The Calcutta High Court today held that The Chatterjee Group, in its tussle with the West Bengal government over control of 155 million shares of Haldia Petrochemicals Limited (HPL), could not seek arbitration at the ICC in Paris as the matter has been decided in Company Law proceedings here.
A division bench comprising Chief Justice Arun Mishra and Justice Joymalyo Bagchi held that the claims being made by TCG before the International Chamber of Commerce (ICC), Paris was also claimed by it in Company Law proceedings in which the Supreme Court had held against TCG on merits. The division bench observed that TCG could not claim the same relief again in arbitration.
The bench also held that the arbitration agreement between the TCG and the state government stood abandoned and the TCG's claims were no longer 'live'.
Delivering the verdict on the appeal by TCG, the bench held that the trial court did have jurisdiction to hear the suit and to decide on the validity and existence of an arbitration agreement. The TCG has been locked in legal battle with the state government since 2005 over control of the now ailing HPL, once a showcase petrochemical industry of West Bengal, when the TCG moved the Company Law Board against the West Bengal government and West Bengal Industrial Development Corporation (WBIDC) over controlling shareholding and management control of HPL. The CLB had passed an order in favour of TCG, which was challenged before the Calcutta High Court by the state government and WBIDC.
The high court had set aside the CLB order on September 21, 2007. With transfer of 155 million shares which would give controlling stake to TCG in HPL being the bone of contention, TCG moved the Supreme Court challenging the high court order.
The apex court passed judgement against TCG on November 30, 2011. TCG had then sought to initiate arbitration before ICC, Paris in March 2012. This was challenged by the state by filing a suit before the Calcutta High Court. The state and WBIDC contended that TCG had no right to go for arbitration regarding the contentious 155 million shares or on any other issue. They claimed that the relief of arbitration had been abandoned by TCG and the agreement for transfer of 155 million shares stood abrogated.
The state also contended that matters decided by the Supreme Court could not be re-agitated before an arbitration tribunal.
Justice I P Mukerji of Calcutta High Court had restrained TCG from continuing with the arbitration proceedings.
