KAVIS FASHIONS PRIVATE LIMITED Vs. DIMPLE ENTERPRISES

JUDGEMENT

(1.) The petitioner is aggrieved by award dtd. 19/3/2014, passed by an arbitral tribunal constituted for resolving the disputes between the parties. The challenge to the said award in the present petition was amended to add further specific grounds of challenge in the light of an order passed by the arbitral tribunal on an amendment application in pursuance of an order dtd. 11/3/2019 passed by this Court (Coram: S. C. Gupte, J.), whereby power under Sec. 34(4) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the 'Arbitration Act') was exercised for the tribunal to eliminate certain grounds raised on behalf of the petitioner for setting aside the arbitral award. As a consequence, the learned counsel for the parties addressed this Court, on the aspect of amendment of the statement of claim as sought by the petitioner and also on the merits of the matter. According to the petitioner, if this Court accepts its contentions on the aspect of the amendment of the claim being rejected by the tribunal, the impugned award would have to be set aside only on that count, without the necessity of entering into the merits of the matter. But, this Court thought it fit to hear the learned counsel for the parties on all aspects of the matter, including the challenge on merits raised by the petitioner.

(2.) The facts in brief leading to filing of the present petition are that, the petitioner, which is in the business of manufacture and export of footwear, intended to set up an additional manufacturing facility and in that regard, it was looking for a plot of land for setting up such a facility. In July 2006, the petitioner entered into negotiations with respondent No.1 in the context of land bearing CTS No.710 F admeasuring 2087.2 square meters at Village Marol, Andheri (East), Mumbai, in which respondent No.1 claimed to have development rights. Respondent Nos.2 to 4 are partners of respondent No.1 firm. During the course of negotiations, respondent No.1 handed over documents to the petitioner and the parties exchanged emails and communications in that regard. On 18/8/2006, the respondents submitted an application before the competent authority for re-validation of existing sanctioned plans for development of the plot of land and deposited the requisite amount.

(3.) In this backdrop, on 31/8/2006, a Memorandum of Understanding (MoU) was executed between the parties in the context of the said plot of land. The MoU consisted of various clauses, specifying stages of payment to be made by the petitioner to the respondents. The total consideration was Rs.14,75,00,000.00. At the time of execution of the MoU, an amount of Rs.2.00 crores was paid to the respondents. It is this MoU, which is the central document of controversy between the parties. The terms of the MoU, as reflected in its various clauses, have been interpreted by the rival parties to further their own interests. While the petitioner claims that the MoU was a concluded contract, the respondents have claimed throughout that it was nothing but an agreement to enter into an agreement. The mutual obligations under the MoU are interpreted by the parties in such a manner that the controversy between them can be resolved only by understanding the true purport of the said document.