M/S AGYA HOLDING PVT. LTD v. JONES LANG LASALLE PROPERTY

1. This petition has been filed under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the ‘Act’) challenging the Arbitral Award dated 29.05.2015 passed by the Sole Arbitrator inter alia dismissing the claim filed by the petitioner on the ground of res judicata.

2. The disputes between the parties are in relation to the payment of fee by the petitioner to the respondent who was appointed as a Valuer for valuation of the land owned by Agya Boortmalt Pvt. Ltd., which is a Joint Venture Company between the petitioner and M/s. Boortmalt N.V., a company registered in Antwerp, Belgium The respondent had been appointed as a Valuer for valuation of the land in terms of the order dated 10.09.2009 passed by the Company Law Board in C.P. NO. 58(ND)/2008 and C.P. NO. 63(ND)/2008 filed by the two joint venture partners against each other. 2018:DHC:3028 O.M.P. (COMM) 392/2016 Page 2

3. By a subsequent order dated 09.02.2010 passed in the above Company Petitions, the petitioner had undertaken to pay the entire cost of valuation to the respondent.

4. Claiming that the respondent had not taken into account the relevant information supplied by the petitioner during the valuation exercise and delayed the submission of its report to the Company Law Board which resulted in the breaking down of negotiations between the petitioner and its Joint Venture partners, the petitioner filed an application before the Company Law Board inter alia praying for the refund of amount already paid by the petitioner to the respondent for the valuation exercise in terms of the above mentioned orders. The Company Law Board by its order dated 14.03.2013 dismissed the said application inter alia holding that the said application was nothing but a blatant abuse of the process of the Board. It was further held that as the respondent had been appointed in terms of the order passed by the Company Law Board, the petitioner was under an obligation to pay the balance fee to the respondent alongwith interest at the rate of 18% per annum from 13.07.2012.

5. The above order was challenged by way of an appeal filed by the petitioner before this Court being, CO.A(SB) 19/2013 (Agya Holdings Pvt. Ltd v. M / S Jones Lang Lasalle Property Consultants (India) Pvt. Ltd. & Ors.). The said appeal was dismissed by this Court by its detailed order on 09.09.2013. This Court inter alia held as under:- “12. After hearing the rival arguments, I am satisfied that there is absolutely no merit in the appeal. The appellant, as pointed by the CLB, had undertook and agreed before the CLB that it would bear the entire fees payable to JLL who were appointed by the CLB to carry out the work of valuation of the land. Accordingly, the first instalment O.M.P. (COMM) 392/2016 Page 3 of the fee of ₹16 lakhs together with service taxt etc. was paid in April, 2010. Thereafter, it kept on communicating with JLL and giving information, which it claims to be relevant information, regarding the valuation of the land. It must be remembered that JLL is the appointee of CLB and is a professional valuer. It is not bound to respond or communicate with the appellant in respect of each and every information or input given by the latter, even though it may be relevant for the purpose of valuation of the land. As a professional valuer it was not the duty of JLL to keep the appellant informed as to how every input supplied by the latter was considered and factored while arriving at the value of the land. It would have been unprofessional if JLL were to do so. It went about the task in a professional manner and when it found necessary to seek an extension of time, it did so by writing to the CLB seeking extension of time for submission of the final report. Even on 20.5.2010 the appellant was intimated by JLL that the report was ready for submission and it was awaiting the payment of the balance of the fees. This was done by JLL by marking a copy of its letter dated 20.5.2010 addressed to the CLB to the counsel for the appellant. On 14.12.2010 JLL wrote an e-mail to the counsel for the appellant intimating that the report will be submitted directly to the CLB once the full payment of the fees was made. JLL also pointed out that since it was appointed by the CLB, the report would be sent directly to the CLB in confidence and therefore it will not be in a position to share any details pertaining to the report with the appellant prior to the submission of the same to the CLB. Despite being notified by JLL about the fact that the report was ready for submission and the appellant should therefore remit the balance of the fees agreed upon, the appellant went on making excuses and did not pay balance fees. Merely because the appellant had agreed to bear the entire fees payable to JLL, it gives no right to the appellant to demand that every step in the process of valuation of the land should be made known to it and it should be taken into confidence as to how the valuation is arrived at and what is the value determined. The conduct of the appellant in insisting of being made aware of the process of valuation at every stage leaves much to be desired. I agree with the sentiments expressed by the CLB, with respect, regarding the conduct of the appellant in filing CA 260/2012. O.M.P. (COMM) 392/2016 Page 4

13. The learned counsel for the appellant relied on section 8 of the Arbitration and Conciliation Act and submitted that the CLB ought to have referred the matter to arbitration instead of deciding the matter itself. Section 8(1) is as follows:

6. The petitioner was still not satisfied and challenged the order passed by this Court before the Supreme Court by way of SLP (C) No. 32217 of

2013. The same was dismissed in limine by the Supreme Court by its order dated 25.10.2013.

7. One would have thought that atleast now the petitioner would put an end to this part of litigations, however, this was not so. The petitioner pursued its application under Section 11 of the Act seeking appointment of an Arbitrator in terms of the Agreement dated 12.04.2010, which had been executed between the parties to give effect to the appointment of the respondent as a Valuer in terms of the order passed by the Company Law Board.

8. This Court by its order dated 31.10.2013, with the consent of the parties, appointed the present Sole Arbitrator.

9. As noted above, these arbitration proceedings have resulted in the Impugned Award.

10. The learned counsel for the petitioner submits that the Arbitrator has erred in holding that the claim filed by the petitioner would be barred by the principle of res judicata. She submits that the orders passed by the Company Law Board, the High Court and the Supreme Court were on an application seeking refund of the 50% of the fee already paid to the respondent and not for seeking restrain from paying a further amount to the respondent. The O.M.P. (COMM) 392/2016 Page 6 Company Law Board and the High Court instead of adjudicating the issue on whether the petitioner was entitled to the refund of the amount already paid to the respondent, directed the petitioner to pay the remaining professional fee as well. However, in the submission of the learned counsel for the petitioner, the Company Law Board or the High Court did not determine the issue, whether the petitioner was entitled to the refund of the amount already paid to the respondent. She submits that in view thereof, these orders cannot act as res judicata against the petitioner.

11. I have considered the above submissions of the counsel for the petitioner, however, I find no merit in the same. The Company Law Board in unambiguous words held that the application filed by the petitioner was an abuse of the process of the Board. It further held that the petitioner was under an obligation to pay the agreed balance fee to the respondent, as the respondent has been appointed pursuant to the order passed by the Board. This order was upheld by this Court while dismissing the appeal filed by the petitioner. This Court further held that whether the report was to the liking of the petitioner or not, could not discharge the petitioner from making the full payment to the respondent as directed by the Company Law Board. In view of the above orders, the submissions made by the counsel for the petitioner is completely fallacious and cannot be accepted.