delhi high court

Delhi High Court: In a petition filed under Section 11 of the Arbitration and Conciliation Act, 1996 seeking appointment of an arbitrator for adjudicating the disputes that have arisen between the parties in relation to a Memorandum of Understanding executed between the parties. Navin Chawla, J., held that the proceedings in the present petition cannot be continued in view of the moratorium imposed by the Supreme Court and further gave liberty to the petitioner to file a fresh legal action for the same relief once the moratorium imposed by the Supreme Court is lifted or varied if so advised, in accordance with the law.

The respondent company is a Special Purpose Vehicle to carry out the project of setting up of a recreation park at Gurgaon, Haryana based on Assisted Sector Agreement dated 01-04-2004 executed between the Haryana State Industrial Development Corporation Ltd. (‘HSIIDC’), on one hand, and Unitech Ltd and Sun Media Pvt. Ltd. on the other.

Counsel for the respondent submitted that the respondent is a subsidiary of Unitech Limited which holds around 52% of the shares of the respondent. Unitech Holdings Limited is a wholly owned subsidiary of Unitech Limited. Thus, the moratorium is applicable to it too. Even on perusal of “Resolution Framework Unitech Groups” the respondent company is a part of the ‘Unitech Group’.

The moratorium order by Supreme Court reads as follows:

“We issue the following directions: xxx (vii) Pending further orders of this Court, there shall be a moratorium against the institution of proceedings against Unitech Limited and its subsidiaries. The moratorium shall also extend to existing proceedings against the company as well as the enforcement of orders that may have been passed against the company.”

The Court noted that though the counsel for the petitioner submitted that the shareholdings of Unitech Holdings Limited in the respondent company was clandestinely increased without the prior permission of the HSIIDC, the fact remains that on the date of declaration of the moratorium, Unitech Holdings Limited held more than 52% shares in the respondent company and, therefore, the respondent company would be a subsidiary of Unitech Limited.

Thus, the Court concluded that the respondent company would be covered by the moratorium declared by the Supreme Court in its orders dated 20-01-2020 and 24-03-2021 passed in the civil appeal.

The Court disposed of the petition and held that the proceedings in the petition cannot be continued subject to the liberty granted to the petitioner to file a fresh legal action for the same relief once the moratorium is lifted or varied.

[Arpit Projects Limited v Gurgaon Recreation Park Limited, 2023 SCC OnLine Del 2767, decided on 11-05-2023]

Advocates who appeared in this case :

Mr. Chetan Anand, Mr. Akash Srivastav, Ms. Tejasvini Singh, Advocates for the Petitioner;

Mr. Siddharth Batra, Ms. Shivani Chawla, Mr. Chinmay Dubey, Mr. Rhythm Katyal, Mr. Ashutosh Chugh, Advocates for the Respondents.

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