Before
THE HON’BLE HIGH COURT OF DELHI, NEW DELHI
APPLICATION No _____/2013
Athletica Ganges……………………...………………….………………………... Petitioner
v.
Government of India.………………………...………………............................ Respondent
With
CONTEMPT PETITION No _____/2013
Athletica Ganges………………………………………………………………….Petitioner
v.
Government of India …………………………...…………..….………..……… Respondent
-MEMORANDUM for THE RESPONDENT-
-Table of Contents-
-Respondent-
TABLE OF CONTENTS
Table of Contents ........................................................................................................................... I
Index of Abbreviations ................................................................................................................ II
Index of Authorities .................................................................................................................... III
Statement of Jurisdiction............................................................................................................VII
Statement of Facts .................................................................................................................... VIII
Questions Presented .................................................................................................................... XI
Summary of Pleadings ...............................................................................................................XII
Pleadings and Authorities ........................................................................................................ - 1 1.
THE RESPONDENT IS JUSTIFIED IN RESCINDING THE CONTRACT AND INVOKING
ARBITRATION: ..................................................................................................................... - 1 1.1 The Petitioner has failed to make necessary disclosures to the Respondent: ........... - 1 1.2 The Petitioner has been involved in Crimes of Financial Impropriety: .................... - 2 1.3 The Respondent has not violated the Company’s trade secret rights: ...................... - 4 2
THE ARBITRAL AWARD IS NOT LIABLE TO BE SET ASIDE: .......................................... - 4 2.1 The Petitioner has accepted the jurisdiction of the Arbitrator: ................................. - 5 2.2 The Arbitrator is the sole judge of quality and quantity of Evidence submitted: ..... - 6 2.3 The Arbitrator’s view is in keeping with the Public Policy of India: ....................... - 7 -
3
THE RESPONDENT IS NOT GUILTY OF CIVIL CONTEMPT OF COURT. ......................... - 13 -
4.
THE RESPONDENT IS NOT LIABLE FOR PERJURY. ...................................................... - 15 -
Prayer ..................................................................................................................................... - 17 -
-MEMORANDUM for THE RESPONDENTI
-Index of Abbreviations-
-Respondent-
INDEX OF ABBREVIATIONS
§
:
Section
§§
:
Sections
¶
:
Paragraph
¶¶
:
Paragraphs
A.P.
:
Andhra Pradesh
A.C.
:
Appellate Cases
AIR
:
All India Reporter
Anr.
:
Another
Bom.
:
Bombay
Cri.L.J
:
Criminal Law Journal
K.B.
:
King’s Bench
Mad.
:
Madras
n.
:
Note
Ors.
:
Others
MMDR
:
Mines and Minerals (Regulation
and Development) Act, 1957
SC
:
Supreme Court
SCC
:
Supreme Court Cases
Sd/-
:
Signed
Supp.
:
Supplementary
U.P.
:
Uttar Pradesh
U.S.
:
United States
-MEMORANDUM for THE RESPONDENTII
-Index of Authorities-
-Respondent-
INDEX OF AUTHORITIES
Cases
1974] AC 113...................................................................................................................... - 11 A.G. v. Walt Hamstow, UDC (1895) 11 TLR 533 .............................................................. - 15 Adikanda Swain v. Emperor, AIR 1947 Pat 251, p 542; Kali Shankar Chatterjee v. Sarat
Chandra Dey, (1977) Cal HCN 538 ............................................................................... - 17 All India Anna Dravida Munnetra Kazhagam v. l.K. Tripathi, (2009) 5 SCC 417 ............ - 15 Asgarall v. Emperor AIR 1942 Nag 80 .............................................................................. - 16 Ashish Kumar Kundu v. A.K.Tandon, 1994 (4) SLR 319 ................................................... - 16 Attorney General v. Guardian Newspapers Ltd [1988] AII ER 545 .................................. - 11 Babu Ram Gupta v. Sudhir Bhasin, AIR 1979 SC 1582 .................................................... - 14 Badat & Co v. East India Trading Co, AIR 1964 SC 538 ................................................. - 13 Bhagwati Foundation v. Commissioner MCD, Writ Petition (C) Nos. 146 ......................... - 2 BSNL vs. BWL Industries Pvt. Ltd., O.M.P. 415/2003 ......................................................... - 7 BWL Ltd. v. MTNL, 2007 (4) ARB LR 398 (Delhi) ............................................................. - 8 Castrol Australian Pty Ltd v. EmTech Associated Pty Ltd, (1980) 51 FLR 184 ................ - 11 Coco v. A.N. Clark Ltd, [1969] RPC 41................................................................................ - 4 Dharmavir Singh & Ors. v. Smt. Navraj Sindhu, 1997 AIHC 259 ..................................... - 15 Edpuganti Bapanaiah v. Sri K.S.Raju & Ors, 2007 AP High Court, Contempt Case No.915 of
2002................................................................................................................................. - 16 Ganga Retreat & Towers Ltd. v. State of Rajasthan, (2003) 12 SCC 91 ............................. - 2 House of Spring Gardens Point Blank, [1983] FSR 213 ...................................................... - 4 In the Matter of the Application of Federation Internationale de Basketball for a Subpoena
Pursuant 28 U.S.C.S 1782 ............................................................................................. - 10 -MEMORANDUM for THE RESPONDENTIII
-Statement of Jurisdiction-
-Respondent-
Initial Services Ltd v. Pueterils, [1968] 1 QB 396.............................................................. - 11 Konrad Wiedemann Gmbh v. Standard Castings Pvt. Ltd, [1985] (10) IPLR 243............... - 4 Krishna Bhagya Jala Nigam Ltd. v. Harishchandra Reddy, AIR 2007 SC 817................... - 6 M.P. Sharma v. Satish Chandra, AIR 1954 SC 300 ........................................................... - 11 Moorgate Tobacco Co Ltd v. Philips Morris Ltd, [1991] AII ER 341 ............................... - 11 Municipal Corporation of Delhi v. Jagan Nath Ashok, (1987) 4 SCC 497 ............... - 7 -, - 13 N., J., Y., W., v. FINA, CAS 98/208 ...................................................................................... - 8 Narayana Panicker v. The Sub – Divisional Magistrate, Fort Coshin & Ors, 1979 Ker LT
346................................................................................................................................... - 15 Nisha Kanta Roy Choudhary v. Smt. Saroj Bashini Goho, AIR 1948 Cal 294 (DB) ......... - 14 ONGC v. Saw Pipes, (2003) 5 SCC 705 ............................................................................... - 7 Padarath Singh v. Rattan Singh, (1920) Pat 419 ................................................................. - 16 Pooran Mal v. Director of Inspection (Investigation), (1974) 1 SCC 345, 364 ................. - 11 Queen v. Ahmed Ally, 11 WR 25, 27 ................................................................................. - 16 R.M. Malkani v. State of Maharashtra, (1973) 1 SCC 471 ................................................ - 11 R.S. Joshi v. Ajit Mills Ltd, (1977) 4 SCC 98 ....................................................................... - 3 Rashtriya Ispat Nigam v. Dewan Chand Ram Saran, (2012) 5 SCC 306 ................. - 5 -, - 12 Ratansi Daya v. Emperor, AIR 1916 Sind 70 (2) ............................................................... - 16 Renusagar Pvt. Co. Ltd. v. General Electric Co., 1994 Supp (1) SCC 644 ......................... - 7 S C Gupta v. Emperor, AIR 1924 Rang 17......................................................................... - 16 S.N. Malhotra v. Airport Authority of India, 2008 (2) ARB LR 76 (Delhi) ......................... - 6 S.R. Bommai v. Union of India, (1994) 3 SCC 1 ................................................................ - 16 Sachindra Nath Panja v. N.L. Basak, Principal Secretary, Govt of West Bengal, 2004 (4)
CHN 602 ......................................................................................................................... - 15 Saltman Eng'g Co. Ltd. v. Campbell Eng'g Co. Ltd., [1948] 65 RPC 203 ........................... - 4 -MEMORANDUM for THE RESPONDENTIV
-Statement of Jurisdiction-
-Respondent-
Shiv Raman Gour v. Madan Mohan Kanda, (1990) Cr LJ 1033 ........................................ - 16 Shyni Varghese v State (Govt. of NCT of Delhi), (2008) 147 DLT 691 (Del) .................... - 11 State (NCT of Delhi) v. Navjot Sandhu, (2005)11 SCC 600.............................................. - 11 State of M.P. v.Ramesh C.Sharma, (2005) 12 SCC 628 ..................................................... - 11 State of Uttar Pradesh v. Allied Constructions, (2003) 7 SCC 396 .......................... - 5 -, - 12 Sudarsan Trading Co. v. Government of Kerala, (1989) 2 SCC 38 ..................................... - 5 Thirupathy Kumar Khemka v. CIT, (2007) 210 CTR (Mad) 287 ......................................... - 3 Thomas Marshall v. Guinle, [ 1979] 1 Ch 237 ..................................................................... - 4 United States v. Conte, (N.D. Cal. 2004) .............................................................................. - 9 USADA v. G., CAS 2004/O/649 ........................................................................................... - 9 USADA v. M. and IAAF, CAS 2004/O/645 .......................................................................... - 9 Statutes
Indian Penal Code, 1860 ..................................................................................................... - 16 The Arbitration and Conciliation Act, 1996 ......................................................................... - 5 The Arbitration And Conciliation Act, 1996 ...................................................................... - 13 The General Clauses Act, 1971 .......................................................................................... - 16 The Indian Evidence Act, 1872 ................................................................................ - 11 -, - 13 The Prevention of Money Laundering Act, 2002 ................................................................. - 3 Rules
The 2012 Prohibited List International Standard, The World Anti-Doping Code ............... - 9 The Anti-Doping Rules, The National Anti Doping Agency, India ..................................... - 9 The World Anti-Doping Code, 2009 .................................................................................... - 8 8
-MEMORANDUM for THE RESPONDENTV
-Statement of Jurisdiction-
-Respondent-
James A.R. Nafziger, ‘Circumstantial Evidence of Doping: BALCO and Beyond’, 16 Marq.
Sports L. Rev. 45 (2005) ................................................................................................... - 9 OP Malhotra and Indu Malhotra, ‘The Law and Practice of Arbitration and Conciliation’,
Lexis Nexis Butterwoerths Wadhwa, Gurgaon (2006) ..................................................... - 5 Patrick K. Thornton, ‘Sports Law’, Jones and Bartlett Publishers, (Boston) (2011) .......... - 10 9
Henry Campbell Black, et.al, Black’s Law Dictionary, 6th Edition, p.1079, St. Paul Minn.
West Publishing Company, 1990. ................................................................................... - 14 -
-MEMORANDUM for THE RESPONDENTVI
-Statement of Jurisdiction-
-Respondent-
STATEMENT OF JURISDICTION
The Respondent humbly submits this memorandum in response to two petitions filed
before this Honourable Court, and clubbed together by the Honourable Court. The first
application invokes its territorial ordinary original civil jurisdiction under section 34(1) of
the Arbitration And Conciliation Act, 1996 read with section 5(1) and section 5(2) of The
Delhi High Court Act, 1966. The second Contempt Petition invokes its original jurisdiction
under section 11 of The Contempt of Court Act, 1971. It sets forth the facts and the laws on
which the claims are based.
-MEMORANDUM for THE RESPONDENTVII
-Statement of Facts-
-Respondent-
STATEMENT OF FACTS
I.
Pan Atheletica Inc. is a company incorporated in the United States of America with the
purpose of providing a spectrum of services in the Sports Industry.. Pan Athletica set up a
research wing to investigate the local flora and fauna in the nearby Amazon forests in Brazil.
The company then set-up a research station near the Indo-Nepal border after incorporating a
subsidiary in Nepal (Athletic Everest) in 1989. Till now Pan Athletica did not have a food
and nutrition department.
In 1991, the company signed a local football team in Brazil, Desvalidos which, did very well.
Eventually 66% percent of the team members went on to become a part of the national
football team. Beginning in 1992 Athletica Machu signed them for a decade. Between 1992
and 2002, Brazil won the World cup twice and reached the final once. By now the company
had a fully functional food department.
II.
The means and methods employed by the company were kept completely secret and the
players were made to sign a 99 year non disclosure agreement. In 2000, Mr. Sumanto Hajela,
the Indian Minister for Sports and International Affairs, approached Mr. Laurie to help out
with the Indian Hockey Team. Pan Athletica incorporated a wholly owned subsidiary in the
Cayman Islands (Athletica Atlantica), and Athletica Ganges served as a wholly owned
subsidiary of Athletica Atlantica in India . Following negotiations between Pan Athletica and
the Indian Government (hereinafter, ‘Government’), wherein all the government’s concerns
were taken care of, the parties entered into a contract on an ‘as is where is basis’ through
‘Athletica Ganges’ (hereinafter, ‘Company’), in 2003. The Contract contained an Arbitration
Clause. During the negotiations, the Company made it clear that as per this contract, the
-MEMORANDUM for THE RESPONDENTVIII
-Statement of Facts-
-Respondent-
government would not be allowed to compel the Company to reveal its means and methods.
Along with this contract, members of the Indian Hockey Team were made to sign an
agreement containing a non-disclosure clause. The Indian Hockey Team fared well between
2002 and 2012.
III.
In 2003, the Brazilian Government did not re-sign with Athletica Machu rather an enquiry
was launched to look into the practices of the company and the enquiry lasted over five years.
In February 2012, during the celebration in an after party, a drunk member of the Indian
Hockey contingent revealed the success to the magic biscuits the company gave. This caused
uproar in the country. A high level enquiry was launched by the Government, while The
Indian Hockey Federation engaged the services of a private detective company. The Indian
Government also invoked the Arbitration clause and served a notice on the company.
IV.
Athetica Ganges filed a petition for interim relief, to stop the Government from breaking the
contract. The Delhi High Court admitted the petition and during the course of proceedings,
the Addl. Solicitor General who appeared before the Court gave an undertaking that pending
proper resolution of the issue it would not break the contract. In the meantime the Brazillian
enquiry was published, and relying on that a local Brazillian Court held Atheletica Machu to
be guilty of environmental violations and paying several bribes. The United States
commenced investigations under the Foreign Corrupt Practices Act, 1977.
Bowing to increasing global pressure, the Indian Government rescinded the contract and
terminated all of the Company’s contractual obligations.
V.
-MEMORANDUM for THE RESPONDENTIX
-Statement of Facts-
-Respondent-
In the ongoing Arbitration proceedings, the Arbitrator took note of the above facts along with
Brazilian judgment, the intimation of the U.S. investigations, the WADA guidelines and
quotes all aspects of Indian law. The Government was also able to present the report of the
private investigators, which relied on several emails which was privileged communication
and excerpts of the Brazilian judgment. The Government also produced the affidavits of the
player, Sushant Singh Lakkarbagha. Amongst the evidence submitted for arbitration, there
were a large number of e-mails which dealt with very sensitive information about the formula
of the food and nutrition products administered to the athletes, information of bank A/c’s, and
certain communication which were supposed to be lawyer-client privileged information. All
these e-mails were forwarded by an e-mail id aceventura@panatheletica.us. The company
went on record to say that there was no person in the employ of the company by the name of
Ace Ventura. In the affidavit submitted by the athlete, he spoke at length about the procedure
of the training and the diet. The Company raised many objections to the procedure of the
conduct of the proceedings and the rules to evidence attached, but each objection was
rejected. The Company also filed a Civil Contempt Petition against the Government.
VI.
At the end of the arbitration, the award held that the company was indeed engaged in doping
and that it had both illegal and unethical means to administer the team. The arbitrator
awarded unliquidated damages to the tune of $1 billion dollars to the Government. Aggrieved
by this award, the Company approached the Delhi High Court in the instant petition. The
company submitted that the entire arbitration was a farce as information obtained by the RTI
indicated that the decision to break the contract was already taken by the minister even before
the interim relief application.
-MEMORANDUM for THE RESPONDENTX
-Questions Presented-
-Respondent-
QUESTIONS PRESENTED
The following questions are presented before the court in the instant matter-
1. WHETHER THE RESPONDENT IS JUSTIFIED IN RESCINDING THE CONTRACT AND INVOKING
ARBITRATION.
2. WHETHER THE ARBITRAL AWARD IS LIABLE TO BE SET ASIDE.
3. WHETHER THE RESPONDENT IS GUILTY OF CIVIL CONTEMPT OF COURT.
4. WHETHER THE RESPONDENT HAS COMMITTED THE OFFENSE OF PERJURY.
-MEMORANDUM for THE RESPONDENTXI
-Summary of Pleadings-
-Respondent-
SUMMARY OF PLEADINGS
1. THE RESPONDENT
IS JUSTIFIED IN
RESCINDING
THE
CONTRACT
AND INVOKING
ARBITRATION:
The Respondent submits that the contract was rescinded due to there being misrepresentation
of material facts by Athletica Ganges ( “The Company”), as well as the commission of
offences. This gives rise to a dispute with regard to the contract, and hence the Respondent is
justified in invoking arbitration. This submission is threefold: Firstly, the Company did not
make necessary disclosures. Secondly, the Company has been involved in financial
impropriety. Thirdly, the Respondent has not violated the Company’s trade secret rights.
2. THE ARBITRAL AWARD IS NOT LIABLE TO BE SET ASIDE:
It is humbly submitted that the Award is not liable to be set aside under the provisions of
Section 34 of the A&C Act. This submission is threefold: Firstly, The Petitioner has accepted
the jurisdiction of the Arbitrator. Secondly, The Arbitrator is the sole judge of the evidence.
Thirdly, The Arbitrator’s view is in keeping with the Public Policy of India.
3. WHETHER THE RESPONDENT IS GUILTY OF CIVIL CONTEMPT OF COURT.
It is submitted to the Hon’ble Court that the respondent is not guilty of civil contempt of
Court. This assertion is twofold. Firstly, the impugned order is a consent decree and hence
non compliance of order does not amount to contempt of court. Secondly, the respondent has
not committed the offence of contempt even if the decree has binding nature.
4. WHETHER THE RESPONDENT GUILTY OF PERJURY.
It is submitted to the Hon’ble Court that the respondent has not committed the act of perjury.
Respondent has not submitted any false evidence there is also a lack of Intention on the part
of the respondent. Hence respondent is not guilty of perjury.
-MEMORANDUM for THE RESPONDENTXII
-Pleadings and Authorities-
-Respondent-
PLEADINGS AND AUTHORITIES
1. THE RESPONDENT
IS JUSTIFIED IN
RESCINDING
THE
CONTRACT
AND
INVOKING
ARBITRATION:
The Respondent submits that the contract was rescinded due to there being misrepresentation
of material facts by Athletica Ganges (hereinafter, “The Company”) in entering into the
agreement, as well as the commission of offences relating to financial impropriety. This gives
rise to a dispute with regard to the contract, and hence the Respondent is justified in
submitting the matter to the arbitrator. This submission is threefold: Firstly, the Company did
not make necessary disclosures. Secondly, the Company has been involved in financial
impropriety. Thirdly, the Respondent has not violated the Company’s trade secret rights.
1.1 The Petitioner has failed to make necessary disclosures to the Respondent:
It has been held by the Supreme Court1 that “a representation is deemed to have been false
and therefore a misrepresentation, if it was at the material date false in substance and in fact.”
The Court also observed that Section 17 of the Contract Act defines fraud as act committed
by a party to a contract with intent to deceive another. Finally, the Court relied on the
landmark judgement on the issue in Derry v. Peek2 to determine that a “fraud is proved when
it is shown that a false representation has been made (1) knowingly, or (2) without belief in
its truth, or (3) recklessly, careless whether it be true or false.”
The Respondent humbly submits that as per the contract negotiations entered into by the two
parties, the Government had clearly expressed its concerns regarding the “episodes” in Brazil.
1
Shrisht Dhawan v. M/s. Shaw Brothers, (1992) 1 SCC 534, at ¶ 20.
2
Derry v. Peek, (1889) 14 App Cas 337.
-MEMORANDUM for THE RESPONDENT-1-
-Pleadings and Authorities-
-Respondent-
To facilitate contract negotiations, the Government had also asked the Company to submit
any pertinent information on these developments and that the same shall be considered under
the necessary disclosures to be made in the matter. To this the Company replied on 11-032003 that nothing with regard to the issue was ‘concrete’. It is also established fact that the
Brazilian Government had decided not to pursue an extension of the Petitioner’s contract
after 2002, and had in fact launched an investigation. Hence, the Respondent submits that the
Petitioner’s stance that nothing with regard to this issue was ‘concrete’ must be construed as
a fraudulent misrepresentation as per Section 17 of the Contract Act.
Moreover, even in case the contract were to be looked at by the Respondent on an ‘as is
where is basis’, the accepted legal principle is that “as is where is” cannot be extended to
include even large discrepancies.3 Hence, even if the Respondent in the instant case did enter
into the contract on an ‘as is where is basis’, it did not mitigate the obligation of the Petitioner
to act responsibly.4 The Respondent asserts that enquiries relating to economic crimes,
environmental law, and doping in Brazil did amount to ‘large discrepancies’ that the
Petitioner was obliged to inform the Government about as per the above legal precedent.
The Respondent avers that, given the fraudulent misrepresentation on the part of the
Petitioner, the Respondent would have the option to rescind the contract and seek damages
through arbitration. This falls in line with the reasoning of the Supreme Court.5
1.2 The Petitioner has been involved in Crimes of Financial Impropriety:
3
Manju Gupta v. Delhi Development Authority, 103 (2003) DLT 776, at ¶ 13.
4
Bhagwati Foundation v. Commissioner MCD, Writ Petition (C) Nos. 146, at ¶ 415.
5
Ganga Retreat & Towers Ltd. v. State of Rajasthan, (2003) 12 SCC 91, at ¶ 24.
-MEMORANDUM for THE RESPONDENT-2-
-Pleadings and Authorities-
-Respondent-
The Prevention of Money Laundering Act6 lays down that a money laundering offender
‘directly or indirectly attempts to indulge in or knowingly assists in or is actually involved in
any process or activity connected with the proceeds of crime and projecting it as untainted
property.’ Also, it has been established by Indian courts7 that the burden of proof required to
prove mens rea in economic offences is not that of ‘beyond reasonable doubt’. Instead, courts
have imposed a burden of no fault/ strict liability in cases dealing with economic offences.
The Respondent submits that the Petitioner’s parent company has in the instant case, been
held guilty of perpetrating a range of illegal activities in Brazil, including violations of
Environmental Law and Bribery.8 Further, it is asserted by the Respondent that not only has
the parent company established a holding company in the Cayman Islands; but in a letter
dated 11-03-2003, the promoter of the Company stated, “You see, we wanted to be sure that
all the financial transactions of the Company are discreet and handled properly, if you know
what we mean.”9 Finally, it is noteworthy that the Petitioner Company has no assets located
in India10, so it can be reasonably inferred that the capital for its transactions is routed to it
through the Cayman Islands Holding Company. Based on the above facts, the Respondent
submits that the Petitioner has been involved in money laundering, and since activities
contrary to Indian law are being committed in pursuance with obligations arising out of the
6
The Prevention of Money Laundering Act, 2002, § 3.
7
Thirupathy Kumar Khemka v. CIT, (2007) 210 CTR (Mad) 287, at ¶ 4.6; R.S. Joshi v. Ajit Mills Ltd, (1977) 4
SCC 98, at ¶ 20.
8
Fact Sheet, at ¶ 12.
9
Fact Sheet, Annexure Two.
10
Fact Sheet, Annexure Two.
-MEMORANDUM for THE RESPONDENT-3-
-Pleadings and Authorities-
-Respondent-
‘standard contract’11, it is the Respondent’s submission that the Government is entitled to
rescind the contract, and refer contractual disputes to the Arbitrator.
1.3 The Respondent has not violated the Company’s trade secret rights:
Information, including a formula, pattern, compilation, program device, method, technique or
process can constitute trade secrete if it qualifies three other criteria.12
Secondly, the
information has commercial value. Thirdly, it has been subject to responsible steps under the
circumstances by the person lawfully in control of the information, to keep it secret. Once a
trade secret is available in public domain then it has lost the status as well as the protection.13
In the instant case, the information that was there in the emails that were produced in front of
the arbitrator did not constitute trade secret as that information was available in the public
domain. After the Brazilian judgement, the training, food and nutrition used by the company
has come to public domain through the judgement and hence lost the status of trade secret.
Therefore the government has not breached the confidence of the company. By implication,
the government has not breached the contract.
2
THE ARBITRAL AWARD IS NOT LIABLE TO BE SET ASIDE:
This Court has recognized that ‘the law with respect to challenge to an Award under
Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter, “The A&C Act”) is
now well settled. An Award can be challenged only if the same is against the contractual
provisions or is illegal or is so perverse that it shocks the judicial conscience.’ It is
11
Fact Sheet, Annexure Two.
12
Indian Innovation Bill, Section 2(3); Coco v. A.N. Clark Ltd, [1969] RPC 41; Thomas Marshall v. Guinle, [
1979] 1 Ch 237; House of Spring Gardens Point Blank, [1983] FSR 213.
13
Konrad Wiedemann Gmbh v. Standard Castings Pvt. Ltd, [1985] (10) IPLR 243; Saltman Eng'g Co. Ltd. v.
Campbell Eng'g Co. Ltd., [1948] 65 RPC 203.
-MEMORANDUM for THE RESPONDENT-4-
-Pleadings and Authorities-
-Respondent-
noteworthy that laws governing Arbitration, internationally14 as well as in India, tilt the
balance in favour of finality of the Arbitral Award. This is in recognition of the ‘Principle of
Party Autonomy’ that governs the law of Arbitration.15 Further, it is submitted by the
Respondent that it is a well established principle of law that while adjudicating a petition to
set aside an arbitral award, the Court cannot substitute its own evaluation instead of that of
the Arbitrator.16 Once it is found that the view of the arbitrator is a plausible one, the court
shall refrain itself from interfering with the award.17
Based on these presumptions, the Respondent submits that the Arbitral Award is not liable to
be set aside under the provisions of Section 34 of the A&C Act. This submission of the
Respondent is a threefold one: Firstly, The Petitioner has accepted the jurisdiction of the
Arbitrator. Secondly, The Arbitrator is the sole judge of the quality and quantity of evidence.
Thirdly, The Arbitrator’s view is in keeping with the Public Policy of India.
2.1 The Petitioner has accepted the jurisdiction of the Arbitrator:
The A&C Act lays down that an arbitral award may be set aside if the award deals with a
dispute not contemplated or not falling within the terms of the submission to arbitration.18
Section 16 of the A&C Act further lays down a legislative acceptance of the ‘kompetenz-
14
UNCITRAL Model Law, Article 5.
15
OP Malhotra and Indu Malhotra, ‘The Law and Practice of Arbitration and Conciliation’, Lexis Nexis
Butterwoerths Wadhwa, Gurgaon (2006), at pg. 1086.
16
Sudarsan Trading Co. v. Government of Kerala, (1989) 2 SCC 38, at ¶ 31.
17
State of Uttar Pradesh v. Allied Constructions, (2003) 7 SCC 396, at ¶ 4; Rashtriya Ispat Nigam v. Dewan
Chand Ram Saran, (2012) 5 SCC 306, at ¶29.
18
The Arbitration and Conciliation Act, 1996, § 34(2)(a)(iv).
-MEMORANDUM for THE RESPONDENT-5-
-Pleadings and Authorities-
-Respondent-
kompetenz’ principle, thereby declaring the Arbitral Tribunal competent to rule on its own
jurisdiction.19
In S.N. Malhotra v. Airport Authority of India20, a division bench of this Court held that
Sections 16 and 34 of the A&C Act need to be read together in dealing with a petition for
setting aside of an arbitral award. The Court in this case relied on precedent laid down by the
Supreme Court21 to establish that in the absence of an objection Section 16 of the A&C Act
being raised before the arbitral tribunal regarding the tribunal’s jurisdiction; the party waives
the right to make such an appeal against the tribunal’s jurisdiction before the Court under
Section 34 of the A&C Act.
In the above mentioned cases, the parties seeking to set aside the award had not raised
objections to the arbitral tribunal’s jurisdiction before the tribunal itself as per Section 16 of
the A&C Act. In fact, in these cases, these parties had submitted to arbitration, and had
directly raised the jurisdictional challenge before the Court. In such a scenario, Indian Courts
have held that the parties have waived their right to raise a jurisdictional challenge. In this
case, Athletica Ganges has not raised any jurisdictional challenge before the arbitrator
himself. Thus, it is submitted by the Respondent that the Petitioner has waived its right to
challenge the Arbitrator’s jurisdiction. Hence, the petition to set aside the award under
Section 34(2)(a)(iv) should not be entertained.
2.2 The Arbitrator is the sole judge of quality and quantity of Evidence submitted:
19
The Arbitration and Conciliation Act, 1996, § 16.
20
S.N. Malhotra v. Airport Authority of India, 2008 (2) ARB LR 76 (Delhi), at ¶ 8.
21
Krishna Bhagya Jala Nigam Ltd. v. Harishchandra Reddy, AIR 2007 SC 817, at ¶ 7.
-MEMORANDUM for THE RESPONDENT-6-
-Pleadings and Authorities-
-Respondent-
In BSNL v. BWL Industries Ltd.22 the Court noted that the A&C Act of 1996 has gone a step
further than the Act of 1940 in empowering the arbitrator. It was observed that the arbitrator
shall be the sole judge of the quality and quantity of evidence, and that the Court shall not be
drawn into re-appraising the evidence. It has been reasoned that the parties have selected their
own forum and that, in doing so, they have conceded the power of appraisement of the
evidence to the arbitrator.23
In the instant case, the parties had agreed that the Procedure of arbitration would be decided
during the arbitration. Furthermore, the Petitioner’s claims with regard to the rules of
evidence have already been looked into and rejected by the arbitrator.24 Hence, it is submitted
that the Arbitrator has already considered the quality and quantity of evidence in determining
the arbitral award. The Respondent submits that the aforementioned legal principles limit the
scope of the Court in appraising evidence.
2.3 The Arbitrator’s view is in keeping with the Public Policy of India:
In ONGC v. Saw Pipes25 (hereinafter, “The Saw Pipes Case”), it was held by the Court that
in addition to the grounds laid down in the Renusagar Case26, the Court can set aside an
award when it finds that the award was ‘patently illegal’.
In the Saw Pipes judgement, the Court had held meaning of Patent Illegality to mean “the
illegality must go to the root of the matter and if illegality was of a trivial nature, it cannot be
22
BSNL vs. BWL Industries Pvt. Ltd., O.M.P. 415/2003, at ¶ 5.
23
Municipal Corporation of Delhi v. Jagan Nath Ashok, (1987) 4 SCC 497.
24
Fact Sheet, at ¶ 14.
25
ONGC v. Saw Pipes, (2003) 5 SCC 705.
26
Renusagar Pvt. Co. Ltd. v. General Electric Co., 1994 Supp (1) SCC 644.
-MEMORANDUM for THE RESPONDENT-7-
-Pleadings and Authorities-
-Respondent-
held that the award is against the public policy. The award could be set aside if it is so unfair
or unreasonable that it shakes the conscience of the Court.”27
Moreover, since the Saw Pipes Case, the Courts in India have given a very restrictive
meaning to patent illegality, in an attempt to minimize the effect of the judgement. 28 In the
instant case, however, the Respondent submits that none of the conditions precedent are
satisfied. In order to substantiate this assertion, the Respondent shall deal with it in a twopronged manner. Firstly, The standard of proof required in cases of sports doping is not as
high as ‘proof beyond reasonable doubt’. Secondly, the evidence submitted before the
arbitrator makes the award a ‘plausible’ one, thereby negating the need for Court
interference.
2.3.1. The Burden of Proof to be discharged is one of ‘Comfortable Satisfaction’:
The Court of Arbitration in Sport, in its landmark decree in N., J., Y., W. vs. FINA29, held
that the standard of proof applicable in proving a Case of doping in sport is not the high
standard of ‘proof beyond reasonable doubt’ that is used in criminal jurisprudence, but
merely one that satisfies the allegations to the ‘Comfortable Satisfaction’ of the hearing body.
This standard of proof has also been adopted under the World Anti Doping Agency’s Code
(hereinafter, “the WADA Code”)30 in dealing with anti-doping rule violations. Moreover,
the standard has also been adopted in India by the revised Anti-Doping Rules of the National
27
Supra Note 25, at ¶ 16.
28
BWL Ltd. v. MTNL, 2007 (4) ARB LR 398 (Delhi).
29
N., J., Y., W., v. FINA, CAS 98/208, at ¶ 13.
30
The World Anti-Doping Code, 2009, at Article 3.1.
-MEMORANDUM for THE RESPONDENT-8-
-Pleadings and Authorities-
-Respondent-
Anti-Doping Agency31 (hereinafter, “the NADA Rules”), which have been adopted in
conformance with the WADA Code. Therefore, it is considered a rule of custom in
International Sports Law.32 In pursuance with this well established principle of sports law
jurisprudence, the Respondent has submitted the WADA guidelines and relevant aspects of
Indian law for perusal by the arbitrator33.
Based on the above law, the Respondent asserts that in adjudicating whether the award is
liable to be set aside on the grounds of it conflicting with the public policy of India, the Court
must look at the arbitral award through the prism of whether the burden of ‘Comfortable
Satisfaction of the hearing body (i.e. the arbitrator)’ has been discharged, and not whether the
allegations could be proved beyond reasonable doubt.
2.3.2 The Award, based on the evidence submitted, is a ‘plausible’ one:
The Respondent submits that the position of law in relation to evidence admissible under
cases pertaining to anti-doping rule violations, especially where the drug administered is
‘difficult to detect’, allows for the admissibility of Circumstantial evidence as opposed to
merely dope test results.34 Moreover, the WADA Code bans gene doping as a prohibited
practice under the 2012 Prohibited List, which has been accepted by the NADA. 35 Also, it is
31
The Anti-Doping Rules, The National Anti Doping Agency, India, at Article 3.1.
32
James A.R. Nafziger, ‘Circumstantial Evidence of Doping: BALCO and Beyond’, 16 Marq. Sports L. Rev. 45
(2005).
33
Factsheet at ¶ 14.
34
USADA v. G., CAS 2004/O/649; USADA v. M. and IAAF, CAS 2004/O/645; Indictment, United States v.
Conte, (N.D. Cal. 2004).
35
The 2012 Prohibited List International Standard, The World Anti-Doping Code, at M3.
-MEMORANDUM for THE RESPONDENT-9-
-Pleadings and Authorities-
-Respondent-
well known that gene doping, as has been carried out by the Petitioner in the instant case, is
difficult to detect.36
In the instant case, the Respondent submits that there is enough circumstantial evidence in the
form of documents, internal records of the company, and testaments given by the players to
corroborate the allegations against the company of committing anti-doping rule violations as
per Article 2 of the NADA Rules.37 In this light, it is submitted that the arbitrator’s findings
with regard to specific offences including trafficking38, and the administering or attempted
administering of performance enhancing drugs39 are justified. This view is further
substantiated by cases arising out of the ‘BALCO Controversy’, wherein the CAS and the US
District Court of Northern California relied on similar circumstantial evidence to establish
guilt of the parties.40
Thus, it is submitted by the Respondent that the arbitrator has carried out a just evaluation of
the evidence presented. This submission is dealt with under the following heads of evidence
that were administered in the arbitral proceedings:
a. Validity of the emails produced by the government.
Private interest of a party is not sufficient warrant for denial of application on the basis of
confidentiality.41 In Norwich Pharmacal Co v. Commissioners of Customs & Excise42, it was
36
Supra note 32.
37
The Anti-Doping Rules, The National Anti Doping Agency, India, at Article 2.
38
The Anti-Doping Rules, The National Anti Doping Agency, India, at Article 2.7.
39
The Anti-Doping Rules, The National Anti Doping Agency, India, at Article 2.8.
40
Supra note 34.
41
In the Matter of the Application of Federation Internationale de Basketball for a Subpoena Pursuant 28
U.S.C.S 1782 as cited in Patrick K. Thornton, ‘Sports Law’, Jones and Bartlett Publishers, (Boston) (2011).
-MEMORANDUM for THE RESPONDENT- 10 -
-Pleadings and Authorities-
-Respondent-
held that ‘public interest’ must be the criterion by which Equity determines whether it will
protect information which an individual claims as confidential.43
In the instant case, public interest of doing justice overweighs the confidentiality claim of the
petitioner. The emails form part of relevant facts and hence form documentary evidence in
order to attain justice in this case and therefore should be considered.
In Arguendo, Indian Evidence Act, 1872 permits ‘relevance’ of evidence as the only test of
admissibility of evidence.44 The Courts have taken a view that there is no law that excludes
evidence on the ground that it was obtained illegally.45 The Supreme Court has said that “It
will be wrong to invoke the supposed spirit of our Constitution for excluding such evidence.
It, therefore, follows that neither by invoking the spirit of our Constitution nor by a strained
construction of any of the fundamental rights can we spell out the exclusion of evidence
obtained on an illegal search.”46 The ‘privilege’ of the clients to the communication with
lawyer only extends to non disclosure by lawyer or any of his subordinates.47 This privilege
does not put a bar on consideration of the evidence if the same is procured by means other
than the lawyer or his subordinate.48
42
[1974] AC 113 at 189; Castrol Australian Pty Ltd v. EmTech Associated Pty Ltd, (1980) 51 FLR 184.
43
The same was also upheld in Attorney General v. Guardian Newspapers Ltd [1988] AII ER 545; Moorgate
Tobacco Co Ltd v. Philips Morris Ltd, [1991] AII ER 341; Initial Services Ltd v. Pueterils, [1968] 1 QB 396.
44
The Indian Evidence Act, 1872, § 5.
45
Shyni Varghese v State (Govt. of NCT of Delhi), (2008) 147 DLT 691 (Del); M.P. Sharma v. Satish Chandra,
AIR 1954 SC 300;State of M.P. v.Ramesh C.Sharma, (2005) 12 SCC 628; R.M. Malkani v. State of
Maharashtra, (1973) 1 SCC 471; State (NCT of Delhi) v. Navjot Sandhu, (2005)11 SCC 600.
46
Pooran Mal v. Director of Inspection (Investigation), (1974) 1 SCC 345, 364, para 23
47
The Indian Evidence Act, 1872, § 127
48
Id.
-MEMORANDUM for THE RESPONDENT- 11 -
-Pleadings and Authorities-
-Respondent-
In the given facts, the emails have been produced through illegal methods, however they still
constitutes evidence and are admissible in the court of law. The emails were produced in
front of the arbitrator by the private investigator. There is nothing in the fact sheet to support
that the lawyer disclosed it to him directly or indirectly. Therefore company cannot claim
protection against such evidence.
b. Validity of the foreign judgment produced by the government.
The arbitrator has exercised the discretion as to the laws of evidence. He has relied on the
foreign judgement correctly. The facts of the case when analysed clearly shows that the
company has used the same practices to enhance the performance of the players as done by
the subsidiary in Brazil. This can be construed from the fact that the company was importing
rare bacteria that was available in Amazon jungle and the one in the Himalayas to Nepal. The
research station in Nepal was used to fuse the DNA of the two and form a genetically
modified organism. Presumption lies in favour of the arbitral award49, so it must be assumed
that the arbitrator would have corroborated this information with the information of the
formula of food present in the emails. The arbitrator has relied on these evidences to award
damages to the government. Therefore it can be inferred that the Athletica Ganges has used
the same genetically modified bacteria and hence is liable for doping.
In Arguendo, a certified copy of a foreign judgment by the original legal keeper with a
certificate by the Indian Consul is admissible in the court of law.50 The presumption lies in
favour of the judgment if the opposition has not raised any objection as to its content.51
49
State of Uttar Pradesh v. Allied Constructions, (2003) 7 SCC 396, at ¶ 4; Rashtriya Ispat Nigam v. Dewan
Chand Ram Saran, (2012) 5 SCC 306, at ¶29.
50
The Indian Evidence Act, 1872, §. 78(6)
-MEMORANDUM for THE RESPONDENT- 12 -
-Pleadings and Authorities-
-Respondent-
In the given facts there is no objection raised as to the content of the relevant parts of the
judgment. Secondly, the facts are silent on the issue of it being certified. Hence the arbitrator
has correctly relied on the judgment.
c. Validity of the affidavit of the player.
Arbitrator is not bound by the law of evidence of India.52 Objection as to manner of adducing
evidence is a matter of procedure and it is an established principle that parties to arbitration
have selected their own forum and that in doing so, they have conceded the power of
appraisement of the evidence to the arbitrator.53 The affidavit in question gives corroborative
evidence of the relevant facts.54 In the given facts, the company has not challenged the
content of the affidavit. Therefore affidavit containing relevant facts should be taken into
account by the arbitrator as it gives relevant evidence as to the manner of doping and other
procedures taken up by the company for enhancing the performance of the players. Hence his
reliance on the affidavit is valid.
Based on all the above law, the Respondents submit that the arbitrator’s view is ‘plausible’,
and hence, not liable to be set aside.
3
THE RESPONDENT IS NOT GUILTY OF CIVIL CONTEMPT OF COURT.
It is submitted that the respondent is not guilty of contempt. This assertion is twofold. Firstly,
the order is a consent decree and hence non compliance of the order is not contempt of court.
51
The Indian Evidence Act, 1872, § 86 ; Badat & Co v. East India Trading Co, AIR 1964 SC 538
52
The Arbitration And Conciliation Act, 1996, § 19
53
Municipal Corporation of Delhi v. Jagan Nath Ashok, (1987) 4 SCC 497.
54
The Indian Evidence Act, 1872, § 156
-MEMORANDUM for THE RESPONDENT- 13 -
-Pleadings and Authorities-
-Respondent-
Secondly, the respondent has not committed the offence of contempt even if the decree has
binding nature.
3.1. The impugned order is a consent decree.
In a case of consent decree passed by a court, disobedience of the undertaking recorded in the
decree given by a party to the other does not amount to contempt.55 Consent decree is in the
nature of a solemn contract of the parties, made under the sanction of the court with a mutual
consent of the parties.56 In the given facts, the order of the court is formed by the consent of
the parties and is in nature of a contract to perform the terms of the contract with each other.
Therefore any disobedience of the said decree does not amount to contempt of court.
3.2. The respondent has not committed the offence of contempt even if the decree has
binding nature.
In Arguendo, The respondent has not committed the offence of contempt even if the decree
has binding nature. This assertion is three fold. Firstly, there was no wilful disobedience on
their part. Secondly, there was partial compliance with the order. Lastly, the subsequent
changes made it difficult to comply with the orders.
3.2.1. There was no ‘wilful’ disobedience.
There is no straight jacket formula for the meaning of ‘wilful’ and it differs from case to
case.57 The court has observed that ‘wilful’ means an act done voluntarily and intentionally
and with the specific intent to do something which a law forbids or with the intent to fail to
55
Nisha Kanta Roy Choudhary v. Smt. Saroj Bashini Goho, AIR 1948 Cal 294 (DB). Babu Ram Gupta v. Sudhir
Bhasin, AIR 1979 SC 1582.
56
Henry Campbell Black, et.al, Black’s Law Dictionary, 6th Edition, p.1079, St. Paul Minn. West Publishing
Company, 1990.
57
Sachindra Nath Panja v. N.L. Basak, Principal Secretary, Govt of West Bengal, 2004 (4) CHN 602.
-MEMORANDUM for THE RESPONDENT- 14 -
-Pleadings and Authorities-
-Respondent-
do something which law requires to be done.58 In the given fact situation, the respondent did
not voluntarily terminated the contract. From the given facts, it can be inferred that the
‘global pressure’ had forced the respondent to terminate the contract.
3.2.2. There was partial compliance on the part of the respondent.
Partial compliance of an order has been considered as a reason for holding that there was no
wilful violation.59 In the given case, the respondent upheld its responsibility till there was no
global pressure. Therefore, it clearly shows that there was no wilful violation and that the
respondent had complied with the order for some time resulting in partial compliance.
3.2.3. The subsequent changes made it difficult to comply with the orders.
If a party charged of contempt without fault on his part is unable to comply with the
undertaking then, there is no contempt.60 Concept of wilful disobedience and contempt does
not cover acts beyond one’s own power. This requires a situation in which the party is ‘not
able to’ comply with the order.61 Subsequent developments may create difficulties in
implementation and compliance of the order.62 In the instant case, the global pressure after
the order had created difficulties for the respondent to comply with the order. Hence it
humbly submitted that the respondent should not be held liable for civil contempt of court.
4. THE RESPONDENT IS NOT LIABLE FOR PERJURY.
58
All India Anna Dravida Munnetra Kazhagam v. l.K. Tripathi, (2009) 5 SCC 417.
59
Dharmavir Singh & Ors. v. Smt. Navraj Sindhu, 1997 AIHC 259.
60
Narayana Panicker v. The Sub – Divisional Magistrate, Fort Coshin & Ors, 1979 Ker LT 346; A.G. v. Walt
Hamstow, UDC (1895) 11 TLR 533.
61
S.R. Bommai v. Union of India, (1994) 3 SCC 1.
62
Ashish Kumar Kundu v. A.K.Tandon, 1994 (4) SLR 319.
-MEMORANDUM for THE RESPONDENT- 15 -
-Pleadings and Authorities-
-Respondent-
Undertaking given to court is an affidavit.63. An "affidavit" includes affirmation and
declaration in the case of persons by law allowed to affirm or declare instead of swearing.64
Whoever in any declaration made by him to any court of justice, makes any statement which
is false, and which he believes to be either false or does not believe to be true, touching any
point material to the object for which the declaration is made shall be punishable in a grave
manner as if he gave false evidence.65 To establish false evidence, it must be shown that the
false statement charged against the accused is ‘literally’ false. There must be statement of fact
which is false. It is no offence if the fact stated is true but some circumstance is suppressed,
with a result that the wrong inference can be deduced.66 Intention is an important ingredient
for prosecution of perjury.
67
If there was a reasonable possibility that the defence story is
true, then the essential ingredient of the prosecution case would not be established and hence
will not be guilty of perjury.68 In the instant case, the facts stated by the respondent were true
that they were upholding the contract till then. Intention of the respondent before the court
order can be taken as to terminate the contract. But there is nothing to construe the same
intention to continue after the order. A court order can be presumed to change the intention of
the respondent causing fear for liability, unless proven to the contrary. It is humbly submitted
to the Hon’ble court that respondent shouldn’t be held guilty of perjury.
63
Edpuganti Bapanaiah v. Sri K.S.Raju & Ors, 2007 AP High Court, Contempt Case No.915 of 2002.
64
The General Clauses Act, 1971 § 3(3).
65
Indian Penal Code, 1860, § 199 Read With § 200.
66
Ratansi Daya v. Emperor, AIR 1916 Sind 70 (2), p 71; Queen v. Ahmed Ally, 11 WR 25, 27; Padarath Singh
v. Rattan Singh, (1920) Pat 419; S C Gupta v. Emperor, AIR 1924 Rang 17
67
Shiv Raman Gour v. Madan Mohan Kanda, (1990) Cr LJ 1033, p 1034 (P&H).
68
Adikanda Swain v. Emperor, AIR 1947 Pat 251, p 542; Kali Shankar Chatterjee v. Sarat Chandra Dey,
(1977) Cal HCN 538, p 542.
-MEMORANDUM for THE RESPONDENT- 16 -
-Prayer-
-Respondent-
PRAYER
In the light of arguments advanced and authorities cited, the Respondent humbly submits
that the Hon’ble Court may be pleased to adjudge and declare that:
1. The Respondent was justified in rescinding the contract and invoking
Arbitration
2. The Impugned Arbitral Award is valid, and is not liable to be set aside
under Section 34 of the Arbitration and Conciliation Act, 1996.
3. The Respondent is not guilty of Civil Contempt of Court.
4. The Respondent is not liable for perjury.
Any other order as it deems fit in the interest of equity, justice and good
conscience.
For This Act of Kindness, the Respondent Shall Duty Bound Forever Pray.
Sd/(Counsel for the Respondent)
-MEMORANDUM for THE RESPONDENT- 17 -