Anupam Mittal vs. People Interactive(India) Pvt. Ltd.and others
Anupam Mittal … Plaintiff
People Interactive (India) Pvt. Ltd. and others … Defendants
SUIT NO.95 OF 2021
INTERIM APPLICATION NO.1010 OF 2021
CORAM : MANISH PITALE J. Reserved on : 18th AUGUST, 2023
Pronounced on : 11th SEPTEMBER, 2023
The Hon'ble Bombay High Court passed an Order for temporary injunction, restraining an order of Anti-Suit Permanent Injunction Orders passed by the High Court of the Republic of Singapore; and (ii) Appeal Court Order passed by the Court of Appeal of the Republic of Singapore, restraining the Plaintiff from proceeding with his petition filed against the defendants before the National Company Law Tribunal (NCLT), Mumbai, raising disputes inter alia pertaining to oppression and mismanagement.
The Hon’ble Bombay High Court reiterated that if an injunction of the foreign Court is offensive to the domestic public policy, enforcement of the same can be resisted and the principle of comity of Courts cannot be used as a weapon to leave a litigant completely remediless.
DETAILS OF THE CASE AND THE ORDER :
People Interactive (India) Pvt Ltd, a company that was co-founded by Anupam Mittal in 1997 was backed by Westbridge Ventures and the parties entered into a Shareholders Agreement (SHA) along with certain supplementary agreements.
Disputes and differences arose between the parties and the plaintiff filed a petition before the NCLT, Mumbai, under Sections 241 and 242 of the Companies Act, 2013, inter alia alleging harassment, oppression, and mismanagement. The plaintiff claims that, although the plaintiff had already served a copy of the petition in advance on the defendants, the petition could not be listed for urgent ad-interim reliefs before the NCLT, in time.
The Defendant No.2, filed proceedings in the High Court of Singapore and contended that the disputes between the parties were merely contractual disputes and as per specific arbitration clause in the SHA, disputes, if any, would be arbitrated in Singapore and ought to be decided as per the Singapore Law.
The Defendants obtained an ex parte order from the High Court of Singapore against the Plaintiff restraining him from pursuing, continuing and/or proceeding with the petition filed before the NCLT.
Thereafter, the plaintiff filed a suit in the Hon’ble Bombay High Court seeking a permanent injunction restraining the defendants from enforcing the anti-suit temporary injunction order. The Plaintiff also moved the against the ex-parte order passed by the High Court of Singapore for vacating / modifying the ex-parte order.
The High Court of Singapore confirmed the anti-suit injunction order against the Plaintiff who then filed an appeal against the said order of the High Court of Singapore before the Court of Appeal at Singapore.
The plaintiff amended the pleadings and brought on record the subsequent events before the Bombay High Court. The defendants did not have any objection to the amendments, subject to their rights and contentions being kept open. Accordingly, the pleadings were amended. The Defendant No.2 filed its affidavit in reply and the plaintiff filed his rejoinder affidavit.
The defendant No.2, then filed an application before the High Court of Singapore seeking ex-parte leave to commence committal proceedings against the plaintiff, alleging that the plaintiff committed contempt of the anti-suit permanent injunction order by amending the plaint and the pleadings in the proceedings before the Bombay High Court and by failing to withdraw the petition filed before the NCLT.
The High Court of Singapore granted the leave and defendant No.2 filed summons in the High Court of Singapore for the plaintiff to be committed to prison or fine being imposed upon the plaintiff for contempt of court in the light of non-compliance with the anti-suit permanent injunction order. The plaintiff brought the aforesaid facts to the notice of the Hon’ble Bombay High Court by filing an additional affidavit.
The defendant No.2 also commenced arbitral proceedings before the Arbitral tribunal, who held that it had jurisdiction to hear and determine the disputes. The parties have stated before the Hon’ble Bombay High Court that the pleadings in the arbitral proceedings have been completed and the final hearing is scheduled in the third week of September, 2023.
In the backdrop of the committal proceedings alleging contempt against the plaintiff, the High Court of Singapore passed an order directing the plaintiff to withdraw the proceedings in the Hon’ble Bombay High Court, as also the petition filed before the NCLT and the Court of Appeal at Singapore also passed its order upholding the anti-suit permanent injunction order, passed by the High Court of Singapore. The appeal filed by the plaintiff in the Court of Appeal at Singapore was dismissed.
The plaintiff brought the same on record before the Hon’ble Bombay High Court, and sought to make suitable modification to the reliefs sought.
Meanwhile, in India, the Division Bench of the Hon’ble Bombay High Court, dismissed the appeal filed by defendant No.2, challenging the interim order of injunction in favour of the Plaintiff and expedited the hearing of the Interim Application filed by the Plaintiff.
The parties argued at length before the Ld. Single Judge of the High Court who upheld the Plaintiffs contentions that NCLT has exclusive jurisdiction to decide disputes pertaining to oppression and mismanagement and even the Hon’ble High Court cannot delve into disputes pertaining to oppression and mismanagement.
The Hon’ble Bombay High Court observed that the plaintiff would be rendered remediless, if the anti-suit permanent injunction order issued by the High Court of Singapore, which restrains the Plaintiff from pursuing his petition filed before the NCLT, is enforced here, especially as it could deprive him of the only remedy available to him, because as per Indian law, disputes pertaining to oppression and mismanagement can be tried only before the NCLT.
The Court reiterated:
“one of the principles recognised, that if the right of a person to pursue legal remedies before the forum competent to adjudicate such rights, is interfered with, it amounts to oppression, particularly when there is no other forum available to the litigant to ventilate his grievances. The principle of comity of Courts is well recognized, but the said principle cannot override the aforesaid valuable right of a litigant to access of justice, particularly when an injunction, as in this case, an anti-suit injunction, is issued by a foreign Court having the effect of interference with or preventing the plaintiff from pursuing the only legal remedy available in the facts and circumstances of the case. If such an injunction of the foreign Court is offensive to the domestic public policy, enforcement of the same can be resisted and the principle of comity of Courts cannot be used as a weapon to leave a litigant completely remediless. Such an oppressive situation for a litigant cannot be countenanced under any circumstances. This Court is of the opinion that in the light of the said position of law recognized by Courts in India, in the present case, the plaintiff has been able to make out a strong prima facie case for issuance of an anti-enforcement temporary injunction during the pendency of the suit.”
The Hon’ble Bombay High Court continued the order of injunction against the Defendants and directed the defendants to adjourn the Extraordinary General Meeting of the shareholders by 8 weeks from the date of the Order to enable the Plaintiff to pursue his petition before the NCLT.
In the present case, the parties chose Singapore as the seat of Arbitration and agreed that the arbitration proceedings are to be carried out in accordance with rules laid down by the International Chamber of Commerce. However, it was specifically stipulated that the enforcement of award shall be subject to provisions of the Indian Arbitration Act.
In India, disputes pertaining to oppression and mismanagement are nonarbitrable and the same can only be tried before the NCLT. It therefore begs the question, how relevant could the findings of the arbitral tribunal in Singapore be on the question of oppression and mismanagement, when the award consisting of such findings, can never be enforced in India?
It becomes important to take into consideration that the laws governing the seat of the Arbitration, the laws where the Arbitration Award is expected to be enforced and even, where the parties have assets and holdings, are all in alignment. Because, after all—an award is only as good as its enforceability.
It has become important to do in-depth research while drafting Arbitration Clauses and not just treat it as another ‘sunset clause’.
The parties now meet again in NCLT.