The appellate insolvency tribunal ruled on Tuesday that any changes by General Electric in its shareholding of unit Baker Hughes will be subject to the outcome of a dispute with Triveni Turbines over their joint venture GE Triveni Limited (GETL).
“All transactions of shares, if made, shall be subject to the decision of these appeals,” a bench of the National Company Law Appellate Tribunal (NCLAT) headed by Justice SJ Mukhopadhaya said, referring to petitions filed by Triveni Turbines.
Triveni Turbines and Baker Hughes are partners in GE Triveni, a manufacturer of steam turbines. The case is a rare instance of a transaction between two overseas companies falling under Indian jurisdiction.
The bench said any share transaction between GE and Baker Hughes should not affect the business of Triveni Turbines and the joint venture agreements including those related to marketing and sales, technology licence, and trade and trade name. The next hearing in the case is scheduled for September 25, after the parties submit their responses.
Triveni Turbines had challenged an interim order passed by the National Company Law Tribunal (NCLT) on August 23, vacating its June 12 directive asking GE not to change the shareholding composition of Baker Hughes.
In its appeal before NCLAT, Triveni Turbines contended that the approach of the NCLT may have the effect of permitting foreign companies that have shareholdings/interest in Indian companies to take a stand that they cannot be subjected to investigation and that no relief can be granted for “direct and brazen acts of oppression and mismanagement by such foreign companies”.
Triveni Turbines said the NCLT had ignored the legislative intent behind conferring jurisdiction in relation to foreign companies through provisions of the Companies Act.
The NCLT in Bengaluru had suspended its order till August 27 to allow Triveni Turbines to approach the NCLAT.
Triveni Turbines has accused its foreign partner of violating JV agreements including those on technology transfer, marketing and exclusivity by diverting business to other group companies and sharing of data, thus adopting fraudulent practices. GE said in November it would sell a part of its stake in Baker Hughes, an oil services company, for about $4 billion.
Source: Economic Times