From trademarks to arbitration process, here are some key court orders

The Competition Commission of India and its appellate body, the Competition Commission Appellate Tribunal (Compat), inflicted seven years of litigation charging 44 suppliers of LPG cylinders to Indian Oil Corporation with cartelisation and rigging of prices. A penalty was imposed on them against which the suppliers moved the Supreme Court. The Competition Commission also moved the court asking for a heavier penalty. Ultimately, the Supreme Court found that the whole allegation was not established with evidence. The Director General of the Commission found that there was a similarity in the bids quoted by all the suppliers and the rates were curiously identical in all different states. He concluded there was a large-scale collusion among the bidders and they operated through its national association. Overturning the views of the authorities below, the Supreme Court stated there was no sufficient evidence to prove any agreement among the suppliers for bid-rigging. The judgment observed that “in such a watertight tender policy of IOC which gave it full control over the tendering process, it was necessary to summon IOC."

Parties cannot blow hot and cold

“A litigant can take different stands at different times but cannot take contradictory stands in the same case. A   party cannot be permitted to approbate and reprobate on the same facts and take inconsistent shifting stands,” the Supreme Court stated last week while dismissing an appeal in the case, Suzuki Parasurampuria Suitings Ltd vs Official Liquidator. The occasion to reiterate this stand arose when Mahendra Petrochemicals Ltd went into liquidation. Suzuki Parasurampuria was an assignee of debt by Industrial Finance Corporation of India (IFCI) for the outstandings of Mahendra Petrochemicals. It moved the company judge for substitution in place of IFCI as a secured creditor of Mahendra. The company judge rejected the application holding that it was neither a bank nor a banking company nor a financial institution or a securitisation company or a reconstruction company and, therefore, could not be substituted in place of IFCI as a secured creditor for the purpose of the SARFAESI Act. The Supreme Court noted that after the application was rejected, the company “made a complete volte-face from its earlier stand and surprisingly, contrary to its own pleadings, now contended that it had never sought the status of a secured creditor under the SARFAESI Act". This prompted the remarks of the Supreme Court that parties should not blow hot and cold by taking inconsistent stands which would prolong proceedings unnecessarily. 

State entities at each other’s throat

In yet another case of a fighting between a public sector firm and state authorities, the Supreme Court appointed a retired judge as the sole arbitrator. The court had asked the parties to settle the issues among themselves, but there was no agreement. In this case, Hindustan Antibiotics Ltd vs Maharashtra Housing and Development Authority, the dispute was over surplus land held by the public sector firm in Pune. It moved the Bombay High Court raising its pleas but the court directed it to a civil court observing that a writ petition would not lie in a land dispute. On appeal, the Supreme Court asked the parties to amicably settle the issues “by sitting across the table rather than drag the disputes to the court.” The effort failed and the arbitrator was appointed. 

DGFT cannot tamper with policy

The Director General of Foreign Trade (DGFT) has no jurisdiction to amend the Export and Import Policy, the Calcutta High Court stated while quashing a 2016 notification regarding the import of newsprint by small newspapers. In this case, Sanmarg Ltd vs Union of India, the newspaper challenged the notification that imposed onerous conditions on the import of newsprint for its use. It argued that only the central government can change the policy and it should be placed in Parliament. Small newspapers get their newsprint requirement from import houses. But by the notification, they were told to import their requirement directly. It would cause financial losses as they have to import large quantities, and money and space would be held up. The High Court accepted the argument and clarified that the DGFT can only issue clarifications; he cannot amend the policy.

Trademarks without borders

While an international chain of hotels may not have a physical presence in India, it can still invoke the Trade Marks Act to seek an injunction against a local company imitating its name and logo. The Delhi High Court observed so while passing an injunction in favour of Millennium & Copthorne  International Ltd, registered in Singapore, against Aryans Plaza Services Ltd. The Millennium company is a subsidiary of London-based Millennium & Copthorne Hotels. It alleged that the opposite company was imitating its name Millennium and its distinct log in its website. Aryans argued that Millennium had no presence in India. The High Court stated that the London company operated through interactive websites and also availed of third-party websites to advertise, offer and accept bookings for its hotels from India. Even though Millennium had no office in Delhi, it would still be carrying on business here and would qualify to institute the suit under the Trade Marks Act. 

Award without reasons set aside

“The credibility of the arbitration process and the soundness of decisions rendered by arbitrators not only depends on their capability and acumen but also the willingness that they display in following the discipline of the law,” the Delhi High Court stated last week in the case, Pearl Developers Ltd vs  Universal Land & Finance Co. The court made this remark because the arbitration tribunal granted ~50 million to Pearl without giving any reason. Though the arbitrator rejected the claims of both sides, Universal was asked to pay the amount to Pearl. The amount was not even claimed by Pearl and Universal was not given an opportunity to show that it was not liable to pay it. In such circumstances, the arbitrators “fatally erred in awarding the sum", the HC wrote while dismissing the appeal.