The National Company Law Appellate Tribunal has referred the ongoing dispute between General Electric and Triveni Turbines over their joint venture back to the Bengaluru bench of the National Company Law Tribunal (NCLT).
An interim order by the NCLAT bench which permitted GE to sell its stake in subsidiary Baker Hughes, as long as the deal would not affect the business of GE Triveni will remain in effect till the NCLT decides on the matter. The interim order had also noted that the obligations of Baker Hughes and GE towards the joint venture would remain unchanged and that any stake sale would be subject to the decision of the tribunal.
Triveni Turbines had opposed the proposed stake sale, stating that it would “de-link” GE from the joint venture in violation of the terms of their deal and its obligations to provide GE Triveni with technology, marketing services and access to its international sales network.
The appellate tribunal also declined to order an independent investigation or audit into the functioning of GE Triveni, calling on the NCLT bench to first decide on the issue. Triveni Turbines had called for an independent investigation alleging that GE had used internal processes to divert business from GE Triveni and compete against it. Counsels for GE had argued that the NCLAT did not have jurisdiction on a stake sale between two foreign entities.
“As the allegations and counter allegations and other facts are to be looked into by the tribunal, we are not deliberating on such issues which are left open to the parties to argue before the tribunal,” the NCLAT ordered.
Source: The Economic Times, February 19, 2020