Delhi High Court Pradeep Anand vs I.T.C. Ltd. & Ors. on 13 March, 2000 Equivalent citations: 2000IIIAD(DELHI)965 ORDER S.K. Mahajan, J. 1. The Appellant has challenged the Order dated April 23, 1999 passed by a learned Single Judge of this Court whereby further proceedings before the Arbitrator appointed by the International Chamber of Commerce in Arbitration Case No. 8080/BGD have been stayed till decision AO (OS) No. 134/99 of the objections to the Award dated April 28, 1998 rendered by the Arbitrator in the aforesaid matter. The facts in short are : 2. That on September 11, 1990 a Cooperation Agreement was executed between late Shri C L Anand, father of the Appellant representing his family and associate Companies (hereinafter referred to as "Anands"), ITC Limited, Toshiba Corporation, Toshiba Battery Company and Toshiba Anand Battery Limited. The Agreement on behalf of ITC Limited (hereinafter referred to as "ITC Limited") was signed by Mr D P Barua. In terms of the Agreement, ITC was to arrange for the purchase of 48% of the share holdings in Toshiba Anand Battery Limited in two lots of 24% each either by itself or through its associate Companies. Under the Agreement Respondents 1 to 3 were to release the personal guarantees given by Anands to the Banks and financial institutions in lieu of the loans and other facilities extended to Respondent No. 4 Toshiba Anand Battery Limited. As certain disputes arose between the parties to the Agreement, the Appellant invoked the Arbitration Clause and filed a claim on September 9, 1993 before the International Chamber of Commerce. In its reply dated 20th December, 1993 to the request for Arbitration the ITC challenged the validity of the Cooperation Agreement on the ground that it had not given authority to any person to sign any Agreement on its behalf with Anands much less the Cooperation Agreement dated 11th September, 1990 and that the said Agreement did not constitute any legal, valid or binding Agreement between the parties. The ICC was, therefore, requested not to proceed any further with the matter. 3. It appears that on or about 16th August, 1994 ITC filed a Suit, which was numbered as Suit No. 50/95, in this Court for a declaration that the Cooperation Agreement was not valid and binding on them. By a letter dated 5th January, 1995 the ICC informed the parties that in its session held on 4th January, 1995 the International Court of Arbitration has decided that the matter shall proceed for Arbitration and would be submitted to the sole Arbitrator. On receipt of this letter the ITC Limited on or about 31st January, 1995 filed an Application in Suit No. 50/95 for stay of the Arbitration proceedings pending the hearing and final disposal of the Suit. On 30th August, 1995 the ICC appointed Respondent No. 5 as the sole Arbitrator. On 9th October, 1995 ITC filed an Application before the Court for withdrawal of Suit No. 50/95. It was stated in the Application that in terms of Rule 8.3 of the ICC Rules of Conciliation and Arbitration should one of the parties raise one or more pleas concerning the existence or validity of the Agreement to arbitrate and should the International Court of Arbitration be satisfied of the prima facie existence of such an Agreement the Court may, without prejudice to the admissibility or merits of the plea or pleas, decide that the Arbitration shall proceed and in such a case any decision as to the Arbitrator's jurisdiction shall be taken by the Arbitrator himself. It was, therefore, stated in the Application that as the said Rule is deemed to be incorporated in the Arbitration Clause itself the ITC was agreeable to having the said issue regarding the existence and binding effect of the document dated 11th September, 1990 determined by the Arbitrator alongwith all other issues arising out of the claim made by Anands in the Arbitration proceedings and the defenses raised by the paries thereto. On this Application having been filed, the Suit being Suit No. 50/95 was dismissed as withdrawn. 4. In the meantime, the ITC had also filed an Application being OMP No. 16/95 under Section 33 of the Arbitration Act 1940 for determination of the existence and validity of the Cooperation Agreement. This Application was also dismissed as withdrawn on 17th October, 1995 on an Application having been made to that effect by the ITC. It may be stated here that on 2nd April, 1994 Toshiba Corporation and Toshiba Battery Company filed a Suit claiming a decree of declaration that the Agreement dated 11th September, 1990 was valid and binding on ITC and that the Court should pass a decree for Rs. 10 crores in their favour and against ITC and Anands alongwith interest. The Petition under Sections 32, 33 and 35 of the Arbitration Act was also filed by the said Toshiba Corporation and Toshiba Battery Company for determining the validity and existence of the Arbi