Summary: The Bombay High Court, led by Justice Somasekhar Sundaresan, overturned an arbitration decision in a disagreement involving Rakesh S. Kathotia, Subhkam Ventures, and the Vaghani Group over a joint venture with Milton Global Ltd. The court found inconsistencies in the arbitration decision, especially in how it treated rights as responsibilities.
The case is about a 50:50 joint venture between the Subhkam Group (Rakesh S. Kathotia and Subhkam Ventures) and the Vaghani Group, involving Milton Global Ltd. The conflict started with an arbitration decision dated December 23, 2017, which the Subhkam Group challenged under a section of the Arbitration and Conciliation Act, 1996.
The arbitration panel found that the Vaghani Group broke the joint venture agreement by moving business to Hamilton Housewares Pvt. Ltd. It also ruled against the Subhkam Group, saying they weren't ready to meet their responsibilities, treating their rights as if they were duties.
"The Subhkam Group’s rights were ignored, yet they were not given any help."
Justice Sundaresan found the arbitration decision full of contradictions. The panel's choice to treat rights as responsibilities was seen as unreasonable. The court stressed that an investor's rights should not be confused with responsibilities.
The court noted the Vaghani Group's dishonest behavior, including lying under oath and misleading the panel. Despite these findings, the arbitration panel denied help to the Subhkam Group, which the court found surprising.
The court overturned the arbitration decision, allowing the parties to go through arbitration again. Justice Sundaresan emphasized that the contradictions in the decision made it unacceptable.
This decision highlights the importance of clear and consistent findings in arbitration and the court's role in ensuring fairness.
