordingly, the said agreement was terminated by the defendant on 7.5.1998.

(3.) It must however, be indicated at this stage that subsequent to the filing of the present suit the plaintiff sent a letter to the defendant on 8.9.1998 bringing to the notice of the defendant about the share purchase and co-operation agreement dated 12.5.1995 subsisting between the plaintiff No.2 and the defendant and also the agreement dated 8.11.1997 executed on 8.12.1997. In the said letter it was stated that the agreement dated 12.5.1995 contains an arbitration clause requiring the parties to refer their disputes for adjudication through the process of arbitration in case of disputes arising in connection with the said agreement. It was stated that as disputes have arisen between the parties in view of the defendant proceeding to acquire the majority shares of BOCL singly, which it is not entitled to do under the agreements dated 12.5.1995 and 8.11.1997 and other understandings arrived at between the parties. It was also stated that disputes have also arisen in view of the fact that the defendant has sought to enter into agreement dated 23.6.1997 with the promoters of BOCL and has also issued a letter of offer dated 6.8.1998 contrary to the understanding between the parties to make a joint acquisition and not to compete with each other. It was indicated that such disputes which have arisen between the parties are referable to arbitration under Clause 13.2 of the agreements dated 12.5.1995. It was also indicated that the case of the plaintiff No.1 is based on the agreement dated 12.5.1995 as also 8.11.1997 and that the plaintiff No.1 is invoking Clause 13.2 of the aforesaid agreements to resolve the differences by arbitration in accordance with the procedure established under the said Clause 13.2. The plaintiff, thereafter also filed an application in this Court under Section 9 of the Arbitration and Conciliation Act which is registered as O.M.P. No.205/1998.