✦ High Court of India · 16 Oct 2025

High Court · 2025

Case Details High Court of India · 16 Oct 2025

Court

High Court of India

Decided

16 Oct 2025

Bench

Not available

Length

1,993 words

Acts & Sections

Arbitration Act §10(2)Arbitration Act §2(1)Arbitration Act §34 Arbitration Act §34(1)Arbitration Act §34(2)Arbitration and Conciliation Act 1996 Commercial Courts Act 2015

1/12Arb O.P.(Com.Div.) No.614 of 2025IN THE HIGH COURT OF JUDICATURE AT MADRASDATED: 16-10-2025CORAMTHE HONOURABLE MR JUSTICE N. ANAND VENKATESHArb O.P(COM.DIV.) No. 614 of 2025 &A.No.5034 of 2025D.RamachandranSesha Nilayam, No.95, Race Course Road Coimbatore-641018....PetitionerVsIG3 Infra Limited (Formerly known as ETL Infrastructure Services Limited and Also as indian Green Grid Group Limited) "Chennai One" Pallavaram-Thoraipakkam 200 Feet Road, Thoraipakkam, Chennai-600097....RespondentPRAYER :PETITION under Section 34(1) read with Section 34(2)(b)(ii) of the Arbitration and Conciliation Act, 1996 (as amended) read with Section 2(1)(c)(vi), (vii), (xi) read with Section 10(2) of the Commercial Courts Act, 2015 praying to partially set aside the interim award dated 30.8.2025 so far as it provides the right of election to the respondent and consequently pass an award in favour of the petitioner as prayed for in the amended statement of claim. https://www.mhc.tn.gov.in/judis 2/12Arb O.P.(Com.Div.) No.614 of 2025For Petitioner :Mr.P.V.Balasubramanian, SC forMr.R.Palaniandavan/sFor Respondent/Caveator :Mr.P.S.Raman, SC for Mr.Geoge CheriyanORDERWhen the matter came up for admission on 15.10.2025, at the first instance, this Court, after hearing the learned Senior Counsel appearing on behalf of the petitioner, orally informed that this Court is not inclined to entertain this petition and is going to dismiss this petition. However, after going through the entire materials, this Court found that a prima facie case has been made out and therefore, posted the matter under the caption 'for clarification', today. 2. This petition has been filed under Section 34 of the Arbitration and Conciliation Act, 1996 (for short, the Act) against the interim award passed by the sole Arbitrator dated 30.8.2025 in so far as it provides for the right of election to the respondent is concerned in terms of Clause B.3 of the agreement dated 03.4.2005.3. Heard both. https://www.mhc.tn.gov.in/judis 3/12Arb O.P.(Com.Div.) No.614 of 20254. The facts leading to filing of this petition are as follows :(i) The petitioner is the second claimant and the first claimant (since deceased) was his elder sister. The first claimant was the owner of the property and she entered into a development agreement dated 03.4.2005 with the respondent (formerly known as ETL Infrastructure Services Limited and also Indian Green Grid Group Limited) for constructing an IT Park in 8 acres 85 cents of land located within Coimbatore Corporation. As per the development agreement read with a letter dated 04.4.2005 issued by the respondent, 84% of the constructed area along with a proportionate undivided share of the land was to be retained by the respondent after development. The remaining 16% was to be given to the share of the first claimant, who was the land owner.(ii) In furtherance of the development agreement, the first claimant executed a power of attorney on the same day i.e. 03.4.2005 authorizing the respondent to implement the project. The respondent paid an advance amount of Rs.2,71,50,001/- to the first claimant by way of cheques in the year 2005. The development agreement imposed obligations on the respondent to prepare plans at their own cost, obtain all required approvals and sanctions, arrange project financing and ensure maintenance of common amenities, facilities and security for the complex. https://www.mhc.tn.gov.in/judis 4/12Arb O.P.(Com.Div.) No.614 of 2025(iii) In order to raise funds for the project, the respondent created a mortgage by depositing the title deeds with the State Bank of India and executed a memorandum for deposit of title deeds dated 06.3.2008, followed by a memorandum of agreement dated 17.3.2010. As a matter of fact, the mortgage was later discharged and a receipt dated 16.11.2012 was issued by the bank confirming the cancellation of the charge. (iv) The respondent commenced the construction of the IT Park and claimed to have spent nearly Rs.125 Crores on the project within two years. However, the project was not completed in its full shape. In the meantime, vide letters dated 18.5.2007 and 29.8.2007, the first claimant expressed her dissatisfaction with the progress made by the respondent and she also started demanding higher share in the built up area. The parties exchanged various communications. Ultimately, it did not end up in any revised agreement or cancellation deed.(v) The respondent was not able to proceed further due to operational and logistical impediments alleged to have been caused by the first claimant. By letter dated 06.10.2010, the first claimant asserted that the period contemplated under the development agreement had expired. The first claimant also declined the request made by the respondent to take effective steps for completion and indicated that the agreement had been determined. On 07.3.2011, the first claimant cancelled the power https://www.mhc.tn.gov.in/judis 5/12Arb O.P.(Com.Div.) No.614 of 2025of attorney. However, the development agreement remained uncancelled. On 19.9.2016, the first claimant executed a settlement deed transferring the land to the second claimant, who is none other than the petitioner before this Court. Thereafter, both the claimants initiated arbitration proceedings by serving a notice of arbitration dated 13.3.2019 raising various claims against the respondent.(vi) The respondent denied the assertion made by the claimants, which led to the constitution of the Arbitral Tribunal. The respondent also came out with counter claims to declare the cancellation of the power of attorney as illegal and invalid. Certain monetary claims were also raised against the claimants. (vii) Thereafter, the respondent filed an application under Section 16 of the Act before the Arbitral Tribunal challenging the maintainability of the claim petition primarily on the ground that the claims were time barred. However, the sole Arbitrator, by order dated 26.3.2021, the sole Arbitrator reserved the issue of limitation for determination at the final stage. In so far as the issue of non maintainability of the arbitration on the part of the second claimant was concerned, it was rejected. (viii) The respondent challenged the said order dated 26.3.2021 before this Court by filing C.R.P.No.897 of 2021 and this Court, by order dated 28.7.2021, https://www.mhc.tn.gov.in/judis 6/12Arb O.P.(Com.Div.) No.614 of 2025disposed of the same directing the sole Arbitrator to treat the issue of limitation as the preliminary issue. (ix) The sole Arbitrator framed the issues both on the claims and the counter claims and also framed a preliminary issue on the question of limitation. In so far as the issue of limitation was concerned, both parties addressed the same before the sole Arbitrator. Further, the sole Arbitrator informed the parties that the findings on merits would have a bearing on the limitation issue and therefore, both parties agreed that all the issues would be dealt with in a consolidated final award. In view of the above, arguments were heard on merits covering all the issues and claims. (x) The claimant, in Claim (b), had sought for the relief of delivery of possession of the subject property. The sole Arbitrator took into consideration the terms of Clause B.3 of the agreement and found that an opportunity must be given to the respondent to give an option as to whether the respondent wants to hand over possession of the subject property to the claimant in its original condition or wants to compensate the claimant by paying the 'market rate prevailing then'. The sole Arbitrator found that the further directions to be given would depend upon the option that might be exercised by the respondent and that in case the respondent exercises their option to pay compensation, that would necessitate determination of the value of https://www.mhc.tn.gov.in/judis 7/12Arb O.P.(Com.Div.) No.614 of 2025the subject land. Therefore, the sole Arbitrator decided to render an interim award and thereafter render the final award after considering the relief in Claim (b) made by the second claimant.(xi) However, the sole Arbitrator, vide interim award dated 30.8.2025, gave the respondent the option to exercise their right under Clause B.3 of the agreement within one month of publishing the impugned award. Apart from that, the sole Arbitrator also deferred all the other issues including the counter claims at the time of passing the final award. (xii) Aggrieved by the interim award passed by the sole Arbitrator giving an option to the respondent to exercise their right under Clause B.3, the petitioner filed the above petition.5. The learned Senior Counsel appearing on behalf of the petitioner submitted as follows :(a) The sole Arbitrator had erroneously incorporated Clause B.3 of the agreement and had failed to take note of the fact that the respondent never elected to purchase the subject land and that the entire exchange of correspondence between the parties was for sale of the land and building to third parties. Once the sole Arbitrator https://www.mhc.tn.gov.in/judis 8/12Arb O.P.(Com.Div.) No.614 of 2025concluded that the counter claims were barred by limitation and that the only relief that would survive was the relief of claim for possession, he ought not to have provided the right of election to the respondent either to return back the land to its original position or purchase the land for the market value in 2010 by literally going by the term 'market rate prevailing then'. (b) The factual conclusions at paragraphs 185, 205 and 209 of the impugned interim award do not support the operative portion, which provides the right of election to the respondent, in any manner. There was no material available before the sole Arbitrator to substantiate that the respondent, at any point of time, had requested the first claimant to cooperate for land conversion or that was refused or failed to cooperate for the same. After a specific finding was rendered on the issue of limitation or breach and after finding that both parties must share the blame for non completion of the project, the sole Arbitrator ought not to have rewarded the respondent with the option of election for their incompetence, breach and inaction. (c) The interim award granted by the sole Arbitrator will shock the conscience of the Court and hence, it is in conflict with the Public Policy of India. https://www.mhc.tn.gov.in/judis 9/12Arb O.P.(Com.Div.) No.614 of 20256. Mr.P.S.Raman, learned Senior Counsel appearing on behalf of the respondent submitted that the respondent had already put up substantial construction and that therefore huge stakes are involved in the present case. He brought to the notice of this Court that a huge sum has been paid to the bank for redeeming the documents. He further submitted that the respondent was also intending to file a petition under Section 34 of the Arbitration and Conciliation Act.7. This Court, on considering the nature of grievance expressed by both sides and having gone through the entire materials suggested that this dispute has been going on for nearly 20 years and therefore at some stage, it has to reach a logical conclusion. Therefore, this Court suggested that the Court is inclined to refer this matter to a Senior Mediator with a view to resolve the dispute amicably between the parties.8. The learned counsel appearing on either side fairly submitted that such an attempt can be made considering the long pendency of the dispute. https://www.mhc.tn.gov.in/judis 10/12Arb O.P.(Com.Div.) No.614 of 20259. After hearing the learned counsel on either side, this Court finds that a prima facie case is made out by the petitioner.10. Hence, there shall be an order of interim stay of the impugned interim award passed by the sole Arbitrator dated 30.8.2025. 11. This Court is inclined to appoint Mr.Sriram Panchu, Senior Advocate, as a Senior Mediator at No.E-110, 16th Cross Street, Besant Nagar, Chennai-90 (Mobile No.9840055379 & E mail: [email protected]) to mediate the dispute between the parties. The learned Senior Mediator shall fix the date, time and venue and inform the parties regarding the same. The process of mediation shall be commenced as expeditiously as possible and it shall be completed at the earliest. As an initial fee, each of the parties shall pay a sum of Rs.2,50,000/- [Rupees Two Lakhs Fifty Thousand Only] to the learned Senior Mediator appointed by this Court. https://www.mhc.tn.gov.in/judis 11/12Arb O.P.(Com.Div.) No.614 of 202512. Post this case under the caption for 'filing mediation report' on 20.11.2025.16-10-2025Office to Note : Issue todayIndex/Internet :Yes/NoSpeaking/Non-speaking orderNeutral Citation:Yes/NoRS/KpToMr.Sriram PanchuSenior Advocate, No.E-110, 16th Cross Street Besant Nagar, Chennai-90 https://www.mhc.tn.gov.in/judis 12/12Arb O.P.(Com.Div.) No.614 of 2025N.ANAND VENKATESH,JRS/KPArb O.P(COM.DIV.) No. 614 of 2025 & A.No.5034of 2025 16.10.2025

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