VENTURE GLOBAL ENGINEERING LLC versus TECH MAHINDRA LTD. & ANOTHER ETC.

VENTURE GLOBAL ENGINEERING LLC versus TECH MAHINDRA LTD. & ANOTHER ETC.

Per Sapre, J.: The arbitral award was obtained by misrepresentation and suppression of material facts with a direct bearing on proceedings, violating public policy under Section 34(2)(b)(ii) and Explanation I. Therefore the award is set aside. Per Chelameswar, J.: No sufficient demonstration of materiality or inducement of fraud; restoration of the award upheld. Due to difference of opinion, matter referred to a larger Bench.

Parties
Appellant: Venture Global Engineering LLC; Respondent: Tech Mahindra Ltd.; Respondent: Satyam Computer Services Ltd.
Jurisdiction
India
Judgment Date
01 November 2017
Procedural Posture
Civil Appeal / On Appeal to Supreme Court; Order of Reference to Larger Bench Due to Split Decision
Outcome
Split decision; matter referred to larger Bench due to difference of opinion between judges.
Legal Topics
Setting Aside Arbitral Award, Public Policy, Fraud and Misrepresentation, Suppression of Material Facts, Joint Venture Agreements
Arbitration Company Law Setting Aside Arbitral Award Public Policy Fraud and Misrepresentation Suppression of Material Facts Joint Venture Agreements

Case Brief

Summary, issues, holding and outcome

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Parties

Venture Global Engineering LLC

Appellant

Tech Mahindra Ltd.

Respondent

Satyam Computer Services Ltd.

Respondent

Procedural Posture

Civil Appeal / On Appeal to Supreme Court; Order of Reference to Larger Bench Due to Split Decision

Legal Issues

  1. 1 Whether arbitral award is vitiated by fraud, misrepresentation, and suppression of material facts.
  2. 2 Whether the award violates the public policy of India under Section 34(2)(b)(ii) of the Arbitration and Conciliation Act, 1996.
  3. 3 Whether acts of manipulation and fabrication of accounts constitute an event of default under the joint venture agreement and Indian law.

Ratio Decidendi

Per Sapre, J.: The arbitral award was obtained by misrepresentation and suppression of material facts with a direct bearing on proceedings, violating public policy under Section 34(2)(b)(ii) and Explanation I. Therefore the award is set aside. Per Chelameswar, J.: No sufficient demonstration of materiality or inducement of fraud; restoration of the award upheld. Due to difference of opinion, matter referred to a larger Bench.

Court Disposition

Split decision; matter referred to larger Bench due to difference of opinion between judges.

Orders

  • Registry directed to place papers before Hon'ble Chief Justice of India for appropriate further course of action.
  • No final disposal on merits reached; impugned judgment of High Court set aside by one judge and restored by another.