On this basis, they had entered into a joint venture agreement which was signed between them.
It had a tie up with an American Company called Excel Technologies International Inc. which was engaged in the business of electrolytic disinfection equipment.
This companypany had been negotiating with Respondent No.
The Government of India had asked for acknowledgement of the said letter.
Respondent Nos.9 to 11 are the Directors of the Respondent number5 companypany, numberinated by the Kocha Group Chloro Controls Group and Respondent No.9 is the Managing Director of the said joint venture.
FC.II 830 96 295 96 dated 11.10.1996, amended 21.04.1997.
It is in this period that the joint venture agreements with the appellant were negotiated, with the companysent of the Severn Trent group, which was, by that time, a majority shareholder in Capital Control Co. Inc. Subsequently, the name of Capital Control Co. Inc., was changed to Severn Trent Water Purification, Inc. Respondent No.1 , with effect from 1st April, 2002.
Ltd., the joint venture companypany, on just and equitable ground under Section 433 j of the Companies Act.
9, on the other.
Suffice it to numbere that Kocha group had floated a companypany and incorporated the same under the Indian laws, which was carrying on the business of manufacture of chlorination equipment under the name and style Chloro Control India Private Limited.
Till January 1999, the respondent Nos.1 and 2 developed and sold electro chlorination equipment under the brand name Hypogen and from January 1999 onwards, the said brand was replaced by the brands Sanilec and Omnipure.
The applicant had prayed for an order of restraint, preventing Respondent Nos.
This agreement numberices that Capital Control was engaged in the design, manufacture, import, marketing, export etc.
Ltd., the present appellant, that they had failed to remedy the issues and grievances companymunicated to them in their previous companyrespondences and meetings and also failed to engage in any productive negotiation in this companynection and therefore, they were terminating from that very day, the joint venture agreements executed between them and the appellant companypany, which included agreements stated in that letter i.e. the Shareholders Agreement, the International Distributor Agreement, the Financial and Technical Know How License Agreement, the Export Sales Agreement and the Trademark Registered User Agreement, all dated 16th November, 1995 and requested them to companymence the winding up proceedings of the joint venture companypany, respondent No.
The name of the first respondent was changed to Severn Trent Water Purification Inc. with effect from 1st April, 2002.
A further prayer was made for grant of injunction against companymitting breach of companytract by directly or indirectly dealing with any person other than the Respondent No.5, in any manner whatsoever, for the manufacture, sale, distribution or services of the chlorination equipment, machinery parts, accessories and related equipments including electro chlorination equipment, in India and other companyntries companyered by the agreement.
In this petition, specific issue was raised that merger of Capital Controls Delaware Co. with Severn Trent was number intimated to the respondent No.
They were inter dependent for their performance and one companyld number be read and understood companypletely without the aid of the other.
Besides this, certain other reliefs have also been prayed for.
Ltd., with 1,50,000 equity shares of Rs.
The purpose of these joint venture agreements as indicated in the Memorandum of Association of this joint venture companypany was to design, manufacture, import, export, act as agent, marketing etc.
1351 of 2008 titled Severn Trent Water Purification Inc. v. Chloro Control India Pvt.
In other words, the Supplementary Collaboration Agreement was a mere companyfirmation of the previous joint venture agreement.
The agreements gave 50 per cent shareholding to the foreign companylaborators which were to be equally divided between Capital Control Del Company Inc. and Capital Control Company Inc. These joint venture agreements were executed between the parties on 16th November, 1995 but the joint venture companypany had been incorporated on 14th November, 1995 itself.
The Principal Agreement specifically referred to various agreements or even terms and companyditions thereof.
It also sought a direction that the scope of business of the joint venture companypany, Respondent No.
Against this order, an appeal was preferred, which came to be registered as Appeal No.24 of 2005 and vide a detailed judgment dated 28th July, 2011, a Division Bench of the High Court of Bombay set aside the order of the learned Single Judge and dismissed both the numberices of motion taken out by the plaintiff in the suit.
Clause 7 of the agreement provided for execution of the International Distributor Agreement which was Appendix II to this Agreement.
The defendants in that suit had taken out another Notice of Motion No.778 of 2004, under Section 8 read with Section 5 of the1996 claiming that arbitration clauses in some of the agreements governed all the joint venture agreements and, therefore, the suit should be referred to an appropriate arbitral tribunal for final disposal and until a final award was made by an arbitral tribunal, the proceedings in the suit should be stayed.
The learned Single Judge, vide order dated 28th December, 2004, allowed Notice of Motion No.553 of 2004 and companysequently disposed of Notice of Motion No.2382 of 2004 as number surviving.
The said parties took out two numberices of motion, being Notice of Motion No.553 of 2004 prior to and Notice of Motion No.2382 of 2004 subsequent to the amendment of the plaint.
5 companypany prior to the filing of the arbitration petition by Severn Trent under Section 9 of the 1996 Act as well as that Severn Trent was number a share holder of the joint venture companypany and thus had numberlocus standi to file the petition.
Notice of Motion No.778 of 2004 was dismissed by another learned Single Judge of the High Court of Bombay, declining the reference of the suit to an arbitral tribunal vide order dated 8th April, 2004.
Having held that all these other agreements as well as the mother principal agreement were part of a companyposite transaction to facilitate implementation of the principal agreement and that was in reality the intention of the parties, number, we will deal with the question of parties to the principal agreement.
When the mother agreement dated 16th November, 1995 was executed between the parties, presumably the Certificate of Incorporation of Capital Control India Private Ltd. had number been issued to the parties though it had been incorporated on 14th November, 1995.
They were negotiating with Severn Trent Water Purification Inc. for an international joint venture agreement to deal with the manufacture, distribution and sale of gas chlorination equipment and electro chlorination equipment, Hypogen Series 3300 etc.
Later, Excel Technologies entered into a joint venture agreement with De Nora North America Inc. and floated another joint venture companypany, Severn Trent De Nora LLC in September, 2001 for dealing in the products Omnipure, Sanilec and Seaclor Mac.
In this suit, earlier interim injunction had been granted in favour of the appellant, which was subsequently vacated at the appellate stage.
This order was again assailed in appeal by the defendants in the suit and another Division Bench of the Bombay High Court, vide its judgment dated 4th March, 2010, allowed the Notice of Motion No.778 of 2004 and made reference to arbitration under Section 45 of the 1996 Act.
The judgments of the Division Benches, dated 4th March, 2010 and 28th July, 2011, respectively, have been assailed by the respective parties before this Court in the present Special Leave Petitions, being SLP C No.8950/2010 and SLP C No.26514 15/2011, respectively.
The disputes had arisen actually between the Kocha Group on the one hand and Severn Trent Water Purification Inc. on the other, and the disputes were mainly with regard to Capital Control India Pvt.
Thus, for all purposes and intents, in fact and in law, interest of respondent number1 and 2 was companytrolled and given effect to by Severn Trent.
Conversely, if the ancillary agreements were number performed in a companylective manner, the Principal Agreement would be of numberconsequence.
The parties herein had already executed a joint venture agreement dated 16th November, 1995.
Respondent No.3 is a companypany incorporated under the Companies Act and engaged in the business of manufacture and marketing of electro chlorination equipment.
Thus, both these appeals shall be disposed of by this companymon judgment.
The request was to widen the scope of the manufacture activities companyered by the foreign companylaboration agreement.
FC II 830 96 245 96 dated 11th October, 1996 amended on 21st April, 1997.
This companypany owned a 100 per cent subsidiary, Severn Trent Services Delaware Inc., U.S.A. Severn Trent Services Delaware Inc. owned Capital Control Delaware Co. Inc. which was formed on 21st September, 1994.
While raising a challenge, both on facts and in law, to the judgment of the Division Bench of the Bombay High Court making a reference of the entire suit to arbitration, Mr. Fali S. Nariman, learned senior companynsel appearing for the appellant, has raised the following companytentions There is inherent right companyferred on every person by Section 9 of the Code of Civil Procedure, 1908, for short CPC to bring a suit of a civil nature unless it is barred by a statute or there was numberagreement restricting the exercise of such right.
The companypany obtained the permission of the Government of India vide its letter No.
The main object of the joint venture companypany was the manufacture, service and sale of the products.
Respondent No.4 is a Private Limited Company incorporated under the Companies Act and carried on business in electro chlorination equipments.
The Financial and Technical Know how Licence Agreement was executed in furtherance to clause 14 thereof.
Chloro Controls India Private Ltd., the appellant herein, filed a suit on the original side of the High Court of Bombay being Suit No.233 of 2004, for declaration that the joint venture agreements and supplementary companylaboration agreement entered into between some of the parties are valid, subsisting and binding.
The appellant, being dominus litus to the suit, had included respondent Nos.3 and 4, who were necessary parties.
This agreement was terminable on the companyditions stipulated in clause 16, which again were similar to the termination clause provided in other agreements.
Letter No.
After the institution of the suit, as already numbericed, the respondent Nos.1 and 2 had terminated the joint venture agreements vide numberices dated 23rd January, 2004 and 21st July, 2004.
1 companypany and the joint venture companypany was number incorporated, the question of the Distribution Agreement, Managing Director Agreement, Financial and Technical Know How License Agreement or the Export Sales Agreement would number have even arisen, in any event.
Severn Trent Services Del Inc. is the holding companypany of the companypanies which have entered into the joint venture agreement for floating both, the Capital Control India Ltd. as well as Severn Trent De Nora LLC.
233 of 2004 praying, inter alia, for a decree of declaration that the joint venture agreements and the supplementary companylaboration agreement are valid, subsisting and binding and that the scope of business of the joint venture companypany included the manufacture, sale, distribution and service of entire range of chlorination equipments including electro chlorination equipment.
Ltd., the respondent No.5 in the present appeals, for the purposes of manufacture, sale and export of chlorination equipments on the terms and companyditions as agreed between the parties.
Respondent Nos.1 and 2 carried on the business of manufacture, supply, sale and distribution of chlorination equipments, including gas and electro chlorination equipments.
In the year 1998, Excel Technologies International Corporation came to be acquired by Severn Trent Services Delaware Inc. This companypany was dealing in the manufacture of Omnipure and Sanilec, distinct brands of chlorination products.
In furtherance to this letter of the Government of India, the joint venture companypany and the respondent number2 executed this Supplementary Collaboration Agreement.
However, the joint venture companypany had been incorporated on 14th November, 1995 itself.
They were also called upon to act in accordance with the terms of the agreement in the event of such termination.
An order of injunction was also obtained restraining respondent Nos.
It is this Order of the Division Bench of the High Court of Bombay that has given rise to the present appeals before this Court.
In order to achieve this object, the parties had decided to execute various agreements.
The respondent Nos.1 and 2 filed an application under Section 8 of the Act, praying for reference of the suit to the arbitral tribunal in accordance with the agreement between the parties.
ON 14.11.1995 a new Joint Venture R 5 GAS CHLORINATORS HYPOGEN Distributorship and Knowhow Agreement ODN, V. DENORA NORTH AMERICA, INC.
Thus, the joint venture entered between the parties had different facets.
of gas and electro chlorination equipments.
It may be numbericed that Seaclor Mac was a product dealt with and distributed by Titanor Components Ltd., Respondent number3, and whose original manufacturer was Groupo De Nora the latter is the parent companypany of the De numbera North America Inc. The distribution rights in respect of all these three products were given by the joint venture companypany Severn Trent De Nora LLC to Hi Point Services Pvt.
In or about the year 1989 90, the said Respondent number3 was floated as a joint venture in technical and financial companylaboration with the De Nora group of Italy which held 51 of the equity share capital of the said respondent.
1 and 2 from interfering in any way and or preventing respondent No.5 from companyducting its business of sale of chlorination equipments including electro chlorination equipment and that they be number permitted to sell their products in India save and except through the joint venture companypany, in companypliance of clause 2.5 of the Financial and Technical Know How License Agreement read with the Supplementary Collaboration Agreement.
1 and 2, the foreign companylaborators, from acting upon their numberice dated 23rd January, 2004, indicating termination of the joint venture agreements and the supplementary companylaboration agreement.
This Court vide its judgment dated 18th February, 2008 in Civil Appeal No.
As per the pleadings of the parties, reference to Capital Control Co. Inc. includes reference to Capital Control Co. Inc. as well as Capital Control Delaware Co. Inc. The appellant is a companypany carrying on business under that name and style for the manufacture of chlorination equipments and incorporated under the Indian laws by Madhusudan Kocha Respondent No.9 herein and his group for short, the Kocha Group .
It also stated that the companypanies had entered into the joint venture agreement dated 16th November, 1995 and had companymenced their operation with effect from 1st April, 1997.
Resultantly, in the amended plaint, specific prayer was made that both these numberices were wrong, illegal and invalid in breach of the joint venture agreements and of numbereffect and the joint venture agreements were binding and subsisting.
MERGED INTO ON 31.03.2003 Shareholders Agreement JV CAPITAL CONTROL INDIA PVT LTD.
Capital Controls Collaboration Company Inc., Colmar number Agreement Severn Trent Water Purification Inc. Respondent No.1 Capital Controls India Private Ltd. Respondent No.5 Facts Prior to the formation of the joint venture companypany, the Chloro Controls Group carried on the business of manufacture and sale of gas chlorination equipments and from 1980 onwards, it developed and companymenced the manufacturing of electro chlorination equipment also.
As we have already numbericed under the head Corporate Structure, the name of Respondent No.
Similarly, the Trademark Registered User License Agreement was required to be executed between the parties in terms of clause 15 of this Agreement.
All the five agreements signed by the parties were primarily to fulfill their obligations and ensure performance of this Principal Agreement.
Other terms and companyditions of the Principal Agreement referred to management of the companypany by appointment or reappointment of Directors or Managing Directors inasmuch as Clause 8.6 companytemplated execution of the agreement which was appended as Appendix III.
Ltd. and Anr.
4, for independent distribution of the products for Severn Trent De numbera LLC, in India.
The Supplementary Collaboration Agreement executed in August 1997 was only to companyply with the companyditions of the Government Approval which were granted vide letter dated 11th October, 1996, as amended by letter dated 21st April, 1997.
The Financial and Technical Know How License Agreement was Appendix III to the Principal Agreement and the details of the goods which were companytemplated to be manufactured, distributed and sold under the Principal Agreement had been specified in Appendix I of the Financial and Technical Know How Agreement.
By this time i.e., somewhere in August 1997, all other agreements had been executed, the joint venture companypany had companye into existence and, in furtherance to those agreements, it had companymenced its business.
If the latter agreement was number there, the Principal Agreement between the parties would have remained incomplete and the parties would have been at a disadvantage to know as to what goods were to be manufactured and what goods companyld number have been manufactured.
All other agreements were executed in furtherance to and for achieving the purpose of this Agreement.
Acquired in 1998 Original OMNIPURE and SANILEC Manufacturer Appellant CHLORO CONTROL INDIA PVT.
5, set up under the said agreements includes the manufacture, sale, distribution and service of the entire range of chlorination equipments including the electro chlorination equipment and claimed certain other reliefs as well, against the defendants in that suit.
5 Chloro Controls India Pvt.
The joint venture agreements were signed between these companypanies for companystituting a joint venture companypany under the name and style of Capital Control India Pvt.
Capital Controls No Registered Company Inc., Colmar number User License Severn Trent Water Agreement Purification Inc. Respondent No.1 Capital Controls India Private Ltd. Respondent No.5 August 1997Suppleme ntary1.
In these numberices of motion, the principal question that fell for companysideration of the learned Single Judge of the High Court was whether the joint venture agreements between the parties related only to gas chlorination equipment or whether they included electro chlorination equipment as well.
In the letter by the Government of India dated 11th October, 1996, besides numbericing the items of manufacture activity companyered by the foreign companylaboration agreement, foreign equity participation being 50 and other companyditions which had been specifically postulated, under clause 7 of the letter it was specified that the approval letter was made a part of the foreign companylaboration agreement executed between the parties and only those provisions of the agreement which were companyered by the said letter or which were number at variance with the said letter would be binding on the Government of India or the Reserve Bank of India.
Thus, the parties were directed to proceed to finalize the agreement.
Thus, Respondent Nos.1 and 2 became the group companypanies and were earlier part of the Capital Controls Group hereinafter referred to as the Capital Controls Severn Trent Group .
5, was incorporated and registered under the Companies Act, 1956 for short, the Companies Act .
Contentions of the learned Counsel appearing for the parties in the backdrop of above detailed facts The appellant had filed a derivative suit being Suit No.
Its foundation was provided under the Principal Agreement but all the agreed terms companyld only be fulfilled by performance of the ancillary agreements.
16.11.1995 Trademark 1.
The companypany then companymenced the operation and business of the joint venture companypany with effect from 1st April, 1997.
Vide its letter dated 21st December, 1996, the joint venture companypany had written to the Ministry of Industry, Department of Industrial Policy and Promotion, Government of India, requesting to amend point No.
50 per cent of the share capital of Respondent No.5 is held by the appellant and balance of 50 per cent is held by Respondent No.2.
Respondent No.5, i.e., Capital Controls India Private Ltd. is a Company incorporated under the Companies Act pursuant to the joint venture agreements dated 16th November, 1995 executed between the appellant and respondent number9 on the one hand and the respondent number.1 and 2 on the other.
A very significant feature of this companytract was that the Kocha Group was put under an injunction to number engage directly or indirectly or be financially interested in the manufacture, sale or distribution of chlorination equipment and related products, which is similar to those manufactured or sold by the companypany during the term of the agreement.
1, Severn Trent Water Purification Co. Inc., USA, had filed a petition for winding up respondent No.
On this issue, version of the respondents had been disputed in the earlier round of litigation between the parties where respondent No.
Swatanter Kumar, J. Leave granted.
1, Capital Control Co. Inc. was changed to Severn Trent Water Purification Inc. with effect from 1st April, 2002.
This application was companytested and finally decided by the High Court in favour of respondent Nos.1 and 2, vide order dated 4th March, 2010 making a reference of the suit to arbitration.
The other amendment that was sought for was increase in the authorized share capital from Rs.25 lakhs to paid up capital of 50 lakhs in the joint venture companypany.
The expanding need for international arbitration and divergent schools of thought, have provided new dimensions to the arbitration jurisprudence in the international field.
The companypany wished to add the manufacture of gas and electro chlorination equipments, amongst other stated items.
The present case is an ideal example of invocation of arbitral reference in multiple, multi party agreements with intrinsically interlinked causes of action, more so, where performance of ancillary agreements is substantially dependent upon effective execution of the principal agreement.
To be precise, the appellant had claimed damages, declaration and injunction in the suit primarily relying upon the agreements entered into between the parties.
If one segregates the Principal Agreement from the rest, the subsequent agreements would be rendered ineffective.
On 14th November, 1995, the joint venture companypany, Capital Controls India Private Ltd., Respondent No.
Respondent Nos.6 and 8 are the Directors of the Respondent No.5 Company, appointed as such by the Capital Controls Group.
The companypany was to be registered and as is evident, in furtherance to the negotiations, steps for registration of the said companypany had been taken and finally it came to be incorporated on 14th November, 1995.
The joint venture agreement companytemplated that the business shall be carried on under the name and style of Capital Controls India Ltd. Private Limited.
On or about 14th May, 1990, Severn Trent Services PLC, U.K., an erstwhile state owned water authority, privatized in 1989, expanded its business into the U.S.A. by acquiring 80 per cent shares in Capital Control Co. Inc. on 15th May 1990 and a further 20 per cent on 31st March 1994.
Ltd., as well as Severn Trent De Nora LLC.
Certain disputes had already arisen between the parties that resulted in termination of the joint venture agreements.
2 , on 31st March, 2003.
Thus, the appellant and Respondent No.2 are the joint venture partners who have together incorporated the Respondent No.5 companypany.
The companypanies which executed the various agreements were the companypanies signatory to the Principal Agreement or their holding companypanies or the companypanies belonging to the respondent group in which they had got merged for the purposes of attaining effective designing, manufacturing, import, export and marketing of the agreed chlorinated products.
were the matters specifically provided for under this agreement.
Ltd., Respondent No.
Later on, respondent number2, Capital Control Delaware Co. Inc. was merged with the respondent number1 on 31st March, 2003.
Formed on 21.09.94 EXCEL TECHNOLOGIES INTL CORP.
Both these requests of the joint venture companypany were accepted by the Government of India vide their letter dated 21st April, 1997 and clauses 2 , 3 and 4 of the earlier approval letter dated 11th October, 1996 were modified.
of gas and electro chlorination equipments.
The reference to joint venture companypany, thus, was number by a specific name.
Still, certain other clauses of the Principal Agreement specifically dealt with the sale of goods manufactured by the joint venture companypany, nationally and internationally.
H. Kapadia J. K. Patnaik J. Swatanter Kumar New Delhi September 28, 2012 IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO.
If the companypany had been duly incorporated and the Certificate of Incorporation was available to the parties, then there companyld be numberreason for the parties to propose in the Principal Agreement that the joint venture companypany would be in the name of Capital Controls India Private Ltd. or any other name which would be mutually agreed between the parties.
These agreements being prior to the merger of Capital Control Delaware Co. Inc. with Capital Control Co. Inc. and also prior to the change of name of Capital Control Co. Inc. to Severn Trent Water Purification Inc., 50 per cent of the shares allotted to the foreign companylaborators were to be equally divided between Capital Control Delaware Co. Inc. and Capital Control Co. Inc. These joint venture agreements were executed between the parties on 16th November, 1995, as already numbericed.
If the agreed goods were number manufactured in India with the technical know how of the respondent No.
The same was dismissed.Respondent No.7 is the Chairman also appointed by the Capital Controls Group, but has numbercasting vote.
On 1st December, 1988, a letter of intent and a letter of understanding were executed between Capital Controls Company Inc., Colmar, Pennsylvania, U.S.A which name was subsequently changed in the year 2002 to Severn Trent Water Purification Inc., respondent No.1 and respondent number9 to form a new, jointly owned companypany in India, to be called Capital Controls India Pvt.
The Severn Trent Water Purification Inc. Capital Control Co. Inc. then came to be merged with Capital Control Delaware Co. Inc. Respondent No.
The petitioner is a Private Limited Company and its shares are entirely held by Respondent Defendant Nos.9 to 11 Kocha Chloro Control Group .
1 for entering into a joint venture agreement, to deal with the manufacture, distribution and sale of gas chlorination equipment and Hypogen electro chlorination equipment Series 3300, etc.
The business was done in the name of Chloro Controls Equipments Company, a sole proprietary companycern of Respondent No.9, Mr. M.B. Kocha and it was the distributor in India for the products of the Capital Controls group for more than a decade prior to the formation of the joint venture.
To examine the factual matrix of the case in its companyrect perspective, reference to pleadings of the parties would be appropriate.
As discussed above, the joint venture agreements were primarily a project between Respondent Nos.
Vide letter dated 21st July, 2004, Severn Trent Services informed respondent number9, respondent number5 and Chloro Controls India Pvt.
It appears that the joint venture companypany, Respondent number5, was incorporated on 14th November, 1995.
1 and 2 on the one hand and the appellant companypany along with its proprietor, Respondent No.
The Principal Agreement referred either specifically or by necessary implication to all other agreements.
All other terms and companyditions of the approval letter remained the same.
This resulted in signing of the International Distribution and Export Sales Agreement between the parties.
All the subsequent agreements were, therefore, ancillary or incidental agreements to the Principal Agreement.
Respondent No.1Company was earlier known as Capital Control Company Inc. and in or about the year 1990 the Capital Controls Group came to be acquired by Severn Trent Services PLC UK , originally a State owned water authority and following privatization from the UK Government in 1989, it proceeded to build a product and services business from the US beginning with the acquisition of the Capital Controls Group.
10 each and 50 per cent shareholding with each party.
As a result thereof, Capital Control Delaware Co. Inc. ceased to exist.
The important part of this one page agreement is we hereby companyform that we shall adhere to the terms and companyditions as stipulated by the Government of India.
This led to the execution of joint venture agreements between the appellant and Respondent No.
