TMI Blog2012 (4) TMI 776X X X X Extracts X X X X X X X X Extracts X X X X ..... The background to the applications is that on 3rd August 1984 a contract was entered into between the Defendant National Hydroelectric Power Corporation Limited ('NHPCL'), a Government of India undertaking, and three Canadian entities. One entity was SNC/ACRES, a joint venture composed of SNC Inc. and Acres International Limited, both incorporated in Canada and neither a party to the arbitral proceedings. The second Canadian entity was Marine Industries Ltd. ('MIL') incorporated under the laws of Canada having its registered office at Montreal, Quebec, Canada. The third Canadian entity was the Canadian General Electric Company Limited ('CGECL'), also incorporated under the laws of Canada. 3. The contract related to the Chamera Hydroelectric Project ('the project in question') on the Ravi River in the State of Himachal Pradesh. The project which commenced in 1983 involved the construction of a dam, an underground power house complex containing three hydro turbine generator units, tunnels, switchyards and a transmission line. The disputes that arose between the parties were referred to the International Court of Arbitration ('Tribunal') of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ections on 27th March 2012. NHPCL's Review Petition No. 114 of 2012 in FAO (OS) No. 554 of 2010 seeking recall of the order dated 19th December 2011 was dismissed by the Division Bench on 21st February 2012. 9. The present applications were heard on 26th March 2012 when the following order was passed: 1. After hearing the submissions for some time, it appears to the Court that the Applicants in both these applications should produce complete documents in support of their respective applications. 2. In relation to IA 20004 of 2011 filed by the General Electric Canada, the correct copy of Schedule A titled 'Excluded Assets' appended to the Partnership Contribution Agreement dated 28th March 2004, without any redaction, be submitted to the Court, within two weeks from today, with an advance copy to the counsel for the non-applicants. 3. In relation to IA No. 20003 of 2011 by Alstom Power and Transport Canada Inc., the copy of Schedule 2.1 (f) referred to in the Sale and Purchase Agreement dated 19th July 1991 should be filed, within two weeks from today, with an advance copy to the counsel for the non-applicant. 4. List on 17th April 2012. 10. This Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o not form part of the Purchased Assets. 2.3 Assignment of Contracts: Nothing herein shall be construed as an attempt to assign the rights and obligations of the Vendor stemming from a contract, agreement, act, licence, permit, undertaking or warranty (including the contracts) which may not be assigned in law without the consent of the other party to such instrument and without such consent having been given. 15. The Schedule 2.1 (f) clearly included the project in question which was entered into with NHPCL. Schedule 2.1 (m), under the heading 'other contracts', included the other contracts. It is clear, therefore, that the project in question was in fact part of the assets acquired by GAE from MGI. In other words even prior to the disputes arising between the parties from the contract dated 3rd August 1984, MIL was no longer in the picture with its assets, including the project in question involving NHPCL, being acquired by GAE. Strangely, however, it was MGI which on 5th December 1994 made a reference of the disputes to the ICC, Paris jointly with GEC Inc. Both MGI and GEC Inc filed their respective statements of claim before the ICC, Paris on 10th February 1995. Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... original entities who were parties to the Award dated 7th May 1996, have been assigned to and/or have been devolved upon each of them and finally, as on date, stand vested in Alstom and GE Canada the present successors-in-interest. It is claimed that the rights of their respective predecessors-in-interest to sue and/or defend have been assigned to each of the applicants and, therefore, their names should be brought on record. 23. In reply to IA No. 20003 of 2011 it is pointed out by NHPCL that inasmuch as the purported assignment and devolution of interest took place even before the commencement of the arbitral proceedings, and the said facts were not disclosed at any point in time till the filing of the appeal by NHPCL, the applications under Order XXII Rule 10 CPC were misconceived and an abuse of the process of law. No steps were taken by either applicant or their respective predecessors-in-interest to inform the Tribunal of the above developments and therefore, the Award dated 7th May 1996 involving non-existent entities stood vitiated in law. It is pointed out that under Clause 10.1 of the contract it is not open to either MIL or CGECL to have assigned their respective righ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Court, on an application made in that behalf, shall cause the legal representatives ('LRs') of the deceased party to be impleaded and proceed with the suit. However, under Rule 3 (2) if the application is not made within the time prescribed by law then the suit shall abate. The period prescribed under Article 120 of the Schedule to the Limitation Act, 1963 for bringing on record the LRs of the deceased party is 90 days from the date of the death of the party. 28. Order XXII Rule 10 talks of the procedure in case of assignment before final order in suit . It reads as under: (1) In other cases of an assignment, creation or devolution of any interest during the pendency of a suit, the suit may, by leave of the Court, be continued by or against the person to or upon whom such interest has come or devolved. (2) The attachment of a decree pending an appeal therefrom shall be deemed to be an interest entitling the person who procured such attachment to the benefit of sub-rule (1). 29. Order XXII Rule 10 CPC is premised on the pendency of the suit. In other words, if the suit already stands abated, there is no question of entertaining an application under Order XXII ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 96 had to be treated and enforced under the Arbitration Act, 1940, it could not be excused for not bringing the changes to the notice of the court before which the suit and later the objections were pending. 33. The proceedings concerning the Award under the Arbitration Act, 1940 cannot be said to have concluded till Award was made Rule of the Court. In other words the remedy under Order XXII Rule 10 CPC can be invoked till such time the Award is made Rule of the Court i.e., 10th May 2010. After that date, the suit could not be said to be 'pending' within the meaning of Order XXII Rule 10 CPC. By then CGECL changed its name to GEC Inc. On 28th March 2004 the original party GEC Inc 'died' legally when by means of the PCA its assets were taken over by GE Canada. In the arbitral proceedings which were in a technical sense still pending as on that date GEC Inc had to be necessarily substituted by its successor-in-interest GE Canada within 90 days of 28th March 2004 in terms of Order XXII Rule 3 CPC read with Article 120 of the Limitation Act, 1963. This was however not done. On the expiry of the said period of limitation, the 'suit' or claim in the arbitratio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndency of the suit, leave of the court has to be obtained. If it is laid down that leave can be obtained by that person alone upon whom interest of a party to the suit has devolved during its pendency, then there may be preposterous results as such a party might not be knowing about the litigation and consequently not feasible for him to apply for leave and if a duty is cast upon him then in such an eventuality he would be bound by the decree even in cases of failure to apply for leave. As a rule of prudence, initial duty lies upon the plaintiff to apply for leave in case the factum of devolution was within his knowledge or with due diligence could have been known by him. The person upon whom the interest has devolved may also apply for such a leave so that his interest may be properly represented as the original party, if it ceased to have an interest in the subject-matter of dispute by virtue of devolution of interest upon another person, may not take interest therein, in ordinary course, which is but natural, or by colluding with the other side. ....Thus, we do not find any substance in this submission of learned counsel appearing on behalf of the appellant and hold that prayer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s. Bank Kreiss AG v. Mr. Ashok K. Chauhan [decision dated 23rd October 2007 in CS (OS) No. 675 of 1999]. It was held, in a case that involved the takeover of one corporate entity by another that an application under Order XXII Rule 10 CPC was not maintainable where suit itself has abated. It was pointed out that it was a contradiction that the person on whom the interest has devolved is given leave to continue the suit after the suit has ceased to exist. The only option available to such party is to apply for setting aside the abatement under Order XXII Rule 9(2) CPC accompanied by an application for condonation of delay. 38. In the present case as far as Alstom's application is concerned, its predecessor-in-interest was GAE which was never a party to the arbitral proceedings. Through the entire arbitral proceedings it was MGI which participated although it had no locus standi to do so even at the commencement. Nothing possibly can now be done to correct this. 39. As regards the application by GE Canada, there was no application under Order XXII Rule 3 filed by it in the first place to be brought on record in place of GEC Inc. during the pendency of the objections to t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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