Milton JV AAward Quashed for Perversity by Bombay HC
Judgment dated 3.11.2025 of the High Court of Bombay in Arbitration Petition No.544 of 2018 (OS) of Rakesh S. Kathotia Vs. Milton Global & others with connected petitions.
Arbitral Award dated 23.12.2017 and the additional Award dated 16.2.2018 are in respect of the disputes of equally owned joint venture of Milton JV between the claimants and the respondents.
The Arbitrator treated the rights in JV agreement as obligations and held that Subhkam group has not demonstrated its readiness and willingness to perform such (perceived) obligations. It was held that specific relief as also damages against violation of non-compete obligations by Vaghani group could not be granted.
Subhakm Group and Vaghani Groups held 50% each in the equity share capital of Milton JV vide agreement dated 13.9.2000 as amended and restated in agreement dated 14.7.2001.
However, Vaghani group diverted the business to its company Hamilton Houseware Pvt.Ltd. As a result, the turn of Milton was eroded from Rs.30.85 crores in 2004 to Rs.71,000/- in 2013.
HELD that the Arbitral Tribunal held in favour of Subhkam Group on every count but it was further held that the said Group could not be said to have been ready and willing to perform the JVA after 2004 and therefore, it was not entitled to any relief.
JVA – Rights Vs Obligations – Arbitral Award
Every right of an investor to participate in the management and governance of a JV company being converted into an obligation to participate is ex facie unreasonable. The impugned Award is riddled with inherent contradictions.
Justice Deliver Subversion turns out Irrelevant
The impugned Arbitral Award, regrettably falls in the realm of being in conflict with the most basic notions of justice and morality, apart from being perverse by reason of being riddled with inherent contradictions, leading to an implausible outcome.
By treating a right as an obligation, the impugned award is also contrary to the contract. This is exacerbated by the finding that the JVA indeed subsists and has not been abandoned.
