- Bookmark
- Share
- CaseIQ
Baker Hughes Singapo... v. Shiv-Vani Oil And Ga...
Factual and Procedural Background
This opinion arises from an Arbitration Petition disposed of by an order dated 11 November 2014, wherein the Respondent was directed to furnish a bank guarantee of US$ 2,000,000 to the Prothonotary and Senior Master of the Court, initially for two years and to be kept alive until the arbitral award was rendered and for three months thereafter. The Respondent challenged this order before the Supreme Court, which modified the bank guarantee amount to Rs. 4.00 crores. The Bank Guarantee was furnished accordingly.
The Arbitral Tribunal issued its final award on 9 September 2015, directing the Respondent to pay the claimant US$ 1,765,916.20 plus 9% interest per annum. This award was challenged in this Court but was dismissed on 3 February 2017. Meanwhile, the Respondent Company went into provisional liquidation and a provisional liquidator was appointed.
Since the Registered Office of the Respondent was in Delhi, the Petitioner approached the Delhi High Court under section 446 of the Companies Act 1956 seeking leave to continue execution and related proceedings concerning the Bank Guarantee. The Delhi High Court, by order dated 19 July 2018, allowed the Petitioner to approach this Court for release of the amount deposited along with accrued interest.
Following this direction, the Petitioner applied before the Prothonotary and Senior Master of this Court to release the amount realized from encashment of the Bank Guarantee and interest. The Prothonotary and Senior Master referred the matter to the Judge in Chambers for directions, leading to the filing of the present Chamber Summons.
Legal Issues Presented
- Whether the Court should direct the release of the amount realized from encashment of the Bank Guarantee and the accumulated interest lying deposited with the Indian Overseas Bank as per the orders of this Court, the Supreme Court, and the Delhi High Court.
- Whether the amendment to the prayer clause (a) of the Chamber Summons should be permitted.
Arguments of the Parties
The opinion does not contain a detailed account of the parties' legal arguments.
Table of Precedents Cited
No precedents were cited in the provided opinion.
Court's Reasoning and Analysis
The Court considered the directions contained in the Delhi High Court order dated 19 July 2018, particularly paragraph 12, which permitted the Petitioner to seek release of the deposited funds and interest. The Court also noted the prior orders by this Court dated 11 November 2014 and the Supreme Court dated 16 March 2015, which mandated furnishing the Bank Guarantee. In light of these authoritative directions, the Court found it appropriate to allow the amendment to the prayer clause and to permit the release of the encashed Bank Guarantee amount along with accumulated interest. The Court exercised its discretion to grant leave to amend the prayer clause forthwith and to dispose of the Chamber Summons accordingly, while reserving costs.
Holding and Implications
The Chamber Summons is allowed in terms of the amended prayer clause (a) and disposed of accordingly.
The Court directed the release of the amount realized from the encashment of the Bank Guarantee along with accumulated interest, as deposited with the Indian Overseas Bank. There is no order as to costs. This decision directly facilitates the release of funds to the Petitioner in accordance with prior judicial directions. The opinion does not establish any new precedent beyond the immediate effect on the parties.
B.P. Colabawalla, J.:— Leave to amend the prayer clause (a) of the Chamber Summons granted. Amendment to be carried out forthwith.
2. This Chamber Summons has been filed in the above Arbitration Petition which was disposed of by an order of this Court dated 11 November 2014. By this order, the Respondent was directed to furnish a bank guarantee of a Nationalized Bank in favour of the Prothonotary and Sr. Master of this Court in the sum of US$ 20,00,000 initially for a period of two years which was to be kept alive till the arbitral award was rendered and for a period of three months thereafter.
3. Being aggrieved by this order, the Respondent approached the Supreme Court, who, by its order dated 16 March 2015, directed the Respondent - Company to furnish a Bank Guarantee for an amount of Rs. 4.00 crores to the Prothonotary and Sr. Master of this Court. As per the directions of the Supreme Court, the Bank Guarantee came to be furnished. Thereafter, the Arbitral Tribunal passed its final award on 9 September 2015 and directed the Respondent to pay to the claimant a sum of Rs. US$ 1,765,916.20 together with interest at the rate of 9% p.a. This arbitral award was thereafter challenged in this Court and was dismissed on 3 February 2017. It also transpires that in the meanwhile, the Respondent Company has gone into provisional liquidation and provisional Liquidator had been appointed in respect of Respondent Company. Considering that the Registered Office of the Respondent - Company was in Delhi, the Petitioner herein approached the Delhi High Court under section 446 of the Companies Act 1956 seeking leave to continue with the execution proceedings as well as other proceedings in relation to the Bank Guarantee that was furnished to the Prothonotary and Sr. Master of this Court. In these proceedings, the Delhi High Court passed an order dated 19 July 2018 wherein at paragraph 12, the Delhi High Court ordered that the Petitioner would be entitled to approach this Court seeking release of the amount received and lying as deposit along with accumulated interest thereon.
4. On the strength of this direction, the Petitioner then moved an application before the Prothonotary and Sr. Master of this Court to release the amount realized from encashment of the Bank Guarantee of Rs. 4.00 crores together with interest thereon. Since the direction given by the Delhi High Court was to move the Bombay High Court, the Prothonotary and Sr. Master of this Court was of the opinion that this matter be placed before the Judge in Chambers for further directions before any amount could be released. This is how the Chamber Summons has been filed in this Arbitration Petition.
5. Considering the direction given by the Delhi High Court in the order dated 19 July 2018 and more particularly paragraph 12 thereof, the Chamber summons is allowed in terms of prayer clause (a) which reads thus:—
“(a) this Hon'ble Court be pleased to direct the office of the Prothonotary and Sr. Master to release the amount received pursuant to the encashment of the Bank Guarantee along with the accumulated interest thereon, and currently lying deposited with the Indian Overseas Bank bearing account No. 00140400000-3342 in consonance with the order of (i) this Hon'ble Court dated November 11, 2014; (ii) the Hon'ble Supreme Court dated March 16, 2015; and (iii) the Hon'ble Delhi High Court dated July 19, 2018.
6. Chamber Summons is disposed of in the aforesaid terms. However, there shall be no order as to costs.
7. All parties are directed to act on an authenticated copy of this order.
Alert