Delhi High Court Refers Claims Against Essel Group Companies under ‘Letters Of Comfort’ To Arbitration
1 year, 10 months ago

Delhi High Court Refers Claims Against Essel Group Companies under ‘Letters Of Comfort’ To Arbitration

Live Law  

The Delhi High Court has ruled that the statements made by a party in a ‘Letter of Comfort’, assuring the creditor that it shall ensure that the debtor repays the loan on the relevant due dates, are promissory in character and thus enforceable, even if they do not meet the requirement of Section 126 of the Indian Contract Act, 1872 which deals with the Contract of Guarantee. The bench of Justice V. Kameswar Rao thus referred the claim raised by the petitioner/ claimant, Aditya Birla Finance Ltd, seeking compliance with the ‘Letters of Comfort’ issued by Zee Entertainment Enterprises Ltd and Essel Corporate LLP, in relation to a loan availed by their group company, Siti Networks Ltd, to arbitration. The Court invoked the doctrine of ‘Group of Companies’ to refer the parties to arbitration, noting that Siti Networks, Zee Entertainment and Essel Corporate are part of the Essel Group of companies and are related parties. 1, Siti Networks, availed a Term Loan from the petitioner, Aditya Birla Finance, under a ‘Credit Arrangement Letter’ read with a ‘Facility Agreement’ executed between them.

Court Companies Comfort Loan Respondent Group Zee Letters Zee Entertainment Delhi High Siti Related Parties Section 126 Petitioner Mr Essel Essel Corporate Siti Networks  group  claims  letters  court  zee  loan  essel  refers  respondent  petitioner  mr  delhi  high  comfort  siti  companies

History of this topic

Group Of Companies Doctrine Cannot Be Applied To Directors Of A Company To Make Them A Party To Arbitration: Delhi High Court
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Live Law  

The High Court of Delhi has held that directors of a company cannot be made parties to arbitration through 'Group of Companies' doctrine. The bench of Justice Dinesh Kumar Sharma held that in terms of Section 230 of the Indian Contract Act, the agent cannot be made personally liable for acts carried out on behalf of the principal. That an …

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The Delhi High Court has ruled that the plea that signatures to the MoU containing an arbitration clause were obtained by threat and coercion, cannot be considered while considering an application under Section 11 of the Arbitration and Conciliation Act, 1996 for appointment of the Arbitrator. However, the Court added that in certain exceptional circumstances, by invoking the concept of …

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2 years, 8 months ago

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3 years, 9 months ago

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The Delhi High Court on Thursday allowed the application field by Amazon to enforce the emergency award against the Future-Reliance deal.The High Court held that the emergency arbitrator is an arbitrator for all the intents and purposes under Section 17 of Arbitration and Conciliation Act and an order passed by such an emergency arbitrator is enforceable under sec. The Delhi …

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6 years, 3 months ago

‘Association’ Referred To In Section 2(1)(f)(iii) Of The Arbitration And Conciliation Act Would Include A Consortium Of Companies, One Of Which Is A Foreign Company: SC [Read Judgment]

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The Supreme Court has held that an ‘association’ referred to in Section 2 of the Arbitration and Conciliation Act, 1996, would include a consortium consisting of two or more bodies corporate, at least one of whom is a body corporate incorporated in a country other than India.Consortium of M/s Larsen and Toubro, an Indian company, together with Scomi Engineering Bhd, …

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