In Brief
Two Indian companies—Venture Global Engineering and Satyam Computer Services—entered into a joint venture in 1999 governed by an agreement that included an arbitration clause. In 2006, an arbitrator awarded in Satyam's favour, directing Venture to transfer its 50% shareholding at book value. Venture challenged the award in Indian courts. In January 2009, Satyam's chairman confessed that Satyam had inflated balance sheets by Rs. 7,080 crore over years. The Supreme Court, with one dissent, held that Satyam's fraud and suppression of material facts had a causative link to the arbitral proceedings and constituted grounds to set aside the award under public policy. Justice Sapre held the award void as procured through fraud. Justice Chelameswar, dissenting, found the fraud findings lacked proper evidentiary foundation. The matter was referred to a larger bench due to the divergence of opinions.
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