TMI Blog2010 (9) TMI 1228X X X X Extracts X X X X X X X X Extracts X X X X ..... . (hereinafter referred to as the plaintiff or Sony ) had applied for an injunction to restrain the defendant-World Sport Group (Mauritius) Limited (hereinafter referred to as the defendant or Mauritius company ) from referring the dispute between the parties to the suit to arbitration upon invoking an arbitration clause in the agreement between the parties dated 25th March 2009 and from continuing with the arbitration proceedings filed by the defendant in the International Chamber of Commerce (ICC). 2. The suit came to be filed by the appellant-plaintiff on 30th June 2010 upon the defendant-Mauritius company issuing notice dated 28th June 2010 to the plaintiff-Sony for invoking arbitration under the arbitration clause in the agreement between the parties dated 25th March 2009 titled as the Deed for the Provision of Facilitation Services (hereinafter referred to as Facilitation Deed for short). Under the Facilitation Deed, plaintiff-Sony was to pay the sum of ₹ 425 crores to the defendant-Mauritius company, out of which ₹ 125 crores was already paid by Sony to the Mauritius company in three installments. 3. The plaintiff's case in brief was that : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmon Directors of the Mauritius company and the Indian company called Worlds Sport Group in India. The said representatives of the Mauritius company reiterated that the Mauritius company had unfettered rights for the Indian sub-continent. They also represented to Plaintiff-Sony that by virtue of the MRLA between BCCI and the Mauritius company, the Mauritius company had the requisite media rights which it could relinquish to facilitate the acquisition of media rights directly from BCCI and that the rights arising out of the agreement between BCCI and defendant Mauritius company could be terminated and that thereafter plaintiff-Sony can directly enter agreement with BCCI to acquire Indian sub-continental media rights to the IPL. 3.4 On the basis of the above representation made by BCCI Commissioner Mr. Lalit Modi and the common Directors of the Mauritius company and the Indian company (World Sport Group India (Pvt.) Ltd.), the following new agreements dated 25th March 2010 were entered into: (i) Deed of termination between WSG (India) and plaintiff-Sony in terminating the Option Deed of 21st January 2008; (ii) BCCI through Mr. Lalit modi and plaintiff-Sony for new MRLA for I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncluding letters and other correspondence as well as certain agreements, unknown to and unavailable to the Plaintiff at the relevant time of execution of the Deed, reveal that Defendant has fraudulently induced the Plaintiff into executing the Deed by suppressing the fact that the Media Rights forming subject matter of the MSMS-MRLA dated 25th March, 2009 had in fact reverted to BCCI and that as on date of Deed, the Defendant did not hold any of the rights whatsoever to the Indian Sub-continent media rights of the IPL. 21. During the IPL season 3 i.e. in April 2010 a controversy erupted in the BCCI regarding the alleged wrong doings of the Commissioner and various charges were levelled against him by the BCCI who reportedly issued show cause notices to Mr. Lalit K. Modi (the Commissioner), BCCI denied any knowledge about the Deed and the fees agreed to be paid by the Plaintiff to the Defendant there under in exchange for the Defendant relinquishing its Media Rights for the Indian sub continent in favour of the Plaintiff. 22. The BCCI has issued a show cause notice to Mr. Lalit K. Modi inter alia alleging that (a) WSG (Mauritius) Pvt. Ltd., appears to have been chosen again ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from issuing any termination notice against the plaintiff on the basis of any agreement along with BCCI and Mauritius company or on the basis of any agreement dated 25th March 2009 between BCCI and WSG (India). The above Suit came to be filed by the plaintiff-Sony against the above three defendants on 25th June 2010 and notice thereof was served upon the defendants on 26th June 2010. When the Notice of Motion in the said Suit came up for hearing before the learned Single Judge on 28th June 2010, the learned Counsel for BCCI stated that BCCI would not terminate the MRLA agreement dated 25th March 2009 between BCCI and the plaintiff during pendency of the Notice of Motion and the matter was adjourned to 16th August 2010. 6. However, after filing of the above referred Suit, the plaintiff was served with a copy of the Mauritius company's letter dated 28th June 2010 addressed to the International Chamber of Commerce enclosing the request of the Mauritius company for arbitration as contemplated under the Facilitation Deed. The Mauritius company indicated that it was seeking an award in the following terms: 38. The Claimant seeks an award in the following terms: (a) a declar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... voidable. Admittedly, no part of the evidence material to the dispute is to be found at Singapore and none of the witness relevant to the issues are at Singapore. It is the settled legal position that when there are serious allegations of fraud or where the dispute requires detailed examination of witnesses, the same are not suitable for arbitration and have to be necessarily decided by Courts. Considering the nature of allegations which the plaintiff has raised against the defendant, which is bound to necessitate detailed evidence and cross examination of parties, it is apparent that even assuming, without admitting that the arbitration clause in the deed survived the rescission on the ground of fraud, it is only the Courts which would have jurisdiction to decide the dispute and having regard to the fact that this Court is the Court of inherent and natural jurisdiction, the dispute would be decided solely and exclusively by this Court in the Indian proceedings which are prior in point of time to the Singapore proceedings. 8. The above Notice of Motion in the second suit came to be opposed by the affidavit in reply filed by the constituted attorney of defendant-Mauritius company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hibit I to the plaint (Facilitation Deed ), were partly held outside India, more particularly with the Plaintiff's lawyers who were in England and the representatives of the parties hereto not being within the jurisdiction of this Hon'ble Court at all material times. On the Plaintiff's own showing, the whole of the cause of action has not arisen in Mumbai. The payment made till date under the Facilitation Deed was also made by the Plaintiff outside India and received by the Defendant outside India, i.e. outside the jurisdiction of this Hon'ble Court. The whole of the cause of action has not arisen within the jurisdiction of this Hon'ble Court. Since no leave has been taken under Clause XII, I submit that this suit is liable to be dismissed. b. the suit is barred by law; c. the plaint discloses no cause of action and the suit is liable to be dismissed on a demurrer; 9. At the hearing of this appeal, the defendant-Mauritius company has also sought to give its defence on merits and further submitted in paragraph 37(g) as under: g. It is submitted that any alleged representation by the IPL Commissioner on behalf of the BCCI, cannot be attributable to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ia Rights for the Indian Subcontinent by means of the agreement referred above. You are hereby informed that BCCI is not aware of any facilitation services provided by World Sports Group (Mauritius) Ltd. World Sports Group (Mauritius) Ltd., had no role to play in the agreement signed by you with Mr. Lalit Kumar Modi for taking the Indian subcontinent rights. Monies expanded by you for the Indian Subcontinent rights referred above should rightfully be paid to BCCI alone and no other party. You are therefore requested to remit all amounts due and payable to WSG (Mauritius) Ltd., to the BCCI. We are sure that MSM Satellite (Singapore)'s favourable decision in this regard would help the relationship between BCCI and MSM Satellite (Singapore) grow stronger in the years to come. Thanking you Yours faithfully Sd/- N. Srinivasan Hon. Secretary. 12. After referring to the above documents at the hearing, Mr. Dave has vehemently submitted that the dispute which has been referred by defendant-Mauritius company purports to be a dispute about non-implementation of the Facilitation Deed dated 25th March 2009, that it is not an independent or isolated dispute between th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he so-called fraud is nothing but a false allegation made by the plaintiff. The reference to the agreement dated 23rd March 2009 in the agreement dated 25th March 2009 between the plaintiff and the defendant was only a typographical mistake and even in the press statement issued by the plaintiff at Exhibit K , there is no reference to the agreement dated 23rd March 2009. It is submitted that such a typographical mistake in the agreement dated 25th March 2009 by referring to the said agreement as merely dated 23rd March 2009 instead of agreement dated 15th March 2009 between BCCI and the defendant can never amount to fraud. 15. It is further submitted by Dr. Singhvi that as per the settled legal position, even in a case where allegations of fraud are made, the accuser cannot prevent the accused from going for arbitration and that it is only the privilege of the accused to plead that he would like to have the allegations of fraud against him tried in a Court of law instead of being tried before the arbitral tribunal. In support of this contention, reference is made to the observations made by the Apex Court in N. Radhakrishnan v Maestro Engineers and Ors. (2010) 1 SCC 72, wherein ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ained from interfering with arbitration except in the manner provided in the 1996 Act. That the orders passed by the High Court would amount to a violation of this mandate is not seriously disputed by the respondents. We, accordingly, set aside the orders of the High Court without expressing our views on the merits of the contentions of the parties in any manner whatsoever.... 17.2 Reliance is also placed on the decision of the Apex Court in Secur Industries Ltd. v Godrej and Boyce Mfg. Co. Ltd. and Anr. (2004) 3 SCC 447, particularly paragraphs 11 and 12 thereof which read as under: 11. ...With the applicability of Part I of the 1996 Act in all its force, the extent of judicial intervention in arbitrations is limited by the non obstante provisions of Section 5 of the 1996 Act,... ...The validity of the proceedings before the arbitral tribunal is an issue which the Council, and not the court, could decide under Section 16 of the 1996 Act.... 12. The arguments which have been raised before us by the learned Counsel on behalf of the respondent to a large extent related to the merits of the appellant's claim before the Council. Having regard to the scope of the authori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claims and pleas even though the contract itself may be non-existent or null and void. 19. In rejoinder, Mr. Dave has referred to Section 45 of the Arbitration Act which reads as under: 45. Power of judicial authority to refer parties to arbitration.- Notwithstanding anything contained in Part 1 or in the Code of Civil Procedure, 1908 (5 of 1908), a judicial authority, when seized of an action in a matter in respect of which the parties have made an agreement referred to in Section 44, shall, at the request of one of the parties or any person claiming through or under him, refer the parties to arbitration, unless it finds that the said agreement is null and void, inoperative or incapable of being performed. (emphasis supplied) It is submitted that the said section incorporates the salutary principle in the New York Convention which also provides that a Court should not refer the parties to arbitration, when it finds that the agreement is null and void, inoperative and incapable of being performed. It is further submitted that even while hearing an application under Section 11 of the Arbitration Act, the Chief Justice or his nominee has a power to go into such questions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te the plaintiff from its liability towards BCCI. By letter dated 30th May, 2010, BCCI has made it clear that any amount payable by the plaintiff Sony to the Mauritius company under the facilitation agreement dated 25th April, 2010 shall be paid to BCCI. Any award by the arbitrators in the proceedings which the respondent-defendant (Mauritius company) has proposed to institute before the International Chamber of Commerce and where the arbitrators are sought to be appointed will not bind BCCI which will be a stranger to such an arbitration award. It is submitted that the plaintiff has no objection to pay the entire amount of ₹ 425 crores as payable by the plaintiff under the facilitation agreement out of which ₹ 125 crores has already been paid to the defendant-Mauritius company and for recovering which the plaintiff has already filed the first suit before this Court on 25th June, 2010. It is stated by Mr. Dave that the plaintiff is ready and willing to pay the balance amount of ₹ 300 crores to BCCI and after recovering ₹ 125 crores and the interest thereon from defendantMauritius company to pay the said amount to BCCI. In other words, Mr. Dave has stated in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le on its own jurisdiction, including ruling on any objections with respect to any existence or validity of the arbitration agreement and for that purpose, a decision by the arbitral tribunal that the contract is null and void, shall not entail ipso jure the invalidity of the arbitration clause. Sub-section (5) of Section 16 also provides that the arbitral tribunal shall decide on a plea that it does not have the jurisdiction or that an arbitral tribunal is exceeding the scope of its authority and that if the arbitral tribunal negating such plea, the arbitral tribunal shall continue with the arbitral proceedings and make an arbitral award and the party aggrieved by the rejection of the preliminary pleas has to wait till the arbitral award is made and, thereafter only it can make an application for setting aside such arbitral award in accordance with Section 34. This is the general scheme of the Arbitration and Conciliation Act, 1996 as contained in Part 1 thereof and ordinarily, the plaintiff would not have been entitled to make any claim for an injunction to prevent the respondent-defendant from going ahead with the arbitral proceedings before the International Chamber of Commerce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2009 for any reason or if for any reason the Plaintiff ceases to be entitled to the media rights granted pursuant to the MSMS-MRLA dated 25th March, 2009. Similarly, it was interalia provided in Clause 10.4 of the MSMS-MRLA Dated 25th March, 2009 that upon receipt of the Defendant No. 1's notice in accordance with the Deed, the BCCI may immediately terminate the MSMS-MRLA dated 25th March, 2009 subject to certain conditions mentioned therein. 28. It is, therefore, clear that the facilitation deed agreement dated 25th March, 2009 was not a stand apart agreement between the sole plaintiff and the sole defendant in the second suit. It was a part of the agreement entered into amongst four parties who are all parties to the first suit filed by the plaintiff on 25th June, 2010 where World Sport Group (India), the defendant-Mauritius company and BCCI are defendants. BCCI has specifically informed the plaintiff-Sony by letter dated 30th May, 2010 that the defendant-Mauritius company is not entitled to any facilitation fees. Even at the cost of repetition, we reproduce the letter dated 30th May, 2010, which reads as under: May 30, 2010 M/s. MSM Satellite (Singapore) Pte. Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ensee of media Rights with an obligation to sub license within 72 hours appears to be ruse to bait SONY to match a practically non existing and bogus bid. Instead of going for a fresh tender process on termination of the WSG Contract, you have taken upon yourself to negotiate with select parties without even knowing the value of the property belonging to BCCI only to enable the payment of Facilitation Fee by Sony. 30. The appellant-plaintiff's reply dated 2nd June, 2010 to BCCI reads as under: June 2, 2010 To Mr. Shashank Manohar (President)/ Mr. N. Srinivasan (Honorary Secretary) The Board of Control For Cricket in India ('BCCI') Wankhede Stadium, Mumbai. Dear Sir, We write further to the meeting our representatives had with you on 30th May, 2010 and in response to your letter of the same date. You have made a representation to us at the meeting by way of inter alia your above letter, and documents shown to us at the meeting and in particular the letter dated on or about 24th March, 2009 from World Sports Group Mauritius ('WSG') to BCCI and the letter dated on or about 24th/25th March, 2009 from BCCI to WSG as briefly and partial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We look forward to an early meeting. Yours sincerely, for MSM Satellite (Singapore) Pte Ltd. Sd/- Name : Andrew Kaplan Title : Director. 31. In the above factual background, the submission made by the learned Counsel for the appellant-plaintiff (Sony) that the facilitation agreement is contrary to public policy of India assumes utmost importance. Admittedly, BCCI is not a party to the arbitration proceedings initiated by the respondent Mauritius company. BCCI will not have any say in the said arbitration proceedings on the footing that in view of the clauses of the facilitation deed taken by itself and as there is an independent contract between the sole plaintiff and the sole defendant in the second suit, giving rise to the present appeal, the arbitral tribunal will make an award requiring the plaintiff to pay the defendant the amount of ₹ 300 crores over and above ₹ 125 crores already paid by the plaintiff. The question is whether such an award will stand the scrutiny on the touchstone of public policy of India. While considering the said question, it would be relevant, therefore, to refer to the aforesaid factual background. 32. The contention o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the parties or any person claiming through or under him, refer the parties to arbitration, unless it finds that the said agreement is null and void, inoperative or incapable of being performed. Provisions of Section 45 quoted hereinabove are also in consonance with the New York convention on the recognition and enforcement of foreign arbitral awards and particularly Clause 3 of Article II thereof. 35. It is also observed by Russell on Arbitration (Twenty-Third Edition-2007) as under: 7-058 Injunctions to restrain arbitral proceedings. Injunctions to restrain arbitrations are, at least in England, few and far between and becoming fewer still over time. This is principally because of the acceptance of the principle that the arbitrator should usually determine his own jurisdiction and so to restrain an arbitration by way of injunction would be inconsistent with the scheme of the Arbitration Act 1996. However, there are exceptional circumstances where an injunction to restrain an arbitration may be obtained. Such an injunction is different in nature from an injunction granted in support of arbitral proceedings, but it is convenient to mention this type of injunction at this st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d with the arbitration under Section 8(3) and make its award. The High Court could not, therefore, have stayed the proceedings before the Council. 37. In so far as the arbitration and sanctity of such agreements is concerned, reliance is placed upon Section 5 of the Arbitration and Conciliation Act, 1996 and also Sections 8 and 16 of the Act. Reliance on the other hand is placed on Section 45 of the Act on the words notwithstanding contained in Part I of the Act or in Code of Civil Procedure, 1908, the judicial authority shall at the request of one of the parties or any person claiming through or under him refer the parties to arbitration unless he finds that the arbitration application is null and void, inoperative and incapable of being performed. In a decision reported in Eastern Mineral and Trading Agency v. Steel Authority of India 2000 (3) RAJ 115, it has been held that Section 45 appears in Part II and therefore it over-rides Part I which includes Section 5. Therefore, a judicial authority shall not intervene except where so provided in this Part. Section 5 therefore does not come in the way of applicability of Section 45. Our attention has also been invited to the words ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat have been brought to our notice by Dr. Singhvi, it has been held that in case of allegations of fraud and serious malpractices on the part of the parties, such a situation can only be settled in Court through furtherance of judicial evidence by either party and such a situation cannot be properly gone into by the Arbitrator. The reason for this appears to be obvious. 41. Section 28 of the Indian Contract Act, 1872 reads thus: 28. Agreements in restraint of legal proceedings, void. - Every agreement (a) by which any party thereto is restricted absolutely from enforcing his rights under or in respect of any contract, by the usual legal proceedings in the ordinary tribunals, or which limits the time within which he may thus enforce his rights, or (b) which entinguishes the rights of any party thereto, or discharges any party thereto from any liability, under or in respect of any contract on the expiry of a specified period so as to restrict any party from enforcing his rights, is void to that extent. 42. Every agreement by which any party thereto is restricted absolutely from enforcing his rights under or in respect of any contract, by the usual legal proceedings in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... msford L.C. In Scott v. Liverpool (Corporation) 1958 L.J.C. 235 and Zarnikow v. Roth (1922) 2 KB 478). 44. Applying these tests to the facts of the present case would show that the appellant-plaintiff instituted a Suit in this Court against the defendant on the basis that it is organized under the laws of Singapore. It owns and operates cable and satellite television channels including the popular SET MAX channel. The defendant is a company incorporated in Mauritius carrying on business as a sports marketing agency. 45. The Board of Control for Cricket in India (for short BCCI ) owns and controls the commercial rights to each of the Indian Premier League (for short IPL ), matches and player auctions related to IPL. After setting out the format of the IPL it is urged that global media rights and Indian sub-continent internet and mobile rights pertaining to IPL were granted by BCCI to World Sport Group India (Pvt.) Ltd., referred to as 'WSGI vide an Indian Premier League Media Rights License Agreement (referred to in the plaint as WSGI-MRLA agreement dated 21st January 2008). 46. On the same date i.e. 21st January 2008, plaintiff and BCCI entered into the Indian Prem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e completed on 16th March 2009 and orders were reserved by the learned Single Judge, commercial negotiations between the appellant and BCCI acting through Mr. Lalit Modi continued, parallel to the Court proceedings in view of the imminent commencement of IPL-Season-2 in April 2009. It is alleged that Directors of the respondent and WSGI were also present. The Court declined to grant interim relief in the arbitration petition because third party rights had been created in favour of the respondent-Mauritius company and the respondent was not a party to the arbitration petition. It is in such circumstances that the plaintiff re-negotiated with the respondent-Mauritius company, WSGI and BCCI for securing the rights and the e-mails that are referred to in paragraphs 11 and 12 of the plaint, according to the appellant indicate that the person having sole exclusive authority to negotiate and execute IPL related contracts on behalf of BCCI was Mr. Lalit Modi. The appellant believed that BCCI had duly licensed the global media rights to the defendant-Mauritius company with the right to grant sub-license. Although the appellant-plaintiff was desirous of securing contract only with BCCI rathe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uished its media rights under the purported MRLA in favour of the plaintiff. However, as alleged in paragraph 20 of the plaint, information received from BCCI after suspension of Mr. Lalit Modi, IPL Commissioner and after having access to the letters and correspondence as well as certain other agreements which were not known to the plaintiff at the relevant time, revealed that the defendant-Mauritius company had fraudulently induced the plaintiff-Sonyinto executing the deed by suppressing the fact that the media rights forming subject matter of MSMS-MRLA agreement dated 25th March 2009 had in fact reverted to BCCI and that as on the date of deed, the defendant-Mauritius companydid not hold any rights of whatsoever nature with regard to the Indian sub-continent media rights of the IPL. A reference is made to the show cause notice issued by BCCI to Mr. Lalit Modi wherein particularly the contracts in question have been referred to and the allegations in the media of alleged unlawful consideration having been paid by the plaintiff for acquiring the relevant media rights disturbed them and that is why they issued a press statement dated 23rd April 2010. A reference has been made to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted by the respondent-defendant is in Mumbai. The respondent-Mauritius company made false representations to the officials of the plaintiff's holding company within the jurisdiction of this Court and, therefore, apart from this Court, there is no other Court which could be construed as Court of natural jurisdiction. Further, there being serious allegations of fraud and which required detailed examination of witnesses, the same are not suitable for arbitration but have to be decided by Court. That is emphasized in paragraphs 50 and 51 of the plaint. It is in this light that the final reliefs are claimed. 50. Therefore, it would be necessary to reproduce the clause which is known as Governing Law . (Clause 9 of the Deed for Provision for Facilitation Services dated 25th March 2009). The same reads as under: 8 Governing law This Deed shall be governed by and construed in accordance with the laws of England and Wales, without regard to choice of law principles. All actions or proceedings arising in connection with, touching upon or relating to this Deed, the breach thereof and/or the scope of the provisions of this Section shall be submitted to the International Chamber o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... indicate that it speaks of, firstly, the Governing Law. Secondly, all actions or proceedings arising in connection with, touching upon or relating to the deed, the breach thereof and/or the scope of this Section shall be submitted to the International Chamber of Commerce for final and binding arbitration. Thirdly, the arbitration would be subject to its rules and will be held in Singapore in the English language before a single arbitrator who shall be a retired Judge with at least ten years of commercial experience. Fourthly, the mode of selection of the arbitrator is set out. Importantly, the arbitration shall be a confidential proceeding, closed to the general public. The arbitrator shall issue a written opinion stating the essential findings and conclusions upon which the arbitrator's award is based. He will have powers to issue temporary restraining orders and injunctions and preliminary and permanent injunctions. Lastly, no party shall be entitled or permitted to commence or maintain any action in a Court of law with respect to any matter in dispute until such matter shall have to be submitted to arbitration as herein provided and then only for the enforcement of the arbit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here is a reference to BCCI-MSM agreement and that means the IPL media rights licensed agreement entered into on the same date as this deed between the BCCI and the appellant. Then, there is a definition of BCCI termination notice . Thereafter, facilitation fee is defined to mean a sum of 425 crores (in Indian rupees) payable in accordance with Clause 3 and the WSG agreement means the IPL agreement dated 23rd March 2009 between BCCI and respondent. If Clauses 2, 3, 4, 5, 6, 7 and 8 are perused together with the Governing Law, it is apparent to us that they pertain to media rights in cricket and particularly with respect to Indian Premier League. The learned Senior Counsel appearing for both sides do not dispute that all rights including media rights are controlled by BCCI. They do not dispute that Indian Premier League is a tournament organized by BCCI. 53. In a decision reported in AIR 2005 SC 2677 (Zee Tele Films Ltd. and Anr. v. Union of India and Ors.), the Supreme Court has held that BCCI may not be State or other authority within the meaning of Article 12 of the Constitution of India but it is discharging public duties which are in the nature of State functions such as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be done excluding BCCI and in an arbitral tribunal based on a foreign soil, that is something which cannot be held to be in public interest or in furtherance of public policy of India. 55. The allegations in the plaint and particularly the statement that the appellant-plaintiff was induced to execute the agreement and pay the fees on the basis that they are paying the same to BCCI, cannot be lightly brushed aside. The respondent-Mauritius company has objected to the relief claimed by the appellant by urging that the facilitation deed is governed by and construed in accordance with the laws in England and Wales without regard to the choice of law principle. Both parties to the suit are companies incorporated outside India and the arbitration agreement/clause is widely worded. However, at the same time the respondent is aware that what is alleged is mis-representation by a third party but it is urged that it is not made to the plaintiff-appellant but to its holding company. Further, it is alleged by the appellant-plaintiff that but for the mis-representation, appellant would have negotiated with BCCI directly. It alleges that it had negotiated only with BCCI and the respondent had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assertion must be understood accordingly. All that has been stated in this affidavit is that once the appellant-plaintiff enters into a facilitation deed with the stipulation of arbitration knowing fully well the effect and implications thereof, then, the appellant-plaintiff cannot urge that the forum chosen is inconvenient to parties because it alleges mis-representation and fraud. 56. We are of the view that the statements made in the affidavit over-look the allegations in the plaint and essentially of fraud. The allegations are indeed serious. It is not as if we are commenting upon the correctness or otherwise of the rival version. Suffice it to state that when such allegations are made in the plaint and the record indicates that BCCI not being a party to the arbitration, the arbitral venue being at Singapore, the governing laws being as decided by parties, all this adversely affects the interest of BCCI and the general public. When in the proceedings between parties the role of BCCI is bound to be highlighted, then, absence of BCCI is a vital factor. As observed by Sabyasachi Mukherji, J. for the Calcutta High Court in General Enterprises and Ors. v. Jardine Handerson Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rbitrator, with respect, would not be valid and proper. The same is also vitiated because the learned Judge proceeded on the basis that by virtue of Section 5 of Arbitration and Conciliation Act, 1996, the Court cannot intervene and interfere with the arbitration agreement. Even that conclusion runs counter to the decisions which are relied on by the respondent-defendant. These decisions clearly indicate that when vital issues of fraud and public policy are raised and when interests of third parties are involved and affected, then, the choice is not left to parties. It is for the Court to determine as to whether it will allow the matters to be gone into by a domestic tribunal in confidentiality or whether they are fit to be decided by a Court of law in an open trial. Once we reach the conclusion that when the issues arising out of fraud as raised in the present proceedings have a bearing on the position of BCCI in the game of cricket, the involvement of the general public in the game and the television rights which are conferred for viewing the games by them, so also presence of BCCI being necessary, then, the matter is fit for an open public trial by a Court of law. That cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... genius and quest for social justice; it is not a mere copy of English Common law; though inspired and guided by it. Therefore, with respect, we cannot sustain the restricted view of the learned Single Judge. 60. The question is whether in the facts of the present case, it was incumbent upon the Court hearing Suit (Lodging) No. 1901 of 2010 to refer all the parties to the said suit (including BCCI) to arbitration. As already discussed elaborately earlier, since the dispute between the appellant and the respondent herein is exclusively linked with the dispute between BCCI on the one hand and Mr. Lalit Modi and respondent-Mauritius company on the other hand and the larger dispute is pending decision in Suit (Lodging) No. 1901 of 2010, the dispute between the appellant-Sony and the respondent-Mauritius company cannot be referred to arbitration. 61. The decision of the Apex Court in CDC Financial Services (Mauritius) Ltd. v. BPL Communications Ltd. and Anr. (2003) 12 SCC 140 was rendered in view of the concession made on behalf of the respondents therein that the orders passed by the High Court interfering with the arbitration were in violation of mandate contained in Section 5 ha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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