The Supreme Court has refused interim relief for Namtech Consultants, which has alleged that its joint venture partner in India, General Electric Pacific (Mauritius), is diverting to China overseas sales orders.
Namtech Consultants Pvt Ltd, a shareholder in the joint venture GE Thermometrics India, has alleged that General Electric Pacific (Mauritius) is diverting sales orders to its China plant, which also manufactures identical sensing products, to ?kill competition? from the joint venture company.
A Bench headed by Justice Markendey Katju refused to give interim relief and posted the matter for hearing after the vacations.
According to Namtech, General Electric Pacific (Mauritius) had written to the JV’s long-standing customer Nidec Sankyo that the parts for sensing products would be manufactured and supplied to it from China and not India.
Namtech said that it is not willing to sell its shareholding in the joint venture and would rather buy GE’s shares. SC-GE 2 LST In spite of the petitions pending before the apex court, the GE company ?blatantly and brazenly? continued to act against the interests of the JV, thereby impinging on the vital interests of Namtech, the application stated.
Namtech, founded by Managing Director (MD) Padman G Nambiar, also alleged that General Electric Pacific (Mauritius), immediately after buying stake in GE Thermometrics India, coerced the JV to become a mere low-cost contract maufacturer of high-quality sensors for affiliates of the GE company.
Namtech had moved the Company Law Board (CLB) under Sections 397 and 398 of the Companies Act 1956. However, the CLB had dismissed the petition holding that since there was a stalemate in the management of the joint venture, Namtech, being minority shareholders, should exit from the JV by selling its shares to GE.
Namtech had challenged the CLB decision before the Karnataka High Court stating that GE cannot be given the right to buy its shares.
However, the High Court in November 2007 ruled that a mechanism should be worked out on the basis of the share values of the joint venture firms by which one can sell its shares to the other.