From noise pollution to arbitration, here are the key court orders

Complaint of forfeiture of the bid amount when the bid was withdrawn, must be filed before a civil court and not before HC as such dispute relates to commercial contractual transactions

Arbitration only if contract is final

In order to refer a dispute to arbitration, there must be a concluded contract between the parties. When there is a global bid, the ‘request for qualification’ or the ‘request for proposal’ and other documents would not amount to an agreement. They are steps only towards agreement and not agreement itself with an arbitration clause. The Supreme Court stated so while setting aside the judgment of the Bombay High Court in a dispute between Singapore firm PSAMumbai Investment PTE and the Board of Trustees of Jawaharlal Nehru Port Trust. The bid was for the development of a fourth container terminal. A consortium bid for it and got the project. The ‘request for qualification’ had clarified that it should not be taken as an agreement. However, when disputes arose, the port trust authorities claimed damages against the consortium and moved arbitration. The arbitrator held that there was no arbitration clause in the documents. The high court, however, allowed the appeal of the port trust authorities. The consortium appealed to the Supreme Court. Setting aside the high court judgment, the apex court stated that the letter of request and the letter of award did not show a concluded contract with an arbitration clause.

Fraud not necessary in ‘passing off’

The Supreme Court last week reiterated that though the common law offence of ‘passing off’ of one product in the name of another is, in essence, an action based on deceit, fraud is not a necessary element for taking legal action. The offender’s state of mind is also wholly irrelevant to the existence of a cause of action for passing off, if otherwise the offender has imitated or adopted the disputed trademark. The court made these observations while dismissing the appeal of Wockhardt against the order of the division bench of the Bombay High Court in its trademark dispute with Torrent Pharmaceuticals. The products in question were chymoral and chymoral forte of Torrent, used to cure wounds after surgery. The single judge Bench had refused injunction, stating the suit was filed after several years and that it would be “unfairly monopolistic” to grant stay now.  But the division bench had overturned it stating that the judge applied wrong principles. On appeal, the Supreme Court upheld the stand of the division bench. It elaborately discussed the question of whether a delay in making a complaint while the rival mark was being sold in the market would amount to acquiescence.

Delhi HC granted jurisdiction

In a dispute between the Ministry of Petroleum and Natural Gas and a foreign firm Hardy Exploration & Production (India) INC, the Supreme Court last week ruled that Indian courts have jurisdiction to decide an appeal against the award of a foreign arbitration tribunal when there is no agreement on the question of venue for arbitration. A contract should be given a ‘holistic’ interpretation, the judgment said.  The court clarified the position while setting aside the judgment of the Delhi High Court in a dispute over product sharing contract. The high court had stated that it had no jurisdiction to hear an appeal against a foreign award. The Supreme Court had to clarify the position as a two-judge Bench referred the issue to a larger bench in view of certain doubts about the venue of arbitration. Analysing the provisions of the Arbitration and Conciliation Act, the Supreme Court set aside the high court judgment and asked it to proceed to hear the appeal of the ministry, as it had jurisdiction in the matter.  The question involved the interpretation of an arbitration agreement which specifies the ‘venue’ for holding the arbitration sittings but does not specify the ‘seat’. This gap raises the issue of procedural law applicable to a particular country for deciding appeals after the award is pronounced.

Urban authority loses third appeal

The Supreme Court last week dismissed the appeal of the Punjab Urban Planning & Development Authority against the judgments of the National Consumer Commission and the fora below it and ordered it compensate the buyer of a residential plot for deficiency in service. Though the plot was handed over to the buyer, the construction was stopped halfway by the authority and the long delay caused financial loss to the buyer in addition to depriving him of living in his own house. He moved the consumer forum, which recorded that the authority itself admitted deficiency in service. The authority went on appeal to the state commission and then the National Commission. It failed all the way and approached the Supreme Court. It upheld the rulings of the fora below and observed that “there was absolutely no justification   on   the   part   of   the   authority to create obstacles once they cleared everything to enable the buyer to go ahead with the work of construction.”

Forfeiture of bid amount for civil court

The Delhi High Court last week stated that a complaint of forfeiture of the bid amount when the bid was withdrawn, must be filed before a civil court and not before it as such dispute relates to commercial contractual transactions. In this case, Tril Roads Ltd vs National Highway Authority, the project was for building a six-lane highway between Kishangarh in Rajasthan and Ahmedabad. However, the bid was withdrawn and the firm sought the security amount back. But the state corporation rejected the demand. The firm moved the high court against it. The corporation argued that if the firm had any right, it should be taken to a civil court and not in a writ petition before the high court. This was accepted by the high court and the petition was dismissed with liberty to move the claim before a civil court.

DJs cannot create noise pollution

The Bombay High Court has rejected the plea of Professional Audio & Lighting to allow it to play DJ (disc jockey) and Dolby systems, which were prohibited by the state police on the ground of noise pollution. According to the firm, there is no ban on these two systems in Maharashtra. It further argued that the ambient noise is higher than that created by the DJ and Dolby systems and many other instruments make more noise than permissible. The court asserted that violation of the noise pollution rules by others cannot justify the playing of the DJ systems. The rules must be followed by everyone. “Noise created by any music system/instrument cannot be allowed to cross the maximum permissible noise level,” the court emphasised.