10 November 2021 | Ratnam Sudesh Iyer v. Jackie Kakubhai Shroff | Civil Appeal No. 6112 of 2021 | Sanjay Kishan Kaul and MM Sundresh JJ | Supreme Court of India | 2021 SCC OnLine SC 1032

The Supreme Court has affirmed the setting aside of an award against the actor Jackie Shroff. We had covered in our Update here the judgment of the set-aside court. In an extremely neatly written decision SC Gupte J had concluded that the award was the exact opposite of justice. The appellate court had affirmed the setting aside.

Jackie and Ratnam were shareholders in Atlas. Atlas was a shareholder in MSM. Dispute arose concerning sale of Atlas’ shares in MSM. Jackie lodged a criminal complaint alleging forgery by Sudesh. The parties sought to settle the dispute and executed a settlement deed. A sum of USD 1,500,000 was kept in escrow to be released to Jackie upon closure or withdrawal of the criminal complaint. An additional amount of USD 2,000,000 was also held in escrow to be paid to Jackie once the sale of Atlas’s share in MSM was completed.

A clause obligated Jackie not to make any communication or reference to the subject matter of the settlement deed. Later, Jackie’s wife Ayesha, in an email that she copied to a few third parties referred to Sudesh a “forger.” Sudesh brought arbitration proceedings on the basis that the emails breached the settlement deed.

An award was made against Jackie directing return of the escrow amount to Sudesh and also granting liquidated damages. The award was emphatically set aside by Gupte J. The appellate court dismissed Sudesh’s appeal by a detail judgment.

In the Supreme Court, the bench of Sanjay Kishan Kaul and MM Sundresh JJ discussed first the points of law and noted that:

1. The award was made in India in an international commercial arbitration because Ratnam was a Singaporean citizen.
2. The pre-2015 Amendments applied because the set aside proceedings commenced prior to 23 October 2015.
3. The general phraseology in the agreement of the parties that the arbitration proceedings shall be governed by the 1996 Act “or any amendment thereto” does not have the effect of making the 2015 Amendments apply.

On the facts they emphasized on Justice Gupte’s pithy summary of the matter at paragraph 23 of his judgment. Gupte J had noted, “when we see the bizarre outcome it has brought about in the matter, the extent of the fallacy can be realised better.” He then very eloquently summed up the matter. Sudesh got practically everything that he wanted from Jackie. And after all that was done, Sudesh even got back his entire money of USD 3,500,000 in the award because Ayesha called him a ‘forger’ in a private communication made to a couple of acquaintances or associates.

Gupte J had asked rhetorically, “can such award be ever sustained as something a fair and judiciously minded person could have made?” He said, “in my humble opinion, it is the very opposite of justice; it would be a travesty of justice to uphold such award.”

The Supreme Court agreed that whatever law applied—whether amended or unamended—the award could not stand.

Read the judgment here.