The Calcutta high court last week ruled that even if a party to a dispute moves a civil court or other forums, it would not be a bar against arbitration if the contract between them provides for this alternative disputes resolution mechanism under the Arbitration and Conciliation Act. In this case, Srei Equipment Finance Ltd vs Paban Poddar, there was a dispute over payment in a hire purchase agreement. The purchaser moved the civil court. The finance company wanted arbitration and stoppage of the civil proceedings under Section 8(3) of the Act which says that “notwithstanding that an application has been made and pending before the judicial authority, an arbitration may be commenced or continued and an arbitral award made." Therefore, a disputing party can invoke arbitration clause even if the civil suit is pending. Any interim order of the civil suit may be looked into by the arbitration court to uphold the principles of comity and avoid any conflict.
“But even then, the arbitration court should not be embarrassed in exercising its authority in any manner whatsoever by the mere pendency of the civil court or like proceedings; or the subsistence of any interlocutory order therein.”
Fear no ground to bar whisky brand
The Delhi high court has rejected the prayer for injunction against a whisky brand on the basis of mere fear that the rival distiller might infringe its brand name in future. In this case, Allied Blenders and Distillers vs Prag Distillers, Allied moved against the opposite party which is a company registered in Maharashtra but has an office in Delhi. Its grievance was that while it owned the well-known brand name “Officers Choice”, Prag has manufactured a competing product in the name of “Smart Choice” with similar trade dress. It might mislead the consumers by passing off the wrong product. Prag on the other hand argued that the Delhi high court had no jurisdiction in the matter as the sale took place in Andhra Pradesh. Allied also has an office in Andhra Pradesh and the suit should be filed there. The argument of Allied is that since Prag has an office in Delhi, the high court has jurisdiction to hear the complaint. It invoked the principle of “imminent threat” of violation, not actual violation. According to it, there was “strong apprehension” that the rival could launch their products in Delhi where it had a distribution network. It contended that the cause of action included “an apprehension of injury” in Delhi. The high court rejected this argument based on fear, not supported by any reasonable ground. A “bald statement” that it apprehended that the rival distiller would launch its product in Delhi cannot be acted upon by the court.
Airline to pay for damage to goods
The National Consumer Commission has directed Malaysian Airlines to pay compensation to Dentply India for delivering goods sent from Los Angeles to New Delhi in a damaged condition and for delay in delivery. When the consignments were opened it was found that they were opened and tampered with and only part of cargo had arrived. The second consignment was also delayed. The Indian company filed a complaint of negligence with the Delhi State Commission. The airlines denied the charges and contended that there was no evidence to prove the allegations. However, the commission rejected the argument and imposed compensation.
On appeal, the national commission upheld the conviction but reduced the rate of damages.