Hon'ble Judges/Coram:
R.V. Raveendran and K.S. Panicker Radhakrishnan

JUDGMENT

R.V. Raveendran, J.

1. Leave granted.

2. The appellant and respondents 1 and 2 are companies incorporated under the Companies Act, 1956. Wescare Care (I) Ltd., the first respondent (for short 'Wescare'), is in the business of setting up and operating/managing windfarms and generation of power from Wind Electric Generators. Subuthi Finance Ltd - second respondent ('Subuthi' for short) is a promoter of the appellant company - Indowind Energy Ltd., (referred to as 'Indowind'). On 24.2.2006 an agreement of sale was entered into between Wescare and Subuthi. The agreement described "Wescare (India) Ltd. including its subsidiary RCI Power Ltd" as the "seller/Wescare". It described Subuthi Finance Ltd. and its nominee as "buyer" and as the "promoters of Indowind Energy Ltd." Under the said agreement, the seller agreed to transfer to the buyer certain business assets of the seller for a consideration of Rs. 98.19 crores, of which Rs. 24.19 crores was payable in cash and Rs. 74 crores by issue of 74 lakhs shares (of the face value of Rs. 10/- at a premium of Rs. 90/- per share). Clause 10 of the agreement relates to arbitration. Clause 11 of the agreement relates to approval. The said clauses are extracted below:

10. Governing Law and Jurisdiction.

This AGREEMENT shall be governed by and interpreted in accordance with the laws of India. The Parties submit to the exclusive jurisdiction of the court in the city of Chennai, Tamil Nadu. Any dispute, difference, claims or questions arising under this agreement or concerning any matter covered by this Agreement or touching upon this Agreement, the same shall be referred to arbitration before a sole arbitrator to be appointed by consent of Seller, Buyer/IW. The decision/award of the Sole Arbitrator shall be final and binding on all parties. The provisions of the Arbitration and Conciliation Act, 1996 with such amendments there to as may be applicable, shall apply to the proceedings. The venue of the arbitration shall be Chennai and the language of the Arbitration shall be English.

11. Approval.

Notwithstanding anything to the contrary herein contained in this AGREEMENT this agreement is expressly subject to the approval of the respective Boards of Directors/Shareholders by the Seller, the Buyer and Indowind Energy Limited and if such approval is not obtained either by the Seller, the Buyer or IW on or before 30th June 2006 this AGREEMENT shall be null and void and of no effect whatsoever and all transactions done under the agreement shall be reversed with all the costs and damages to the defaulting party.

3. The Board of Directors of Wescare at its meeting held on 28.2.2006 accorded approval to the agreement dated 24.2.2006. The Board of Directors of Subuthi at its meeting held on 1.3.2006 approved the said agreement. There was however no such approval by the Board of Directors of Indowind.

4. According to Indowind, Wescare sold 31 Wind Electric Generators (WEGs) to Indowind on 15.3.2006 for a consideration of Rs. 13,48,00,700/-, out of which Rs. 4.5 crores was paid in cash and Rs. 8........