The Bombay High Court set aside an arbitral tribunal’s order that had refused interim protection to Atul Projects, remanding the matter for reconsideration based on full and unredacted disclosure of key evidence.
The case concerns the standard and fairness required in arbitral tribunal decisions on interim measures under Section 17 of the Arbitration and Conciliation Act, especially when critical contractual documents or third-party agreements are withheld from scrutiny.
The petitioner, Atul Projects, entered into an MoU in 2014 with Nima Developers, granting it rights to develop 12.5 acres within a larger tract of land in Mumbai. The title to this land was highly contested, with ongoing government litigation and unresolved show-cause notices that restricted transfer and development. Disputes escalated when petitioner’s rights were allegedly terminated following payment defaults, but the petitioner argued that these contractual obligations never arose as “clear and marketable title” remained elusive. Meanwhile, the landowners (India Farmers Pvt. Ltd.) executed a separate MoU with Oberoi Realty on the same property, raising concerns about third-party rights and transparency.
The petitioner’s request for urgent interim relief was rejected by the arbitral tribunal, which held that: (i) the land’s new “No Development Zone” status barred residential construction; (ii) Petitioner had not shown readiness and willingness to perform, by defaulting on his payment obligations; (iii) the contract’s subject-matter was too vague for enforcement, since the 12.5 acres were never properly demarcated; and (iv) the agreement had already been terminated.
The Bench comprising Justice Somasekhar Sundaresan found that the tribunal’s decision was substantially compromised by Nima and India Farmers’ failure to disclose the full Oberoi MoU. Only a heavily redacted version, showing 6 out of 33 pages, was presented, depriving both the tribunal and petitioner of insight into contemporaneous third-party dealings. The Court emphasized that such concealment hampered a fair and complete assessment of merits at the interim stage.
On the question of petitioner’s readiness and willingness, the Court stressed that payment milestones in the MoU were expressly conditional on a clear title to the land. The arbitral tribunal had not adequately considered how absence of such clear title impacted petitioner’s contractual obligations.
The Court found that allegations of the contract being void for uncertainty were found to be premature. The Court clarified that the existence of architectural plans, references to designated areas, and subsequent conduct of the parties—all pointed to triable issues best resolved at the evidentiary stage and not at the interim application phase.
The Court held there was no unequivocal or final termination of the agreement until late 2023, contrary to the tribunal’s finding of termination in 2020. Both parties had engaged in further correspondence and actions inconsistent with termination of their respective obligations.
The Court clarified that the NDZ classification did not mean total impossibility of residential or mixed development, as relevant regulations permitted IT/ITES-based projects with ancillary residential use.
In result, the impugned order refusing interim relief was set aside and the arbitral tribunal was directed to reconsider petitioner’s interim application after the Respondents provide an appropriately redacted but full copy of the Oberoi MoU. The High Court also made clear that status quo protection for Atul Projects would continue until the remanded decision is rendered.
Appearances:
For Atul Projects (Petitioner): Mr. P. Chidambaram, Senior Advocate a/w Dinyar Madon, Senior Advocate, Cyrus Ardeshir, Senior Advocate, Kausar Banatwala, Ziyad Madon, Manini Roy, Neuty N. Thakkar, Vaishali Dedhia, Nisha Waghmare, Dipsy Sequiera, i/b Tushar Goradia.
For Nima Developers and India Farmers (Respondents): Mr. Darius Khambata, Senior Advocate, a/w Karl Tamboly, Karan Rukhana, Deeksha Jani, Niket Jani, i/b Jani & Parikh.
For Oberoi Realty (Applicant): Mr. Aspi Chinoy, Senior Advocate a/w, Mr. Rohaan Cama a/w Pheroze Mehta, Krishna Balaji Moorthy, Bhakti Mehta, Letishiya Chaturvedi, i/b Wadia Gandhi & Co.