# WORLD SPORT GROUP (MAURITIUS) LTD v. MSM SATELLITE (SINGAPORE) PTE. LTD

- **Citation:** [2014] 1 S.C.R. 796
- **Court:** Supreme Court of India
- **Decided:** 2014-01-24
- **Case number:** Civil Appeal No. 895 of 2014
- **Bench:** A.K. Patnaik, Fakkir Mohamed Ibrahim Kalifulla
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/world-sport-group-mauritius-ltd-v-msm-satellite-singapore-pte-ltd-29778
- **Pages:** 39

## Headnote

Arbitration and Conciliation Act, 1996:
ss.44 and 45 - Foreign seated arbitration - Jurisdiction
of High Court to pass an order of injunction restraining a
foreign seated international arbitration at Singapore between
the parties - Plea of respondent that the main agreement
D which contains the arbitration agreement is void because of
fraud and misrepresentation by the appellant and therefore
court cannot refer the parties to arbitration - Held: s.45 of the
Act postulates that even where request of arbitration is made
by a party, it will not refer the parties to arbitration, if it finds
that the agreement is null and void, inoperative or incapable
E of being performed - The words "inoperative or incapable of
being performed" in s.45 have been taken from Article II (3)
of the New York Convention - Jn the case of such arbitrations
covered by the New York Convention, the Court can decline
to make a reference of a dispute covered by the arbitration
F agreement only if it comes to conclusion that the arbitration
agreement is null and void, inoperative or incapable of being
performed, and not on the ground that allegations of fraud or
misrepresentation have to be inquired into while deciding the
disputes between the parties - In the instant case, the
G allegation of fraudulent misrepresentation in the main
agreement did not impact the validity of the arbitration
agreement which was separable from the rest of the contract
- Therefore, applying principle of separability parties were
wrongly refused to refer arbitration on the ground that
H
796
WORLD SPORT GROUP (MAURITIUS) LTD. v. MSM
797
SATELLITE (SINGAPORE) PTE. LTD.
arbitration agreement was also void along with main A
agreement - Principle of separability.
Arbitration restricting the right of the parties to move the
courts for appropriate relief and also barring the right to trial
by a jury - Whether void for being opposed to public policy
8
as provided in s.23 of the Indian Contract Act, 1872 and void
for being an agreement in restraint of the legal proceedings
in view of s.28 of the said Act - Held: Parliament has made
the Arbitration and Conciliation Act, 1996 providing domestic
arbitration and international arbitration as a mode of resolution
C
of disputes between the parties and Exception 1 to s. 28 of the
Contract Act, 1872 clearly states that s.28 shall not render
illegal a contract, by which two or more persons agree that any
dispute which may arise between them in respect of any
subject or class of subjects shall be referred to arbitration and
that only the amount awarded in such arbitration shall be D
recoverable in respect of the dispute so referred - The right
to jury trial is not available Under Indian laws - In the instant
case, the finding of the Division Bench of the High Court that
arbitration clause of the Facilitation Deed is opposed to public
policy and is void u/ss.23 and 28 of the Contract Act, 1872 is
E
clearly erroneous - Contract Act, 1872 - ss.23, 28.
Doctrines/Principles: Principle of Comity of Courts -
Applicability of - Plea of appellant that. on principle of comity
of courts, the Bombay High Court should have refused to
F
interfere in the matter and should have allowed the parties to
resolve their dispute through ICC arbitration subject to the
jurisdiction of the Singapore Courts in accordance with the
arbitration clause of the Facilitation Deed - Held: Not
applicable in the instant case, no decision of a court of foreign
G
country or no law of a foreign country was cited on behalf of
the appellant to contend that the courts in India out of
deference to such decision of the foreign court or foreign Jaw
mu'st not assume jurisdiction to restrain arbitration
proceedings at Singapore - On the other hand, uls. 9 of the
H
798
SUPREME COURT REPORTS
[2014] 1 S.C.R.
A CPC, the courts in India have jurisdiction to try all suits of a
civil nature excepting suits of which cognizance is either
expressly or impliedly barred - Thus, the appropriate civil
court in

## Text

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[2014) 1 S.C.R. 796
A
WORLD SPORT GROUP (MAURITIUS) LTD.
8
c
v.
MSM SATELLITE (SINGAPORE) PTE. LTD.
(Civil Appeal No. 895 of 2014)
JANUARY 24, 2014
[A.K. PATNAIK AND FAKKIR MOHAMED
IBRAHIM KALIFULLA, JJ.]
Arbitration and Conciliation Act, 1996:
ss.44 and 45 - Foreign seated arbitration - Jurisdiction
of High Court to pass an order of injunction restraining a
foreign seated international arbitration at Singapore between
the parties - Plea of respondent that the main agreement
D which contains the arbitration agreement is void because of
fraud and misrepresentation by the appellant and therefore
court cannot refer the parties to arbitration - Held: s.45 of the
Act postulates that even where request of arbitration is made
by a party, it will not refer the parties to arbitration, if it finds
that the agreement is null and void, inoperative or incapable
E of being performed - The words "inoperative or incapable of
being performed" in s.45 have been taken from Article II (3)
of the New York Convention - Jn the case of such arbitrations
covered by the New York Convention, the Court can decline
to make a reference of a dispute covered by the arbitration
F agreement only if it comes to conclusion that the arbitration
agreement is null and void, inoperative or incapable of being
performed, and not on the ground that allegations of fraud or
misrepresentation have to be inquired into while deciding the
disputes between the parties - In the instant case, the
G allegation of fraudulent misrepresentation in the main
agreement did not impact the validity of the arbitration
agreement which was separable from the rest of the contract
- Therefore, applying principle of separability parties were
wrongly refused to refer arbitration on the ground that
H
796
WORLD SPORT GROUP (MAURITIUS) LTD. v. MSM
797
SATELLITE (SINGAPORE) PTE. LTD.
arbitration agreement was also void along with main A
agreement - Principle of separability.
Arbitration restricting the right of the parties to move the
courts for appropriate relief and also barring the right to trial
by a jury - Whether void for being opposed to public policy
8
as provided in s.23 of the Indian Contract Act, 1872 and void
for being an agreement in restraint of the legal proceedings
in view of s.28 of the said Act - Held: Parliament has made
the Arbitration and Conciliation Act, 1996 providing domestic
arbitration and international arbitration as a mode of resolution
C
of disputes between the parties and Exception 1 to s. 28 of the
Contract Act, 1872 clearly states that s.28 shall not render
illegal a contract, by which two or more persons agree that any
dispute which may arise between them in respect of any
subject or class of subjects shall be referred to arbitration and
that only the amount awarded in such arbitration shall be D
recoverable in respect of the dispute so referred - The right
to jury trial is not available Under Indian laws - In the instant
case, the finding of the Division Bench of the High Court that
arbitration clause of the Facilitation Deed is opposed to public
policy and is void u/ss.23 and 28 of the Contract Act, 1872 is
E
clearly erroneous - Contract Act, 1872 - ss.23, 28.
Doctrines/Principles: Principle of Comity of Courts -
Applicability of - Plea of appellant that. on principle of comity
of courts, the Bombay High Court should have refused to
F
interfere in the matter and should have allowed the parties to
resolve their dispute through ICC arbitration subject to the
jurisdiction of the Singapore Courts in accordance with the
arbitration clause of the Facilitation Deed - Held: Not
applicable in the instant case, no decision of a court of foreign
G
country or no law of a foreign country was cited on behalf of
the appellant to contend that the courts in India out of
deference to such decision of the foreign court or foreign Jaw
mu'st not assume jurisdiction to restrain arbitration
proceedings at Singapore - On the other hand, uls. 9 of the
H
798
SUPREME COURT REPORTS
[2014] 1 S.C.R.
A CPC, the courts in India have jurisdiction to try all suits of a
civil nature excepting suits of which cognizance is either
expressly or impliedly barred - Thus, the appropriate civil
court in India has jurisdiction to entertain the suit and pass
appropriate orders in the suit by virtue of s.9 of the CPC -
B Code of Civil Procedure, 1908 - s. 9.
The BCCI invited tenders for IPL Media Rights on a
worldwide basis. Amongst the tenders submitted, the bid
of WSG (India) was accepted by BCCI. By a pre-bid
arrangement, however, the respondent was to get the
C media rights for the sub-continent for the period from
2008 to 2010. On 21.01.2008, the BCCI and the
respondent entered into a Media rights Licence
Agreement for the period from 2008 to 2010. After the first
IPL season, the BCCI terminated the agreement dated
D 21.01.2008 and entered into a new agreement with the
WSG (India).
Pursuant to the negotiations between BCCI and WSG
(India), the BCCI entered into an agreement with the
E appellant whereunder the media rights for the Indian subcontinent was awarded to the appellant. To operate the
media r~hts in India, the appellant was required to get a
sub-licensee which it could not get within stipulated time.
Thereafter, the appellant claimed to have allowed media
F rights in India to have lapsed and then facilitated on
25.03.2009, a new Media Rights License Agreement
between the BCCI and the respondent for the Indian subcontinent for the same contract value of Rs.4, 791.08
crores. BCCI and WSG India, however, continued with
G the Rest of the World media rights.
Thereafter the appellant entered into an agreement
with the respondent called the Facilitation Deed
whereunder the respondent was to pay a sum of Rs.425
crores to the appellant as Facilitation fees. The
H respondent made three payments totaling Rs.125 crores
WORLD SPORT GROUP (MAURITIUS) LTD. v. MSM
799
SATELLITE (SINGAPORE) PTE. LTD.
to the appellant under the Facilitation Deed during 2009
A
but did not make the balance payment. Instead, on
25.06.2010, the respondent wrote to the appellant
rescinding the Facilitation Deed on the ground that it was
voidable on account of misrepresentation and fraud. The
respondent also filed suit for a declaration that the
B
Facilitation Deed was void and for recovery of Rs.125
crores already paid to the appellant.
On 28.6.2010, the appellant acting under Clause 9 of
the Facilitation Deed sent a request for arbitration to ICC
C
Singapore and ICC issued a notice to the respondent to
file its answer for arbitration.
On 30.06.2010, the respondent filed a second suit
before the High Court against the appellant for a
declaration that as the Facilitation Deed stood rescinded,
D
the appellant was not entitled to invoke the arbitration
clause in the Facilitation Deed. The respondent also filed
an application for temporary injunction against the
appellant from continuing with the arbitration
proceedings commenced by the appellant under the
E
aegis of ICC.
The Single Judge of the High Court dismissed the
application for temporary injunction of the respondent
saying that it would be for the arbitrator to consider
F
whether the Facilitation Deed was void on account of
fraud and misrepresentation and that the arbitration
must, there'fore, proceed and the Court could not
intervene in matters governed by the arbitration clause.
The Division Bench of the High Court allowed the appeal
and passed an order of temporary injunction restraining
G
the arbitration by ICC. Aggrieved, the appellant filed the
instant appeal.
Allowing the appeal, the Court
H
800
SUPREME COURT REPORTS
[2014] 1 S.C.R.
A
HELD: 1. The first plea of the appellant is not
. accepted that as Clause 9 of the Facilitation Deed
provides that any party may seek equitable relief in a
court of competent jurisdiction in Singapore, or such
other court that may have jurisdiction over the parties and
B that the Bombay High Court had no jurisdiction to
entertain the suit and restrain the arbitration proceedings
at Singapore because of the principle of Comity of
Courts. What is meant by the principle of "comity" is that
courts of one state or jurisdiction will give effect to the
c laws and judicial decisions of another state or
jurisdiction, not as a matter of obligation but out of
deference and mutual respect. In the instant case no
decision of a court of foreign country or no law of a
foreign country has been cited on behalf of the appellant
0 to contend that the courts in India out of deference to
such decision of the foreign court or foreign law must not
assume jurisdiction to restrain arbitration proceedings.at
Singapore. On the other hand, it was rightly submitted by
the respondent that under Section 9 of the CPC, the
courts in India have jurisdiction to try all suits of a civil
E nature excepting suits of which cognizance is either
expressly or impliedly barred. Thus, the appropriate civil
court in India has jurisdiction to entertain the suit and
pass appropriate orders in the suit by virtue of Section 9
of the CPC and Clause 9 of the Facilitation Deed providing
F that courts in Singapore or any other court having
jurisdiction over the parties can be approached for
equitable relief could not oust the jurisdiction of the
appropriate civil court conferred by Section 9 of the CPC.
In the plaint In second suit, it was stated that the
G Facilitation Deed in which the arbitration clause is
incorporated came to be executed by the defendant at
Mumbai and the fraudulent inducement on the part of the
defendant resulting in the plaintiff entering into the
Facilitation Deed took place in Mumbai and the
H rescission of the Facilitation Deed on the ground that it
WORLD SPORT GROUP (MAURITIUS) LTD. v. MSM
801
SATELLITE (SINGAPORE) PTE. LTD.
was induced by fraud of defendant has also been issued
A
from Mumbai. Thus, the cause of action for filing the suit
arose within the jurisdiction of the Bombay High Court
and the Bombay High Court had territorial jurisdiction to
entertain the suit under Section 20 of the CPC. [Para 20]
[820-B-H; 821-A-D]
B
Black's Law Dictionary, 5th Edition - referred to.
1.2. Any civil court in India which entertains a suit,
however, has to follow the mandate of the legislature in
Sections 44 and 45 in Chapter I of Part II of the Arbitration
C
and Conciliation Act. As per Section 45 of the Act,
notwithstanding anything contained in Part I or in the
Code of Civil Procedure, 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,
D
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. Thus, even
if, under Section 9 read with Section 20 of the CPC, the
E
Bombay High Court had the jurisdiction to entertain the
suit, once a request is made by one of the parties or any
· person claiming through or under him to refer the parties
to arbitration, the Bombay High Court was obliged to
refer the parties to arbitration unless it found that the
F
agreement referred to in Section 44 of the Act was null
and void, inoperative or incapable of being performed. In
the instant case, the appellant may not have made an
application to refer the parties to arbit~tion, but Section
45 of the Act does not refer to any application as such.
G
Instead, it refers to the request of one of the parties or
any person claiming through or under him to refer the
parties to arbitration. In this case, the appellant has filed
an affidavit in reply to the notice of motion and has stated
therein that the defendant had already invoked the
H
802
SUPREME COURT REPORTS
[2014) 1 S.C.R.
A arbitration agreement in the Facilitation Deed and the
arbitration proceedings have commenced and that the
suit was an abuse of the process of court. The appellant
had thus made a request to refer the parties to arbitration
at Singapore which had already commenced. [para 21]
8 [821-E; 822-D-H; 823-A-B]
2. Section 45 of the Act also makes it clear that even
where such request is made by a party, it will not refer
the parties to arbitration, if it finds that the agreement is
null and void, inoperative or incapable of being
C performed. As per Section 45 of the Act the word
"agreement" would mean the agreement referred to in
Section 44 of the Act. Clause (a) of Section 44 of the Act
refers to "an agreement in writing for arbitration to \Vhich
the Convention set forth in the First Schedule applies."
D The First Schedule of the Act sets out the different Articles
of the New York Convention on the Recognition and
Enforcement of Foreign Arbitral Awards, 1958. It will be
clear from clauses 1, 2 and 3 of the New York Convention
as set out in the First Schedule of the Act that the
E agreement referred to in Section 44 of the Act is an
agreement in writing under which the parties undertake
to submit to arbitration all or any differences which have
arisen or which may arise between them. Thus, the court
will decline to refer the parties to arbitration only if it finds
F that the arbitration agreement is null and void, inoperative
or incapable of being performed. [para 22] [823-B-E; 824B-C]
3. Applying the principle of separability to the facts
of this case, the respondent rescinded the Facilitation
G Deed on the grounds that the appellant did not have any
right to relinquish and/or to facilitate the procurement of
Indian subcontinent media rights for the IPL from BCCI
and no facilitation services could have been provided by
the appellant and therefore the representation by the
H appellant that the appellant relinquished its Indian
WORLD SPORT GROUP (MAURITIUS) LTD. v. MSM
803
SATELLITE (SINGAPORE) PTE. LTD.
subcontinent media rights for the IPL in favour of the
A
respondent for which the appellant had to be paid the
facilitation fee under the deed was false and accordingly
the Facilitation Deed was voidable at the option of the
respondent on account of false representation and fraud.
This ground of challenge to the Facilitation Deed does
B
not in any manner affect the arbitration agreement
contained in Clause 9 of the Facilitation Deed, which is
independent of and separate from the main Facilitation
Deed and does not get rescinded as void by the letter
dated 25.06.2010 of the respondent. The Division Bench c
of the Bombay High Court, therefore, could not have
refused to refer the parties to arbitration on the ground
that the arbitration agreement was also void along with
the main agreement. [Para 25] [826-H; 827-A; 828-E-H;
829-A]
4. The plea of the respondent was that the arbitration
agreement was inoperative or incapable of being
performed as allegations of fraud could be enquired into
D
by the court and not by the arbitrator. However, the
authorities on the meaning of the words "inoperative or E
incapable of being performed" do not support such plea.
The words "inoperative or incapable of being performed"
in Section 45 of the Act have been taken from Article II
(3) of the New York Convention. Thus, the arbitration
agreement does not become "inoperative or incapable of
F
being performed" where allegations of fraud have to be
inquired into and the court cannot refuse to refer the
parties to arbitration as provided in Section 45 of the Act
on the ground that allegations of fraud have been made
by the party which can only be inquired into by the court G
.and not by the arbitrator. In the case of such arbitrations
· covered by the New York Convention, the Court can
decline to make a reference of a dispute covered by the
arbitration agreement only if it comes to the conclusion
that the arbitration agreement is null and void, inoperative
H
804
SUPREME COURT REPORTS
[2014) 1 S.C.R.
A or incapable of being performed, and not on the ground
that allegations of fraud or misrepresentation have to be
inquired into while deciding the disputes between the
parties. [paras 26, 29) [829-A-C; 831-D-G]
N. Radhakrishnan v. Maestro Engineers & Ors. (2010)
B 1 SCC 72: 2009 (15) SCR 371; Abdul Kadir Shamsuddin
Bubere v. Madhav Prabhakar Oak AIR 1962 SC 406:1962
Suppl. SCR 702 - Distinguished.
Redfern and Hunter on International Arbitration (Fifth
C Edition); Albert Jan Van Den Berg in an article titled "The
New York Convention, 1958 -An Overview" published in
the website of ICCA [www.arbitration-icca.org/medla/O/
12125884227980/new york convention of 1958 overview
.pdf]; 'Recognition and Conferment of Foreign Arbitral
D Awards: A Global Commentary on the New York
Convention' by Kronke, Nacimiento, et al.(ed.) (2010) -
referred to.
5.1. The Division Bench of the High Court has held
E that the Facilitation Deed was part of several agreements
entered into amongst different parties commencing from
25.03.2009 and, therefore, cannot be considered as stand
apart agreement between the appellant ·and the
respondent and so considered the Facilitation Deed as
contrary to public policy of India because it is linked with
F the finances, funds and rights of the BCCI, which is a
public body. This approach of the Division Bench of the
High Court is not in consonance with the provisions of
Section 45 of the Act, which mandates that in the case
of arbitration agreements covered by the New York
G Convention, the Court which is seized of the matter will
refer the parties to arbitration unless the arbitration
agreement is null and void, inoperative or incapable of
being performed. In view of the provisions of Section 45
of the Act, the Division Bench of the High Court was
H required to only consider in this case whether Clause 9
WORLD SPORT GROUP (MAURITIUS) LTD. v. MSM
805
SATELLITE (SINGAPORE) PTE. LTD.
of the Facilitation Deed which contained the arbitration
A
agreement was null and void, inoperative or incapable of
being performed. The Division Bench of the High Court
has further held that Clause 9 of the Facilitation Deed
insofar as it restricted the right of the parties to move the
courts for appropriate relief and also barred the right to
B
trial by a jury was void for being opposed to public policy
as provided in Section 23 of the Indian Contract Act, 1872
and was also void for being an agreement in restraint of
the legal proceedings in view of Section 28 of the said
Act. Parliament has made the Arbitration and Conciliation c
Act, 1996 providing domestic arbitration and international
arbitration as a mode of resolution of disputes between
the parties and Exception 1 to Section 28 of the Indian
Contract Act, 1872 clearly states that Section 28 shall not
render illegal a contract, by which two or more persons 0
agree that any dispute which may arise between them in
respect of any subject or class of subjects shall be
referred to arbitration and that only the amount awarded
in such arbitration shall be recoverable in respect of the
dispute so referred. Clause 9 of the Facilitation Deed is
consistent with this policy of the legislature as reflected
E
in the Arbitration and Conciliation Act, 1996 and is saved
by Exception 1 to Section 28 of the Indian Contract Act,
1872. The right to jury trial is not available under Indian
laws. The finding of the Division Bench of the High Court,
therefore, that Clause 9 of the Facilitation Deed is
F
opposed to public policy and is void under Sections 23
and 28 of the Indian Contract Act, 1872 is clearly
erroneous. [Paras 30, 31] [831-H; 832-A-H; 833-A-B]
5.2. The Division Bench of the High Court has also
G
held that as allegations of fraud and serious malpractices
on the part of the appellant are in issue, it is only the court
which can decide these issues through furtherance of
judicial evidence by either party and these issues cannot
be properly gone into by the arbitrator. Section 45 of the
H
806
SUPREME COURT REPORTS
[2014] 1 S.C.R.
A Act does not provide that the court will not refer the
parties to arbitration if the allegations of fraud have to be
inquired into. Section 45 provides that only if the court
finds that the arbitration agreement is null and void,
inoperative or incapable of being performed, it will
B decline to refer the parties to arbitration. The Division
Bench of the High court has further held that since the
earlier suit was pending in court since 25.06.2010 and
that suit was inter-connected and inter-related with the
second suit, the court could not allow splitting of the
C matters and disputes to be decided by the court in India
in the first suit and by arbitration abroad in regard to the
second suit and invite conflicting verdicts on the issues
which are inter-related. This reasoning adopted by the
Division Bench of the Bombay High Court in the
0
impugned judgment is alien to the provisions of Section
45 of the Act which does not empower the court to
decline a reference to arbitration on the ground that
another suit on the same issue is pending in the Indian
court. Hence, it has been rightly held by the Single Judge
of the Bombay High Court that it is for the arbitrator to
E decide this dispute in accordance with the arbitration
agreement. [Paras 32, 33, 34] [833-B-G; 834-D]
Chloro Controls India Private Limited v. Seven Trent
Water Purification Inc. & Ors. (2013) 1 SCC 641; National
F
Insurance Co. Ltd. v. Boghara Polyfab Pvt. Ltd. (2009) 1 SCC
267: 2008 (13) SCR 638; Reva Electric Car Company Private
Ltd. v. Green Mobil (2012) 2 SCC 9: 2011 (13) SCR 359;
Branch Manager, Magma Leasing and Finance Ltd. & Anr.
v. Potluri Madhavilata & Anr. (2009) 10 SCC 103: 2009 (14)
G SCR 815; V. 0. Tractoroexport, Moscow v. Tarapore &
Company and Anr. (1969) 3 SCC 562:1970 (3) SCR 53; Oil
and Natural Gas Commission v. Western Company of North
America (1987) 1 SCC 496: 1987 (1) SCR 1024; SMS Tea
Estates (P) Ltd. v. Chandmari Tea Co. (P) Ltd. (2011) 14 SCC
H 66: 2011 (9) SCR 382; Haryana Telecom Ltd. v. Sterlite
WORLD SPORT GROUP (MAURITIUS) LTD. v. MSM
807.
SATELLITE (SINGAPORE) PTE. l TD.
Industries (India) Ltd. (1999) 5 SCC 688: 1999 (3) SCR 861;
A
Mis Zee Tele Films Ltd. & Anr. v. Union of India & Ors. AIR
2005 SC 2677:2005 (1) SCR 913; Booz Allen·& Hamilton v.
SB/ Home Finance (2011) 5 SCC 532: 2011 (7) SCR 310;
India Household and Healthcare Ltd. v. LG Household and
Healthcare Ltd. (2007) 5 SCC 510: 2007 (3) SCR 726 -
B
referred to.
Premium Nafta Products Ltd. v. Fili Shipping Company
Ltd. & Ors. 2007 UKHL 40; United States in Buckeye Check
Cashing, Inc. v. John Cardegna et al 546 US 440 (2006);
C
Russel on Arbitration, para 7 -056, 7 -058, and Claxton
Engineering v. Txm olaj - es gaz Kutao Ktf [2011] EWHC 345
(COMM.) - referred to.
Redfern An<:J Hunter On International Arbitration (Fifth
Edition page 134 para 2.141) - referred to.
D
Case Law Reference:
(2013) 1 sec 641
Referred to
Para 8
2008 (13) SCR 638
Referred to
Para 9
E
2011 (13) SCR 359
Referred to
Para 9
2007 UKHL 40
Referred to
Para 9
546 us 440 (2006)
Referred to
Para 9
F
2009 (15) SCR 371
Distinguished
Para 10
1962 Suppl. SCR 702 Distinguished
Para 10
1970 (3) SCR 53
Referred to
Para 15
1987 (1) SCR 1024
Referred to
Para 15
G
2011 (9) SCR 382
Referred to
Para 16
1999 (3) SCR 861
Referred to
Para 17
H
808
A
SUPREME COURT REPORTS
2005 (1) SCR 913
2011 (7) SCR 310
2007 (3) SCR 726
Referred to
Referred to
Referred to
[2014] 1 S.C.R.
Para 18
Para 18
Para 18
B
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 895
of 2014.
From the Judgment and Order dated 17.09.2010 of the
High Court of Judicature at Bombay in Appeal (L) No. 534 of
2010 in Notice of Motion No. 1809 of 2010 in Suit No. 1828 of
c 2010.
K.K. Venugopal, V.K. Misra, Pojat T., line A., Swapnil
Jain, Madhav Misra, Devendra Singh for the Appellant.
Gopal Subramonium, Devansh Mohta, Vijay K. Sondhi,
D Sanjay Kumar, Ashish Prasad, Soham Kumar, Samir Ali Khan,
Mayank Grover for the Respondent.
The Judgment of the Court was delivered by
E
A.K. PATNAIK, J. 1. Leave granted.
2. This is an appeal against the order dated 17.09.2010
of the Division Bench of the Bombay High Court in Appeal
(Lodging) No.534 of 2010.
F Facts:
3. The facts very briefly are that on 30.11.2007 the Board
of Control for Cricket in India (for short 'BCCI') invited tenders
for IPL (Indian Premier League) Media Rights for a period of
G ten years from 2008 to 2017 on a worldwide basis. Amongst
the tenders submitted, the bid of World Sports Group India (for
short 'WSG India') was accepted by BCCI. By a pre-bid
arrangement, however, the respondent was to get the media
rights for the sub-continent for the period from 2008 to 2010.
H Accordingly, on 21.01.2008 BCCI and the respondent entered
WORLD SPORT GROUP (MAURITIUS) LTD. v. MSM
809
SATELLITE (SINGAPORE) PTE. LTD. [A.K. PATNAIK, J.]
into a Media Rights License Agreement for the period from
A
2008 to 2012 for a sum of US$274.50 million. After the first
IPL season, the BCCI terminated the agreement dated
21.01.2008 between BCCI and the respondent for the Indian
sub-continent and commenced negotiations with WSG India.
On 14.03.2009, the respondent filed a petition under Section
B
9 of the Arbitration and Conciliation Act, 1996 (for short 'the
Act') against the BCCI before the Bombay High Court praying
for injunction against the BCCI from acting on the termination
letter dated 14.03.2009 and for preventing BCCI from granting
the rights under the agreement dated 21.01.2008 to any third c
party. Pursuant to the negotiations between BCCI and WSG
India, BCCI entered into an agreement with the appellant
whereunder the media rights for the Indian sub-continent for the
period 2009 to 2017 was awarded to the appellant for a value
of Rs.4, 791.08 crores. To operate the media rights in India, the
D
appellant was required to seek a sub-licensee within seventy
two hours. Though, this time period was extended twice, the
appellant was not able to get a sub-licensee. Thereafter, the
appellant claimed to have allowed media rights in India to have
lapsed and then facilitated on 25.03.2009, a new Media Rights
E
License Agreement between the BCCI and the respondent for
the Indian sub-continent for the same contract value of
Rs.4,791.08 crores. BCCI and WSG India, however, were to
continue with the Rest of the World media rights.
4. On 25.03.2009, the appellant and the respondent also
F
executed the Deed for Provision of Facilitation Services
(hereinafter referred to as 'the Facilitation Deed') whereunder
the respondent was to pay a sum of Rs.425 crores to the
appellant as facilitation fees. Clause 9 of the Facilitation Deed
dated 25.03.2009 between the appellant and the respondent
G
was titled 'Governing Law' and read as follows:
"9. GOVERNING LAW
This Deed shall be governed by and construed in
accordance with the laws of England and Wales, without
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120141 1 s.c.R.
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 of Commerce (the "Chamber") for
final and binding arbitration under its Rules of Arbitration,
to 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. The arbitrator shall
be selected by mutual agreement of the Parties, or, if the
Parties cannot agree, -then by striking from a list of
arbitrators supplied by the Chamber. If the Parties are
unable to agree on the arbitrator, the Chamber shall
choose one for them. The arbitration shall be a confidential
proceeding, closed to the general public. The arbitrator
shall assess the cost of the arbitration against the losing
party. In addition, the prevailing party in any arbitration or
legal proceeding relating to this Deed shall be entitled to
all reasonable expenses (including, without limitation,
reasonable attorney's fees). Notwithstanding the foregoing,
the arbitrator may require that such fees be borne in such
other manner as the arbitrator determines is required in
order for this arbitration provision to be enforceable under
applicable law. The arbitrator shall issue a written opinion
stating the essential findings and conclusions upon which
the arbitrator's award is based. The arbitrator shall have
the power to entsr temporary restraining orders and
preliminary and permanent injunctions. 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 been submitted to arbitration as
herein provided and then only for the enforcement of the
arbitrator's award; provided, however, that prior to the
appointment of the arbitrator or for remedies beyond the
jurisdiction of an arbitrator, at any time, any party may seek
equitable relief in a court of competent jurisdiction in
Singapore, or such other court that may have jurisdiction
WORLD SPORT GROUP (MAURITIUS) LTD. v. MSM
811
SATELLITE (SINGAPORE) PTE. LTD. [A.K. PATNAIK, J.]
over the Parties, without thereby waiving its right to
A
arbitration of the dispute or controversy under this section.
THE PARTIES HEREBY WAIVE THEIR RIGHT TO JURY
TRIAL WITH RESPECT TO ALL CLAIMS AND ISSUES
ARISING UNDER, IN CONNECTION WITH, TOUCHING
UPON OR RELATING TO THIS DEED, THE BREACH
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THEREOF AND/OR THE SCOPE OF THE PROVISIONS
OF THIS SECTION, WHETHER SOUNDING IN
CONTRACT OR TORT, AND INCLUDING ANY CLAIM
FOR FRAUDULENT INDUCEMENT THEREOF."
5. The respondent made three payments totaling Rs.125
C
crores to the appellant under the Facilitation Deed during 2009
and did not make the balance payment. Instead, on 25.06.2010,
the respondent wrote to the appellant rescinding the Facilitation
Deed on the ground that it was voidable on account of
misrepresentation and fraud. On 25.06.2010, the respondent
D
also filed Suit No.1869 of 2010 for inter alia a declaration that
the Facilitation Deed was void and for recovery of Rs.125
crores already paid to the appellant. On 28.06.2010, the
appellant acting under Clause 9 of the Facilitation Deed sent
'ii request for arbitration to ICC Singapore and the ICC issued
E
a riotice to the respondent to file its answer to the requestfor
arbitration. In the meanwhile, on 30.06.2010, the respondent
filed a second suit, Suit No.1828 of 2010, before the Bombay
High Court against the appellant for inter alia a declaration that
as the Facilitation Deed stood rescinded, the appellant was not
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entitled to invoke the arbitration clause in tbe Facilitation Deed.
The respondent also filed an application for temporary injunction
against the appellant from continuing with the arbitration
proceedings commenced by the appellant under the aegis of
ICC.
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6. On 09.08.2010, the learned Single Judge of the
Bombay High Court dismissed the application for temporary
injunction of the respondent saying that it would be for the
arbitrator to consider whether the Facilitation Deed was void
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812
SUPREME COURT REPORTS
[2014) 1 S.C.R.
A on account of fraud and misrepresentation and that the
arbitration must, therefore, proceed and the Court could not
intervene in matters governed by the arbitration clause. The
respondent challenged the order of the learned Single Judge
before the Division Bench of the Bombay High Court and by
B the impugned order, the Division Bench of the Bombay High
Court allowed the appeal, set aside the order of the learned
Single Judge and passed an order of temporary injunction
restraining the arbitration by ICC. Aggrieved, the appellant has
filed this appeal.
C Contentions on behalf of the appellant:
7. Mr. K.K. Venugopal, learned senior counsel for the
appellant, submitted that the Division Bench of the High Court
failed to appreciate that the Bombay High Court had no
D jurisdiction to pass an order of injunction restraining a foreign
seated international arbitration at Singapore between the
parties, who were not residents of India. In this context, he
referred to Clause 9 of the Facilitation Deed which stipulated
that any party may seek equitable relief in a court of competent
E jurisdiction in Singapore, or such other court that may have
jurisdiction over the parties. He submitted that on the principle
of Comity of Courts, the Bombay High Court should have
refused to interfere in the matter and should have allowed the
parties to resolve their dispute through ICC arbitration, subject
F to the jurisdiction of the Singapore courts in accordance with
Clause 9 of the Facilitation Deed.
8. Mr. Venugopal next submitted that the Division Bench
of the High Court failed to appreciate that under Section 45 of
the Act, the Court seized of an action in a matter in respect of
G which the parties have made an agreement referred to in
Section 44 has to refer the parties to arbitration, unless it finds
that the agreement referred to in Section 44 is null and void,
inoperative or incapable of being performed. He submitted that
the agreement referred to in Section 44 of the Act is 'an
H agreement in writing for arbitration' and, therefore, unless the
WORLD SPORT GROUP (MAURITIUS) LTD. v. MSM
813
SATELLITE (SINGAPORE) PTE. LTD. [A.K. PATNAIK, J.)
Court finds that the agreement in writing for arbitration is null
A
and void, inoperative or incapable of being performed, the Court
will not entertain a dispute covered by the arbitration agreement
and refer the parties to the arbitration. In support of this
submission, he relied on the decision of this Court in Chloro
Controls India Private Limited v. Seven Trent Water B
Purification Inc. & Ors. [(2013) 1 SCC 641].
9. Mr. Venugopal submitted that the Division Bench of the
High Court, instead of examining whether the agreement in
writing for arbitration was null and void, inoperative or C
incapable of being performed, has held that the entire
Facilitation Deed was vitiated by fraud and misrepresentation
and was, therefore, void. He vehemently submitted that it was
for the arbitrator to decide whether the Facilitation Deed was
void on account of fraud and misrepresentation as has been
rightly held by the learned Single Judge and it was not for the
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Court to pronounce on whether the Facilitation Deed was void
. on account of fraud and misrepresentation. He referred to
Article 6(4) of the ICC Rules of Arbitration which permits the
Arbitral Tribunal to continue to exercise jurisdiction and
adjudicate the claims even if the main contract is alleged to be
E
null and void or non-existent because the arbitration clause is
an independent and distinct agreement. He submitted that this
principle of Kompetenz Kompetenz has been recognized in
Section 16 of the Act under which the Arbitral Tribunal has the
competence to rule on its own jurisdiction and on this point
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relied on National Insurance Co. Ltd. v. Boghara Polyfab Pvt.
Ltd. [(2009) 1 SCC 267] and Reva Electric Car Company
Private Ltd. v. Green Mobil [(2012) 2 SCC 93]. He submitted
that as a corollary to this principle, Courts have also held that
unless the arbitration clause itself, apart from the underlying
G
contract, is assailed as vitiated by fraud or misrepresentation,
the Arbitral Tribunal will have jurisdiction to decide all issues
including the validity and scope of the arbitration agreement.
He submitted that in the present case, the arbitration clause
itself was not ass.ailed as vitiated by fraud or misrepresentation.
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SUPREME COURT REPORTS
[2014] 1 S.C.R.
A In support of this argument, he relied on the decision of the
House of Lords in Premium Nafta Products Ltd. v. Fili
Shipping Company Ltd. & Ors. [2007] UKHL 40], the decision
of the Supreme Court of United States in Buckeye Check
Cashing, Inc. v. John Cardegna et al [546 US 440 (2006)] and
B the decision of this Court in Branch Manager, Magma Leasing
and Finance Ltd. & Anr. v. Potluri Madhavilata & Anr. [(2009)
10 sec 103].
10. Mr. Venugopal submitted that the Division Bench of the
C High Court relied on the decision in N. Radhakrishnan v.
Maestro Engineers & Ors. [(2010) 1 SCC 72] to hold that
serious allegations of fraud can only be enquired by a Court
and not by an arbitrator, but the Division Bench failed to
appreciate that in N. Radhakrishnan v. Maestro Engineers &
Ors. (supra) this Court relied on Abdul Kadir Shamsuddin
D Bubere v. Madhav Prabhakar Oak [AIR 1962 SC 406] in which
it was observed that it is only a party against whom a fraud is
alleged who can request the Court to inquire into the allegations
of fraud instead of allowing the arbitrator to decide on the
allegations of fraud. In the present case, the respondent has
E alleged fraud against the appellant and thus it was for the
appellant to make a request to the Court to decide on the
allegations of fraud instead of referring the same to the
arbitrator, and no such request has been made by the appellant.
He further submitted that in any case the judgment of this Court
F in N. Radhakrishnan v. Maestro Engineers & Ors. (supra) was
rendered in the context of domestic arbitration in reference to
the provisions of Section 8 of the Act. He submitted that the
language of Section 45 of the Act, which applies to an
international arbitration, is substantially different from the
G language of Section 8 of the Act and it will be clear from the
language of Section 45 of the Act that unless the arbitration
agreement is null and void, inoperative or incapable of being
performed, the parties will have to be referred to arbitration by
the Court. In the present case, the respondent has not made
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WORLD SPORT GROUP (MAURITIUS) LTD. v. MSM
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SATELLITE (SINGAPORE) PTE. LTD. [A.K. PATNAIK, J.J_
out that the arbitration agreement is null and void, inoperative
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or incapable of being performed.
11. Mr. Venugopal submitted that the High Court has
taken a view that Clause 9 forecloses an open trial in a court
of law except to the extent permitted therein and the parties
8
have to necessarily submit themselves to a confidential
proceeding which is closed to the general public. He submitted
that the Bombay High Court thus appears to have held that
Clause 9 is opposed to public policy and, in particular, Sections
23 and 28 of the Indian Contract Act, 1872. He submitted that
in any case the arbitration agreement contained in Clause 9
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of the Facilitation Deed cannot be held to be opposed to public
policy and void under Sections 23 and 28 of the Indian Contract
Act, 1872. This will be clear from Exception 1 of Section 28 of
the Indian Contract Act, 1872, which says that the section shall
not render illegal a contract, by which two or more persons
D
agree that any dispute which may arise between them in
respect of any subject or class of subjects shall be referred to
arbitration and that only the amount awarded in such arbitration
shall be recoverable in respect of the dispute so referred. He
explained that under the American Law, in a suit for common
E
law where the value of claim is more than US$20, the right to
jury trial is preserved and this applies even in relation to claims
for breach of contract and for this reason, the parties made a
provision in Clause 9 of the Facilitation Deed waiving their right
to jury trial with respect to all claims and issues arising under,
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in connection with, touching upon or relating to the Facilitation
Deed. He submitted that this provision in Clause 9 of the
Facilitation Deed cannot, therefore, be held to be opposed to
public policy.
12. Mr. Venugopal next submitted that the crux of the case
of the respondent is set out in its letter dated 25.06.2010 to
the appellant in which it was alleged that 'in view of the false
misrepresentations and fraud played by WSGM the deed is
~oidable at the option of our client and thus our client rescinds
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[2014] 1 S.C.R.
A the deed with immediate effect'.