Enercon (India) Ltd & Ors. v Enercon GMBH & Anr.
[2014] 2 S.C.R. 855; 2014 INSC 100
Coram: Hon’ble Justice Surinder Singh Nijjar & Hon’ble Justice Fakkir Mohamed Ibrahim Kalifulla
Forum: Hon’ble Supreme Court of India
Case No.: Civil Appeal No. 2086 of 2014 with Civil Appeal No. 2087 of 2014
Date of Decision: February 14, 2014
Conclusion

Facts & Background:
- The Appellants in the case were:
- Appellant No. 1, Enercon (India) Ltd. (EIL), incorporated in 1994 with its registered office in Daman, India, engaged in the manufacturing and sale of Wind Turbine Generators (WTGs),
- Appellants No. 2 and 3, members of the Mehra family, associated with the company’s establishment and operations.
- The Respondents in the case were:
- Respondent No. 1, a company incorporated under the laws of Germany, with its registered office in Aurich, Germany, and
- Respondent No. 2, a German-incorporated company holding the patent for technology related to the Wind Turbine Generators (WTGs).
- The 2nd and 3rd Appellants, in conjunction with the 1st Respondent, entered into a joint venture by incorporating the 1st Appellant, Enercon (India) Ltd., with its registered office in Daman, India, and executed a Shareholding Agreement (SHA) on January 12, 1994.
- On the same date, the 1st Appellant and the 1st Respondent executed a Technical Know-How Agreement (TKHA), and subsequently, on September 29, 2006, the parties entered an Intellectual Property License Agreement (IPLA).
- Disputes had occurred between the parties, and the 2nd and 3rd Appellants had instituted a derivative suit before the Bombay High Court, seeking directions for resuming the supply of parts and components.
- In response, the 1st Respondent filed an application under Section 45 of the Arbitration and Conciliation Act, 1996, seeking a reference of the dispute to arbitration while concurrently initiating proceedings before the English High Court, seeking, inter alia, the constitution of an arbitral tribunal under the IPLA.
- On April 8, 2008, the Appellants filed a suit before the Daman Trial Court, challenging the IPLA's validity and arbitration agreement. The Daman Court directed the Respondents to maintain the status quo concerning the proceedings before the English High Court.
- The Respondents filed an application under Section 45 of the Arbitration and Conciliation Act in the Daman Suit, while the Appellants sought an interim ex-parte anti-arbitration injunction. On January 5, 2009, the Daman Trial Court dismissed the application and granted the injunction in favour of the Appellants.
- The Respondents filed four appeals, which were allowed by the Daman Appellate Court. Consequently, the anti-arbitration injunction was vacated, and the application under Section 45 of the Arbitration and Conciliation Act was allowed.
- The Appellants filed two writ petitions before the Bombay High Court challenging the decision of the Daman Appellate Court. The High Court held that:
- a prima facie arbitration agreement existed,
- Indian law was the curial law,
- London was the venue, but not the seat of arbitration, and
- The English Courts had concurrent jurisdiction due to London being the venue.
- Hence, the present appeal.
Main Issue:
- Whether the IPLA constitutes a valid and concluded contract, and whether the Court or the Arbitral Tribunal should decide its validity, along with the Appellants' ability to refuse arbitration based on this contention?
- Whether, assuming the IPLA is a concluded contract, the Arbitration Clause 18.1 was vague and unworkable, as observed by both Arbitrators, Mr. V.V. Veeder QC and Mr. Justice B.P. Jeevan Reddy?
- Whether, in the event the arbitration clause was held to be workable, the seat of arbitration was in London or India?
- Whether, in the event it was held that the seat was in India, the English Courts had concurrent jurisdiction to take measures in support of the arbitration, given that the venue for the arbitration proceedings was London
- Were the Appellants entitled to an anti-suit injunction? (Paragraph 69)
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