Prysmian Cavi E Sistemi S.r.I. v. Vijay Karia & Ors.

At a glance

Parties

Prysmian Cavi E Sistemi S.r.I. (Italy) v. Vijay Karia and 76 other shareholders of Ravin Cables Limited

Case no.

Arbitration Petition No. 442 of 2017

Court

High Court of Judicature at Bombay, Ordinary Original Civil Jurisdiction

Underlying award(s)

LCIA sole-arbitrator awards (London seat): First Partial Final Award; Second Partial Final Award (19 December 2013); Third Partial Final Award (14 January 2015); Final Award (11 April 2017)

Treaty

Joint Venture Agreement of 19 January 2010 (clause 27, LCIA arbitration); New York Convention, Article V; Arbitration and Conciliation Act 1996, Section 48

Tribunal

A. K. Menon, J. (single judge)

Sector

Energy and telecommunications cables; joint venture

Outcome

Enforcement granted (7 January 2019): the awards are enforceable in India and the petitioner may proceed to execution. No order as to costs.

Amount

The Final Award ordered the respondents to transfer their 49% shareholding in Ravin for a total of Rs. 65.20 crores (Rs. 63.90 per share). No costs in the enforcement petition.

The dispute

Prysmian, an Italian cable maker, acquired 51% of the Indian company Ravin Cables Limited under a Joint Venture Agreement (JVA) of 19 January 2010. The Karia family and other existing shareholders kept 49%, and Vijay Karia represented them all. The partnership broke down in 2011–2012 over management control. Prysmian started LCIA arbitration in London. A sole arbitrator found the Karia side in material breach and ordered them to sell their shares at a 10% discount to fair market value, using Deloitte's valuation. When Prysmian sought enforcement in Bombay, the respondents objected under Section 48 of the Arbitration and Conciliation Act. They argued that the arbitrator was biased, that they had been unable to present their case (because ACPL documents were not produced and their counterclaims were not considered), that the findings were perverse, that specific performance was granted without the averment of readiness and willingness required by Section 16(c) of the Specific Relief Act, and that the discounted share transfer breached FEMA pricing rules.

Key holdings

1. A party may resist enforcement in India even if it did not challenge the award at the seat. The Court agreed with Dallah and PT First Media on this point, but excluded cases where a challenge at the seat was required, as in ARK Shipping and POL India. ¶¶ 67, 70–71
2. After the 2015 amendment (Explanation 2 to Section 48(2)), the Court cannot review a foreign award on the merits. The wider public-policy tests of Saw Pipes, Western Geco and Associate Builders do not apply to foreign awards, and the narrow Renusagar and Shri Lal Mahal approach governs. The respondents' objections would require a detailed reappreciation of evidence, which is not permitted. ¶¶ 72, 86–89, 96
3. There was no inability to present the case. ACPL refused to produce documents on confidentiality grounds, and the tribunal correctly found that it could not order a third party to disclose them. The respondents could have sought court-ordered disclosure. Nor was the tribunal bound to give its views on expert evidence in advance or to warn the parties of a view neither had put forward. ¶¶ 74, 81, 83–84
4. The tribunal's interpretation of clause 21.1 was not perverse; it was reasoned in detail. The counterclaims (Jaguar, ouster, direct sales) were dealt with, and the alleged inconsistencies between the partial awards do not show that the tribunal shifted the goalposts. ¶¶ 67, 73, 77–78
5. The bias allegation was an afterthought. It was first raised after the Second Partial Final Award, the respondents kept participating in the arbitration without reservation, and they did not pursue the allegation under the English Arbitration Act. ¶ 79
6. Section 16(c) of the Specific Relief Act is not part of the fundamental policy of Indian law. In any case the point was not raised before the tribunal, and the substance of readiness and willingness had been pleaded. ¶¶ 92–94
7. The FEMA objection fails. A contravention of Indian law alone is not enough to refuse enforcement, and on the facts the FEMA fair value was far lower than the contract price. ¶ 97

Procedural history

1. 19 January 2010Joint Venture Agreement and Control Premium Agreement signed. Prysmian takes a 51% stake in Ravin.
2. 2012Prysmian files a Request for Arbitration under clause 27 of the JVA. The LCIA appoints a sole arbitrator. The respondents serve a Determination Notice on 26 March 2012.
3. 19 December 2013Second Partial Final Award: the respondents are in material breach and must sell their shares at a discounted price.
4. 14 January 2015Third Partial Final Award: the respondents' rights under the JVA have ceased, and the valuation date is fixed at 30 September 2014.
5. 23 November 2015Deloitte values the respondents' shares at Rs. 71 per share after the 10% discount.
6. 11 April 2017Final Award: the respondents must transfer their shares for Rs. 65.20 crores.
7. 7 January 2019The Bombay High Court holds the awards enforceable and allows execution.

Tribunal, counsel and experts

Decided by

• A. K. Menon Judge, High Court of Judicature at Bombay

For the claimant

Bharucha and Partners

For the respondent

Vimadalal & Co. · Unadkat & Co.

Experts

Kalyaniwalla & Mistry (claimant)

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Keywords

• enforcement of foreign award
• New York Convention Article V
• Section 48 Arbitration and Conciliation Act
• public policy
• fundamental policy of Indian law
• review on merits
• inability to present case
• arbitrator bias
• Specific Relief Act Section 16(c)
• FEMA pricing guidelines
• joint venture
• shareholders agreement
• material breach
• LCIA
• Ravin Cables
• share valuation
• Deloitte
• Shri Lal Mahal

Summary generated with AI from the published documents — refer to the award for the authoritative text.