Breaking: Supreme Court rules against proprietorship concern of Abhishek Manu Singhvi

The Supreme Court today allowed an appeal filed against the proprietorship concern of Senior Advocate Abhishek Manu Singhvi.

A Bench of Justices Ranjan Gogoi and R Banumathi delivered the judgment today, sending the dispute for arbitration, thereby setting aside the decision of the Delhi High Court.

“The impugned order of the High Court is set aside and this appeal is allowed. All the aforesaid four agreements and the parties thereon are referred to arbitration. By notice dated 13.02.2016, appellants have nominated Justice Sujata Manohar, former Judge of the Supreme Court of India as their Arbitrator. We leave it open to the parties as to the choice of the Arbitrator. If the parties are not in a position to arrive at consensus as to the Arbitrator, the parties shall approach the appropriate High Court for appointment of the Arbitrator”, the Court ruled.

The Court also held that the appellants shall be jointly and severely liable to pay the arrears of lease rent and also to pay the future lease rent for the equipments.  Such payment of lease rent shall, however, be subject to the final outcome of arbitration proceedings.

Senior Advocate Kapil Sibal appeared for Abhishek Manu Singhvi, while Senior Advocate Shanti Bhushan and advocate Kamini Jaiswal appeared for the appellants.

The case is an appeal against a decision of the Delhi High Court on whether a dispute between Ameet Lalchand Shah and Rishabh Enterprises (which is AM Singhvi’s proprietorship concern) should be referred to arbitration or not. The case relates to four agreements between Rishabh Enterprises and three other companies. Three of the four agreements had arbitration clauses.

Disputes arose between Rishabh Enterprises and one of the companies, Dante. This was sought to be referred to arbitration. Rishabh Enterprises and its sole proprietor – Dr. Abhishek Manu Singhvi – preferred a suit before the Delhi High Court, making various allegations against the companies.

When notice was issued to the companies by Rishabh Enterprises, they contended that all agreements have to be treated as part of one transaction and are, therefore, arbitrable in accordance with the express provisions contained in the three agreements.

Rishabh Enterprises resisted the same contending that the suit was based upon allegations of serious fraud, committed jointly and severally by the companies, and that these issues were not arbitrable, but rather have to be decided by the civil courts.

It was further argued by Singhvi’s company that the existence of an arbitration clause in some of the agreements could not per se drag the dispute arising out of the principal agreement into arbitration, when no such stipulation was agreed to by the parties.

The single judge bench of the Delhi High Court ruled in favour of Rishabh and Singhvi. This led to an appeal before a Division Bench of Justices S Ravindra Bhat and IS Mehta. The Division Bench agreed with the decision of the single judge and dismissed the appeal, whereupon the companies preferred an appeal to the Supreme Court.

In the Supreme Court, at least four judges – Justices DY Chandrachud, NV Ramana, Rohinton Nariman and Sanjay Kishan Kaul – had recused from the case.

Read the judgment below.