The Bombay High Court on Monday upheld an arbitral award, directing city-based businessmen brothers Yogesh Mehra and Ajay Mehra to pay about Rs 700 crore ‘siphoned off’ by them from a joint venture (JV) company between them and German wind turbine major Enercon GmbH.
The order, passed by a single judge of the high court in the arbitral award, was challenged by Mehra brothers before the bench of Chief Justice Pradeep Nandrajog and Justice N M Jamdar. The bench dismissed the petitons of the siblings and said, “The majority Award is liable to be upheld in its entirety.”
The bench, in its order, said, “This Court finds no perversity in the approach adopted by the Arbitral Tribunal in directing the Mehra brothers to recompense WWIL; the independent jural entity from whose exchequer the funds had been diverted. Rather, such a course is fair and inures to the advantage of the Mehras as they are themselves shareholders to the tune of 44 per cent in WWIL.”
The Mehra brothers, petitioners in the arbitration petitions filed in 2016, had set up a renewable energy business. They entered into a joint venture agreement (JVA) to set up a company Wind World India Limited (WWIL). WWIL was set up between Enercon GmbH (EG) — a German entity which holds 56 per cent of the shares of WWIL. The Mehras and their family members hold the remaining 44 per cent shares.
In or around 2006, certain disputes arose between the parties, including allegations of mismanagement of WWIL by the Mehras; and non-payment of royalties and the nature of the technology rights granted by EG to WWIL.
The dispute also arose out of an intellectual property license agreement (IPLA) which one of the parties, the Mehras and WWIL contended to be a draft. After several rounds of litigation, the Supreme Court appointed a presiding arbitrator. The three member tribunal, by majority of two and one dissenting member, passed the award in 2016.
The award held that WWIL was due to make payments of royalties of 55 million euros (plus interest) to EG and return the technology previously provided by EG to WWIL; WWIL was due to make payments of parts and components previously supplied by EG to the tune of 19 million euros (plus interest) and the Mehras had siphoned off sums to the tune of almost Rs 700 crore from WWIL into Vish Wind Infrastructure Ltd (a company owned by the Mehras themselves), which they were directed to repay to WWIL.
WWIL and the Mehras challenged this arbitral award before the Bombay High Court in the same year. Justice A K Menon dismissed the petition, stating that the petitioners’ case is that “they were prejudiced by want of a proper opportunity to defend the case against them and resulting in the award being perverse has not been made out.” The order of Justice Menon was challenged before the bench.