LI NETWORK
A bench of Justices Siddharth Mridul and Talwant Singh of the Delhi High Court has observed that it has the jurisdiction to decide a plea filed by late industrialist KK Modi’s wife.
The plea challenged her son Lalit Modi’s decision to initiate arbitration proceedings in Singapore over a family dispute related to property.
The HC set aside the judgement of a single-judge bench of the HC that had said that it does not have the jurisdiction to grant an anti-arbitration injunction plea filed by Bina Modi, Lalit Modi’s sister Charu and brother Samir.
The single judge had said that the pleas are not maintainable as the anti-arbitration suit did not lie.
Bina, Charu, and Samir, in separate suits, contended that there was a trust deed between the family members and the family trust matters cannot be settled via a foreign country’s arbitration as per Indian laws.
They have asked for a permanent injunction restraining Lalit Modi from approaching the arbitration in Singapore for seeking emergency measures.
The bench said, “In view of the foregoing discussion, we are of the considered view that the single judge gravely erred by failing to exercise the jurisdiction vested in the court, which statutorily required him to adjudicate, whether the disputes between the parties, concerning the trust deed, were per se referable to arbitration.”
“This, in our respectful view, is tantamount to wrong exercise of jurisdiction by the single judge. The impugned judgment cannot resultantly be sustained…,” the bench said in its 103-page judgement.
The bench noted:
“We also hold that inherent and substantive rights ensure to the benefit of the appellants (Bina, Charu, and Samir) to urge that the disputes between the parties in relation to the Trust Deed were not arbitrable and that consequently, they were duly entitled to prosecute their claim for the substantive relief of declaration and permanent injunction, as prayed for.”
The High Court bench remanded their two civil suits to the single judge for further proceedings and directed for hearing on January 8.
The trust deed was executed in London by KK Modi as managing trustee and Bina, Lalit, Charu, and Samir as trustees, and was recorded to be done on February 10, 2006.
KK Modi died in 2019, after which the dispute arose amongst the trustees.