YOGESH MEHRA Vs. ENERCON GMBH

JUDGEMENT

(1.) These three petitions filed under section 34 of the Arbitration and Conciliation Act, 1996 challenge an award passed by a three member tribunal by majority of 2 : 1 and one dissenting member who passed the award on 26 th August, 2016. The petitioners challenge the majority award to the extent it holds against the petitioner. By consent all arguments of Counsel were advanced with reference to Arbitration Petition No. 205 of 2016. Factual background

(2.) Before dealing with the substance of the challenge it is appropriate to briefly set out the factual background. The Petitioner in Arbitration Petition Nos. 196 of 2016 and 205 of 2016 are brothers Mr. Yogesh Mehra and Mr. Ajay Mehra ( "the Mehras" ) who set up a renewable energy business. They entered into a Joint Venture Agreement (JVA) known as Wind World India Limited ( "WWIL"). Respondent no. 2 is Wobben Properties Gmbh ( "WPG") incorporated under the laws of Germany. WPG is stated to be the exclusive licensing agent of Dr. Aloys Wobben ("Dr. Wobben") and Enercon Gmbh ("Enercon"). Dr. Wobben was initially the sole shareholder of WPG. Thereafter the shares were transferred to Aloys- Wobben Stiftung, a Trust organised under German law. Respondent no. 2 is WWIL. Respondent no. 4 is Mr. Yogesh Mehra, Managing Director of WWIL and petitioner in Arbitration Petition No. 196 of 2016. The Joint Venture Agreement ("JVA") was executed in 1994. Respondent no. 1 is a company- Enercon incorporated under the laws of Germany and holds 56% of the shares of WWIL. The Mehras and family members hold the remaining 44%. It is believed to be set up by one Dr. Wobben, a German electrical engineer and entrepreneur. WWIL is an unlisted public company, a joint venture.

(3.) The Mehras are believed to have used their managerial, marketing and liaising skills in running the business of WWIL. Enercon also contributed its technology to WWIL. The board of directors of WWIL was four strong and the right of appointment of directors vested in Mehras and Enercon equally. Thus two directors could be appointed by Enercon and two by the Mehras. Dr. Wobben was Chairman of the board, appointed by Enercon who held a casting vote in the event of deadlock. This was not to apply in case of investments and any matters of finance.