Tropicana’s appeal dismissed by Hyderabad court

KUALA LUMPUR: The Hyderabad City Civil Court has dismissed Tropicana Corp Bhd’s appeal against an order by the Arbitration Tribunal of India to add it as a respondent to a counterclaim by a former joint-venture partner.

In a filing with Bursa Malaysia yesterday, Tropicana said it will be filing an appeal in the High Court of Judicature of Andra Pradesh at Hyderabad.

Starlite Global Enterprises (India) Ltd (SGEIL), was a party to a joint development agreement inked in 2007 with Tropicana’s then indirect subsidiaries Dijaya-Malind JV (Mauritius) Ltd and Dijaya-Malind Properties (India) Pvt Ltd to develop SGEIL’s 25.4 acre (10.27ha) piece of land in Hyderabad.

The agreement was terminated due to a breach of terms by SGEIL, which prompted Tropicana’s then subsidiaries to seek for the return of a refundable deposit of 127.08 million rupees (RM9.34 million) and damages suffered by the two.

When SGEIL did not refund the deposit and failed to pay the damages, it was served a notice of arbitration. A claim petition was also filed by Tropicana’s then subsidiaries, which was counterclaimed by SGEIL.

On July 21, 2012, the tribunal said SGEIL had added Tropicana as a respondent without the tribunal’s permission and Tropicana’s name was subsequently deleted. It then directed SGEIL to file an application to add Tropicana as a respondent.

On Aug 26, 2013, Tropicana received an order from the tribunal to add the company as a party to the arbitration proceedings between its then subsidiaries and SGEIL.

The group disagreed with the tribunal’s decision and so filed an appeal to the civil court against the order on Aug 27 that year, on the grounds that the group was not party to the joint development agreement between its then subsidiaries and SGEIL, and that there was no arbitration agreement between Tropicana and SGEIL.


This article first appeared in The Edge Financial Daily, on August 13, 2014.



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