ACERHOTELS GROUP LIMITED & ANR v. CONVENTION HOTELS (I) PVT. LTD. & ANR

1. Learned counsel for the Appellants submitted that a: this stage the Appellants would be satisfied if the Respondents stands by the statement attributed to them in para 17.[5] of the impugned order of the Arbitral Tribunal('AT')that any sale ofthe assets in the ordinary course ofbusiness ofRespondent No.1would be only for the puiposes offulfilling its financial commitments.

2. The concern ofthe Appellants is that they should be able to recover the sum,ifany,that is awarded in their favour againstthe Respondents. Arb.A. No. 10/2014 Page I of[4] 2015:DHC:11776

3. Learned counselfortheRespondenthasraisedtwo objections.Thefirstis to thejurisdiction ofthis Court to entertain the petition. He points out that the seat of arbitration is Bangalore and Respondent No.l is also in Bangalore. He points out that the money given by the Appellants to the Respondents wastowards subscription ofshares and the Share Subscription Agreement ('SSA') containing the arbitration clause does not confer jurisdiction in this Court. It is submitted that the Respondents had reserved their right, in the earlier rounds of litigation, to raise an objection as to jurisdiction.

4. Secondly,it is submitted that the statement attributed to the Respondents in the impugned order ofthe AT does not required any further elaboration. It is submitted that in the garb of an application under Section 17 of the Arbitration and Conciliation Act, 1996 ('Act') seeking interim reliefs, the Appellants were trying to convert what is essentially an unsecured debt into a secured one and that is why the AT declined the relief prayed for i.e. requiring the Respondent No.l to himish security for the claimed amount.It is submitted that the Respondent No.l maintains that only in order to meet its financial commitmentsin the regular course ofbusiness it will dispose of Arb.A.No.10/2014 Page2of[4] its assets and itis always prepared to meetanyliability that may arise outof the Award as and when passed.It is pointed out that the Respondents also have counter-claimsagainstthe Appellantinthe arbitral proceedings.

5. Asregardsthe objection on the ground ofjurisdiction,the Courtfinds that in the earlier rounds oflitigation,an order was passed on January 2011 in OMP No. 11/2011 to the effect that ifan allotment ofthe equity shares was made by Respondent No.l in favour ofthe Petitioners 1 and 2 in the said petition, it would be without prejudice to the rights and contentions of the Petitioners. Subsequently,on 10^''October2012an order was passed that it would be open to the parties to seek appropriate interim reliefs before the AT. Subsequently on R' November 2012 in an application seeking clarification, it was directed that the order passed on iR"^ January 2011 would continue till such time the AT passed an order in the application filed by either party under Section 17 of the Act. The Court recorded the statement on behalfofthe Respondents herein that they should not be taken to have conceded to the jurisdiction ofthis Court. The Court observed that the issue if and when raised would be decided in appropriate course in accordance with law withoutreference to the said order. Arb.A. No.10/2014

6. Subsequently,the AT had sittings not only in Bangalore which was the seat ofthe AT butin other places as well. A detailed order has been passed in an application under Section 17 ofthe Act filed by the Appellants.In the facts and circumstances,the Court does not consider it as having caused any prejudice to the Respondents that an appeal has been filed against the said interim order ofthe AT in this Court. With there already having been several rounds oflitigations between the parties,the Court declines to entertain the objection as tojurisdiction atthis stage.

7. On the merits ofthe appeal, the Court finds that impugned order ofthe AT is sufficiently clear and elaborate. It has discussed the aspects ofprima facie case and balance of convenience vis-a-vis each of the interim reliefs sought by the Appellants.The statement attributed to the Respondents which has been quoted in the impugned order is also unambiguous.The Courtfinds no need to further add to what the AT has already noted in the impugned order. Consequently, the Court finds no ground to interfere with what is already stated in the impugned order passed by the AT.

8. The appeal is disposed of.

S.MURALIDHAR,J