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National Projects Construction … vs Royal Construction Co. Pvt. Ltd. on 10 October, 2017

2. On the basis of the aforesaid pleas, the plaintiff, in this suit, has

sought the reliefs of, i) declaration that the arbitral award dated 10 th

August, 2002 is vitiated by fraud and consequently null and void, non

est in law, inoperative and incapable of being enforced; ii) direction to

the defendant to refund to the plaintiff the amount of Rs.1.50 crores

along with interest of 18% per annum; and, iii) permanent injunction

restraining the defendant from executing the arbitral award dated 10th

August, 2002.

CS (Comm) No.188/2017 Page 4 of 26
3. It is the contention of the plaintiff in the plaint, i) that the

arbitral award aforesaid is premised upon fraudulent transactions and

is informed and motivated by corruption between Mr. Mool Chand

Jain, Managing Director of the defendant and officers of the plaintiff,

as has been held in the criminal case; ii) that in this manner pecuniary

loss has been caused to the plaintiff; iii) that the arbitral award has

been obtained by suppressing material facts from the Arbitral

Tribunal; iv) that the conviction of Mr. M.C. Jain, Managing Director

of the defendant and ex-officials of the plaintiff relate to a substantial

component of arbitral proceedings particularly the Counterclaim No.1

therein of the plaintiff and which was decided against the plaintiff; v)

that the conviction aforesaid is based on fraudulent suppression,

concealment and misrepresentation in relation to two critical

documents, being letters dated 25th November, 1983 and 30th

November, 1985; vi) that “by reason of conviction in criminal

proceedings in relation to the same contract / the agreement that was

the subject matter of the arbitration proceedings, the higher

evidentiary threshold of proof beyond reasonable doubt has been made

and as a result, the lower evidentiary threshold of proof of balance of

CS (Comm) No.188/2017 Page 5 of 26
probabilities applied in the arbitral proceedings is no longer

sustainable”; vii) that “as a result of the criminal conviction of the

accused persons in relation to the same contract, the award granting

the civil claim is no longer valid”; viii) that notwithstanding the

decisions rendered in OMP No.374/2002, the arbitral award being

vitiated by fraud is liable to be declared as null and void, non est in

law, inoperative and incapable of being enforced.

Source: Indian Kanoon

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