Delhi HC Quashed ₹770 Million Arbitral Award Against Bharat Forge,Subsidiary

The Delhi High Court has quashed an arbitral award directing Bharat Forge Ltd and its wholly owned subsidiary BF Infrastructure Ltd to pay ₹770 million to Tarsem Jain, owner of multiple companies in India. The court also dismissed Jain’s petition seeking enforcement of the award.

The court noted that Jain unilaterally appointed the arbitrator without consensus, rendering the arbitration proceedings invalid. “The appointment of the arbitrator was not consensus ad idem as provided under Section 11 of the Arbitration and Conciliation Act, 1996,” the court said.

The dispute arose from a 2010 share purchase agreement where BF Infrastructure agreed to acquire stakes from Jain, who claimed ownership of Coal Columbia SAS, Mines and Minerals Company Colombia SAS, Multitex Africa SA, and 99% of Aggressive Projects Pvt Ltd. Under the deal, Jain was to transfer 100% equity of the foreign companies to Aggressive Projects, which would then transfer 90% of its shares to BF Infrastructure.

BF Infrastructure alleged that Jain failed to meet a condition precedent in the agreement, which caused the deal to lapse, reverting parties to their original positions. Due to the disputes, BF Infrastructure terminated the agreement in 2012.

Jain initiated arbitration in 2013 and sought appointment of an arbitrator with his consent. However, Jain later appointed the arbitrator unilaterally, naming BF Infrastructure and Bharat Forge as respondents. The petitioners objected but participated under protest. 
Following an adverse award, they approached the high court, which ruled in their favour.