Arbitration Act, 1940 — Section 39 — Appeal against dismissal of objections

April 2nd, 2013

Arbitration Act, 1940 — Section 39 — Appeal against dismissal of objections — Impleadment of amalgamated company/taking over company under order 22 Rule 10 CPC Permissibility — Contract between respondent No.1/NHPC and three Canadian entities — One of the entities, changed its name from CGECL to GEC Inc. — Dispute arose and referred to arbitration — Award passed — Respondent No.1 filed objections which were dismissed — NHPC preferred an appeal — Decretal amount was directed to be deposited in Court in the appeal filed by the NHPC, which was so deposited — It is at that stage that two applications came to be filed both under Order XXII Rules 10 & 11 of the Code of Civil Procedure, one by appellant and the other by respondent No.2 — Application were filed in the original suit proceedings and Division Bench observed in the appeal proceedings of NHPC that it would like to await the outcome of those applications filed before the Single Judge — The applications filed by the appellant had been dismissed by the impugned order — No appeal field by respondent No.2, but the appellant assailed the order in the appeal — NHPC objected to the application of the appellant on the ground that despite a number of takeovers and amalgamations during the arbitration proceedings and during the suit, no application had been brought on record to bring forth these developments — Single Judge, referring to the various amalgamations, which had taken place, relied upon the various judicial pronouncements of the Supreme Court and of the Single Judge of this Court, decided to conclude that where there is an amalgamation of a transferor company into a transferee company, the transferor company ceases to exist as a consequence of the amalgamation and, thus, the provisions of Order XXII Rule 3 of the Code would apply — No such application having been filed by the appellant, the application of the appellant under Order XXII Rule 10 of the said Code was dismissed — Challenged — Held, application under Order XXII Rule 10 of the Code can be filed even during the appeal proceedings even when the assignment has taken place during the pendency of the matter before the trial Court and, thus, applies on all fours to the facts of the present case — We are unable to agree with the direction taken by the Single Judge in coming to the conclusion in the impugned order that GEC Inc. had died, as it is predicated on an incorrect finding as to the effect of the PCA — The said entity continues to exist and had only assigned the right to pursue the decree in favour of the partnership, General Electric Canada – who is the appellant before us and, thus, the appellant was well within its right to move the application under Order XXII Rule 10 of the Code before the Single Judge, when it sought to withdraw the amount deposited by respondent No.1 in the appellate Court, and in response objection was taken to such withdrawal by the respondent No.1 — Therefore, impugned order qua the appellant is set aside and I.A. filed by the appellant in suit is allowed — Appeal allowed — Civil Procedure Code, 1908 — Order 22 Rules 10 & 11 — Application during appeal proceedings, Entertainment of — Companies Act, 1956 — Section 394 — Amalgamation of companies — Transferor company, Status of.

Amit Kumar Shaw & Another Vs. Farida Khatoon & Another, (2005) 11 SCC 403, C. Wright Neville Vs. E.H. Freser & Another, AIR 1944 Nag 137 & Alagar Raja Vs. Narayana Raja, AIR 1938 Mad. 757, Relied on.

(Para 25, 27 & 28)

General Electric Canada v. National Hydroelectric Power Corporation Ltd.[DB], FAO (OS) 299/2012(06/12/2012), 2013(133) DRJ 551 [Sanjay Kishan Kaul, J.: Vipin Sanghi, J.]

Entry Filed under: Commercial Laws,Judgements,News that Matter