Sirajuddin Kasim & Anr vs M/S Paramount Investment Ltd

2. The first petitioner (hereinafter, P1) is Sirajuddin Kasim, an Indian, who is the Director, Promoter and shareholder of the second petitioner holding 75% of issued share capital of the second petitioner (hereinafter P2). P2 is a company incorporated under the laws of the Republic of Singapore and inter alia deals and trades in cotton, timber, logging, acquisition, operation and sale of oil and gas assets, mining of Manganese and other metals. The respondent on the other hand is a company incorporated under the Laws of Mauritius. The respondent is engaged inter alia in the business of making investments by way of equities in private and public companies on a negotiated basis.

3. The petitioners' case is that the understanding between the parties was that the respondent would procure farm out transactions of oil and gas blocks for P2. For such farm out transactions, the respondent would be paid a commission separately. On the date of the Shareholders' 2 Agreement (SHA), P2 was allotted oil and gas blocks in the Republic of Gabon. There were proposed oil blocks to be procured by execution of Production Sharing Contract ("PSC") in Brunei as well as in Tajikistan. In their affidavit the respondent admitted this arrangement between the petitioners and the respondent and also admitted the receipt in the name of Valpro, a sum of US $ 625,000, claiming that the same was paid by the petitioners for services rendered in relation to the farm out contracts.

4. In March, 2006 the respondent was successful in farming out the oil blocks of P2 through Oil India Limited and Indian Oil Corporation Limited for which their company Valpro Private Limited was paid a commission of US $ 625,000 i.e. 5% of the value of the farm out. Subsequently, attempts were purported to be made by the respondent to farm out oil and gas blocks for P2, but the respondent could not procure any farm out transaction. Between March, 2006 and 23rd April, 2008 3 correspondence was exchanged between the parties i.e. P1 and P2 and the respondent. From that correspondence, it will appear that disputes and differences cropped up between the parties. Allegations were made by the respondent that P1 was allegedly falsifying and manipulating the accounts of P2. There were several other allegations which are not required to be discussed in detail.

6. On 23rd April, 2008 a Settlement Agreement (Annexure-P8 pg. 116 Vol.1) was executed between P1 and the respondent; Clause C thereof stipulates that there have been disputes and differences between P1 and the respondent in relation to SHA and the management of the company and with a view to amicably resolve the same, P1 agreed to purchase the entire interest of the respondent in P2.

Where full payment of any of the above amounts is not received in the due date for such payment, the amount unpaid shall bear simple interest at the rate of 12% p.a. from the due date of payment to the date of actual payment, as well after as before judgment (the interest)."

15. It may be noted that the said Settlement Agreement is between petitioner No.1 and respondent and petitioner No.2 is not a party to this Agreement.

28. The petition for appointment of an arbitrator is thus allowed. No order as to costs.

.......................J. (ASOK KUMAR GANGULY) New Delhi August 02, 2010 16