Share Holders Agreement Enforcement in India through Foreign Arbitral Awards
Judgment dated 1.9.2025 of the High Court of Delhi in O.M.P. (COMM) 88/2020 of Roger Shashoua and others Vs. Mukesh Sharma and others with connected matters.
Foreign Investment – Delhi HC Enforces ICC Award on Share Transfer.
Corporate Remedies via Arbitration – Delhi HC Affirms Arbitral Tribunal’s Power to Order Share Transfers
Share Holders Agreement Enforcement in India through Foreign Arbitral Awards
Arbitration Beyond Borders – Delhi HC Reinforces India’s Pro-Enforcement Stance
Sctions 47 and 49 AA – Execution of Foreign Arbitral Awards
ICC Arbitral Tribunal had passed two Awards – partial final award dated 5.1.2010 and second final award dated 1.8.2011.
The core of the dispute is the Shares Holders Agreement between the petitioner, respondent no.1 and the respondent no.3. It was through this agreement that the respondent no.3 company came into existence.
The purpose of SHA was formation of a joint venture to carry ouot the construction and running of an exhibition Centre in Noida.
The entire project was based on the funds of the petitioners and the respondent was merely using the said funds.
First Partial Final Award passed several directions to the respondent no.1 for transfer of all his shares in respondent no.3 company to the petitioners / claimants.
By the final second award, the respondent no.2 was directed to transfer all its shares in the respondent no.3 company to the petitioners / claimants.
The enforcement was challenged on various submissions summarized in
paras 100 and 101 of the judgment and the objections in para 140 of the judgment that the Arbitral Tribunal has no powers to order share transfer.
HELD that the Arbitral Tribunal being the creature of the contract derives its jurisdiction from the agreement between the parties. In the present case, the jurisdiction is derived from the SHA. The parties have submitted to the arbitration under SHA. Once the said Tribunal has rendered its decision and has directed transfer of shares which is in effect, contemplated in the SHA, the respondents cannot now renege from the same and challenge the jurisdiction of the Arbitral Tribunal.
In fact, it would be within the public policy of India to allow a foreign investor who has invested in an Indian joint venture company and has been in effect, been duped of the entire investment, to be allowed to take over the business and turn it into a successful venture.
HC clarifies that the share holder disputes even involving allegations of oppression are arbitrable if contractually agreed.
Judicial support for foreign investment for business – oriented, pragmatic dispute resolution and enhancing India’s reputation as an arbitration – friendly jurisdiction.
During the arbitral proceedings, the respondent no.1 transferred 490,000
shares to respondent no.1 (HUF) on 7.10.2006 and Company transferred 3,500,000 shares to HS Oberoi Company.
Similarly, the respondents continued to hold Board meetings and on 8.4.2010, issued 30 lakh shares to Hyderabad Trade Expo Centre without informing the petitioners.
